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From Leaf to Latte: unveiling the dynamic evolution and remarkable growth trajectory of the ready-to-drink (RTD) tea and coffee industry across global markets, the market is expected to cross USD 145.61 Billion by 2028.
May, 31
2023

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From Leaf to Latte: unveiling the dynamic evolution and remarkable growth trajectory of the ready-to-drink (RTD) tea and coffee industry across global markets, the market is expected to cross USD 145.61 Billion by 2028.

 

rtd tea and coffee market
The Ready-to-Drink (RTD) tea and coffee segment has emerged as a significant and rapidly expanding sector within the global beverage industry, meeting the evolving demands of consumers seeking convenient alternatives to traditional hot beverages. RTD tea and coffee products encompass pre-packaged and ready-to-consume beverages that capture the distinctive flavours and caffeine content associated with tea and coffee, respectively. This burgeoning industry has experienced remarkable growth in recent years, fuelled by shifting consumer lifestyles, increased urbanization, and a rising desire for on-the-go beverage solutions. Market-leading companies, driven by innovation, convenience, and unwavering commitment to quality, have introduced a wide array of RTD tea and coffee options that cater to a diverse range of taste preferences and dietary requirements. Furthermore, advancements in packaging technology and the expansion of efficient distribution channels have facilitated widespread accessibility to RTD tea and coffee products, ensuring their availability to consumers worldwide. In an intensely competitive beverage market, this dynamic sector offers both established brands and emerging player’s ample opportunities for expansion and profitability. Many RTD tea and coffee products cater to health-conscious consumers by offering options with reduced sugar content, natural ingredients, and functional additives like antioxidants or vitamins. The RTD tea and coffee industry continuously introduces new and unique flavour profiles to cater to diverse consumer preferences. From classic flavours like green tea and black coffee to more exotic options like matcha or cold brew, there is a wide range of choices available. The market has seen the emergence of specialty brews, such as cold brew coffee and premium loose-leaf tea blends. These products offer a more artisanal and gourmet experience, appealing to consumers seeking high-quality and distinctive taste profiles. Also, RTD tea and coffee products often incorporate functional ingredients, such as herbal extracts or adaptogens, to provide additional health benefits. These can include stress reduction, improved focus, or enhanced energy levels. Many companies in the RTD tea and coffee industry are making efforts to promote sustainability. This includes using eco-friendly packaging materials, sourcing ethically produced ingredients, and implementing environmentally responsible production practices.

According to the research report, "Global RTD Tea & Coffee Market Research Report, 2028," published by Actual Market Research, the market is anticipated to cross USD 145.61 Billion, increasing from USD 103.96 Billion in 2022. The market is expected to grow at a CAGR of 5.86% by 2023–2028. RTD tea and coffee offer convenience to consumers who are looking for quick and ready-to-consume beverage options. The fast-paced modern lifestyle and increasing time constraints have led to a greater demand for on-the-go beverages that require no preparation. Rapid urbanization and busy lifestyles have led to an increase in the number of people seeking convenience in their food and beverage choices. RTD tea and coffee products fit well into this trend by providing a refreshing and energizing option for busy individuals. The preferences and purchasing power of millennials have significantly impacted the market. This demographic values convenience, health-conscious options, and sustainability, which has driven the development of innovative RTD tea and coffee products that align with their preferences. The market has witnessed the rise of specialty and premium RTD tea and coffee options. These offerings cater to consumers seeking unique and high-quality beverages, allowing them to indulge in a more premium experience compared to standard offerings. The growing focus on health and wellness has propelled the RTD tea and coffee market forward. Consumers are actively seeking beverages that offer functional benefits, such as antioxidants, natural ingredients, and specific health-promoting properties. The globalization of food and beverage trends has contributed to the boost in the RTD tea and coffee market. With the increasing influence of different cultures and their beverage traditions, consumers are becoming more open to trying new and diverse RTD tea and coffee options.

There is a growing demand for plant-based and alternative ingredients in RTD tea and coffee products. Brands are introducing options that use plant-based milk alternatives like almond milk, oat milk, and coconut milk, catering to consumers with dietary preferences or lactose intolerance. In response to increasing health consciousness, many RTD tea and coffee brands are offering low or no sugar options to cater to consumers looking for healthier alternatives. Reduced-calorie variants are also gaining popularity as people seek to manage their calorie intake without compromising on taste. With growing consumer concern for the environment, brands are adopting sustainable packaging solutions for their RTD tea and coffee products. This includes using recyclable materials, reducing plastic waste, and exploring innovative packaging designs that minimize environmental impact. Cold brew coffee continues to be a popular choice among consumers. Brands are introducing ready-to-drink cold brew coffee products with unique flavour profiles, nitro-infused options for a creamier texture, and even incorporating cold brew into tea-based beverages for a refreshing twist. Some brands are incorporating functional features into their packaging to enhance the consumer experience. This includes resealable caps, built-in straws, and innovative designs that allow for easy consumption and portability. Apart from traditional tea and coffee, functional tea infusions are gaining traction in the market. These include herbal teas infused with specific health-promoting ingredients like chamomile for relaxation, turmeric for anti-inflammatory properties, or hibiscus for cardiovascular health.

North America is a significant market for RTD tea and coffee products. The region has a well-established coffee culture, with a high demand for iced coffee and cold brew variants. In recent years, there has been a growing interest in premium and specialty RTD coffee options, with consumers valuing quality and unique flavour profiles. The health-conscious trend has also led to an increase in the demand for functional RTD tea beverages. North America has seen a rise in innovative packaging and marketing strategies to cater to evolving consumer preferences. Europe is a mature market for RTD tea and coffee, with a strong presence of established brands and a diverse range of product offerings. The region has a strong tea-drinking tradition, with consumers favouring iced tea and herbal infusions. However, there is also a growing interest in RTD coffee, especially among younger consumers. The United States is the birthplace of iced tea, and it remains a popular beverage choice, particularly in the southern states. The specialty coffee culture in North America has contributed to the rise of innovative coffee-based RTD products, such as cold brew, nitro-infused coffee, and unique flavor combinations. North America has a strong emphasis on convenience, with a wide variety of RTD tea and coffee options available in supermarkets, convenience stores, and vending machines.

Europe is witnessing an increasing demand for organic and sustainable RTD beverages, with a focus on natural ingredients and ethical sourcing. The on-trade sector, including cafes and specialty tea/coffee shops, plays a crucial role in driving consumption and introducing new product innovations. Europe has a rich history of tea consumption, with countries like the United Kingdom known for their love of traditional black tea. However, there is also a growing interest in herbal infusions and unique tea blends. The European market has seen an increasing demand for organic, fair-trade, and sustainably sourced RTD tea and coffee products, reflecting the region's focus on ethical and responsible consumption. Europe is home to a vibrant caf? culture, with specialty coffee shops and tea houses playing a significant role in introducing new flavors, brewing techniques, and RTD innovations.
Asia-Pacific is a dominant region in the global RTD tea market, with countries like China, Japan, and India being major consumers. Traditional tea, such as green tea and jasmine tea, holds strong cultural significance, and there is a growing demand for ready-to-drink variations of these teas. The region has also witnessed a rise in innovative tea-based beverages, such as bubble tea and fruit-infused teas. In recent years, there has been an increasing interest in RTD coffee, particularly among younger demographics in urban areas. Asia-Pacific's large population, changing lifestyles, and rising disposable incomes make it a significant growth market for RTD tea and coffee products. China is the largest consumer of tea in the world, and RTD tea is extremely popular in the country. It offers a wide range of tea-based beverages, including traditional green teas, oolong teas, and fruit-infused teas. Japan has a strong tradition of tea ceremonies and matcha consumption. RTD matcha-based beverages, such as matcha lattes and bottled matcha tea, have gained popularity not only in Japan but also globally. India has a diverse tea culture, with popular variations like masala chai and iced tea. The country's growing middle class and urbanization have contributed to the rise of RTD tea products, catering to the on-the-go lifestyle.

South America has a rich coffee culture, and the region is known for its coffee production. In countries like Brazil and Colombia, coffee consumption is deeply ingrained in the culture. RTD coffee products, including canned or bottled coffee, have gained popularity, offering convenience and variety to consumers. The region is also witnessing the emergence of specialty coffee shops and cafes, contributing to the growth of the on-trade sector. In addition, herbal and fruit-infused RTD teas are gaining traction, with unique flavours inspired by local ingredients and traditional remedies. RTD coffee options, including canned or bottled coffee, cater to the region's strong coffee culture. Brazil is the largest producer of coffee in the world, and the country has a vibrant caf? culture. RTD coffee options, particularly iced coffee, have gained popularity as consumers seek convenient ways to enjoy their favorite beverage.

The Middle East has a strong tea-drinking culture, with black tea and herbal infusions being popular choices. Traditional teas like Moroccan mint tea and Turkish tea have influenced the region's RTD tea market. The demand for RTD coffee is also increasing, with a rising number of specialty coffee shops and the introduction of iced coffee variants. Africa, known for its production of tea and coffee, presents opportunities for the growth of the RTD tea and coffee market. The region's diverse flavours and unique blends contribute to the development of innovative RTD beverage offerings. Middle Eastern countries like Morocco and Turkey have strong tea-drinking traditions. Moroccan mint tea, a sweet and refreshing green tea infusion, is an iconic beverage in the region, and the flavors of mint and other traditional herbs have influenced the RTD tea market. Africa is a significant producer of tea and coffee, with countries like Kenya and Ethiopia known for their high-quality coffee beans and tea estates. The region offers unique flavors and blends that contribute to the development of distinctive RTD beverages.

According to the report, the global market is segmented into two types including tea & coffee. Among them, tea is dominating the market with more than 55% market share in 2022. Tea is a popular beverage globally as the market is driven by the demand for convenient and ready-to-drink tea options. The market offers a variety of flavoured and functional RTD tea products catering to different consumer preferences. Green tea holds a significant share in the RTD tea market, driven by its perceived health benefits and antioxidant properties. It is popular for its refreshing taste and is available in various flavors and combinations, including green tea with citrus, green tea with honey, and green tea with jasmine. Black tea remains a popular choice globally, especially in regions like Europe and North America. RTD black tea products offer convenience and a rich, robust flavour. Flavoured variants like Earl Grey, English breakfast, and fruit-infused black teas cater to diverse consumer preferences. Herbal and fruit-infused RTD teas have gained popularity due to their natural ingredients and unique flavour profiles. Popular herbal infusions include chamomile, peppermint, and rooibos, while fruit-infused options include hibiscus, berry blends, and tropical fruit combinations. n the other hand, coffee is one of the most widely consumed beverages globally, and its popularity continues to grow. The coffee market is driven by the strong demand for hot and cold coffee beverages, including RTD coffee options such as iced coffee, cold brew, and specialty coffee variants. Iced coffee is a major segment in the RTD coffee market. It offers a refreshing and convenient alternative to hot coffee, particularly in warmer regions. Various flavors, such as vanilla, mocha, caramel, and seasonal offerings, are available to cater to different taste preferences. Cold brew coffee has witnessed significant growth in recent years. Its smoother and less acidic taste, along with the perceived health benefits, has attracted consumers. RTD cold brew options, including ready-to-drink bottled or canned versions, have become popular for their convenience and on-the-go consumption. The market has seen a rise in specialty RTD coffee options, targeting consumers who appreciate high-quality, gourmet coffee experiences. These products often highlight specific coffee origins, brewing methods, and flavor notes, appealing to coffee enthusiasts seeking a premium experience.

Bottles are a popular packaging format for RTD tea and coffee products. They are available in various sizes, ranging from single-serve to larger family-sized bottles. Plastic bottles, including PET (polyethylene terephthalate) and HDPE (high-density polyethylene), are commonly used due to their lightweight, durability, and convenience. Glass bottles are also used for premium or specialty products, offering a more premium and eco-friendly image. Cans are also widely used for RTD coffee and some tea beverages. Aluminum cans provide several advantages, including product protection, portability, and recyclability. They are particularly popular for carbonated RTD coffee and energy drinks. The size options vary, with standard sizes like 250ml and 355ml being common in the market whereas tetra Pak cartons or similar composite packaging are used for RTD tea and coffee, especially for larger volumes. These cartons offer a combination of convenience, sustainability, and product protection. They are lightweight, recyclable, and often feature resealable caps, making them suitable for on-the-go consumption. On the other hand, single-serve pods, such as coffee pods or tea capsules, have gained popularity in the RTD coffee market in recent years. These pods are designed for use with specific coffee or tea machines, offering convenience and customization. The pod format ensures portion control and freshness, allowing consumers to prepare their preferred beverages quickly.

There has been a growing trend towards premium and specialty RTD tea and coffee products. Consumers are willing to pay more for higher quality, unique flavors, and a premium experience. This has led to the emergence of specialty coffee-based RTD beverages, including cold brew, single-origin coffees, and artisanal blends. Similarly, specialty teas, such as matcha, chai, and exotic herbal infusions, have gained popularity among consumers seeking a distinctive and indulgent tea experience. Convenience remains a significant driver in the RTD tea and coffee market. Consumers seek ready-to-drink options that fit their busy, on-the-go lifestyles. This has led to the popularity of single-serve bottles, cans, and pouches that offer portability and easy consumption. Furthermore, the rise of e-commerce and online food delivery services has made it more convenient for consumers to access a wide range of RTD tea and coffee products. The market has also experienced a significant shift towards digital marketing and social media platforms to engage with consumers. Influencer marketing, user-generated content, and interactive digital campaigns have become effective strategies for promoting RTD tea and coffee products. Brands are leveraging social media platforms to communicate product features, recipes, and brand stories, while also gathering insights and feedback from consumers.