Market Scope

Market Research Future (MRFR) expects the functional tea market to be worth USD 12,942.3 Million by the year 2026. The market size is also touted to expand at a rate of 6.15% between 2017 and 2023 (assessment period).

Prominent Vendors

Major contenders in the global market for functional tea include Organic India (India), Guangzhou Lohas Biological Technology Co., Ltd (China), Tata Tea Limited (India), The Mate Factor (U.S.), Wuhan z-Micro Unite ST Co., Ltd. (China), Godrej Tea (India), Herbaty Szlachetne Sp. Z O.O. (Poland), to name a few.

Major Drivers and Impediments

Product innovation combined with continuous launch of local flavors by players to grab the attention of a higher number of customers are expected to facilitate market growth in the following years. Aesthetic packaging designs and the emerging trend of green packaging among manufacturers should also ensure steady market demand throughout the conjectured period.

Focus of manufacturers on infusing natural and organic ingredients in functional tea has helped spark the interest of the health enthusiasts. Moreover, surge in promotional activities to elevate brand awareness will also open profitable avenues for the global market in the ensuing years.

The thriving retail sector as well as the mounting popularity of the e-commerce sector is touted to be a significant opportunity to the major manufacturers in the worldwide market. Established firms are inclining towards online shopping channels since these require lower expenditure compared to the traditional retail outlets. E-commerce helps organizations easily reach out to a wider customer base, thereby resulting in extensive business exposure. As a result, the growing significance of online shopping platforms among consumers will prove to be quite favorable for the functional tea market in subsequent years.

Segmental Review 

The global industry can be categorized with respect to type, form, function and packaging.

Functional tea industry, with respect to type, caters to herbal tea, fruit tea, flower tea, longjing tea, and more. Herbal tea is the most prominent segment in the market and can continue to soar at a decent rate in the years to come, in view of the growing awareness among consumers regarding the health benefits of these products.

The forms in which functional teas are primarily available in the global market are instant tea powder, loose tea, broken tea, and more. Instant powder form of functional tea is thriving at a better rate compared to other segments, as it is easy to consume and therefore, widely preferred by consumers.

Depending on function, the market has been considered for weight loss, heart health, and detox, to mention a few.

Packaging-wise, the key segments are bag, can, sachet, bottle, and more.

Regional Status

Functional tea industry has been geographically considered for North America, APAC or Asia Pacific, Europe, as well as rest of the world (ROW).

In view of the soaring awareness about health among consumers along with the subsequent increase in the preference for functional beverages, APAC has successfully procured the lead in the global market. Rising disposable income combined with the escalating cases of arthritis, cardiovascular and osteoporosis diseases have also fostered the product demand in Asia Pacific. Convenience beverages are experiencing massive demand in the region, thanks to the improving living standards of the consumers. Growth in health concerns coupled with the surging consumption of a variety of functional teas like herbal, fruit, Longjing, and others will further enhance the market share in the region. The APAC industry is also favored by the thriving food and beverage sector along with the preference for healthy drinks among consumers.

The United States houses a vast customer base for tea, which emerged as a highly sought-after beverage in the country. This gives a substantial boost to the functional tea market in North America, while the mounting health consciousness among consumers is touted to be a remunerative opportunity for the players in the years ahead. The market size is further elevated by the constant launch of new and exciting flavors, as well as the surmounting demand for convenience beverages among time pressed consumers. The extensive ranges of functional tea offered by top manufacturers, boasting of attractive packaging to draw in a higher number of consumers will also spur the market growth rate in the oncoming years. The US functional tea market is currently in the lead, followed by Canada and Mexico, with sports persons emerging as major end-users.