Europe Tea Market - Growth, Trends, and Forecasts (2023 - 2028)

The European tea market is projected to register a CAGR of 4.9% during the next five years.

The European tea market is witnessing a premiumization trend. Customers are seeking a high-quality, one-of-a-kind tea experience. This opens up chances for suppliers of specialty tea. The market for these specialty teas in Europe is still relatively small and is expanding gradually. According to "Agriculture and Agri-Food Canada," between 2016 and 2021, the European tea market witnessed sluggish growth, a compound annual growth rate (CAGR) of 3.4%, with total retail sales of USD 10.9 billion in 2021.

Western European countries dominate organic tea retail sales. France, the United Kingdom, Germany, the Netherlands, and Italy were the top five organic tea markets in Europe in 2021, accounting for 75.4% of total organic tea retail value sales in Europe. These countries are predicted to lead growth during the forecast period. Health benefits associated with consuming tea and an increase in awareness related to carbonated drinks among people are some of the major factors increasing the demand for tea in the region. Moreover, the increasing work culture and busy schedules of consumers are dragging the per capita spending toward the market.

Also, according to the CBI Ministry of Foreign Affairs, the main European tea markets with a strong tea tradition are West European countries and Poland. The United Kingdom is the world's largest tea market. There has been a rise in the popularity of specialty teas with unique flavors and higher quality across Europe. Green tea and herbal/fruit teas are also gaining traction in European markets due to their supposed health benefits.

Europe Tea Market Trends

Rising Demand for Herbal Tea

The demand for green tea and herbal tea in the country is growing at a faster rate due to aggressive marketing and campaigns showcasing the health benefits of tea. Consumption of tea improves blood flow in the body by broadening the key arteries and reducing the risk of clots, thereby reducing the risk of heart attacks. It has a high capacity to absorb oxygen radicals in the human body, which further helps to destroy the free radicals that are harmful. Such health benefits associated with the consumption of tea drive the demand for tea in the country. Moreover, the popularity of tea is continuously increasing in the food services sector. Herbal tea can help in promoting the immune system. The preference for herbal tea is growing because many consumers use herbal tea as a medicine that can help improve the digestive system of the body.

The United Kingdom is the Largest Market

The United Kingdom is the largest market. The changing lifestyles of people are gradually amplifying the importance of herbal tea, and a large part of the population now prefers herbal tea over caffeinated forms of tea. High nutritive content and fat-burning properties in green tea play a significant role in driving the growth of the tea market. The rising need for tea enables manufacturers to introduce natural and infused tea flavors targeted toward health-conscious consumers. For instance, Lipton Herbal Tea is mostly used for the treatment of liver problems by supporting the release of toxins from the body. Due to the engagement of the individuals in several works, the stress level rises eventually. Thereby, consumers of this region prefer tea as a stress-reliever drink, as tea reduces cortisol, the stress level hormone. Therefore, consumer demand for tea is rising in this region, thereby driving the market.

Europe Tea Market Competitor Analysis

The European tea market is highly competitive in nature. This is due to the presence of domestic and international players in this sector. The major players in the industry are Unilever PLC, Associated Britsh Foods PLC, Dilmah Ceylon Tea Company PLC, Nestle SA, and Cafedirect PLC. Key players are majorly focusing on product development and product innovation to meet the needs of customers. They are keen on offering quality and a variety of tastes to maintain premiumization. Some of the major players use mergers and acquisitions as their key strategy to sustain and secure a leading position in the industry. This will enable the companies to maintain dominance over other players, and the companies can remain a strong competition for other players in the market.

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