India Vies with China to be Crowned as World’s Biggest Packaged Tea Market

While the story of tea begins in China, as per the Mintel Report, in 2017 India consumed a total retail volume of 678,200 tonnes worth of packaged tea, followed by China in second place at 576,800 tonnes. Meanwhile, Turkey (173,400 tonnes), Russia (134,200 tonnes) and Japan (92,900 tonnes) complete the top five global ranking.


India is the leading market for retail volume sales globally. Behind Turkey, European countries feature strongly in the global per capita consumption ranking: the average Turkish consumer guzzled 2.15kg of packaged tea last year, followed by British consumers at 1.15kg, Russian consumers at 0.91kg, Japanese consumers at 0.74kg, and German consumers at 0.67kg.


“Traditionally, Chinese consumers prefer fresh tea in loose formats, so it makes sense that our research shows that India is ahead of China as the world’s leading retail packaged tea market,” said Loris Li, Associate Director, Food and Drink, at Mintel.


“Looking beyond top-level market sizes and consumption figures, there is an interesting new tea culture brewing in both hot and ready-to-drink tea, fuelling global and regional innovation activity,” commented Julia Buech, Global Food & Drink Analyst at Mintel.


hot tea launches in the Asia Pacific accounted for 27 percentages of all global new tea product launches in 2017


According to Mintel Global New Products Database (GNPD), hot tea launches in the Asia Pacific accounted for 27 percentages of all global new tea product launches in 2017, while RTD tea launches in the Asia Pacific accounted for 13 percentages of these global tea launches. Hot tea introductions in Europe accounted for 30 percentages of the world’s new tea launches in 2017, while European RTD tea launches represent 7 percentages of these launches. Meanwhile, North American hot tea launches accounted for 4 percentages, while RTD tea launches take up 3 percentage of this share.


“The RTD tea landscape is changing dramatically; having suffered for years from a ‘cheap’ and unhealthy image, the category is now undergoing a lifestyle makeover. Artisanal production attributes, such as cold brew, are helping create a new premium tier in the segment. Research shows that cold brew is just emerging as an upscale taste and quality descriptor in RTD tea. Better-for-you innovations from major beverage companies are further boosting the development of the RTD tea category,” continued Buech.


Still a niche, the ‘cold brew’ descriptor featured in just 1 percentage of global RTD tea launches in 2017, according to Mintel GNPD, with the Asia Pacific accounting for 55 percent of these introductions, followed by Europe with 25 percentage.


India is the leading market for retail volume sales globally

“Most Asian consumers are, at the end of the day, traditionally inclined to enjoy tea in loose formats—which is also likely the reason behind Asia Pacific’s lead in driving loose formats in packaged tea innovation. However, the tea bag category in China, and the wider Asia Pacific region, has definite growth potential as we see more and more tea bag innovations coming from Asian tea manufacturers,” added Li.


Indeed, Mintel research reveals that 62 percent of US adults drink coffee in the morning, while 24 percentage drink tea. In China, the door is open for tea to adopt an ‘energy drink’ status.


“In a world that is becoming more health conscious, naturally functional drinks are ever more relevant. Tea consumers continue to show interest in products that can target specific ailments and provide diverse functions, from energy-boosting and anti-inflammatory to slimming and relaxing benefits. In this saturated field, ‘energy’ has grown in significance as a focus of innovation activity among tea companies and will continue to be a market with potential in the near future,” Buech concludes.



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