Herbal tea is a fast-growing segment that represents the majority of future tea growth in many regions. Usage is expanding beyond traditional medicinal and slimming to embrace a wide variety new occasions that have arisen as a result of modern wellness trends. This gives herbal tea a number of new areas to target in functional, indulgent, and hydration spaces.
Herbal teas is one of the fastest-growing segments of hot drinks, with a CAGR in the coming years of 4% expected. In many regions, herbal teas represents the largest chunk of tea growth of any format. This growth is occurring because consumers are looking for products that are natural and functional like herbal tea.
The countries that are seeing the most herbal tea growth are those in which wellness trends are strong. Consumers are using naturally healthy herbal teas as components of wellness-orientated lifestyles. They are thus increasingly looking for more general health benefits such as relaxation rather than the slimming teas or medicinal usages that have traditionally dominated the category. Increasingly they are also looking to use herbal tea to replace unhealthy alcoholic and/or soft drinks.
Rising rates of anxiety and stress provide a natural opportunity for herbal tea to find new occasions. The association of herbal tea with calming is already strong among consumers and the category is doing a great deal to create teas designed to support stress relief in a variety of occasions.
Calming is a prominent wellness usage but it is not the only one. Digestion support, “detoxes”, immune support, even beauty are all functionalities that teas are increasingly targeting. Non-wellness usages are also growing, targeting indulgent and hydration occasions.
Brazil, Canada, the US, and a handful of European countries account for nearly the entirety of global growth in herbal tea because it is in these countries that the wellness trend that is boosting the category is strongest. In many other countries the category is still reliant on slimming or traditional usages, which are not doing as well.
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