In recent years, the beverage industry has recorded outstanding growth in the ready-to-drink tea segment. According to statistics, there is still plenty of room for growth in this segment. Follow this article to learn more about the global RTD tea trends.
Contents
Introduction
Consumers’ interest in health & wellness, along with the return to nature and proactive health trends have led to consumers’ preference for products with natural ingredients. RTD teas have also benefited from their association with health-promoting qualities. There has been a significant increase in revenue and volume of ready-to-drink teas over the years. This growth is driven by the awareness of health, a shift in consumer preferences, and some other factors.
The growth of the ready-to-drink tea segment in recent years
RTD Tea, or ready-to-drink tea, is defined as packaged tea drinks in liquid form that are ready to be consumed. The main ingredients of this beverage are tea (green tea, black tea, oolong tea, etc), fruit extract, sugar. It can have other additives depending on the manufacturer’s formula. RTD tea is one of the most popular, convenient, and available drinks out there. Plus, it has some surprising health and beauty benefits, thus attracting new customers of all ages.
According to Statista, the global RTD Tea market generated revenue of US $106.20 billion in 2023 and is projected to expand at a CAGR of 6.69% during the forecast period from 2023 to 2027. Based on total population, revenue per capita in 2023 is $13.83. In terms of volume, the RTD tea market volume is expected to reach 35.70 billion liters in 2027, with a volume growth rate of 3.8% in 2024. The average consumption per capita is estimated to be 4.03 liters in 2023.
Key markets of RTD tea
North America is dominating the RTD tea market due to the mature and homogeneous RTD tea market penetration in the region. It also leads the shift in consumer preferences towards healthier alternatives when it comes to caffeinated drinks. It is anticipated that the United States RTD tea market will contribute the most to the regional RTD tea market. The second-largest market share belongs to Asia Pacific. This region is driven by the presence of populous countries and the growing number of older people who love tea. Besides, the RTD tea market in Europe is projected to be the fastest growing between 2023 and 2032. This is due to the growing awareness healthy lifestyle and nutrition, as well as the increasing per capita disposable income.
In the non-alcoholic beverage industry, RTD tea is projected to be the fastest-growing category over the next few years. People are becoming more aware of their health and well-being, which has caused the RTD tea industry to explode around the world. In recent years, there has been a shift away from carbonated and highly sugary soft drinks towards healthier alternatives. RTD tea variants are also attempting to fill certain market niches. There is a growing variety of products available such as RTD tea without sugar, and carbonated RTD tea. These compete with traditional soft drinks like colas and lemonades.
The reason why ready-to-drink tea is growing rapidly
Extensive analysis of the market shows that the growth of the ready-to-drink tea industry can be attributed to a multitude of significant factors. These encompass the surging consumer demand for convenient and refreshing beverages, the continuous advancements in technology facilitating the production and distribution of RTD teas. Additionally, the evolving preferences of consumers, who are increasingly favoring healthier and diverse beverage choices, influence the tea industry.
Growing awareness of health and wellness
The high health and wellness consciousness has led to a shift to healthier and more natural alternatives to carbonated beverages. Consumer awareness and understanding of the health benefits of tea encourage people to live healthier lives. This is one of the driving forces behind the growth of the RTD tea industry around the world.
In addition, RTD tea is effective in weight loss, alleviating headaches and body aches, and reducing cholesterol levels and the risk of heart attack. This tea has a high concentration of antioxidants and polyphenols as well as plant-based nutrients, making it popular among health-conscious. It is thanks to its main ingredients such as tea leaves, exotic herbs, etc.
Convenience and portability of ready-to-drink tea
RTD tea is available in a variety of packaging types, such as cans, glass, PET bottles, and aseptic cardboard boxes. Compared to traditional brew-it-yourself tea, ready-to-drink tea offers greater convenience to consumers when taking it anywhere. The wide range of flavors also allows customers to easily find their favorite tea.
Moreover, RTD tea is perfect for the on-the-go lifestyles of modern consumers. They’re usually found in places where impulse shopping takes place (i.e. convenience stores and vending machines). The key players in the industry invest in the development and expansion of distribution networks. As a result, RTD tea easy to find in several supermarkets or retail stores and groceries.
Easy accessibility of RTD tea across different sales channels
The development of the distribution network across the globe further drives the ready-to-drink tea demand, especially the significant growth in the food and beverage industry. The number of cafes, retail stores, both online and offline, and food outlets is increasing rapidly, leading to a surge in the demand for RTD tea.
Some studies also show that the HoReCa (Hospitality, Restaurants, Cafés) market continues to present a significant demand for RTD tea. The fast-moving sales channels like convenience stores and vending machines is now available of tea. Therefore, consumers easily access to the product, which plays a significant role in the segment’s robust growth.
Gradual shift in consumer preferences
The growth of the market is further supported by the evolving lifestyle trends, rising disposable income, and changing dietary habits of consumers. As the working population continues to grow and people’s lives become more hectic, the demand for RTD teas has grown significantly. People are looking for food and drinks that don’t take long to make and can be consumed quickly and easily. The convenience of canned and bottled packaging for tea drinks increases the overall demand for them.
Besides, there is a growing popularity of socialization and gatherings among different age groups, particularly the millennial generation. This has led to an increase in the demand and desire for portable beverages, such as ready-to-drink teas. The advancement of technology provides people with a comprehensive understanding of health and sustainability. As a result, RTD tea has emerged as a healthy alternative to carbonated beverages, thus increasing its popularity.
Global trends in RTD Tea
The various elements that contribute to the growth of the ready-to-drink tea sector also shape the top trends in the global RTD tea market. As consumers are increasingly concerned about health, products centered around community health will probably garner favorable responses from consumers. Manufacturers should keep in mind some important trends in order to better serve the demands of the market.
Reduced sugar content
Sugar is believed to be associated with obesity and diabetes. As more consumers have become aware of the health risks of consuming too much sugar from RTD teas, they have shown more concern about the sugar content of RTD teas, rather than how much it’s refreshing. That’s why the demand for reduced sugar in RTD teas is expected to grow significantly, even though regular RTD teas are projected to decrease off-trade volumes.
RTD tea manufacturers also search for alternative natural sweeteners to decrease the amount of sugar content while still making sure their tea drinks taste great. In recent years, low-sugar tea and sugar-free tea have been launched a lot in the global market, meeting the growing demand of customers. More and more products are being reformulated to reduce sugar and marketing efforts are being intensified to emphasize the reduction of sugar content in new formulations.
Innovative flavors in RTD
When it comes to RTD tea, consumers are now looking for more distinctive and captivating drinks. As a result, new flavors and combinations have been developed to capture the attention of consumers. RTD teas are expected to continue to expand in terms of flavors and better teas that are health-focused.
Lemon is the most sought-after RTD tea flavor around the world, with peach coming in second. Recent years have seen a surge in RTD tea due to the desire to experiment with novel flavors and fruit mixtures, such as lychee, passion fruit, and mint. Furthermore, there are several variants of tea produced using plant-based milk and infused with fruity and floral flavors such as apple, orange, rose, lavender, etc.
Support digestive wellness
Digestive wellness has been gaining traction in recent years, as some researchers have proved the connection between gut health and overall well-being. A range of ready-to-drink teas that help improve bowel function and support good bacteria have been launched and are being welcomed by customers. Kombucha is a great fit for this trend, as it has functionality that appeals to health-conscious consumers across all age groups. Although it is still a relatively small sub-sector and at a high price point, Kombucha is expected to continue to grow in the RTD tea segment, supported by trends that focus on health and wellness.
Sustainability
Sustainability is a long-standing trend in the tea category and will continue to be a pressing issue for brands, thus they strive to be more transparent in their ingredient quality and source selection. In addition to prioritizing eco-friendly packaging, brands have a significant chance to gain a larger portion of the market by actively addressing the environmental consequences associated with tea sourcing. By being open and transparent about the measures being taken to safeguard the planet and support tea growers, brands can truly make a positive impact and establish themselves as responsible leaders in the industry.
About Future Generation Co., Ltd
Future Generation Company Limited is one of the largest beverage suppliers in Vietnam, with 26 years of experience in production and export. FGC is equipped with modern machines such as Hotfill PET and TetraPak, ensuring high-capacity production. FGC strives to achieve our mission to become Vietnam’s leading healthy beverage company. Our factories also meet international standards such as ISO, HACCP, etc. In addition, we constantly innovate our machinery system, strengthen production capacity, and increase productivity.
FGC also provides Private Label Services. With this service, we can help customers in researching and formulating beverages, designing product label packaging, and creating their own brands. This is an ideal solution for small and medium enterprises. Moreover, FGC provides free samples for customers to test before bulk orders. We also ensure delivery as fast as possible.
Contact
Address: R4 building, Office Quarter 02, Royal City, 72A Nguyen Trai St., Thanh Xuan Dist., Hanoi.
Phone: +84 24 73 000 125/ +84 24 73 063 369
Mail: info@vietnam-tea.com
Website: https://oem-fgc.com/
Facebook: https://www.facebook.com/fgcvietnamtea
LinkedIn: https://www.linkedin.com/company/fgcvietnamtea/
Source:
https://www.statista.com/outlook/cmo/non-alcoholic-drinks/ready-to-drink-rtd-coffee-tea/ready-to-drink-rtd-tea/worldwide
https://www.futuremarketinsights.com/reports/ready-to-drink-rtd-tea-market
https://www.treatt.com/news/global-trends-in-rtd-teas
https://www.linkedin.com/pulse/three-trends-driving-growth-ready-to-drink-tea-market
