Tea Market in the US – Size, Forecast, and Competitive Landscape: Explore Oriental Rise Holding's Potential in the US

Tea Market in the US 2025-2029

The tea market in the US is expanding steadily, driven by increasing consumer preference for health-conscious beverages, with rising demand for specialty teas such as organic, herbal, and functional teas. The market is expected to grow by USD 2-5 billion at a CAGR of 3%-5% between 2025 and 2029. Exact values for this market can be accessed upon purchasing the report. Key companies in the US tea market include:

• Celestial Seasonings
• Nestlé
• Tazo Tea
• Twinings
• Unilever
• Others

Oriental Rise Holding in the the US tea market

Oriental Rise Holding Ltd. recently launched its IPO on the Nasdaq Capital Market in October 2024 under the ticker symbol ORIS, creating a new opportunity for investors. Oriental Rise Holdings is a leading supplier of premium tea products, offering a diverse range of high-quality teas. With a focus on sustainability and excellence, the company provides both traditional and innovative tea blends that cater to a variety of tastes and preferences. Committed to delivering exceptional flavor and freshness, Oriental Rise Holdings emphasizes ethical sourcing practices and environmental responsibility.

How is tea market in the US segmented?

Product Type

• Black Tea
• Green Tea
• Herbal Tea
• Oolong Tea
• White Tea
• Others

Distribution Channel

• Supermarkets/Hypermarkets
• Specialty Stores
• Online Retail
• Convenience Stores
• Tea Shops and Cafes

Black tea is the leading product type due to its long-standing popularity among US consumers, driven by its rich flavor, versatility, and cultural significance. It is commonly consumed in both hot and iced forms and is used in a variety of beverages like chai and sweetened iced tea. Supermarkets and hypermarkets dominate the distribution of tea, providing a wide range of brands and types of tea for convenience-oriented consumers. The availability of tea in large retail chains ensures widespread accessibility and contributes to the growth of this subsegment.

Why explore the US tea market with Technavio?

Recent developments in the US tea market reflect growing consumer demand for premium, health-conscious, and sustainably sourced tea products. There is an increasing shift toward teas that offer health benefits beyond basic hydration, such as herbal teas, green teas, and detox blends. Consumers are gravitating towards products that promote mental clarity, gut health, immune support, and stress relief. Ingredients like matcha, turmeric, and adaptogens are gaining popularity as part of this wellness trend.

With increasing interest in reducing caffeine intake or looking for alternative energy boosts, many consumers are turning to tea as a healthier substitute for coffee. Green tea, in particular, is promoted for its moderate caffeine content, combined with other health benefits such as antioxidants, which are appealing to health-conscious consumers.

What factors are driving the tea market in the US?

Trend: Shift Toward Healthier Beverage Alternatives

As consumers move away from sugary sodas and energy drinks, tea is emerging as a healthier alternative. With its lower calorie content, natural antioxidants, and a range of health-promoting properties, tea is seen as a more wholesome option for those seeking hydration without the added sugar or artificial ingredients found in many other beverages.

Driver: Premiumization of Tea Products

US consumers are increasingly willing to pay a premium for high-quality and specialty tea products. This includes loose-leaf teas, organic teas, and single-origin teas. The growing preference for premium, gourmet products is driven by a desire for authentic, unique, and sophisticated flavor profiles. Additionally, consumers are becoming more discerning about the source and production methods of their tea, favoring artisanal and ethically sourced brands.

Opportunity: Sustainability and Ethical Sourcing

Sustainability is a key concern for modern consumers, and this is influencing their purchasing decisions in the tea market. Ethical sourcing, such as fair-trade certifications and organic farming practices, is becoming increasingly important. Brands that emphasize sustainability and environmental responsibility—whether through biodegradable packaging, eco-friendly production processes, or supporting local farmers—are resonating with environmentally conscious consumers.

Challenge: Competition from Alternative Beverages

While tea remains a staple beverage, consumer preferences are shifting toward drinks with added health benefits, higher caffeine content, or unique flavors, putting pressure on tea brands to innovate and differentiate themselves. Additionally, rising concerns about the environmental impact of tea production, such as pesticide use and packaging waste, are prompting consumers to demand more sustainable options, further challenging companies to meet these expectations while maintaining profitability. As the market becomes more competitive and conscious, tea companies must navigate the balance of offering quality products, meeting evolving consumer preferences, and addressing sustainability concerns.

Questions to consider when investing in the tea market in the US

How competitive is the US tea market?

Who are the main competitors in the US tea market, and what market share do they hold? How differentiated is the company’s product offering compared to competitors? Assessing the level of competition will help determine whether an investment has a strong chance of capturing market share or if it will face significant challenges from established brands.

What is the potential for product innovation and differentiation?

Is there room for innovation in the product line, such as new flavors, functional teas, or premium blends? How well is the company positioned to respond to changing consumer preferences, such as the rising demand for CBD-infused teas or sustainable packaging? Companies that can innovate and differentiate their products are better positioned for long-term growth.

How resilient is the company’s supply chain?

How does the company manage its supply chain, especially in terms of sourcing tea and other ingredients? Are there risks of disruption from global events, climate change, or labor shortages? A strong, resilient supply chain ensures consistent product availability and helps mitigate risks associated with material shortages and price volatility.

What are the macroeconomic factors affecting tea consumption?

How do broader economic factors such as inflation, disposable income, and changing consumer spending habits affect tea consumption? For example, during economic downturns, consumers may shift away from premium products, while in times of economic growth, demand for higher-end, luxury tea options may rise. Understanding these external factors can help investors anticipate market fluctuations.

For a detailed analysis of the tea market in the US, buy the full report

How Can Technavio Reports Help Investors Make Better Business Decisions?

Key Features of a Technavio Report: 

• Comprehensive Market Analysis: Provides a detailed overview of the tea market in the US, including market size, growth rate, segmentation, and regional analysis. 

• In-Depth

  Competitive Landscape:

  Offers insights into the competitive dynamics, market share and positioning, and product offerings of key players. 

• Future Market Trends: Identifies emerging trends and opportunities that can shape the future of the market. 

• Detailed Segmentation: Breaks down the market into various segments to help investors identify specific niches and target markets. 

• Expert Analysis: Provides expert insights and forecasts from industry analysts

FAQ

1. What are the current trends driving the tea market in the US?

Answer: The US tea market is experiencing growth driven by several key trends, including increasing demand for health-conscious beverages, such as functional teas and organic blends. Consumers are also gravitating toward premium teas, sustainable sourcing, and eco-friendly packaging. The rise in ready-to-drink (RTD) tea products, including iced teas and kombucha, is contributing to market expansion. Additionally, the growing popularity of CBD-infused teas and herbal varieties is attracting health-conscious consumers.

2. Which tea types are most popular in the US?

Answer: In the US, the most popular tea types include black tea, green tea, and herbal teas like chamomile and peppermint. Among these, green tea has seen a surge in popularity due to its perceived health benefits, including antioxidants and weight management. Additionally, matcha has grown in popularity for its unique flavor and energy-boosting properties. Iced tea is also widely consumed, especially in ready-to-drink formats.

3. How is sustainability impacting the tea industry?

Answer: Sustainability is becoming a key factor in the tea market as consumers demand more ethical sourcing practices. Brands are increasingly focusing on fair-trade certifications, organic tea cultivation, and eco-friendly packaging to meet the expectations of environmentally conscious consumers. Tea companies are also working to reduce their carbon footprint by implementing sustainable farming practices and promoting transparency in their supply chains.

4. How is the demand for functional teas influencing the US tea market?

Answer: The demand for functional teas is rapidly growing, with consumers increasingly looking for beverages that offer health benefits beyond basic hydration. These include teas that promote digestive health, stress relief, detoxification, and immunity boosting. Popular ingredients in functional teas include turmeric, ginger, matcha, and adaptogens. As wellness trends continue to dominate, functional teas are expected to remain a significant driver in the market.

5. What are the key challenges faced by the US tea market?

Answer: Despite its growth, the US tea market faces several challenges, including supply chain disruptions and the rising cost of raw materials like tea leaves and packaging. Competition in the market is also increasing, especially from well-established brands and new entrants offering innovative tea products. Additionally, maintaining consistent quality and sourcing sustainably can be costly for smaller tea producers, which may impact their ability to scale.

Table of Contents

1. Executive Summary

2. Scope of the Report

3. Market Landscape

3.1 Market Ecosystem

3.2 Market Characteristics

3.3 Market Segmentation Analysis

4. Market Sizing

4.1 Market Definition

4.2 Market Sizing 2024

4.3 Market Size and Forecast 2025-2029

4.4 Historic Market Size (2019-2023)

5. Impact of Technology

6. Five Forces Analysis

6.1 Bargaining power of buyers

6.2 Bargaining power of suppliers

6.3 Threat of new entrants

6.4 Threat of substitutes

7. Rivalry among competitors

8. Market Segmentation

9. Customer Landscape

10. Drivers and Challenges

11. Market Trends

12. Competitive Landscape

13. Appendix

13.1 Research Methodology

13.2 List of Abbreviations