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Ready to Drink Tea And Coffee Products Market Size, Share, & Trends Analysis Report (2023 – 2030)
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Report Overview
The global ready-to-drink tea and coffee products market was valued at USD 57.2 billion in 2022 and is projected to expand at a CAGR of 6.2% from 2023 to 2030. Ready-to-drink (RTD) tea and coffee products are pre-packaged beverages that are ready to consume without any additional preparation. Consumers prefer RTD products due to their convenience, portability, and availability in various flavors.
The increasing demand for RTD tea and coffee products is primarily attributed to the growing number of health-conscious consumers. In addition, a surge in the number of product launches by various market participants has further supported RTD tea and coffee products market growth. For instance, in July 2021, Unilever launched Lipton’s new line of RTD tea, Lipton Refresh. The new line of tea is designed to provide a refreshing and energizing drink for on-the-go consumers.
The rising popularity of ready-to-drink tea and coffee products has led to an increase in the number of product launches by various market participants. Furthermore, the growing demand for organic RTD tea and coffee products is also expected to drive the market growth. For instance, in June 2021, Nestlé launched a range of organic RTD coffees under its Nescafé brand. The new range will offer consumers organic, cold-brewed coffee in three flavors, Espresso, Roast & Ground, and French Vanilla.
In addition, manufacturers are focusing on the development of new flavors and product innovations to attract younger consumers and expand their customer base. For instance, in April 2021, Starbucks launched a new line of RTD iced teas in the U.S. The new line consists of six flavors, including Black Tea, Peach Green Tea, Mango Black Tea, Strawberry Black Tea, Teavana Shaken Iced Peach Green Tea Lemonade, and Teavana Shaken Iced Mango Black Tea Lemonade.
Furthermore, the rising trend of premiumization and the growing demand for natural ingredients in RTD beverages are expected to drive the market growth. For instance, in May 2021, PepsiCo launched premium ready-to-drink (RTD) tea under its Starbucks brand. The new range of teas is made with natural ingredients and comes in four flavors, including Peach Citrus, Passion Tango, Mango Dragonfruit, and Strawberry Acai. This move is expected to attract health-conscious consumers and support the market growth.
Product Insights
The ready-to-drink (RTD) tea segment led the market and accounted for a share of around 34.0% in 2022. The rising popularity of RTD tea among young consumers has been driving the demand for RTD tea-based products globally. According to an article published by The New York Times, in October 2020, RTD tea sales in the U.S. have risen by nearly 15% in the past year. In addition, the growing popularity of flavored tea and the emergence of various organic tea brands are boosting the sales of RTD tea products worldwide.
The ready-to-drink (RTD) coffee segment is anticipated to expand at the fastest CAGR of 8.2% over the forecast period. The increasing demand for convenience in the beverage industry has been driving the demand for RTD coffee-based products globally. According to an article published by The Guardian, in August 2020, the RTD coffee market is expected to grow by 8.2% annually over the next five years. In addition, the rising popularity of healthy and organic RTD coffee products and the emergence of various RTD coffee brands are some of the key factors driving the market growth.
Distribution Channel Insights
The supermarkets and hypermarkets segment dominated the market in 2021 and is expected to expand at a CAGR of 7.2% during the forecast period. The segment accounted for a share of over 40.6% in 2021. The growth of the supermarkets & hypermarkets segment is attributed to the convenience offered by these outlets in terms of selection and availability of a wide variety of ready-to-drink tea and coffee products. In addition, the increasing penetration of supermarkets & hypermarkets in emerging countries such as India and China is also expected to fuel the growth of the segment.
The e-commerce segment is anticipated to expand at the highest CAGR of 10.4% over the forecast period. The increasing penetration of the internet and digitalization of retail sales are major factors driving the growth of the segment. The rising trend of online shopping and the convenience of getting products delivered at home are some other key factors that are likely to drive the growth of the segment. In addition, the increasing number of digital marketing campaigns by companies to increase their online presence is expected to propel the demand for ready-to-drink tea and coffee products through the e-commerce segment.
Type Insights
The ready-to-drink (RTD) tea segment accounted for the largest share of 47.3% in the year 2022. The increasing popularity of RTD tea, due to its convenience and health benefits, is driving the market. The rising trend of organic tea and the introduction of new flavors and varieties by manufacturers is further driving the segment. For instance, in February 2021, Unilever launched the Lipton Gold Matcha range of RTD tea in the U.S. The range includes Matcha Green Tea and Matcha Lemonade flavors.
The RTD coffee segment is anticipated to expand at the highest CAGR of 9.3% over the forecast period. The rising trend of coffee shops and the introduction of new flavors are driving the market. For instance, in November 2020, Kraft Heinz launched the Starbucks Cold Brew Black Unsweetened and Starbucks Cold Brew Vanilla & Fig flavors in the U.S. This introduction has increased the demand for RTD coffee. Other factors such as the increasing demand for convenience and on-the-go products, and the increasing penetration of RTD coffee in the global market are propelling the segment.
Regional Insights
Asia Pacific held the largest market share in 2022 and is expected to register a CAGR of 8.3% during the forecast period. Factors such as the increasing demand for convenience and ready-to-drink tea and coffee products, rising disposable income, and growing health consciousness among consumers are the key drivers of growth in the region. Moreover, the presence of big players such as Unilever, Nestle, and Ting Hsin International Group are expected to further drive the growth of the region.
The North American region is expected to be the second-largest market owing to increasing consumer preference for convenience and ready-to-drink tea and coffee products. The growing number of health-conscious consumers and the adoption of premium products among consumers are the key factors driving the growth of the region. Additionally, the presence of innovative packaging formats such as cans, bottles, and pouches is expected to further propel the growth of the market.
Financial Projections
In this part of the Ready to Drink Tea and Coffee Products business plan, we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your Ready to Drink Tea and Coffee Products business. Usually, these projections are drafted for a 5-year period.
Revenue Assumptions
The main sources of revenue for a Ready to Drink Tea and Coffee products business come from the sale of the ready to drink products, as well as other sources such as sponsorships, advertising, and partnerships. It is important to include in the business plan a detailed breakdown of the cost of production and the expected sales.
Projecting Expenses
In this section, all the regular expenses related to keeping the Ready to Drink Tea and Coffee Products business running will be described. The list of operating expenses includes product sourcing, packaging, wages, marketing, shipping, taxes, utilities, insurance policies, advertising, and others.
Key companies & market share insights
Some of the major companies operating in the ready-to-drink (RTD) tea and coffee market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:
– In June 2022, Unilever launched the RealTea range of ready-to-drink (RTD) tea products in the UK.
– In August 2022, Nestle launched the Nescafé RTD coffee range in India.
– In October 2022, PepsiCo launched the Lipton RTD tea range in the US.
Some of the prominent players in the ready-to-drink (RTD) tea and coffee market include:
– Unilever
– Nestle
– PepsiCo
– Asahi Group Holdings, Ltd.
– Coca-Cola Company
– DR.PEPPER SNAPPLE GROUP INC.
– Ting Hsin International Group
– Suntory Holdings Ltd.
– Ito En Ltd.
– Starbucks Corporation
Global Ready to Drink Tea and Coffee Market Segmentation
This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global ready to drink tea and coffee products market based on product, distribution channel, and region:
1. Product Outlook (Revenue, USD Million, 2017 – 2030)
– Tea
– Coffee
– Milk Tea
2. Distribution Channel Outlook (Revenue, USD Million, 2017 – 2030)
– Supermarkets & Hypermarkets
– Online
– Others
3. Regional Outlook (Revenue, USD Million, 2017 – 2030)
– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa
Frequently Asked Questions
[Q]: What are the Key Drivers of the Ready to Drink Tea and Coffee Market?
[A]: The key drivers of the ready to drink tea and coffee market include the rising demand for convenience and health benefits, the growing trend of on-the-go consumption, and the increasing popularity of tea and coffee culture across the globe.
[Q]: Who are the Key Players in the Ready to Drink Tea and Coffee Market?
[A]: The key players in the ready to drink tea and coffee market include Unilever Plc, Nestle SA, Coca-Cola Co, Starbucks Corporation, Kraft Foods, Tata Global Beverages, and The Republic of Tea.
[Q]: What are the Potential Opportunities for this Market?
[A]: Potential opportunities for this market include the introduction of innovative products, the expansion of distribution channels, and the development of new flavors and packaging.
[Q]: What are the Major Restraints of this Market?
[A]: Major restraints of this market include the high cost of production and the threat of substitutes.
[Q]: What Regions are Expected to Offer the Largest Opportunities in the Ready to Drink Tea and Coffee Market?
[A]: Asia-Pacific and Europe are expected to offer the largest opportunities in the ready to drink tea and coffee market due to the increasing demand for convenience and health benefits, and the growing popularity of tea and coffee culture in these regions.
Research Methodology
Impact Analytix employs a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. The company utilizes a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. In Addition, a recurring theme prevalent across all our research reports is data triangulation which looks market from three different perspectives. Critical elements of the methodology employed for all our studies include:
Preliminary data mining
Raw market data is obtained and collated on a broad front. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. For a comprehensive understanding of the market, it is essential to understand the complete value chain and in order to facilitate this; we collect data from raw material suppliers, distributors as well as buyers.
Technical issues and trends are obtained from surveys, technical symposia, and trade journals. Technical data is also gathered from an intellectual property perspective, focusing on white space and freedom of movement. Industry dynamics with respect to drivers, restraints, and pricing trends are also gathered. As a result, the material developed contains a wide range of original data that is then further cross-validated and authenticated with published sources.
Statistical model
Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously. These factors are studied on a comparative basis, and their impact over the forecast period is quantified with the help of correlation, regression, and time series analysis. Market forecasting is performed via a combination of economic tools, technological analysis, industry experience, and domain expertise.
Econometric models are generally used for short-term forecasting, while technological market models are used for long-term forecasting. These are based on an amalgamation of the technology landscape, regulatory frameworks, economic outlook, and business principles. A bottom-up approach to market estimation is preferred, with key regional markets analyzed as separate entities and integration of data to obtain global estimates. This is critical for a deep understanding of the industry as well as ensuring minimal errors. Some of the parameters considered for forecasting include:
Market drivers and restraints, along with their current and expected impact
Raw material scenario and supply v/s price trends
Regulatory scenario and expected developments
Current capacity and expected capacity additions up to 2030
We assign weights to these parameters and quantify their market impact using weighted average analysis, to derive an expected market growth rate.
Primary validation
This is the final step in estimating and forecasting our reports. Exhaustive primary interviews are conducted, face to face as well as over the phone to validate our findings and assumptions used to obtain them. Interviewees are approached from leading companies across the value chain including suppliers, technology providers, domain experts, and buyers so as to ensure a holistic and unbiased picture of the market. These interviews are conducted across the globe, with language barriers overcome with the aid of local staff and interpreters. Primary interviews not only help in data validation but also provide critical insights into the market, current business scenario, and future expectations and enhance the quality of our reports. All our estimates and forecast are verified through exhaustive primary research with Key Industry Participants (KIPs) which typically include:
Market-leading companies
Raw material suppliers
Product distributors
Buyers
The key objectives of primary research are as follows:
To validate our data in terms of accuracy and acceptability
To gain an insight into the current market and future expectations
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