India takes title of biggest packaged tea market, while APAC RTD innovation booms

According to Mintel, Turkey takes the lead when it comes to per capita consumption, followed by Britain, Russia, Japan and Germany.

“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 associate director Loris Li.

Indeed, Mintel research reveals that in 2017, most Chinese consumers (78%) were frequent users of freshly brewed loose tea. Ready-to-drink (RTD) tea drinks also enjoy high penetration in China, with half (49%) of Chinese consumers identified as frequent RTD tea drinkers. Tea bags, on the other hand, are frequently enjoyed by 45% of these Chinese respondents.

According to Mintel Global New Products Database (GNPD), hot tea launches in Asia Pacific accounted for 27% of all global new tea product launches in 2017, while RTD tea launches in in Asia Pacific accounted for 13% of the global total.

Hot tea introductions in Europe accounted for 30% of the world’s new tea launches in 2017, while European RTD tea launches represent 7% of this total.

Meanwhile, North American hot tea launches accounted for 4% of the global pie of overall tea launches, while RTD tea launches take up 3% of this share.

“Although hot tea continues to be the biggest tea subcategory globally, RTD tea has started to build its base in the global tea market—following the same developments seen in the global coffee market,” ​said Mintel’s Julia Buech.

Market makeover

“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.​

“Our 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.”​

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

The data also shows that Asia Pacific is currently driving loose formats in packaged hot tea tea innovation. Of all new tea launches in Asia Pacific in 2017, loose tea formats accounted for 36%, compared to 19% in Europe and 12% in North America.

“Most Asian consumers are, at the end of 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.