The global RTD tea market hit 37 billion litres in 2016, which has risen 40 percent since 2011, according to Zenith Global, a food and beverage consultancy. This growth is projected to increase to 45 billion litres by 2021.
A factor responsible for the shift in demand towards RTD tea is consumers’ rising health awareness, as they are a healthier option to carbonated drinks. The largest market for RTD tea is in Asia, where consumers also look for functional benefits of teas.
The market growth of RTD tea continues to rise with an annual growth rate of seven percent, which is performing better than that of carbonated drinks.
North America has the highest per capita consumption, at 16 litres in 2016. Asia Pacific has a consumption rate of seven litres per capita but it is the leading region in terms of sales.
Europe’s per capita consumption is about five litres. Europe has witnessed mixed performances in individual markets. Consumption of RTD tea decreased due to consumers’ higher price sensitivity and declining purchasing power in certain European countries.
The Middle East, Africa and Latin America’s RTD tea market is substantially lower, and only accounted for four percent of global sales in 2016. It was reported that these markets are still emerging and has potential as key growth regions, as growth rates from 2010 to 2016 were in the double digits.
The development of RTD tea will include a wider range of flavours, including flavours which are more exotic. This category might face scrutiny over its sugar content as some RTD teas carry the same amount of sugar carbonated drinks do.
The price of premium RTD tea is no longer a dissuading factor for consumers who are keen on trying the latest offerings. RTD tea manufacturers could emphasise on clean label and highlight reformulation in sugar reduction to appeal to consumers. RTD brands should focus on tailoring their products to consumers’ needs for healthier beverage options.