The global tea market is experiencing a robust expansion, propelled by rising health consciousness, growing disposable incomes across Asia Pacific, and the accelerating shift toward premium, specialty and ready‑to-drink (RTD) tea formats. Meanwhile, India — the world’s second-largest tea producer — continues to remain central to this growth story as domestic consumption rises and export opportunities expand.

A steep upward trajectory — global and India market size & growth

The global tea market continues on a strong growth trajectory. Industry estimates indicate that the market will grow from USD 52.7 billion in 2023 to USD 56.1 billion in 2024, reaching approximately USD 70.2 billion by 2028, showing a compound annual growth rate (CAGR) of ~5.8%.

In India, the tea industry was valued at INR 1.0 trillion in 2024 and is forecast to hit INR 1.47 trillion by 2029 — a CAGR of nearly 7% over 2025–2030. These figures reflect not only traditional demand, but increasing consumer willingness to spend on premium and value‑added tea products.

What’s driving growth — evolving consumer trends & distribution shifts

Health and wellness awareness: Consumers globally — and increasingly in India — are becoming more health-conscious, driving demand for green, herbal, and functional teas. The shift toward beverages with perceived antioxidant, stress-relief, or holistic wellness benefits is fueling growth.

Premiumisation & specialty teas: There is a noticeable move away from mass-market teas toward premium, specialty, and ethically sourced teas. Consumers are willing to pay more for unique flavor profiles, organic or sustainable sourcing, and better quality.

Convenience & format innovation: Ready-to-drink teas, specialty blends, flavored teas, and other innovative formats are gaining traction — especially among younger and urban consumers seeking convenience without compromising health benefits.

E‑commerce & changing retail landscape: The expansion of online retail and direct-to-consumer sales channels has widened reach for premium and niche tea brands, enabling smaller producers to reach global audiences.

Strong regional growth in Asia‑Pacific: The Asia-Pacific region — led by large tea-producing and consuming nations — continues to dominate global tea supply and consumption. Urbanization and rising disposable incomes are sustaining demand in these markets.

Segment trends — which types are leading, which are accelerating

• Black tea remains dominant: Black tea continues to be the largest revenue-generating segment in India and globally, reflecting cultural preference and affordability.

• Green, herbal & specialty teas — fastest growth: Green tea and other non-black teas are the fastest-growing segments in India and globally, driven by health and wellness trends.

• RTD, flavored, organic, ethical teas gaining share: Consumers’ changing preferences toward convenience, lifestyle beverages, and sustainable sourcing are pushing growth in ready-to-drink, flavored, organic, and specialty teas.

Headwinds — challenges confronting the tea industry

Despite robust growth, the tea industry faces several challenges:

• Production & supply-side risks: Climate change, erratic weather, and land/labour constraints threaten yield and quality.

• Cost pressures and competition: Rising input costs, labour migration, and competition from other tea-producing countries may squeeze margins.

• Shifting consumer tastes and substitution: Popularity of coffee, RTD beverages, and alternative drinks poses competition, particularly among younger urban consumers.

• Sustainability and regulatory challenges: Demand for ethically sourced and organic teas requires investment in sustainable farming, traceability, and higher-cost operations.

What lies ahead — industry outlook & opportunities

“As consumers increasingly value wellness, ethical sourcing, and premium experiences, the tea industry stands at a transformative inflection point,” says a senior industry analyst. “We project the growth of green, herbal, and functional teas to outpace traditional black tea over the next 5–7 years — particularly in urban markets and among younger demographics. Brands investing in quality, sustainability, and convenience will likely capture the largest gains.”

Looking forward, the tea market is expected to benefit from several converging trends:

• Expansion of RTD teas and convenient formats for on-the-go consumption

• Rising adoption of green, herbal, and functional teas for health-conscious consumers

• Growth of online retail and direct-to-consumer channels that democratize access to specialty teas

• Premiumisation and differentiation through origin-based teas, organic/sustainable sourcing, and value-added blends

For stakeholders — from growers and exporters to consumer-brand companies and investors — the next five years present promising opportunities. Growing middle classes in Asia, evolving consumer preferences globally, and rising awareness of tea’s wellness benefits make this a favorable time to invest in innovation, branding, and sustainable cultivation.

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