Herbal Tea Market Expected to Reach $4.3 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Herbal Tea Market," The herbal tea market was valued at $2.5 billion in 2022, and is estimated to reach $4.3 billion by 2032, growing at a CAGR of 5.6% from 2023 to 2032.

Herbal teas have been a popular and widely chosen beverage for a significant duration throughout the course of human history. The earliest known reference to herbal teas dates back to 2737 BC in China, and written records from the third century AD further document their consumption. This cultural tradition has crossed geographical boundaries, with herbal teas making their journey from China to Egypt, Japan, Europe, and beyond, which highlights their enduring and widespread significance in health benefits.

The herbal tea industry is analyzed on the basis of type, packaging, distribution channel, and region. By type, the market is divided into chamomile, peppermint, hibiscus, lemongrass, ginger, fruits, blends, and others. The chamomile segment occupied the major share of the market in 2022 and is projected to maintain its dominance during the herbal tea market forecast period. The market for chamomile tea is fueled by the significant active components found in chamomile, specifically terpenoids alpha-bisabolol, and azulenes. These components possess antioxidant, antibacterial, and anti-inflammatory traits, which contribute to the widespread demand for herbal tea infused with chamomile extracts. Chamomile tea is frequently consumed for its potential health advantages, including promoting relaxation, assisting in sleep, and aiding with digestive problems. In addition, chamomile tea is naturally caffeine-free, which makes it a popular choice for individuals seeking soothing beverage without the stimulating effects of caffeine. As a result, chamomile tea segment is to maintain dominance throughout the anticipated period, thus helping with the overall herbal tea market growth.

By packaging, the market is segmented into loose tea, paperboards, aluminum tins, and tea bags. The tea bags segment is anticipated to grow at a moderate rate during the forecast period. Busy and fast-paced lifestyle of consumers has propelled the demand for ready-to-use products such as tea bags. They are designed to provide a standardized flavor and strength, which ensures a consistent and reliable taste experience with each use. The tea bags offer a hygienic and mess-free alternative to another packaging of herbal tea leaves available in the market. The contained nature of tea bags prevents tea leaves from floating freely in the cup and thus provides a cleaner drinking experience. Overall, the convenience, time-saving benefits, consistent brewing results, and effective marketing efforts contribute to the widespread adoption of tea bags. This has resulted in a quite popular herbal tea market trends in recent times.

Depending on distribution channel, it is classified into supermarket-hypermarket, specialty stores, convenience stores, online sales channel, and others. The online sales channel segment is anticipated to grow at the highest CAGR during the herbal tea market analysis. A supermarket be regarded as a large shopping center focused on a self-service model. A hypermarket, on the other hand, is a large self-service warehouse and convenience store with characteristics of almost all types of retail stores, such as supermarkets, grocery stores, retail stores, and specialty stores. Thus, hypermarkets are considered to be one-stop shops for all the needs of consumers and provide all the things that an individual need every day.  Herbal tea has a good opportunity to grow with the help of hypermarkets & supermarkets distribution channel. The reason for this is easy availability of the products. Consumers have access to niche products on the market in these types of stores. Thus, the establishment of hypermarkets and supermarkets at a widespread location gives way to lucrative opportunities for the growth of the global market for herbal tea market. Manufacturers offer special discounts through these hypermarkets and encourage hypermarkets and supermarket chains to sell their own products. For these strategies, manufacturers are making efforts to increase the visibility of the products, which attracts consumers and contributes to the growth of the herbal tea market.

Asia-Pacific dominated the global herbal tea market share in 2022, and its dominance is anticipated to continue during the forecast period. Herbal tea has held a significant place in traditional Chinese medicine and its therapeutic properties have been recognized and utilized for centuries in various herbal remedies. These herbal concoctions are highly regarded for their potential effectiveness in treating serious health concerns in this region. Moreover, herbal teas are grown in plenty in China, Japan, and India, thus, it may help the key players to cater to the requirements of consumers with less cost and effort, as people in this region are accustomed to the benefits of herbal tea. These factors will help to create herbal tea market opportunities in coming years as the demand is expected to rise with increasing awareness. These patterns are anticipated to continue as the region leads the world in herbal tea consumption, making the Asia-Pacific region a major market share holder globally.

The major players analyzed for the global herbal industry are Tata Consumer Products Limited, The Hain Celestial Group, Inc., Dilmah Ceylon Tea Company PLC, Bigelow Tea, Tielka, Mountain Rose Herbs, Terra Teas Organic, Indigo Herbs Ltd, The Indian Chai, Organic India Pvt. Ltd.

KEY FINDINGS OF STUDY

• By type, the chamomile segment was the highest revenue contributor to the herbal tea market size in 2022.
• As per packaging, the tea bags segment is expected to be the fastest growing segment in the global herbal tea market during the forecast period.
• Depending on distribution channel, the supermarket-hypermarket segment was the largest segment in 2022.
• Region-wise, Asia-Pacific was the highest revenue contributor in 2022.