Specialty Tea at a Crossroads

Specialty Tea at a Crossroads: What’s Brewing Now—and What Must Change-Lorna Owens.

The specialty tea industry has never been more visible—or more vulnerable. On one hand, premium loose-leaf, matcha, oolong, white, and botanical blends are riding a global wave of wellness and connoisseurship. Analysts estimate specialty tea sales will grow at ~6–7% annually through decade’s end, reaching roughly $49B by 2030, even as ready-to-drink (RTD) teas accelerate in parallel.

Where the Market Is Now

Tea is expanding in two lanes:

- Premium leaf & ceremony-adjacent formats. Consumers are paying for provenance, varietal, and processing—Darjeeling first flush to small-batch oolongs and ceremonial-grade matcha—mirroring wine and specialty coffee.

- Convenience & cold. RTD tea is a juggernaut, projected to grow from ~$34–40B in 2024 to ~$60–69B by the mid-2030s. Low-sugar, functional and sparkling styles are winning cooler space alongside kombucha.

What Must Change for Tea to Thrive

1. Invest in climate resilience and price it in. Buyers should back regenerative practices (shade trees, soil health, water stewardship) and long-term contracts that help farmers adapt to heat and erratic rains.

2. Make provenance legible. Like coffee, specialty tea needs consistent traceability and digital QR storytelling.

3. Rethink formats without sacrificing quality. Younger drinkers want great tea fast. That means elevating sachets, concentrates, and RTDs that are truly premium.

4. Educate beyond buzzwords. Matcha’s boom brings confusion. Clear standards protect both culture and trust.

5. Price honestly. Communicate the reasons behind price shifts—climate, harvests, labor costs—to build consumer goodwill.

What the New Generation Wants

Gen Z and Millennials buy beverages that match their values and routines:

- Function without the sugar. They want hydration and focus without excess sweeteners.

- Sustainability, ethics, and story. Origin, labor practices, and footprint matter.

- Convenience plus craft. Premium RTDs, café experiences, and education-rich content drive loyalty.

Can Tea Win the “No- and Low-Alcohol” Moment?

Yes—if it shows up like a contender. The no/low-alcohol category is expanding rapidly, and tea has natural advantages:

- Terroir and complexity rival wine without ethanol.

- Flexible formats allow tea-based cocktails, cold brews, spritzers, and nitro pours.

- Tea’s wellness halo (calm focus, low/no sugar) aligns perfectly with moderation trends.

Restaurants, bars, and venues can lean into this by offering tea lists with origins, tasting notes, and creative tea cocktails.

The Bottom Line

Specialty tea is poised for growth—but only if it modernizes farming, formats, and storytelling. Resilience at origin, transparency, premium convenience, and bold entry into the no-alcohol space will future-proof the category. The signals are there; now the industry must brew a better system to match the moment.