Iced tea is a type of cold drink made by dissolving tea leaves in water and letting it cool. It is flavored using lemon, mint or peach with variations available in black, green and oolong tea flavors. The rising demand for refreshment drinks due to hot climatic conditions and busy lifestyles is growing the consumption of iced tea.

The global iced tea market is estimated to be valued at US$ 7476.95 Mn in 2024 and is expected to exhibit a CAGR of 2.1% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

The key driver from the heading, rising consumption of iced tea, can be attributed to increasing disposable income of consumers and hot climatic conditions in major tea consuming regions like North America. Iced tea is found to be refreshing for hot summer months. Furthermore, aggressive marketing strategies by manufacturers introducing new flavors is also boosting the demand. Additionally, the demand for caffeine-free herbal tea options for health-conscious consumers is surging the adoption of iced tea varieties sweetened with natural ingredients like honey instead of sugar. However, rising health awareness around sugar content may hamper the market growth over the forecast period.

SWOT Analysis

Strength: Iced tea market size offers wide variety of flavored and blended iced teas for consumers. The market is growing popularity among health-conscious consumers as iced tea contains antioxidants and relatively lower calories compared to carbonated drinks. Wide distribution network of major companies ensures availability of iced tea products across various retail formats.

Weakness: Seasonal demand nature of iced tea as it sales are primarily driven by summers. Dependency on weather conditions can impact sales. Significant price variations across private label and branded iced tea products may discourage some price-sensitive consumers.

Opportunity: Growth in demand for on-the-go and functional beverages presents an opportunity for companies to introduce innovative ready-to-drink iced tea products. Rising health awareness is encouraging companies to develop organic and natural ingredient based iced tea variants. Expanding middle-class in emerging economies opens potential for market expansion.

Threats: Intense competition from carbonated drinks, juices, and other alternatives limits market potential for iced tea. Fluctuations in tea leaf prices can squeeze profit margins. Strict regulations regarding product claims and ingredients compliance increases compliance costs.

Key Takeaways

The global iced tea market is expected to witness high growth over the forecast period of 2024 to 2031 supported by rising product visibility through expanding retail distribution and marketing campaigns by major players. The global iced tea market is estimated to be valued at US$ 7476.95 Mn in 2024 and is expected to exhibit a CAGR of 2.1% over the forecast period 2024 to 2031.

The Asia Pacific region currently dominates the market, accounting for over 30% value share in 2024 led by strong demand from China, Japan and India. Rising health-consciousness is driving demand for natural brewed and lightly sweetened iced tea variants in the region. The key North American and European markets are also exhibiting steady growth led by product innovation and availability of various flavors. Companies are actively promoting ready-to-drink bottled iced tea products through social media influencers and branding initiatives to drive trials among young consumers.

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. Major players are focused on capacity expansion, mergers and acquisitions to consolidate market presence and diversify product portfolio. Innovation in ingredients, flavors and packaging are key strategies adopted by companies to differentiate their brands.

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