Specialty Tea Market Size, Share, and Industry Analysis by Type (Black Tea, Green Tea, Oolong Tea, and Others) by Application (Residential and Commercial), by Distribution Channel (B2B and B2C [Supermarkets/Hypermarkets, Specialty Stores, Online Retail Stores, and Others]), and Regional Forecast till 2032

The global specialty tea market is experiencing significant growth, driven by changing consumer preferences and increasing demand for premium, artisanal beverages. Specialty teas, which include varieties such as herbal, oolong, white, and matcha, cater to a niche segment of tea connoisseurs who prioritize unique flavors and high-quality ingredients. This rise is further fueled by the growing number of tea-centric cafes and the integration of tea culture in various regions worldwide.

According to the Tea Association of the U.S., in 2023, nearly 4 billion gallons or almost 36 million servings of tea were consumed by Americans in 2023. In addition, the market is witnessing a surge in innovations, with tea manufacturers experimenting with blends and infusions to attract health-conscious and environmentally aware consumers.

Specialty Tea Market Driver

Rise of Premiumization and the Influence of Social Media and e-Commerce

The market is experiencing an increasing shift toward organic and sustainable products as consumers are becoming more concerned about the environmental impact of conventional farming practices. Additionally, the premiumization trend in the food and beverage industry has led to a growing preference for artisanal and luxury tea brands. Social media has also played a significant role, with influencers and lifestyle bloggers promoting the aesthetic and wellness aspects of specialty teas. The expansion of e-commerce platforms has made specialty teas more accessible globally, further propelling market growth.

Specialty Tea Market Restraint

High Product Price and Availability of Substitute Products to Hamper the Market Growth

However, the market faces several restraints, including the higher cost of specialty teas compared to traditional mass-produced options, which may deter price-sensitive consumers. Additionally, the complexities involved in maintaining quality and consistency across various specialty tea products can pose challenges for producers. Additionally, the availability of substitute products, including conventional tea products, coffee, and soft drinks, may hamper product consumption worldwide.

Specialty Tea Market Opportunity

Growing Premium Product Demand and Product Innovation to Drive the Market Growth

Product diversification and innovation are likely to shape the industry over the upcoming years. With consumers seeking personalized and experiential food and beverage options, there is room for brands to create unique blends or limited-edition products that cater to specific preferences. Furthermore, Gen-Z consumers and millennials are opting for premium products, including soft drinks, tea, coffee, and other food products. The emerging premium product trend in the beverages industry propelled the specialty tea product demand. Additionally, expanding into emerging markets where tea consumption is already high could open up new revenue streams. Collaborations with wellness brands or the incorporation of functional ingredients such as adaptogens and probiotics into tea blends can also provide an edge in this competitive market.

Specialty Tea Market Segmentation

KEY INSIGHTS

The report covers the following key insights:

• Overview of Parent Market
• Supply Chain Analysis
• Regulatory Analysis
• Industry SWOT Analysis
• Key Industry Developments
• Qualitative Analysis Related to COVID-19

Analysis by Type

Based on type, the market is divided into black tea, green tea, oolong tea, and others.

The green tea segment holds the largest market share of the global specialty tea market. The product’s distinct flavor, paired with health benefits, led to the segment's prominence in the global market. Additionally, the higher flexibility and adaptability of green tea with flavor enhancement and fortification process make the product type more popular in the industry. As a result, the segment is anticipated to grow at a steady CAGR during the forecast period.

The black tea segment is anticipated to expand at the highest growth rate during the forecast period. The consumption of black tea is increasing due to its high antioxidant, anti-aging, and anti-diabetic properties. Additionally, increasing new product launches using black tea is driving the segment growth in the near future.

Analysis by Application

Based on application, the market is subdivided into residential and commercial.

The residential segment leads the market. Consumers are increasingly incorporating specialty teas into their daily routines due to their premium quality, unique flavors, and growing interest in health-conscious lifestyles. The rise in home brewing, driven by the availability of premium tea-making equipment and the growing tea culture, further boosts the segment growth.

The commercial segment is experiencing significant growth, especially in tea-centric cafes, restaurants, and luxury hotels. Specialty teas have become a staple in high-end establishments, as these venues seek to offer unique and premium beverages to attract a niche business. Moreover, the trend of wellness-focused menus in cafes and restaurants is also fueling demand in this segment, making commercial use a key growth area in the market.

Analysis by Distribution Channel

Based on distribution channel, the market is fragmented into B2B and B2C.

The B2C segment leads the specialty tea market, with a majority of consumers purchasing directly from retailers. Supermarkets and hypermarkets hold a significant share in the B2C category due to their widespread presence and ability to offer a variety of specialty tea brands under one roof, making them convenient for everyday shoppers. However, online retail stores are the fastest-growing distribution channel. The convenience of online shopping, combined with a wider selection of niche and international specialty tea brands, has attracted a growing number of customers. The shift to e-commerce platforms has been accelerated by the digital transformation of retail, as well as the impact of the COVID-19 pandemic, which led to increased online purchases.

The B2B segment is anticipated to exhibit the fastest growth trajectory over the upcoming years. Increasing café culture among Gen-Z consumers is likely to propel the product demand from B2B channels. Additionally, adults are spending more on leisure and food-at-out-side-home, which will additionally contribute to the market growth. Growing HoReCa industries in developing countries such as India, China, Brazil, and South Africa is likley to push the segment growth.

Key Market Players

• Yogi Tea (U.S.)
• Numi Organic Tea (U.S.)
• Bigelow Tea Company (U.S.)
• Tata Global Beverages (Tata Tea) (India)
• Associated British Foods plc (Twinings) (U.K.)
• Unilever (Lipton, Pure Leaf) (U.S.)
• The Hain Celestial Group (U.S.)
• Harney & Sons (U.S.)
• The Republic of Tea (U.S.)
• Dilmah Tea (Sri Lanka)

Key Industry Development

• In September 2024, Twinings, a U.K.-based ready-to-drink beverages brand, launched a range of Twinings Sparkling Tea fortified with multiple vitamins and minerals to support general well-being. The newly launched product is available in Defence (orange, passionfruit with Chinese green tea), Refresh (raspberry, lemonade, hibiscus with Chinese white tea), and Boost (lemon, ginger with Indian black tea) flavors.
• In June 2023, Bigelow Tea, one of the specialty tea manufacturing companies, expanded its product offerings by launching three new flavors: Peak Energy™ Black Tea plus extra L-Theanine and Caffeine, Whispering Wildflowers™ Herbal Tea plus L-Theanine, and Ginger Honey Herbal Tea plus Zinc.