Tea Bags Market Expected to Reach $12.9 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Tea Bags Market," The tea bags market was valued at $6.1 billion in 2021, and is estimated to reach $12.9 billion by 2031, growing at a CAGR of 7.6% from 2022 to 2031.

Tea bags is a small porous sachet that contains tea leaves or powdered tea, on to which boiling water is poured to make readily drinkable tea. Tea bags are available with string and label or not. According to UK Tea & Infusions Association, 96% of British people consume their tea with tea bags.  Innovative ways of attracting customers towards tea by eye-catching presentation of the teas and infusion of flavors in tea through tea bags are likely to supplement the growth of the market during the forecast period. Growth in urbanization leads to increase in cafés, restaurants, and hotels where tea bags are considerably used furthermore expansions of the metro cities with a rising tea liking population are likely to supplement the growth of the market. 

The demand for tea is driven by several health benefits associated with it, such as it is rich in antioxidants such as polyphenols, which majorly include flavonoids and catechins. These prevent large-scale cellular destruction via stabilization of harmful free radicals present in the human body. The nutritional composition of tea includes vitamins (C, K, B12, B6, and E), minerals (trace amount of potassium, manganese, magnesium, and calcium), and amino acids (L-theanine). Moreover, as per research conducted by different reputed organizations, Ready to drink tea is proven to prevent different types of cancers, lowers cholesterol, boosts immunity, facilitates weight loss, and prevent neurological diseases. Altogether, the abovementioned factors indicate that health benefits associated with tea drive the tea bags market growth.

Online retail is gaining significant popularity and is being used frequently to sell and buy products. The proliferation of smartphones and growing usage of social media nowadays are attracting alcoholic and non-alcoholic beverage manufacturers and advertising media companies to promote their products on social media. Thus, supplementing the growth of the tea bags market share during forecast period.

However, availability of tea substitute products including coffee and drinks at cost-effective prices and trend of coffee consumption are expected to restrict the market growth. The outbreak of the pandemic has negatively affected the global tea bags market, owing to the fact that cafes and restaurants were temporarily shuttered during the lockdown and export and import activities were also shut down temporarily leading to scarcity of tea was created and increase in price. Thus, COVID-19 negatively affected growth of the tea bags market during the forecast period.

The tea bags market is segmented on the basis of type, distribution channel, application, shape, and region. On the basis of type, the market is categorized into green tea, black tea, oolong tea, fruit & herbal tea, and others. On the basis of distribution channel, it is segmented into supermarkets & hypermarkets, specialty stores, convenience stores, online stores, and others. By application, it is segregated into residential and commercial. On the basis of shape, it is segmented into pillow shaped, round shaped, square shaped, pyramid shaped, and others. Region wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (UK, Germany, France, Italy, Spain, Russia, and Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, Pakistan, and Rest of the Asia-Pacific), and LAMEA (Brazil, South Africa, Turkey, Saudi Arabia, Egypt, and Rest of LAMEA).

On the basis of type, the black tea segment was the highest contributor to the tea bags market, with $1,619.4 million in 2021, and is estimated to reach $2,673.5 million by 2031, at a CAGR of 4.9% during the forecast period. Growth of the black tea segment is driven by rise in number of tea drinkers across the globe. Furthermore, high concentration of antioxidants and polyphenols makes black tea popular among health-conscious people, which propels growth of the black tea segment. Moreover, it helps in curing various illnesses such as headaches and cancer as well as aids in regulating blood pressure.

According to tea bags market analysis, by distribution channels, the supermarkets and hypermarkets segment was the most prominent segment accounting for the highest share in the product market. Hypermarkets/supermarkets are becoming increasingly popular, owing to the availability of a wide range of groceries and beverages under one roof as well as adequate parking and convenient operating hours. Furthermore, the popularity of hypermarkets/ supermarkets is led by urbanization, increase in working class population, and competitive pricing. Furthermore, these stores offer a wide range of product categories giving customers more choices when it comes to purchasing tea bags

According to tea bags market trends, by application, the commercial segment was the significant contributor to the tea bags market size, with $2,194.9 million in 2021, and is estimated to reach $5,093.6 million by 2031, at a CAGR of 8.6% during the forecast period. People majorly visit cafes, restaurants, independent tea bars, and hotels for drinking tea, owing high standard of services, privacy, and community involvement. The growing millennial population and consumer awareness regarding the medical benefits of fruit and herbal tea is majorly influencing growth of the product market through tea bars, restaurants, and cafes.

According to tea bags market opportunities, region wise, North America garnered a considerable share in the market in 2021, and is expected to increase its share throughout the forecast period. This is attributed to increased spending of customers on healthier beverages. Furthermore, intense marketing and celebrity brand endorsements for various tea bag flavors drive sales in this region. Moreover, presence of major tea bags industry players in the region that have high-volume production facilities leads to increase in production of tea bags. Thus, all these factors collectively drive growth of the North America market.

Players operating in the global tea bags industry have adopted various developmental strategies to expand their market share, increase profitability, and remain competitive in the market. The key players profiled in this report include Associated British Foods Plc., Barry's Tea, Nestle S.A., Northern Tea Merchants Ltd., Numi, Inc., Organic India, Tata Consumer Products, The Hain Celestial Group, Inc., The Kroger Company, and Unilever Plc.,

Key findings of the study

• The tea bags market size was valued at $6,124.0 million in 2021, and is estimated to reach $12,903.1 million by 2031, registering a CAGR of 7.6% from 2022 to 2031.
• In 2021, by type, the green tea segment is estimated to witness the significant growth, registering a CAGR of 8.9% during the forecast period.
• In 2021, depending on distribution channel, the specialty stores segment was valued at $1,008.7 million, accounting for 16.5% of the global tea bags market share.
• In 2021, by application, the residential segment is estimated to witness significant growth, registering a CAGR of 6.9% during the forecast period.
• In 2021, depending on shape, the round shaped segment was valued at $768.7 million, accounting for 12.6% of the global tea bags market.
• In 2021, depending on region, China is estimated to witness highest growth, registering a CAGR of 8.9% during the forecast period.