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U.S. Tea Market Brews Strong Sales in Rise to $7 Billion

December 21, 2016

Packaged Facts predicts tea industry will approach $9 billion by 2020.

Tea sales in the U.S. have shown strong growth in 2016, continuing the upswing in ready-to-drink and refrigerated categories. In a new report “Tea and Ready-to-Drink Tea: U.S. Retail Market, 6th Edition,” market research firm Packaged Facts estimated tea sales slightly exceeded $7 billion in 2015, up almost 6%. By 2020, Packaged Facts expects retail sales of tea in the U.S. to close in on $9 billion for the first time.

Continued growth will come from the still hot ready-to-drink and refrigerated tea markets, as well as consumers’ ongoing recognition of tea’s healthy properties and their switch to tea from carbonated soft drinks. Most importantly, the category is quite dynamic, with innovative new products and creative new players that engage consumers.

“The tea industry is known for both established brands in tea bags and ready-to-drink categories, with names like Lipton and AriZona joining traditional beverage heavyweights PepsiCo and Coca-Cola at the top of the tea chain,” said David Sprinkle, research director, Packaged Facts. “The overall health of the industry can largely be measured by how those companies’ brands are performing. But much of the industry’s innovation still comes from smaller operators, who introduce new ingredients and flavors that consumers are eager to try.”

Eighteen companies have at least 1% of the tea market, a tribute to the variety of tea available on shelves. Still, the top five marketers account for 56% of all tea sold in supermarkets, drugstores, mass merchandisers, military commissaries, and select club and dollar stores, as calculated by dollar sales.
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