Cost of living pressures, conscious shopping and new flavour combinations are driving tea consumers’ decisions.
In case you’ve been living under a rock, you’ve likely noticed that the price of tea has gone up thanks to a triple whammy of inflation, rising logistics costs and increased overheads – farming inputs, and production and labour costs. It means tea drinkers need to decide whether tea is a staple part of their diet, or a discretionary item. (It’s a necessity, of course, and has been for hundreds of years.)
Save or spend?
Interestingly, as budgets get tighter and households look for savings on everyday goods like tea, there’s a segment of consumers who class tea as a affordable luxury. Like the lipstick index of beverages, specialty tea is one of the pockets of indulgence that consumers feel good about spending money on.
Moreover, though the bubble has burst on the boba tea shop business (pun fully intended) in China, where they have reached saturation point, there is still expansion happening in areas like the UK. The core demographic for bubble tea – girls and young women – seem to regard bubble tea as a stalwart of their discretionary spend. I mean, how else are all those bubble tea places staying afloat with $9 cups of tapioca balls in milk tea?
Conscious sipping
The other area seeing growth is conscious sipping, both for tea as a commodity with increasing interest in sustainability, ethical labour and transparency in the production process, and tea as a health and wellness product.
Blue lotus (Nymphaea caerulea), an Egyptian flower, is the tisane du jour for wellness, used frequently in calming ceremonies for its sedative properties. Many influencers are still touting slimming and detox teas, but thankfully consumers are becoming wise to the promises that never deliver with these sometimes dangerous infusions. In any case, the mental health benefits from tea – preparing it and drinking it – are well documented.
Inspired flavours
A younger millennial and Gen Z backlash against drinking alcohol has led to the growth of the craft tea segment. According to Statista, the ready-to-drink tea market in Australia is projected to grow by 5.48% from 2024 to 2028 – and it’s not just Lipton and Nestle taking the spoils. Iced tea and kombucha from independent brands like East Forged, freed, TINA (This Is Not Alcohol) and XO are edging into the teetotaller market and they’re doing it with the promise of low sugar and unusual ingredients – both from far-flung places and native herbs – in their beverages.
What trends are you seeing in the tea industry?
This article originally appeared in AUSTCS enews 25 June 2024.