| REPORT ATTRIBUTE |
DETAILS |
| Historical Period |
2020-2023 |
| Base Year |
2024 |
| Forecast Period |
2025-2032 |
| Craft Tea Market Size 2024 |
USD 362.76 million |
| Craft Tea Market, CGR |
3.6% |
| Craft Tea Market Size 2032 |
USD 481.39 million |
Market Overview
The Craft Tea Market is projected to grow from USD 362.76 million in 2024 to USD 481.39 million by 2032, at a compound annual growth rate (CAGR) of 3.6%.
The Craft Tea Market is experiencing significant growth driven by increasing consumer preference for premium, artisanal, and natural beverages. Rising awareness about health benefits, such as antioxidants and stress-relief properties, is pushing demand for organic and sustainably sourced teas. The growing trend of mindful consumption, where consumers seek unique and flavorful experiences, has also led to the popularity of craft teas. Additionally, the expanding global demand for plant-based and functional beverages is influencing market dynamics. Innovative product offerings, such as blends infused with herbs, spices, and flowers, are gaining traction among tea enthusiasts. The proliferation of e-commerce platforms has made it easier for consumers to access specialty teas, contributing to market expansion. As sustainability and ethical sourcing continue to be major trends, more tea brands are aligning with these values, which further strengthens their market position and appeal to environmentally conscious consumers. These factors combined are fueling the growth of the craft tea market.
The Craft Tea Market shows diverse growth across various regions, with North America leading the market share at 34%, driven by health-conscious consumers and a preference for premium teas. Europe follows with 28%, where traditional tea-drinking countries like the UK and Germany are embracing artisanal offerings. The Asia Pacific region, with a market share of 18%, benefits from rich tea-drinking cultures, particularly in China and India, which are evolving towards high-quality craft teas. The Rest of the World, with 20% market share, is experiencing growth, particularly in Latin America and the Middle East. Leading players such as Twinings, Tazo Tea Company, Teavana, and Harney & Sons cater to these regions, capitalizing on regional preferences and sustainability trends to strengthen their market position.
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Market Insights:
- The Craft Tea Market is projected to grow from USD 362.76 million in 2024 to USD 481.39 million by 2032, at a CAGR of 3.6%.
- Rising consumer preference for premium, artisanal, and natural beverages is a significant driver of market growth.
- Increased awareness of health benefits like antioxidants and stress-relief properties boosts demand for organic and sustainably sourced teas.
- The growing trend of mindful consumption is driving the popularity of unique and flavorful craft tea offerings.
- E-commerce expansion plays a crucial role in increasing accessibility to specialty teas, contributing to market growth.
- Sustainability and ethical sourcing are major trends, with brands focusing on eco-friendly practices to appeal to environmentally conscious consumers.
- Regional growth varies, with North America leading at 34%, Europe at 28%, and Asia Pacific at 18%, with the Rest of the World capturing 20% market share.
Market Drivers:
Growing Consumer Demand for Health-Conscious Beverages:
A significant driver of growth in the Craft Tea Market is the increasing consumer demand for health-conscious beverages. As consumers become more aware of the health benefits associated with natural and organic products, tea has emerged as a popular choice due to its antioxidant properties, immune-boosting effects, and stress-relieving benefits. For instance, Tata Consumer Products introduced Tetley Green Tea with added vitamin C in 2021, specifically formulating Tata Tea Tulsi Green and Tata Tea Gold Care to help boost the body’s defenses and promote wellness, directly targeting health-conscious consumers seeking functional benefits in their beverages. With rising concerns over the consumption of sugary and processed drinks, more individuals are opting for craft teas as a healthier alternative, contributing to market expansion.
Preference for Premium and Unique Offerings:
Another key market driver is the growing preference for premium, artisanal, and unique beverage experiences. As consumers seek more personalized and high-quality products, craft tea brands are capitalizing on this trend by offering exclusive blends and innovative flavors. The demand for distinctive, handcrafted teas is increasing as consumers desire an authentic and unique experience. This shift toward premium offerings, often with a focus on small-scale production and local sourcing, is driving the growth of the craft tea segment.
Sustainability and Ethical Sourcing Trends:
Sustainability and ethical sourcing have become increasingly important to consumers, influencing their purchasing decisions. Craft tea brands are aligning with these values by sourcing leaves from sustainable farms, prioritizing eco-friendly packaging, and ensuring fair trade practices. For instance, Lipton sustainably sources 100% of its tea from Rainforest Alliance-certified growers, with 75% of its tea bags now plant-based and compostable, and was the first major tea brand to adopt Rainforest Alliance certification in 2007, setting industry standards for environmental and social responsibility. As environmentally conscious consumers continue to prioritize sustainability, brands that embrace these principles are gaining a competitive edge, further driving market growth. This trend toward sustainability is strengthening the appeal of craft teas, particularly among younger generations.
Expansion of E-Commerce and Online Retail Channels:
The expansion of e-commerce platforms has also played a crucial role in the growth of the Craft Tea Market. Online shopping has made it easier for consumers to access a wide range of craft teas from different brands and regions. E-commerce platforms offer convenience, better product visibility, and direct access to niche brands that may not have physical store presence. This increased availability and accessibility through online retail channels are driving the demand for craft teas globally, contributing to the overall market growth.
Market Trends:
Rise of Functional and Blended Teas:
One of the current trends in the Craft Tea Market is the growing demand for functional and blended teas. Consumers are increasingly seeking teas that offer specific health benefits, such as improved digestion, stress relief, or enhanced energy levels. As a result, brands are introducing teas infused with herbs, spices, and superfoods to cater to these preferences. For instance, Pantenger offers a Turmeric Herbal Tea with Matcha and Ginger, blending turmeric, matcha, and ginger for digestive support and metabolism-boosting benefits, with matcha providing antioxidants and L-theanine to help convert fat cells into energy. These functional blends, often featuring ingredients like turmeric, ginger, and matcha, are becoming popular for their added health benefits, which go beyond traditional tea offerings.
Focus on Sustainability and Eco-Friendly Practices:
Sustainability remains a strong trend within the Craft Tea Market, with consumers becoming more conscious of the environmental impact of their purchases. Brands are responding by adopting eco-friendly practices, from using biodegradable or recyclable packaging to sourcing tea leaves from sustainable farms. For instance, Arbor Teas became the first tea company in the United States to offer a full line of organic loose teas in backyard compostable packaging, using cellulose film made from sustainably managed, non-GMO trees, and ensuring even their labels and adhesives are compostable. This trend is not only driven by consumer demand but also by increasing regulatory pressure for companies to reduce their carbon footprints. Consumers, particularly Millennials and Gen Z, are more likely to support brands that prioritize environmental responsibility, making sustainability a key trend shaping the market.
Increased Popularity of Premium and Specialty Teas:
There is a noticeable shift toward premium and specialty teas as consumers continue to favor high-quality, artisanal products. As more individuals move away from mass-market beverages, they are gravitating toward craft teas that offer unique flavors, superior quality, and distinct production methods. Specialty teas such as rare green, white, and oolong teas are becoming more widely available, with consumers eager to explore diverse and high-end options that offer a refined and luxurious tea-drinking experience.
Growth of Online Retail and Subscription Services:
The expansion of online retail platforms and subscription-based services has significantly impacted the Craft Tea Market. With the convenience of e-commerce, consumers can now easily access a wide range of craft teas from global brands and niche producers. Subscription services, offering curated selections of craft teas delivered to customers’ doorsteps, are gaining popularity. This trend not only makes specialty teas more accessible but also enhances customer loyalty by providing a personalized tea-drinking experience.
Market Challenges Analysis:
Supply Chain and Sourcing Challenges:
A significant challenge within the Craft Tea Market is the complexity of sourcing high-quality, organic, and sustainably produced tea leaves. Many craft tea brands rely on small, specialized farms that may face environmental and economic difficulties, such as adverse weather conditions, limited resources, or fluctuating market prices. This can lead to disruptions in the supply chain, causing inconsistent product availability and price volatility. Additionally, as demand for craft teas grows, scaling up production while maintaining the same level of quality and sustainability becomes increasingly challenging. For instance, Bird & Blend Tea Co., a certified B Corp, addresses these challenges by paying above Fairtrade prices and sourcing tea traceably from small-scale producers, but still faces the reality of longer lead times and potential supply bottlenecks due to their commitment to ethical sourcing and small-batch production. Smaller, artisanal producers often lack the infrastructure and resources to expand significantly, limiting their ability to meet the rising consumer demand. The reliance on such niche suppliers can also result in longer lead times and potential supply bottlenecks, impacting product delivery and brand reputation. As a result, brands must balance quality control with the realities of managing an often-fragile supply chain in a global market.
Intense Competition and Market Fragmentation:
The Craft Tea Market faces considerable competition and fragmentation, with a growing number of players entering the market. This competitive environment poses challenges for both new and established brands striving to differentiate themselves in an increasingly crowded space. Large, established brands with extensive distribution networks, marketing budgets, and consumer recognition have a competitive edge over smaller, independent players. As more companies launch craft tea offerings, it becomes difficult for niche brands to stand out and secure shelf space, particularly in physical retail locations. Furthermore, the rise of e-commerce and online retail platforms has made the market even more fragmented, allowing consumers to access a wide variety of teas from global and local producers. This increases the difficulty for smaller companies to maintain customer loyalty and achieve growth, forcing them to continuously innovate, offer unique products, and ensure a strong digital presence to stay competitive.
Market Opportunities:
The Craft Tea Market presents significant opportunities driven by the growing global demand for premium, healthy beverages. As more consumers seek alternatives to traditional sugary drinks, craft tea, known for its natural, antioxidant-rich properties, is positioned to benefit. The increasing focus on health and wellness has created a strong market for functional teas, offering blends infused with ingredients like turmeric, ginger, and matcha. This provides an opportunity for brands to expand their product portfolios by introducing health-focused teas that cater to various consumer needs, such as boosting immunity, improving digestion, and reducing stress. Additionally, the rise of conscious consumerism, where individuals prioritize organic and sustainably sourced products, opens up further growth potential for brands that align with these values. Companies that embrace transparency in sourcing and production while emphasizing ethical and sustainable practices are likely to attract a more environmentally conscious customer base, creating a competitive advantage in the market.
Another key opportunity lies in the expansion of online retail channels and subscription-based services, which have made it easier for consumers to access a wider range of craft teas from global and niche brands. As e-commerce continues to grow, craft tea companies have the chance to reach new markets and customer segments without the constraints of physical retail distribution. Subscription models, which deliver curated selections directly to consumers’ doorsteps, are particularly attractive as they offer convenience and the opportunity to build customer loyalty. Additionally, as consumers become more adventurous and open to exploring new tea varieties, brands have the opportunity to experiment with unique blends and flavors to differentiate themselves. This trend towards customization and personalized experiences is a growing opportunity for brands to engage with their customers and foster long-term relationships.
Market Segmentation Analysis:
By Product Type
The Craft Tea Market is segmented into loose leaf tea, tea bags, ready-to-drink tea, and other product types. Loose leaf tea remains a popular choice due to its premium quality and authentic brewing experience. Tea bags offer convenience, while ready-to-drink teas cater to on-the-go consumers seeking convenience without compromising quality.
By Flavor
The flavor segment includes herbal, fruit, floral, spiced, and other flavor profiles. Herbal teas, known for their health benefits, are popular among wellness-focused consumers. Fruit and floral teas offer refreshing and aromatic experiences, while spiced teas cater to those seeking bold, exotic flavors. The growing demand for unique and diverse flavors drives this segment’s growth.
By Distribution Channel
The distribution channels for craft tea include online stores, supermarkets/hypermarkets, specialty stores, and others. Online stores have seen significant growth, offering convenience and access to global brands. Supermarkets and specialty stores are key for consumers seeking curated tea selections, while niche outlets also cater to the demand for exclusive craft teas.
Segments:
Based on Product Type
- Loose Leaf Tea
- Tea Bags
- Ready-to-Drink Tea
- Others
Based on Flavor
- Herbal
- Fruit
- Floral
- Spiced
- Others
Based on Distribution Channel
- Online Stores
- Supermarkets/Hypermarkets
- Specialty Stores
- Others
Based on Packaging Type
Based on the Geography:
- North America
- Europe
- Germany
- France
- U.K.
- Italy
- Spain
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- South-east Asia
- Rest of Asia Pacific
- Latin America
- Brazil
- Argentina
- Rest of Latin America
- Middle East & Africa
- GCC Countries
- South Africa
- Rest of the Middle East and Africa
Regional Analysis:
North America
In 2024, North America holds a significant share of the Craft Tea Market, with a market share of 34%. The growing demand for healthy, premium beverages, combined with the increasing awareness of the health benefits associated with craft teas, is driving market growth in this region. Consumers in the U.S. and Canada are increasingly shifting away from sugary drinks and opting for organic and functional beverages like craft tea. The popularity of herbal and fruit-infused teas, along with the rise of ready-to-drink tea products, further contributes to the market’s expansion. Moreover, the e-commerce boom and the growth of specialty stores have made craft teas more accessible to a wider consumer base. North America’s focus on sustainability and ethical sourcing is also pushing demand for premium, responsibly sourced craft teas.
Europe
Europe captures a market share of 28% in the Craft Tea Market in 2024. The region has a long history of tea consumption, and the growing preference for high-quality, organic teas is helping to fuel market growth. Countries such as the United Kingdom, Germany, and France are leading the demand for craft teas, especially in the premium and functional tea segments. The increasing consumer interest in health and wellness is driving the preference for organic and natural products. Additionally, European consumers are increasingly focused on sustainability, with many tea brands aligning with eco-friendly practices, which has enhanced the appeal of craft teas. Europe’s strong retail infrastructure and the growth of online platforms have facilitated the market’s expansion in the region.
Asia Pacific
Asia Pacific holds a market share of 18% in 2024 in the Craft Tea Market, with countries like China, India, and Japan showing steady growth. The region’s rich tea culture is a strong factor behind the demand for craft teas, particularly in the premium and specialty segments. Traditional tea-drinking cultures in countries such as China and India are evolving, with consumers increasingly opting for high-quality, artisanal teas. Additionally, the rise of health-conscious consumers in urban areas is promoting the consumption of organic and functional teas. The region’s growing e-commerce sector and expanding distribution channels are also contributing to the increased availability and popularity of craft teas.
Rest of the World
The Rest of the World, which includes regions like Latin America, the Middle East, and Africa, holds a smaller share of the Craft Tea Market at 20% in 2024. However, this region is expected to see rapid growth in the coming years, driven by the increasing popularity of healthy beverages and rising disposable incomes. Latin America, in particular, is seeing a surge in the demand for specialty teas as more consumers seek alternative, health-focused drinks. The Middle East, known for its tea-drinking traditions, is also embracing premium, artisanal teas, contributing to the market’s growth in the region.
Key Player Analysis:
- DAVIDsTEA
- Mighty Leaf Tea
- Bigelow Tea Company
- The Republic of Tea
- Teavana
- Celestial Seasonings
- Rishi Tea & Botanicals
- Yogi Tea
- Harney & Sons
- Numi Organic Tea
- Twinings
- Tazo Tea Company
Competitive Analysis:
The Craft Tea Market is highly competitive, with several established brands dominating the landscape. Leading players such as Twinings, Tazo Tea Company, Teavana, Harney & Sons, The Republic of Tea, Celestial Seasonings, Bigelow Tea Company, Yogi Tea, Numi Organic Tea, DAVIDsTEA, Rishi Tea & Botanicals, and Mighty Leaf Tea are constantly innovating to capture consumer attention. These brands leverage strong distribution networks, extensive product portfolios, and strong brand recognition to maintain their competitive edge. Many of these companies have embraced sustainability and health-conscious trends, offering organic, functional, and ethically sourced teas to meet growing consumer demand. In addition, some players are expanding their presence in e-commerce and subscription services to cater to the increasing demand for convenience and personalized experiences. Despite this, smaller niche brands continue to emerge, often focusing on specific tea blends or unique offerings, creating a dynamic and rapidly evolving competitive landscape in the Craft Tea Market.
Recent Developments:
- In October 2024, Celestial Seasonings, part of Hain Celestial Group, launched two new Non-GMO Project verified teas with functional benefits: Lemon Honey Drop (a caffeine-free tea with lemon, honey, and vitamin C) and Sleepytime Biotin Beauty Rest (featuring the classic Sleepytime blend with added biotin for self-care routines).
- In March 2024, Rishi announced the expansion of its Sparkling Botanicals ready-to-drink (RTD) line, with new flavors and increased distribution.
- In May 2024, Yogi Tea recalled nearly 900,000 tea bags of its Echinacea Immune Support blend after routine audits detected pesticide residues above acceptable limits, despite the company’s organic sourcing standards.
- On March 4, 2025, Numi Organic Tea debuted a new line of Premium Organic Latte Powders at Natural Products Expo West, introducing five blends (Turmeric Spice, Matcha Maca, Masala Chai, Rooibos Chai, and Cocoa Coconut).
Market Concentration & Characteristics:
The Craft Tea Market exhibits moderate market concentration, with a mix of well-established global brands and emerging niche players. Leading companies such as Twinings, Tazo Tea Company, and Teavana hold a significant portion of the market, benefiting from extensive distribution networks, strong brand recognition, and diverse product offerings. However, the market is also characterized by fragmentation, with numerous smaller, independent brands catering to specific consumer preferences for unique flavors, organic ingredients, and artisanal blends. This creates a competitive environment where innovation is key to differentiation. Companies are increasingly focusing on health-conscious, functional, and sustainable products to meet the growing demand for premium and ethically sourced teas. Additionally, the rise of e-commerce platforms has democratized market access, allowing smaller brands to compete on a global scale. Overall, the market’s characteristics include a balance of large players with established infrastructure and agile, innovative smaller brands.
Report Coverage:
The research report offers an in-depth analysis based on Product Type, Flavour, Distribution Channel, Packaging Type and Geography. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.
Future Outlook:
- The demand for premium, organic, and functional teas will continue to rise as consumers become more health-conscious.
- The increasing shift toward plant-based and sustainable beverages will drive further growth in the craft tea market.
- E-commerce platforms will remain a crucial channel, making craft teas more accessible to a global audience.
- The popularity of ready-to-drink craft teas will expand, catering to convenience-seeking consumers.
- Brands will increasingly focus on unique and innovative flavors to meet the evolving preferences of tea enthusiasts.
- Sustainability and ethical sourcing will become more prominent, with brands prioritizing eco-friendly packaging and fair-trade practices.
- The market will see greater regional expansion, particularly in emerging markets in Latin America, the Middle East, and Asia Pacific.
- Health-focused product lines such as detox, immune-boosting, and stress-relief teas will attract more consumers.
- New and smaller brands will continue to emerge, creating a dynamic and competitive landscape.
- Collaborative partnerships with wellness and lifestyle brands will help craft tea companies reach broader consumer segments.
