BLENDING THE FLAVORS OF TEA INDUSTRY 14
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MARKET PULSE JUNE-2019
ea has a long history of popularity worldwide. Initially considered as a medicinal beverage, the drink eventually got popularized for multiple uses across the globe. Currently, this industry is mostly driven by the health benefits associated with consuming tea and increasing
awareness regarding carbonated drinks among people. Additionally, increase in cafe culture, rise in disposable income, change in tastes of people, and introduction of additional healthy ingredients in tea by different market players played a significant role in fueling the market growth over the years. At present, more than half of global tea is consumed in Asia and the top three markets for tea consumption are Turkey, Ireland and UAE. However, increase in cost of raw materials due to unstable weather conditions, rise in cost of agricultural inputs, and increase in trend of out of home coffee consumption are likely to limit the growth of the tea industry. On a brighter side, the introduction of new flavors and variety in tea and growth in demand from health-concerned young population are anticipated to provide lucrative opportunities in the future.
By: Mithila Chowdhury
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GL BAL IND U STRY
O
riginated in China, tea refers to an aromatic beverage which is usually prepared by adding hot or boiling water over the tea leaves. It is more than just a commodity for everyone, as it holds a crucial part of tradition in many countries and is consumed the most after water. This beverage has paved its way into all of the major occasions, starting from hydration to refreshment, indulgence to nourishment and functional energy. This gave the tea category, in some way or the other, a place in the consumer basket at all times of day. Among hot drinks, tea has increased the most constantly for several years. Major population consuming tea has adopted it as a habit, while contributing in the growth of the tea market. Tea consumption has increased by around 30 billion to 36 billion liters in volume during the past five years 2014-2019. Currently, an average person drinks 236 cups of tea a year and 132 cups of coffee, as well as 27 cups of other hot drinks. The top three cold tea markets by total RTD (ready to drink) volume are China, Japan, and the U.S. The top three hot tea markets by total brewed volume are China, India, and Russia.
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MARKET PULSE JUNE-2019
Market Overview Tea is mainly grown in the developing countries, such as Asia, Africa, South America, and around the Black and Caspian Seas, with favorable soil and climatic conditions. It is considered as the widely consumed beverage across the globe as it helps in digestion, improves the immunity, assists in weight loss, benefits the bone health and minimizes the risk of heart attacks. In 2018, the global tea market size stood at 40.5 billion U.S. dollars, and the market is forecasted to reach around 44.3 billion U.S. dollars by 2021. The market is estimated to increase incrementally by $12.62 billion during the period 20192023, while accelerating at a nearly 5% compound annual growth rate. Around 58% of the market growth is likely to get generated from the Asia Pacific
region, led by China and India, while maintaining their position as the world’s largest tea producer and the biggest tea growing region in the world. The global market for tea at retail level is expected to grow by $7.9 billion between 2017 and 2022, with an average rate of expansion of 4% annually in real terms.
varieties of black tea include Darjeeling, Assam, Turkish and Ceylon teas. Major types of tea, including black tea, green tea, herbal tea and instant tea, are all gaining increasing popularities across the world, due to their remarkable health benefits, great taste, and ample availability in the global market.
Driven by the growing consumption of tea around the world, the global tea market is growing with a steady pace over the recent decades. Global consumption of tea is forecasted to reach 3.3 million metric tons in 2021 with over half of this growth in Asia. The global revenue generated from the entire industry stood at $84.53 billion dollars in 2018.
In 2018, the global tea market size stood at 40.5 billion U.S. dollars, and the market is forecasted to reach around 44.3 billion U.S. dollars by 2021.
There are wide range of teas, depending on their oxidation levels like green, yellow, oolong and black. Well-known
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COVER STORY Size of the Global Tea Beverage Market from 2013 to 2021 (in billion U.S dollars) 34.9
36.0
37.1
38.2
39.3
2013
2014
2015
2016
2017
40.5
41.7
43.0
44.3
2018
2019
2020
2021
Source: Statista
Tea Global Revenue (in billion U.S dollars) 36.57
42.32
46.38
52.56
60.78
68.13
75.19
2010
2011
2012
2013
2014
2015
2016
79.03
84.53
90.17
95.63
101.85
108.93
115.86
2017
2018
2019
2020
2021
2022
2023
Source: Statista
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MARKET PULSE JUNE-2019
The Origin & History of Tea World’s most widely consumed beverage, tea, comes from the tropical plant known as Camellia Senensis, majorly grown in four countries, China, India, Kenya, and Sri Lanka. The tea plant grows best in a warm climate with long sunlit days, cool nights and an abundance of rainfall. Tea plants grow at altitudes ranging from sea level to 7,000 feet and on latitudes as far north as Turkey and as far south as Argentina. The best tea grows at higher altitudes and many bushes can be cultivated for over 100 years. Tea bushes cover about six million acres of the earth and are harvested every week during the almost year-long growing season. The inception of tea took place in China around 2750 BC. During that time, the tea plant was considered to have a number of medicinal properties. It was discovered by the emperor Shennong, who is regarded as the father of Chinese medicine and agriculture. During the early days of tea consumption, the leaves were picked and boiled in water to produce a rather bitter brew. The leaves were used primarily as a medicine and secondly as a pleasurable drink. It took over 3000 years for tea to become a popular drink throughout the Chinese empire.
drinking tea quickly outspread to France, Germany and later to Great Britain. Tea has achieved popularity in other parts of the world only since the middle of the 17th century. Commercial cultivation of tea gradually expanded to India, Indonesia, and Sri Lanka until the middle of the 19th century. The first record of cultivation of tea in Africa was in 1850; commercial production in Africa started in former British colonies such as Kenya, Tanzania and Malawi. During the early 1900's tea was being cultivated in Java, Sumatra, Indonesia, Kenya and other parts of Africa. Currently, the United States has been added to the list of tea producers as there is one plantation in North Carolina. The history of tea dates back almost 5,000 years and tea itself now has more than 3,000 different variations. Currently, tea plants are distributed worldwide and grown commercially in tropical, subtropical and temperate climatic regions of Asia, Africa and South America, and in limited areas in North America, Europe and Australia.
The first record of cultivation of tea in Africa was in 1850; commercial production in Africa started in former British colonies such as Kenya, Tanzania and Malawi. During the early 1900's tea was being cultivated in Java, Sumatra, Indonesia, Kenya and other parts of Africa. Currently, the United States has been added to the list of tea producers as there is one plantation in North Carolina.
Tea was one of the commodities that was a part of colonial trading. While the Portuguese were the first to trade tea in the Far East, the Dutch spread the consumption of tea in the West, both in their colony and in their home country. The custom of
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TIMELINE 2737 B.C - TEA DISCOVERED The second emperor of China, Shen Nung, discovered tea when tea leaves blew into his cup of hot water.
1765 A.D. – MOST POPULAR BEVERAGE IN AMERICA Tea got ranked as the most popular beverage in the American colonies.
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618-907 A. D. T'ANG DYNASTY - TEA BECOMES A POPULAR DRINK IN CHINA Tea became a popular drink in China for both its flavor and medicinal qualities.
1826 A.D. – TEA GOT SEALED IN PACKAGES English Quaker John Horniman introduced the first retail tea in sealed, lead-lined packages.
960-1280 A.D. SUNG DYNASTY – CHINESE AND JAPANESE TEA DRINKING WERE ON THE RISE Drinking powdered and frothed tea or tea scented with flowers became widespread in China.
1840S AND 50S A.D. – TEA PLANTS CULTIVATED IN SRI LANKA The first tea plants, imported from China and India, were cultivated on a trial basis in Sri Lanka.
MARKET PULSE JUNE-2019
1368-1644 MING DYNASTY - ALL TEAS FOUND IN CHINA
1589 A.D – EUROPEANS LEARN ABOUT TEA
At the fall of the Mongol take over, teas like green, black, and oolong - were easily found in China.
Europeans learnt about tea and the lengthy lives of Asians due to their tea drinking habits.
1856 A.D. – TEA IN DARJEELING INDIA
1998 A.D. – REVOLUTION TEA IS FOUNDED
Tea was planted in and about Darjeeling, India.
Revolution Tea was founded on the idea of bringing premium, fullleaf teas to consumers.
1702-14 A.D – TEA DRINKING THRIVES During Queen Anne's reign, tea drinking thrived in British coffeehouses.
2000 A.D. – FLOWTHROUGH INFUSER TEA BAG INTRODUCED Revolution Tea was introduced as the first flow-through infuser tea bag, which captured the flavor and aroma of loose, full-leaf tea in the form of a tea bag.
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COVER STORY
Tea Market Dynamics In the global tea market, the two most important types of tea produced are black tea and green tea. The major production is of black tea, which is nearly 60% of the global production and, nearly 30% comprising of green tea and remaining 10% consisted of others. High nutritive content of flavonoids, phytochemicals and antioxidants in tea has been one of the crucial factors driving the growth of tea industry. Moreover, due to the result of rising popularity of various flavors in the tea market and increasing consumer base along with introduction of new tea flavors such as lemon flavor, mint flavor, chocolate flavors and others is expected to have robust growth in the global tea market. As a result of availability of a wide variety of flavored tea worldwide, and increase in consumer base, the global tea industry is more likely to thrive in the future.
Tea Production & Consumption Global tea consumption and production are going to keep on rising in the next few
decades. It is becoming widely consumed and not just in production countries like China but in the US as well. Tea consumption and production are strongly correlated. During the period 2007-2016 production grew 4.4% according to the United Nation’s FAO. Tea producing countries are currently among the largest consumers of tea. Tea volume recorded annual growth of 2.8% in 2018 and is expected to be higher in the future. By 2021, there will be an additional 31 billion litres of tea drunk annually. The underlying reason is the robust demand in developing and emerging countries. Naturally, this will create new rural income opportunities and improve food security in tea-producing countries. Countries such as China, Sri Lanka, India, Kenya, and Indonesia are the largest producers and consumers of tea.
Production On the production front, China produces about 40% of the world’s tea globally, even though there are more than 30 countries in the world which are involved
in tea production. Among tea producing countries, the principal producers are India, China, Sri Lanka, Kenya and Indonesia. These 5 countries account for 76% and 79% of world production and export respectively. Exports of tea are also increasing to cater to the globally increasing demand for tea. Global tea production and consumption will continue to increase over the next decade, mainly becasue of rising demand in developing and emerging countries especially China, India and Japan. Meanwhile, the tea exports from major tea exporting countries, such as Kenya, India, Sri Lanka, China, Argentina, Vietnam, Uganda, Tanzania, Rwanda are also expected to increase over the near future, due to the upward trend of drinking tea in Asia Pacific, Europe and North America. As the popularity of tea continues to spread across the world, the top tea producing countries are expected to maintain their dominance in the global tea market, due to their large plantation areas and preferential natural conditions for growing tea.
Global Tea Production from 2004 to 2015 (in millon metric tons) 3.15
3.38
3.52
3.73
3.75
3.86
2004
2005
2006
2007
2008
2009
4.07
4.22
4.68
4.82
5.03
5.20
2010
2011
2012
2013
2014
2015
Source: Statista
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MARKET PULSE JUNE-2019
Top 10 Tea Producing Countries in 2018
CHINA 2,414,802
INDIA 1,252,174
KENYA 473,000
SRI LANKA 349,308
TURKEY 243,000
VIETNAM 240,000
INDONESIA 144,015
ARGENTINA 89,609
JAPAN 80,200
IRAN 75,000
Source: Food and Agriculture Organization (FAO)
Consumption Worldwide there are 25,000 cups of tea consumed every second, about 2.16 billion cups per day. The per capita consumption of tea was around 35% in 2017, and it is expected to increase by around 3% by 2021. Major consumers
of tea in terms of per capita consumption include Turkey, Ireland, Paraguay, Argentina, Kuwait, and the UK.
tea and launching different flavor of tea.
Tea is consumed in two forms – packaged and loose. Loose tea holds the major market share but packaged tea manufacturers are focusing on increasing their market share by raising the quality of
Tea is experiencing high growth because
The market for CTC tea is comparatively larger as compared to leaf tea market. of its popularity in countries like India and China, which will witness expansion because of their huge populations and high growth rates.
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COVER STORY Tea Preferences in Different Countries ICED-TEA
FRUIT FLAVORED TEA
FOAMY TEA
HERBAL TEA
READY TO DRINK TEA
USA
EUROPE
TAIWAN
USA, CHINA, JAPAN, THAILAND
JAPAN, USA, TAIWAN (IN CANS)
Source: Food and Agriculture Organization (FAO)
Over the years, global production has always outpaced global consumption. However, this is slowly changing. Global per capita consumption of prepared tea stood at 273 billion liters in 2018. It is one of the few beverage categories which is expected to grow through 2021.
Global Tea Consumption (in billion liters) 234
242
250
258
266
2013
2014
2015
2016
2017
273
281
289
297
2018
2019
2020
2021
Source: International Tea Committee
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MARKET PULSE JUNE-2019
Tea Production Process Tea processing is the method in which the leaves from the tea plant Camellia Sinensis are transformed into the dried leaves for brewing tea. Generally, the categories of tea are distinguished by the processing they go through. In its most general form, tea processing involves different manners and degree of oxidation of the leaves, stopping the oxidation, forming the tea, drying and many others. The innate flavor of the
dried tea leaves is determined by the type of cultivar of the tea bush, the quality of the plucked tea leaves, and the manner and quality of the production processing they undergo. Once the processing is done, a tea may be blended with other teas or mixed with flavorants to alter the flavor of the final tea. The most common practices of tea processing are – Orthodox and CTC (crush, tear and curl) method.
The Orthodox Method
The entire process of producing tea under this method can be broken into the following steps: cultivation, pruning, plucking, withering, rolling, oxidization, firing, sorting and packing. Among these, the first two steps are considered part of the growing process and the last seven steps falls under the manufacturing process. The key steps for determining the specific type of tea are withering, rolling/breaking, oxidation, and firing.
Growing Process Cultivation: This process requires moderately hot and humid climate, since climate influences yield, crop distribution and quality. Tea grows best on well-drained fertile acid soil on high lands. Once the tea plant reach maturity, the leaves are then harvested from it. Pruning: In this stage the planter selectively removes parts of a plant like the branches, roots or buds, in order to facilitate the removal of diseased or damaged, unproductive, unwanted or dead tissues from the plant body and thus helps the plants to maintain and improve health. During this period, the plant growth rate stays at its lowest and thus, carbohydrate reserves remain at the highest level.
Manufacturing Process Plucking: Plucking is done by hand when a higher quality tea is required, or where labor costs are not prohibitive. Tea flushes and leaves can also be picked by machine, though there will be more broken leaves and partial flushes reducing the quality of the tea. Withering: Withering is used to remove excess water from the leaves and allows a very slight amount of oxidation. The leaves can be either put under the sun or left in a cool breezy room to pull moisture out from the leaves. The process is also important in promoting the breakdown of leaf proteins into free amino acids and increases the availability of freed caffeine, both of which change the taste of the tea. Rolling: The aim of rolling is to twist the tea leaves, either by hand or through a mechanical process. After rolling, the tea goes through a roll-breaking machine, which separates the large clumps of rolled leaf into smaller, more consistent pieces. Oxidation: Oxidation is the process which makes tea different from all other types of tea (green, oolong, white, etc.). Oxidation typically occurs in rooms with a temperature between 75 and 90 degrees Fahrenheit and a relative humidity of 90%. Oxidation times range from 45 minutes to 180 minutes, depending on the temperature and the style of tea desired. White and green teas are not formally oxidized. Oolong tea is partially oxidized and black tea is fully oxidized. Firing: During this stage, a gentle heat is applied to the leaf to stop the oxidation process. Firing may be done by blowing hot air over the leaf or running the leaf through heat tunnels. The temperature for firing remains between 140 and 170 degrees Fahrenheit and lasts from 10 minutes to no more than an hour. This heating, or "firing" processes destroys the specific shapes of the enzyme proteins in the leaf, killing the enzymes so the leaf is stable and does not mold or break down. Sorting: Once the tea is fired, the leaves are sorted into grades of different sizes. Sorting may be done by hand or with the use of sizing equipment. Often, tea leaves are sorted using mesh screens of various sizes. Packing: Once the tea has completed its processing and is sorted, it is packaged and sold for consumption.
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COVER STORY
The CTC Method
The second way of making tea is called the 'Cut, Tear and Curl', also known as CTC tea, and was invented during the Second World War in order to increase the weight of tea that could be packed into a sack or chest. The processing has three stages (crush or cut, tear, curl). The tea leaves may be either hand plucked or harvested by machinery. The leaves are then processed through the CTC machine, have a palletised appearance and are always broken sizes. The method
is less costly to produce and made a less bulky tea that would brew more quickly and with an even, robust flavor.
Tea Ingredients & Health Benefits Tea has long been considered as one healthy beverage across the globe. Tea leaves contain various health benefits including antioxidants, vitamins, trace minerals, and different amino acids which are considered to be good for having stronger immunity, lower cholesterol,
In the global tea market, the two most important types of tea produced are black tea and green tea. The major production is of black tea, which is nearly 60% of the global production. During the period 2007-2016 production grew 4.4% according to the United Nation’s FAO. Tea producing countries are currently among the largest consumers of tea.
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increased metabolism, prevention of cancer and many others. For instance, green tea has been scientifically proved to be able to reduce the effect of LDL cholesterol levels in the body, cancerous cells and reduces body pains. Additionally, presence of small amount of caffeine makes tea a mild stimulant preventing fatigue. Therefore, more and more health-conscious consumers worldwide nowadays prefer drinking tea over the other beverages such as coffee and soft drinks, subsequently contributing in the growth of the tea market.
MARKET PULSE JUNE-2019
TEA MARKET SEGMENTATION The global tea industry tea industry is segmented on the basis of product type, packaging, application, geography and distribution channel. The product type under the study are classified into black tea, dark tea, oolong tea, yellow tea, green tea and white tea. Geographically it is subdivided into North America, Europe, and Asia- Pacific. Based on distribution channel, the global tea market has been segregated into supermarkets/ hypermarkets, specialty stores, convenience stores, online stores and others.
Application wise, the industry has been split into residential and commercial. Based on product packaging, the global tea market has been segmented into loose tea, tea bags, barrier bags, and foil pouches.
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COVER STORY SEGMENTATION BY TYPE All types of tea come from the same basic plant, the Camellia Sinensis plant. The differences between teas arise while processing, growing conditions, geography and on the degree of fermentation and processing techniques. Generally, tea can be divided into six basic categories: black, dark, oolong, yellow, green, and white.
Black Tea
Dark Tea (Fermented Tea)
Oolong Tea
Black teas are the most consumed of all types of teas. It is more oxidized than oolong, green, and white tea. Black tea is generally stronger in flavor than the less oxidized teas and contains the highest amount of caffeine.
Fermented tea (also known as dark tea) is a class of tea that has undergone microbial fermentation, from several months to many years. The exposure of the tea leaves to humidity and oxygen during the process also causes endooxidation (derived from the tea-leaf enzymes themselves) and exo-oxidation (which is microbially catalysed).
Oolong teas lies somewhere in between green and black tea. It is a traditional semi-oxidized Chinese tea (Camellia sinensis) produced through a process including withering the plant under strong sun and oxidation before curling and twisting.
Yellow Tea
Green Tea
White Tea
Yellow tea is a lightly fermented tea. A rare and expensive variety of tea, yellow tea has gained increasing popularity in recent years because of its delicious, silky taste.
Green tea is nothing more than the leaves of the camellia sinensis that have been processed in a certain way. Green teas, like white teas, are closer to tasting like fresh leaves or grass than the black or oolong. They are also lower in caffeine and have higher antioxidant properties.
White tea is similar to green tea, in a sense that it has undergone very little processing and no fermentation. White tea does not have a distinctive 'grassy' taste to them. The flavor is described as light, and sweet. There is also considerably less caffeine in white tea than the other varieties. White tea contains more active cancer-fighting antioxidants than green tea.
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MARKET PULSE JUNE-2019
SEGMENTATION BY GEOGRAPHY Regionally, the major global markets for tea has been segmented into USA, Europe and Asia Pacific.
USA Functional or fortified tea has been driving the growth of the tea market in North America. The U.S. held for the dominant share of the market owing to its huge presence of regional and global
players offering innovative products. North America generated market revenue of US $2.75 billion and market volume of 0.14 bkg in 2018. Rise in the popularity of ready to drink products has fuelled the growth for tea in this region. The Geriatric population of this region has been demanding the growth of healthy beverage. Growing inclination of the consumers in the region towards tea and
shift in preference from tea to coffee enticed by its health benefits will likely be instrumental in driving the growth of the North American tea market. Moreover, premiumization of tea products coupled with expansion of tea drinker base have been boosting the growth of the tea market in Canada. Nonetheless, the market is expected to grow annually by 2.4% (CAGR 2019-2023).
USA Tea Market Revenue (in billion US dollar) 1.89
1.94
1.94
1.94
2.06
2.23
2.36
2.52
2.75
2.81
2.87
2.95
3.03
3.10
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Statista
USA Tea Market Volume (in billion kilograms) 0.13
0.13
0.13
0.12
0.12
0.13
0.13
0.14
0.14
0.14
0.14
0.14
0.15
0.15
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Statista
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COVER STORY Europe Europe accounted for a considerable market share of the tea market owing to the interest of specialty teas with special flavors and higher quality. The market revenue stood at US $7.19 billion along with a volume 0.43 bkg in 2018. North
and Western Europe held for the majority of the tea market in Europe. In UK itself, the fruit/herbal tea market witnessed an increasing growth at the cost of black tea. Green tea is the most consumed tea in Denmark, Belgium, and France. Germany, U.K., France, Poland, Netherlands, and
Ireland are the major tea consuming countries in Europe. Consumers are looking for unique and high quality tea experiences, which is expected to fuel the expansion of the market in this region. The market is expected to grow annually by 4.7% (CAGR 2019-2023).
European Tea Market Revenue (in billion US dollars) 4.66
4.84
2010 2011 Source: Statista
4.99
5.15
5.62
6.33
6.71
6.90
7.19
7.58
7.93
8.31
8.73
9.12
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
European Tea Market Volume (in billion kilograms) 0.43
0.43
0.42
0.42
0.41
0.41
0.42
0.42
0.43
0.44
0.45
0.45
0.45
0.45
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Statista
The tea value chain is quite complex, with many actors, producers, collectors, traders/brokers and packers involved, who undertake various tasks (cultivation, collection, manufacturing, marketing, and exporting) in order to add value to the product.
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MARKET PULSE JUNE-2019
Asia Pacific Asia Pacific led the global tea market with a market revenue of US $58.75 billion and a market volume of 3.46 bkg in 2018. The market is expected to grow annually by 6.6% (CAGR 20192023). The emerging economies of Asia Pacific have liberalized their market
which supports the tea market growth in Asia Pacific. In addition, the inflow of foreign direct investment attracted by the low-cost advantage that the region offers has boosted the growth of the tea market. In Asia, China is one of the largest tea consuming countries in the world driven by raising awareness regarding the health
benefits of tea and high demand for hot beverages. In global comparison, revenue generated in China is expected to be US $40,298 million in 2019. The Asia Pacific region is ideally suited for the production of tea with subtropical monsoon climates with hot summers and relatively cold and dry winters.
Asian Tea Market Revenue (in billion US dollars) 23.51
28.14
31.34
36.22
42.45
47.30
52.21
54.97
58.75
62.58
66.43
70.81
75.82
80.71
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Statista
Asian Tea Market Volume (in billion kilograms) 2.27
2.48
2.60
2.81
3.04
3.14
3.25
3.35
3.46
3.56
3.67
3.77
3.88
3.98
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Statista
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COVER STORY SEGMENTATION BY DISTRIBUTION CHANNEL The tea value chain is quite complex, with many actors, producers, collectors, traders/brokers and packers involved, who undertake various tasks (cultivation, collection, manufacturing, marketing, and exporting) in order to add value to the product. The value chain with a wide range of stakeholders and activities involves transforming tea leaves into the beverage for consumer. Likewise, transforming the tea industry into a sustainable economic sector
presents an extraordinary challenge to all stakeholders. While the overall chain can be best described as buyer-driven, different parts of it (cultivation, manufacturing, marketing and exporting) are governed in distinct ways (market, relational, captive and hierarchical). Besides, cooperation between producers, governments, traders, processors and retailers is also necessary to improve the efficiency of people involved in the tea supply chain. Some of the prominent companies involved in the manufacturing of tea are Tetley, Bigelow, Dilmah, Harney & Sons, Celestial Seasonings, Yorkshire Tea, Lipton, Twinnings and many others.
Foil pouches are useful for packaging small quantities of tea. They can be used in hotels, offices, and homes etc.
SEGMENTATION BY APPLICATION By Application, the market has been split into -
Residential
Commercial
SEGMENTATION BY PACKAGING Tea is one of the most consumed beverages in the world and it is exceptionally critical to pack; there are various types of tea that require certain tea packaging solution. Effective tea packaging bags are expected to store and transport different types of tea with ease. LOOSE TEA Loose tea is the preferred way to buy and brew great teas. High quality loose tea from a reputable tea source is considered better because the tea leaves are usually left whole, or at least in large pieces. Whole leaf tea is better for two reasons. Firstly, whole leaf tea does not lose its flavors and oils as quickly when stored. Secondly, loose tea tends to brew tastier tea because it is more difficult to over-infuse larger tea leaves. TEA BAGS Tea bags are a relatively new invention. Tea bags are simply measured amounts of tea enclosed in an envelope of filter paper, like coffee filter packs. Although most serious tea drinkers prefer loose tea, tea bags can be really convenient to use. BARRIER BAGS Barrier bags are among the best bags for tea leaves. They can protect tea from a number of harmful factors. Their multi layered protection ensures that the delicate leaves are protected from UV rays. Sun rays can be harmful for tea leaves, which is why strong bags are required. FOIL POUCHES Foil pouches are useful for packaging small quantities of tea. They can be used in hotels, offices, and homes. These pouches can also be used for promotional offers. They can be easily carried in a wallet or a handbag. They are better than ‘dip’ bags since foil is of better quality and it can resist a number of foreign particles.
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MARKET PULSE JUNE-2019
Market Trends Over the last decade consumers have continued to shift from carbonated soft drinks, as they migrated towards a healthier alternative like tea. A lot of this growth early on was a rising tide that helped all brands. Consumers evolved a growing interest in more innovative tea and were no longer satisfied with something which would taste bland. They began to hunt for unique and authentic experiences, and were looking for unexpected flavors and functional benefits. Recently, innovation in RTD
(Ready to Drink) tea, cold brew and kombucha attracted attention, even though hot tea remained as an important driver of innovation in the global tea category. In spite of the attraction of new RTD variants, hot tea remained to in the dominant category and accounted for 74% of global tea launches, compared to just 25% for RTD varieties. In Europe, hot tea innovation lied at 30%, while Asia Pacific followed at 26%. A growing number of tea brands were currently shifting their focus on energy in order to gain a competitive advantage on coffee, mostly for morning occasions.
The major competitive countries of tea in the world are Sri Lanka, Kenya, China and Indonesia. Considering the competition, this market is characterized by presence of over 1,000 market players.
Tea Price Trends The prices of tea at the various places across the globe have posted an increase in 2018 compared to the year 2017. The hike in prices of tea was witnessed mostly because of strong global demand and low supply, along with unfavorable weather conditions in major producing areas, which affected production. The fluctuation in the prices began since 2010, amounting up to US $17.98 in 2019.
Global Tea Average Prices Per Unit 10.28
11.16
11.85
12.71
13.93
15.19
16.28
2010
2011
2012
2013
2014
2015
2016
16.64
17.32
17.98
18.60
19.33
20.21
21.00
2017
2018
2019
2020
2021
2022
2023
Source: Statista
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COVER STORY
Export & Import Scenario Tea is the 373rd most traded product and the 1192nd most complex product according to the Product Complexity Index (PCI).
Export Global sales from tea exports by country amounted to US $7.8 billion in 2017. Year over year, global tea exports appreciated 4.6% from 2016 to 2017. Among continents, Asian countries accounted for the highest dollar worth of exported tea during 2017 with shipments valued at $4.27 billion or three-fifths (60%) of the global total. In second place were African exporters at 24% while 13% of worldwide tea shipments originated from Europe. Much smaller percentages of exported tea were sent from South America 1.5%, North America 1.4% and Oceania 0.1%. The top 10 tea exporting countries in 2017 were: China 20.6%, Sri Lanka 19.3%, Kenya 18.2%, India 7.5%, United Arab Emirate 3.7%, Germany 3.1%, Poland 2.4%, United Kingdom 1.8%, United States 1.7%, and Japan 1.7%.
The Top 10 Tea Exporting Countries in 2017 RANK
2017 TEA EXPORTS (in USD)
WOLRD TOTAL %
1
CHINA
1600 million
20.6%
2
SRI LANKA
1500 million
19.3%
3
KENYA
1400 million
18.2%
4
INDIA
591.2 million
7.5%
5
UNITED ARAB EMIRATES
286.8 million
3.7%
6
GERMANY
245.2 million
3.1%
7
POLAND
189.0 million
2.4%
8
UNITED KINGDOM
137.7 million
1.8%
9
UNITED STATES
136.1 million
1.7%
10
JAPAN
129.9 million
1.7%
Source: Internet
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EXPORTER
MARKET PULSE JUNE-2019
TEA EXPORT CONTINENT WISE Export Value and Percentages (as of 2017)
ASIA $4.27 BILLION EUROPE $942 BILLION NORTH AMERICA $0.1 BILLION
60% 13% 1.4%
AFRICA $1.68 BILLION SOUTH AMERICA $0.11 BILLION
OCEANIA $0.01 BILLION
24% 1.5% 0.1%
Source: OEC
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COVER STORY Import Global purchases of imported tea totaled US $7.349 billion in 2017. Year over year, the value of tea imports appreciated by 6.8% from 2016 to 2017. From a continental perspective, Asian countries accounted for the highest dollar worth of tea imported during 2017 with purchases valued at $3.1 billion or 44% of the global total. In second place were European countries at 31% while 14.5% of worldwide tea imports were delivered to customers in Africa. North America’s imported tea amounted to a 7.5% share. Smaller percentages were purchased by customers in Oceania 2% and South America 1%. The top 10 tea importing counties in 2017 were: Pakistan 7.5%, Russia 7.2%, United States 6.7%, United Kingdom 5.5%, Iran 3.9%, Egypt 3.7%, Saudi Arabia 3.6%, United Arab Emirates 3.3%, Germany 3.1% and Morocco 3.0%.
The Top 10 Tea Importing Countries in 2017
RANK
IMPORTER
2017 TEA IMPORTS (in USD)
WOLRD TOTAL %
1
PAKISTAN
549.6 million
7.5%
2
RUSSIA
525.0 million
7.2%
3
UNITED STATES
486.8 million
6.7%
4
UNITED KINGDOM
404.0 million
5.5%
5
IRAN
283.8 million
3.9%
6
EGYPT
273.8 million
3.7%
7
SUADI ARABIA
263.2 million
3.6%
8
UNITED ARAB EMIRATES
238.8 million
3.3%
9
GERMANY
225.2 million
3.1%
10
MOROCCO
219.8 million
3.0%
Source: Internet
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MARKET PULSE JUNE-2019
TEA IMPORT CONTINENT WISE Import Value and Percentages (as of 2017)
ASIA $3.1 BILLION AFRICA $1.04 BILLION OCEANIA $0.14 BILLION
44% 14.5% 2%
EUROPE $2.22 BILLION
NORTH AMERICA $ 0.54 BILLION SOUTH AMERICA $0.07 BILLION
31% 7.5% 1%
Source: OEC
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