RTD Tea Market Is Growing Faster Than Soda

Bottles of tea. Photo Credit: Thinkstock by Getty Images.

Ready-to-drink teas are steadily increasing in popularity among consumers and sales are expected to continue to grow. The ready-to-drink tea market grew by 40 percent between 2011 and 2016, according to a report by Zenith Global, a beverage consultancy.

The average annual growth rate of RTD teas is 7 percent. Its growth has far exceeded that of soda for the last five years; and global consumption of RTD tea is expected to surpass 45 billion liters by 2021, reported Zenith Global. The Asia-Pacific region tops the world in sales. However, Latin America, Africa and the Middle East are emerging markets. North America and Europe represent 24 percent of worldwide consumption.

“Ready-to-drink tea is the biggest of the emerging soft drinks categories by volume growth,” said Chairman of Zenith, Richard Hall. “It is also remarkable for the extraordinary range of choice now being offered.”

In Asia, the focus is on the health benefits of tea with regard to digestion, the heart and the skin, according to the Asia Food Journal. It goes on to state that Latin American and Middle Eastern markets are driven by the image of tea being a healthy alternative to soda.

Photo Credit: Steaz.com

RTD teas are convenient and most offer a healthy alternative to other ready-to-drink beverages on the market. Some RTD teas have faced scrutiny for their sugar content, which gives tea companies an opportunity to distinguish themselves with alternatives that are both healthy and flavorful. Overall, lemon and peach are currently the most popular flavors according to BeverageDaily.com, but tea companies are becoming more creative with their flavor combinations. For example, Steaz has an unsweetened iced tea collection with passion fruit and dragon fruit flavors, as well as a lightly sweetened line with jasmine hibiscus. Steaz also mixes green tea with cactus water. Ito En’s Matcha Love tea line has a pina colada flavor.

All data point to tea being a strong product investment for beverage producers and retailers, and consumers’ options are constantly expanding.