Black tea is expected to dominate North American consumption through 2024.
Black tea will continue to dominate consumption in North America with green teas gaining ground. Combined they will make North America the “most lucrative market for tea from 2016 to 2024.”
Persistence Market Research (PMR) forecasts the global market for tea will surpass $21 billion by 2024, reflecting a compound annual growth rate of 5%.
Rahul Singh, manager of Digital Marketing at the New York City-based firm, estimated the global tea market totaled $14.45 billion by the end of 2016, up from $13.85 billion in 2015.
“North America is expected to account for a relatively higher value share of the market in 2016 followed by Europe and Asia Pacific (APAC) respectively,” he wrote. “The region is expected to continue its dominance, gaining 210 BPS (basis points) reaching an estimated 37% share of the market in revenues during the forecast period.”
The pattern of consumption is changing as high-value (packaged and blended) teas find consumer acceptance in producing countries where low-value tea remains the predominant choice.
“At the world level, black tea production increased annually by 2.6% during the period 2005–2014 and green tea by 6.4%, in response to continued firm prices,” according to the FAO IGG (Food and Agriculture Organization’s Intergovernmental Group of Tea). In a May 2016 report, FAO IGG noted exports have increase annually by 1.6% over the past decade to reach 1.73 million metric tons in 2014, underpinned by larger shipments from Kenya, reaching a record level in 2013, according to FAO.
Exports of green tea during this time increased by 3.8%; black tea exports grew by 1.2%.
Volumes available for export are actually decreasing “as larger portions of production, particularly in China and India, were consumed domestically,” according to FAO IGG.
Globally, prices for cut, tea curl (CTC) tea are declining in response to the growing demand for orthodox (loose whole leaf and broken leaf) tea.
“Due to aggressive promotional strategies implemented by tea producers, awareness of health benefits from consumption of tea has spread vehemently across the globe,” Singh wrote. “This, in turn, is appealing people to start drinking tea on a regular basis, which is further fueling the demand for tea products globally.”
Black tea processing in India.
“In traditional importing countries of Europe (except Germany) and the Russian Federation, tea consumption has declined over the last decade,” observes FAO. “The European tea market is mature and per capita consumption has been declining as competition from other beverages, particularly bottled water and carbonated drinks, has intensified, while for the Russian Federation, the decline in oil prices has negatively impacted on the country’s tea imports.”
In contrast, writes PMR, “the market in Asia Pacific is anticipated to witness significant growth over the forecast period. APAC countries such as China and India are set to witness a healthy growth of their domestic tea market.”
Unlike many commodities, notably coffee, “the main determinant for growth of the global tea economy is demand for the commodity,” writes FAO.
Learn more: http://www.persistencemarketresearch.com/market-research/tea-market.asp
Source: FAO Committee on Commodity Problems, Persistence Market Research