Premium Tea: The Storm in a Teacup
The global tea market has acquired a new taste as the demand for premium, specialty and herbal teas is on the rise. The health and wellness industry has cited health benefits of such teas that has influenced consumer preferences. This has fuelled the growth of the premium and specialty teas market, which has been projected at $6.4B by the end of this year.
Green tea that has been recognised world over for its health benefits has seen a 7.8% growth in global consumption from 2005 to 2015. Consumers are ditching the high calorie, high sugar carbonated drinks for green tea that is a stress reliever and with weight loss benefits. The preference for green tea will push its growth rate to 8.8% in the next five years as opposed to the traditional black tea growing at 2.7%, which is being surpassed by innovative flavoured herbal/fruit teas as well. Consumers wish to further explore and sample other variants that include new and differentiated flavours, formats and artisanal teas like cucumber, wild berry, rooibos, oolong, and white tea.
The premium and specialty tea segments offering innovative flavoured healthy variants are giving a stiff competition to mass market players who have had a strong foothold in the global tea industry. These mass establishments are proposing mergers through acquisition of the premium tea suppliers or are diversifying their portfolio to include the specialty teas to cater to changing tastes. Ajoy Misra, CEO of Tata Global Beverages, states, “We are changing our portfolio mix of teas and quickly moving into teas which are more premium and parts of the tea category that are showing growth.”
