Iced Tea Market Is Estimated To Witness High Growth Owing To Opportunity Of Increasing Demand For Ready-To-Drink Beverages
Iced tea is a flavored tea that is prepared and served cold or chilled. It is made from camellia sinensis leaves that are infused in water and allowed to cool. Iced tea is available in numerous flavors such as peach, lemon, and raspberry. It provides hydration as well as health benefits associated with tea consumption such as weight management and improved gut health. The on-the-go lifestyle followed by people has boosted the demand for ready-to-drink beverages like iced tea.
The global Iced Tea Market is estimated to be valued at Us$ 6490.4 Mn in 2023 and is expected to exhibit a CAGR Of 2.1% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Increasing demand for ready-to-drink beverages is projected to drive the growth of the iced tea market during the forecast period. Factors such as changing lifestyles, hectic schedules, and improving economic conditions are compelling consumers to opt for beverages that can be consumed quickly without much preparation. Iced tea being a ready-to-drink beverage is garnering widespread popularity among consumers. Players in the iced tea market are introducing innovative packaging and product offerings such as canned and bottle iced tea to further boost the on-the-go consumption of iced tea. They are also offering customization by providing consumers options to choose from different tea varieties as well as flavors. This product diversification enabled by manufacturers is expected to boost the sales of iced tea globally.
Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate as the market is fragmented with many regional players. However, market dominance of leading brands and requirements for large scale production pose entry barriers.
Bargaining power of buyers: The bargaining power of buyers is high since iced tea is substitutable with other beverages. Buyers can negotiate on price and use private labels.
Bargaining power of suppliers: The bargaining power of suppliers is moderate given that the ingredients used for iced tea like tea leaves, sugar are widely available. However, a few players dominate in raw material supply.
Threat of new substitutes: The threat of substitutes is high as drinking patterns are changing. Carbonated drinks, juices, and coffee offer stiff competition to iced tea.
Competitive rivalry: The competitive rivalry is intense due to presence of many regional and international brands. Players compete on factors like pricing, marketing, innovation.
SWOT Analysis
Strengths: Easily available product with health benefits. Established brands like Lipton and Brisk command large market share.
Weaknesses: Seasonal demand and dependency on weather conditions. Premium products find limited demand in price-sensitive areas.
Opportunities: Growing health-conscious population presents new product lines like herbal and fruit-flavored variants. Emerging markets in Asia Pacific region offer scope for expansion.
Threats: Stringent regulations on ingredients sourcing and packaging materials add compliance cost. Economic slowdowns reduce disposable incomes.
Key Takeaways
The Global Iced Tea Market Demand is expected to witness high growth over the forecast period supported by rising consumption across developing economies.
North America dominated the market in 2021 with a value share of over 35% owing to a well-established distribution channel and popularity of brands like Arizona, Snapple and Newman's Own. The Asia Pacific region is projected to be the fastest growing market for iced tea during 2023-2030 with a CAGR of around 3.5% attributed to increasing consumption, changing lifestyles and rising number of health-conscious people in countries like China and India.
Key players operating in the iced tea market are Adelaide Brighton Ltd, Boral Ltd., Sibelco Australia, Omya Australia Pty Ltd, Wagners, and Lime Group Australia. These players are focusing on product launches catering to regional preferences. For instance, Lipton launched green tea variants with tropical flavors for South Asian countries. Players are also investing in manufacturing facilities and distribution networks across developing countries to leverage opportunities from rising demand.
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