Tea-ing Off Into America

Shift towards a healthier lifestyle opens the market for international companies looking to expand 

Health and wellness is quickly becoming more and more of a concern for people. One small step people are taking towards this healthier lifestyle is drinking more tea and less coffee. The gourmet coffee shop market has been steadily declining for the past five years. This provides a gap that needs to be filled and is being done so by the high quality tea market.

In the United States, over 22% of the population drinks tea. In general, tea consumption increased with age; however, this trend is shifting. The largest tea consumer groups are now urbanites and hipsters under the age of 34 years old. While women still consume more tea than men, this new consumer group in comprised of more men than women. This shows a shift in tea consumption and broadens the market.

Despite the US recession, the sales of tea did not slow down. Instead, the positioning encouraged consumers to learn more about what they were paying for. This led to the opening of boutiques and artisan teashops.

Premiumsation trends tend to anchor tea consumers to higher quality teas. Manufacturers use a health and wellness image of tea from exotic countries and use perceptions of high-end quality to justify these higher prices. The entry barriers for this market are quite low because of the low capital intensity of the market. Also, this market has risen close to 9% in the past four years. Companies need to leverage these health and wellness and premiumsation trends for added value.