Iced Tea Market

Iced Tea Market Outlook (2024 to 2034)

The global iced tea market size is anticipated to be worth USD 12,132 million by 2034. According to the estimates, the market is projected to clock a 6.0% CAGR until 2034. In 2024, the iced tea market size is valued at USD 6,753 million.

Attributes	Details
Iced Tea Market Size, 2024	USD 6,753 million
Iced Tea Market Size, 2034	USD 12,132 million
Value CAGR (2024 to 2034)	6.0%

Key Market Highlights

Functional Ingredient Integration Trends Boost Growth in the Market

Differentiation is essential for success in the cutthroat beverage industry. Functional additives, including vitamins, adaptogens, and superfoods, are added to iced tea beverages to increase the product's perceived value and appeal.

By emphasizing the health advantages of these components, businesses draw in health-conscious customers looking for products that provide more than simply enjoyment. Companies can gain a competitive edge and spur growth in the burgeoning functional beverage market by investing in research and development to find and use trendy, functional ingredients.

Leveraging this trend, Beyond Water, an Indian functional beverage company, introduced its first ready-to-drink (RTD) iced tea in the country in October 2023. The new launch aims to capitalize on customers' demand for healthier drinks and premium tea sourcing. It comes in peach and lemon flavors.

Manufacturers Tap into the Wellness and Relaxation Segment by Launching Cannabis-infused Iced Tea

Businesses are incorporating cannabinoids like CBD in iced tea formulas in an effort to capitalize on the growing demand for cannabis-infused products. Targeting consumers looking for premium and unconventional beverage experiences, this calculated approach capitalizes on the growing health and relaxation market.

Businesses can establish themselves as trailblazers in the nascent cannabis and beverage industries by conforming to changing regulatory frameworks and capitalizing on the medicinal implications of cannabinoids. This will allow them to carve out a distinct market niche and possibly draw in customers who are looking for both refreshments and the possible health benefits of cannabis derivatives.

For instance, in February 2024, Tilray Brands, Inc., a prominent global cannabis and consumer packaged products company, launched two new ready-to-drink cold brew iced tea beverages under its premium cannabis wellness brand, Solei. Solei's two cold brew tea products, Peach Cranberry, and Wildberry Hibiscus, are non-carbonated, somewhat elevated, softly sweet, and come in 355ml cans.

Social Media Influence Emerges as Powerful Tools for Market Players

Social media platforms are turning into effective tools for increasing brand visibility, engagement, and impact in our modern, digitally connected world. Beverage firms increase their marketing efforts, establish a personal connection with consumers, and encourage purchasing intent using social media platforms.

Companies can establish brand advocates that actively promote their iced tea beverages, boost brand exposure, and create buzz about their products by collaborating with influencers, producing interesting content, and encouraging community involvement. Businesses can extend their relevance, increase brand equity, and spur development in a market that is becoming increasingly digitally focused.

Iced Tea Market Trends Analysis

Trends	Some businesses are opening up shops or launching platforms that let customers design their own iced tea blends, capitalizing on the need for individualized experiences. Iced tea is growing increasingly popular as a flexible mixer for mocktails and cocktails. Subscription business models are becoming increasingly popular. These models offer carefully chosen assortments of high-quality, artisanal iced teas regularly delivered to customers' doorsteps. Businesses are progressively embracing zero-waste programs, emphasizing recycling and limiting packaging waste. The surge in popularity of ready-to-drink (RTD) iced teas can be attributed to consumer demand for portable, easily consumed beverages. Packaging solutions that are portable and single-serve have grown increasingly appealing to customers who lead hectic lives.
Opportunities	Businesses can take advantage of the increasing popularity of cold brew methods and launch iced teas made using cold brew and nitro. Partnering with well-known food or dessert businesses creates opportunities for launching special edition iced tea flavors that are modeled after beloved desserts. Developing and promoting sugar-free and low-calorie iced tea selections is a strategic opportunity to capitalize on the growing consumer desire for healthier beverage options. Engaging in partnerships with fitness and health gurus offers a calculated opportunity to promote iced tea as a necessary component of healthy living. Biodegradable iced tea bags and eco-friendly brewing supplies present a strategic potential.
Challenges	Customers' perception that iced tea is less premium than other beverage alternatives can impact sales strategies and brand positioning. Regulations pertaining to ingredient supply, labeling, and health claims can shift, affecting product compositions and marketing tactics and creating compliance issues.

Category-wise Insights

Powdered Mixes Prevail as the Leading Format for Ice Tea

Segment	Powdered Mixes (Format)
Value Share (2024)	43.3%

Based on format, the powdered mixes segment garnered 43.3% of iced tea market shares in 2024.

• Companies often highlight powdered mixes as a diverse and creative option, emphasizing their distinctive tastes, functional ingredients, and bespoke blends. This marketing technique improves customer perception and creates a sense of excitement and discovery for powdered iced tea products.
• Powdered blends are convenient to carry and store, making them an excellent choice for global distribution. The powder's lightweight composition decreases transportation costs and logistical challenges, resulting in the broad availability of powdered iced tea mixtures worldwide.

Retail Dominates as the Top End Use for Iced Tea

Segment	Retail (End Use)
Value Share (2024)	54.3%

Based on end use, the retail segment holds 54.3% of iced tea market shares in 2024.

• Iced tea products are widely available and convenient to purchase from retail establishments such as supermarkets, hypermarkets, convenience stores, and specialized beverage stores. Because iced tea is so simply incorporated into everyday purchasing patterns, retail is used as the main distribution method.
• The conventional route for selling beverages has always been retail, and customers are used to buying drinks from well-known retail establishments. This channel's dominance in the iced tea industry is partly due to consumer familiarity and confidence in the retail landscape.

Country-wise Insights

Countries	Value CAGR (2024 to 2034)
United States	4.3%
Germany	5.1%
Japan	3.7%
China	2.5%
India	7.3%

Adaptation to New Consumption Patterns Fuels Demand in the United States

The demand for iced tea in the United States is projected to rise at a 4.3% CAGR through 2034.

• Identifying and responding to changing consumption habits, such as greater instantaneous consumption and single-serve preferences, is critical to market growth in the United States. Companies can profit from the changing dynamics of customer behavior and get a competitive edge in the dynamic market landscape by innovating in package styles that provide ease and mobility.
• The United States' cultural variety offers opportunities for taste innovation and the launch of iced tea flavors influenced by many cultures. Companies can appeal to specific ethnic tastes, combine distinctive and authentic flavors, and reach a wider audience by going beyond their typical product offers to satisfy various palates.

Premiumization Trends Surge Sales in Germany

The sales of iced tea in Germany are anticipated to increase at a 5.1% CAGR through 2034.

• The growing premiumization trends in Germany's beverage sector present a unique potential for iced tea companies. Businesses can present their goods as a luxury and indulgent alternative by providing high-quality, premium iced tea blends, stressing distinctive taste profiles, and using sophisticated packaging, appealing to customers who are prepared to pay a premium for upgraded tea experiences.
• The growing tendency of on-premise consumption in cafés and restaurants creates opportunities for market development. Businesses can partner with restaurants to provide a one-of-a-kind dining experience by offering specialty iced tea alternatives. This approach capitalizes on the increased need for different beverage options in the food service industry, contributing to overall market growth.

Convenience Store Dominance Aids Market Growth in Japan

The iced tea market growth in Japan is estimated at a 3.7% CAGR through 2034.

• Convenience shops are Japan's primary means of distribution, making them ideal for iced tea products. Iced tea can become a staple in customers' grab-and-go selections by cooperating with convenience store chains and strategically placing products within these locations to enhance exposure and accessibility.
• Japan's sophisticated vending machine technology can possibly be used for market development. Smart vending machines that provide personalized iced tea suggestions according to consumer preferences and purchase history can improve user experience, promote repeat purchases, and contribute to market development by adhering to retail's digitalization trends.

Urbanization and On-the-Go Lifestyles Fuel Demand in China

The demand for iced tea in China is predicted to increase at a 2.5% CAGR through 2034.

• Because of the country's fast urbanization, people are living more mobile lives, which opens up new markets for convenient beverage alternatives. Companies that sell iced tea beverages can strategically place their products in metropolitan areas to capitalize on the need for refreshing quick and fast on-the-go options. The emphasis on urban convenience is in line with the lifestyle choices of China's urban populace, which helps to drive market growth in important cities.
• China's thriving livestreaming e-commerce industry presents a distinctive path for market development. Influencer partnerships and sponsored livestream events are effective ways to increase product exposure, engagement, and direct-to-consumer sales. This digital approach uses cutting-edge online marketing platforms to support market expansion while catering to the tastes of tech-savvy Chinese consumers.

Chai Culture and Fusion Blends Amplify Sales in India

The sales of iced tea in India are projected to surge at a 7.3% CAGR through 2034.

• Businesses can create unique chai-infused iced tea mixes by capitalizing on India's deeply ingrained chai tradition. In a market crowded with conventional products, combining traditional chai spices with current tea varietals generates a fusion product that appeals to both traditional and contemporary customer tastes, creating a unique marketing strategy.
• By using India's abundant fruit supply, companies can introduce distinctive, seasonal, and regional iced teas flavored with fruit. Mangos are a fruit often appreciated and can be used as a focal point. By utilizing local taste profiles and producing goods that align with regional fruit preferences, companies can broaden their market reach by providing culturally appropriate offers that resonate with the local market.

Competitive Landscape

The iced tea market is highly competitive, with prominent firms contending for market share and customer retention. Leading multinational firms like Nestle SA, The Coca-Cola Company, and PepsiCo Inc. dominate the industry, capitalizing on their enormous distribution networks and brand familiarity to develop a stronghold.

To secure their positions and adapt to changing customer preferences, these industrial behemoths constantly execute strategic moves such as product innovation, marketing campaigns, and mergers and acquisitions.

Recent Developments

• In November 2023, Coca-Cola India entered the ready-to-drink tea beverage segment by launching Honest Tea. Honest, a Coca-Cola subsidiary, owns the brand. Luxmi Tea Co Private Ltd's Makaibari Tea Estate, headquartered in Kolkata, will supply the product's organic green tea.
• In June 2023, Arizona Iced Tea launched AriZona Hard, a malt-spiked drink that contains 5% alcohol.

Key Players in the Iced Tea Market

• Nestle SA
• The Coca-Cola Company
• PepsiCo Inc.
• Unilever N.V.
• Arizona Beverage Company
• Harney & Sons Fine Teas
• Snapple Beverage Corp.
• The Republic of Tea
• Lipton (Unilever)
• AriZona Beverages USA LLC
• Celestial Seasonings (Hain Celestial Group)
• Sweet Leaf Tea Company
• The Hain Celestial Group, Inc.
• Turkey Hill Dairy
• Luzianne (Reily Foods Company)
• Tejava
• Gold Peak Tea (The Coca-Cola Company)
• Tradewinds Beverage Co.
• Pure Leaf (Unilever)
• Steaz (The Healthy Beverage Company)

Key Coverage in the Iced Tea Market Report

• Adjacent Study on the Alcoholic Tea Market, Bottled Tea Market, and Iced Tea Premixes Market
• Highlights on Iced Tea Market Trends, Data, and Analytics
• Consumption Analysis of Masala Iced Tea Market
• Sales Analysis of India Iced Tea Market
• Demand Analysis of Europe Iced Tea Market

Iced Tea Market Segmentation

By Format:

• Ready-to-Drink
• K-cups
• Bottled
• Stand-up Pouches
• Powdered Mixes
• Cartons
• Tins/Jars
• Concentrates
• Sachets
• Tea Bags

By Base:

• Green Tea
• Black Tea
• Herbal Tea
• Oolong Tea
• White Tea
• Matcha Tea
• Fruit Chai

By End Use:

• Food Service
• Bakeries & Patisseries
• Airport Retail
• Travel Retail
• Retail
• Hypermarket/Supermarket
• Convenience Stores
• Departmental Stores
• Wholesale Stores
• Online Retailers

By Region:

• North America
• Latin America
• Western Europe
• Eastern Europe
• Asia Pacific (APAC)
• Middle East & Africa (MEA)
• Japan

Frequently Asked Questions

How Big is the Iced Tea Market?

The iced tea market is valued at USD 6,753 million in 2024.

What is the Projected CAGR of the Iced Tea Market?

The iced tea market size is estimated to increase at a 6.0% CAGR through 2034.

What is the Future Outlook for the Iced Tea Market?

The iced tea market is anticipated to be worth USD 12,132 million by 2034.

Which is the Leading Format in the Iced Tea Market?

Powdered mixes witness a high demand in the industry.

Which Country is Rising at a Higher CAGR in the Iced Tea Market?

The iced tea market in India is predicted to rise at a 7.3% CAGR through 2034.