Craft Tea Market Size, Share, and Industry Analysis by Product Type (Active Craft Tea, Blooming Craft Tea, and Floating Floss Craft Tea), by Packaging (Tea Bags and Pouches) by Distribution Channel (Supermarkets/Hypermarkets, Specialty Stores, Online Retail Stores, and Others), and Regional Forecast till 2032

The global craft tea market has grown dramatically in recent years, driven by increasing consumer tastes for premium and artisanal drinks. Craft tea has evolved as a prominent participant in the overall beverage business, appealing to both tea experts and health-conscious customers. Craft tea, unlike mass-produced teas, is distinguished by its emphasis on authenticity, quality, and sustainability. It is frequently supplied by small, independent tea producers that adhere to ethical production standards and organic farming methods, in line with the worldwide trend toward healthier and more ecologically conscious consumption.

The market is also witnessing more innovation, with a broad range of flavors, mixes, and brewing processes to accommodate different tastes. From single-origin loose-leaf teas to inventive herbal infusions, the craft tea market provides a premium, individualized experience that appeals to an increasing number of customers looking for alternatives to typical caffeinated beverages such as coffee. Furthermore, the emergence of e-commerce platforms and specialized tea stores has made craft tea more accessible, resulting in additional growth.

Craft Tea Market Driver

Health, Sustainability, and Innovation Fuel Growth in the Global Market

Health concerns, sustainability trends, and tea product innovation are pushing the global craft tea industry. As consumers become more aware of the health advantages of tea, such as its antioxidant qualities, stress reduction, and digestive assistance, the demand for premium and artisanal tea products has increased. Craft tea, which is generally produced from small-scale farms, emphasizes organic and ethically farmed components, reflecting the global trend toward sustainability and environmental responsibility. This emphasis on quality and sustainability resonates with today's consumers, who value environmentally friendly products and ethical sourcing.

Furthermore, the craft tea industry has benefitted from a wave of product innovation, with businesses offering a wide range of unique blends, flavor profiles, and brewing ways to suit a variety of tastes and preferences. Craft tea's diverse choices, which range from exotic herbal infusions to single-origin loose-leaf teas, help separate it from mass-produced alternatives, adding to its popularity. The ease of online buying and the advent of e-commerce platforms have broadened the market's reach, making high-quality teas more accessible to a worldwide audience. With a rising number of customers seeking healthier, more sustainable, and individualized tea experiences, the artisan tea industry is positioned for further expansion as it capitalizes on these changing consumer preferences.

Craft Tea Market Restraint

Scarcity of Raw Materials and Premium Price Range to Hamper the Market Growth

Despite the fast expansion and increased consumer interest in the artisan tea business, a number of hurdles or constraints prevent it from reaching its full potential. One of the most significant impediments is the high cost of production and price when compared to mass-produced teas. Craft tea frequently relies on small-scale growers, organic processes, and premium ingredients, which raises costs and limits affordability for price-conscious customers. Furthermore, the scarcity of raw materials is a barrier, as many craft tea makers originate from places with distinct temperatures and growing conditions. Raw material supply will be affected by weather, geopolitical upheaval, or crop failure, resulting in uneven availability and price volatility.

Craft Tea Market Opportunity

Emerging Premium Tea Product Consumption among Users to Drive the Market

The craft tea market is expanding rapidly, driven by increased consumer demand for premium, artisanal drinks with distinct tastes and health advantages. Craft tea, which is frequently made in small quantities and contains unique combinations of herbs, spices, and high-quality tea leaves, appeals to health-conscious customers looking for natural and functional beverages. According to the U.S. Department of Agriculture (USDA), tea consumption in the U.S. has gradually surged, with specialty teas accounting for a bigger percentage of the USD 13 billion U.S. tea industry by 2023.

The global tea industry is shifting toward organic, fair-trade, and sustainably produced goods, providing an opportunity for artisan tea makers to differentiate themselves via ethical sourcing and eco-friendly packaging. Government-backed efforts supporting organic farming and sustainable agriculture, such as the European Union's Common Agricultural Policy (CAP) and India's National Programme for Organic Production (NPOP), are pushing for the creation of premium tea blends with organic certification. Furthermore, the rising demand for health goods, such as teas packed with adaptogens, antioxidants, and detoxifying herbs, creates several potentials for innovation.

Segmentation

Key Insights

The report covers the following key insights:

• Overview of Parent Market


• Supply Chain Analysis


• Regulatory Analysis


• Industry SWOT Analysis


• Key Industry Developments


• Qualitative Analysis related to COVID-19

Analysis by Product Type

Based on product type, the market is segmented into active craft tea, blooming craft tea, and floating floss craft tea.

The active craft tea segment leads the market, recognized for its health benefits and functional properties. This category comprises teas steeped with herbs, spices, and other natural components that offer health benefits such as detoxification, immune boost, and stress reduction. With increased consumer interest in health and wellbeing, particularly in North America and Europe, active craft tea is a key category, appealing to health-conscious consumers looking for drinks with added functional value.

The floating floss craft tea segment is emerging as the fastest-growing segment, owing to its distinctive appearance and creative brewing processes. This variety of tea features fine tea strands that "float" in water, providing a unique experience for tea lovers. It is a developing trend in places such as Europe and the U.S., where consumers are increasingly interested in experimental and artisanal drinks. These product divisions reflect the changing preferences in the craft tea industry, with innovation playing an important role in driving demand.

Analysis by  Packaging

Based on packaging, the market is fragmented into tea bags and pouches.

The tea bags segment holds the largest share of the market due to their convenience, simplicity, and ease of usage. They are especially appealing to on-the-go consumers who value rapid and easy brewing. However, in the premium craft tea industry, tea bags are changing, with firms launching biodegradable and eco-friendly solutions to fulfill the rising demand for sustainable products, notably in North America and Europe.

Pouches are increasing in popularity, particularly in the loose-leaf tea market. They provide more storage capacity and are frequently equipped with resealable features to keep food fresh. Pouches are especially popular among health-conscious consumers who prefer loose-leaf or single-origin teas. Brands are increasingly using eco-friendly, biodegradable materials in pouch packaging, which appeals to environmentally concerned consumers in regions such as the U.S. and Western Europe.

Analysis by Distribution Channel

On the basis of distribution channel, the market is subdivided into supermarkets/hypermarkets, specialty stores, online retail stores, and others.

The supermarkets/hypermarkets segment continue to be the leading distribution channels for artisan teas, providing customers with convenient access to a diverse selection. Changing customers' lifestyles and preferences for easy and one-stop shopping is significantly driving the segment growth. Supermarkets are extending their luxury tea departments to meet the rising demand for artisanal, organic, and health-conscious tea brands.

The online retail stores segment is the fastest-growing segment owing to the advent of e-commerce and direct-to-consumer companies. Online platforms provide artisan tea brands access to a global consumer base. The ease of home delivery, along with the availability of multiple brands, has made online shopping a crucial growth driver. Overall, internet purchasing is likely to grow as more people prefer digital buying for specialized teas.'

Regional Analysis

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Based on region, the market has been studied across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Asia Pacific holds the largest share of the global craft tea market. Cultural traditions in Asian countries, including China, Vietnam, India, Malaysia, and Indonesia, have driven the product demand. The rising popularity of ready-to-drink teas among millennials and Gen-Z consumers will additionally drive the product demand.

North America is emerging as the fastest-growing market for craft tea products, owing to increased health consciousness and customer demand for premium, organic, and ethically derived products. Craft tea demand has increased significantly in the U.S., owing to the popularity of health trends and the emergence of e-commerce platforms offering a diverse choice of specialty teas.

Key Players Covered

• Rishi Tea & Botanicals (U.S.)


• Art of Tea (U.S.)


• DAVIDsTEA (Canada)


• TWG Tea (Singapore)


• Tielka (Australia)


• Harney & Sons (U.S.)


• The Tea Spot (U.S.)


• Numi Organic Tea  (U.S.)


• Pukka Herbs (U.K.)


• T2 Tea (Australia)


• VAHDAM Teas (India)


• Jade Leaf Matcha (Japan)

Key Industry Development

• In June 2022, Bigelow Tea, a U.S.-based family-owned tea company, announced an investment in research and development focused on sustainable packaging and enhancing tea quality. The company is prioritizing eco-friendly solutions and innovative product formulations, ensuring long-term growth in the competitive craft tea market.


• In December 2021, Nestlé, through its subsidiary Nestlé Health Science, acquired a majority stake in Yogi Tea, which also owns the Pukka brand. This strategic acquisition strengthens Nestlé’s presence in the premium and functional tea categories, with Yogi Tea known for its herbal and wellness-focused products. The deal reflects Nestlé’s commitment to investing in health and wellness innovations, including R&D efforts to expand functional tea offerings.