Ready to Drink Tea And Coffee Market Size, Share & Trends Analysis Report By Product (RTD Tea, RTD Coffee), By Packaging (Canned, Glass Bottle, PET Bottle), By Distribution Channel, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global ready to drink tea and coffee market size was valued at USD 98.04 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2022 to 2030. Rising demand for energy drinks that have a taste familiar to coffee and tea is one of the primary factors driving market expansion. Additionally, the growing prevalence of lifestyle diseases is pushing consumers toward ready-to-drink tea and coffee since these contain antioxidants and other beneficial ingredients. Positioning RTD tea and coffee as recreational products has succeeded in boosting their consumption among millennials.

The COVID-19 outbreak has positively impacted the growth of the overall food & beverage industry, including products such as RTD tea and coffee. At the World Tea Summit held in October 2020, Peter F. Goggi, President of the Tea of Association of the U.S., said that the pandemic has enhanced tea consumption. The dramatic increase was not only driven by health and wellness, but also by the ability of tea to provide a feeling of comfort. RTD tea and coffee are a subgroup of soft drinks but differ in function with proven health benefits.

Growing consumer awareness regarding the health concerns associated with the consumption of carbonated drinks is leading to a shift toward ready-to-drink tea and coffee. Rapid socio-economic development that has taken place over the last two decades has led to a rise in the cases of several chronic health conditions such as cancer, heart disease, and diabetes. Health advantages associated with the consumption of RTD tea and coffee are drawing older populations toward the segment. Diverse products are being launched in the market to cater to the wide consumer base spread across geographies.

For instance, in June 2019, The Coca-Cola Company and Costa Coffee launched Costa Coffee Ready-to-Drink (RTD), a chilled, canned coffee brewed with Costa beans. Several nutraceutical ingredients are also being incorporated to create more functional and versatile products. Customizing health beneficial products for children and women is the strategy of some major players to penetrate the market. In May 2020, Promise Beverages, a new premium socially-responsible beverage brand launched a line of craft small-batch Cold Brew Tea, which is made with high-quality, organic ingredients.

However, unforeseeable rainfall and a rise in the cost of agricultural inputs have increased the cost of raw materials, which increases the cost of the final product. The higher cost of RTD tea and coffee than conventional hot tea and ground coffee is one of the major hindrances to the growth of the market. Moreover, prevalent practices of brewing hot tea and coffee can constrain market expansion. The crucial and indispensable winning imperative of the industry is widely spread distribution networks of major players across different geographies, which help them supply products to a vast number of consumers.

Product Insights

The RTD tea segment led the market and accounted for a 63.8% share of the global revenue in 2021. Some of the commonly consumed RTD tea variants are black, green, fruit, herbal, matcha, oolong, and iced. Owing to the increasing working population and hectic schedules of professionals, product demand has escalated significantly. The growing preference for carbonated RTD tea among consumers is driving the segment growth. Further, a consistent decline in global soda consumption is creating an ideal opportunity for the product manufacturers of RTD tea and coffee to gain shares in the global arena.

The RTD coffee segment is anticipated to expand at the fastest CAGR of 6.4% from 2022 to 2030. Few of the commonly found RTD coffee variants in the market are yerba mate, guarana, acai berry, ginseng, taurine, and iced. These are manufactured using various ingredients such as extracts, additives, preservatives, natural and artificial sweeteners, flavors, acidulants, and nutraceuticals. Coffee is a well-accepted beverage and is considered a healthy replacement for carbonated soft drinks, hence, the demand for the product is likely to grow exponentially.

RTD coffee is an excellent source of instant energy and antioxidants; thus, it is accepted by youngsters as well as middle-aged working professionals. RTD coffee is available as a coffee extract or brewed coffee and can be consumed cold or hot. Manufacturers are not only striving to improve their sales and distribution networks but also focusing on innovative products with different flavors as a key strategy to expand their business. For instance, in July 2020, Omni Bev, the world's first ready-to-drink authentic Vietnamese Cold Brew Coffee, launched Vietnamese Coconut Matcha Cold Brew Coffee in the U.S.

Packaging Insights

The global ready to drink tea And coffee Market is segmented into canned, glass bottles, PET bottles, and others by packaging. The PET bottles segment led the market and accounted for a 33.9% share of the global industry revenue in 2021. The ease of handling coupled with low manufacturing cost is boosting the demand for this type of packaging. In addition, as PET bottles can be molded in different sizes and shapes, as well as produced in multiple colors, a large number of manufacturers are adopting this packaging type. Manufacturers are using attractive packaging solutions to grab consumer attention.

PET bottles offer greater breakage resistance and consume lesser energy and time during manufacturing than glass bottles. The demand for PET bottles for packaging RTD tea and coffee is rising due to their recyclability and reusability. PET bottles are easily recycled from many types of secondary products, including pillow stuffing, carpet fibers, tote bags, and strapping materials. The lightweight of plastic bottles reduces the cost of transporting materials to recycling centers. Thus, multiple benefits of PET bottles over other packaging types can be attributed to the segment’s overall growth in the market.

Canned packaging was the second-largest segment in 2021 and is projected to grow substantially over the forecast period. The growth of the segment is attributed to its benefits such as flavor preservation and enhanced product shelf-life. The canned packaging of these beverages adds to the convenience of consumers. Manufacturers opt for canned packaging since it accentuates the brand image in the minds of consumers. In February 2020, Rise Brewing Co. expanded its portfolio with the launch of London Fog, the company’s first-ever canned Nitro Earl Grey Tea Oat Milk Latte.

Distribution Channel Insights

With unique distribution strategies, RTD tea and coffee producers can tap most parts of the world. Supermarkets/hypermarkets made the largest contribution to the global market in terms of revenue, accounting for over 33.7% in 2021. Changing retail landscape and the growing number of supermarket chains, especially in densely-populated countries such as India, are fueling the sales of RTD tea and coffee through this channel. Additionally, the large amount of shelf space available in supermarkets/hypermarkets was responsible for the strong product sales through this channel in 2021.

The progression of the foodservice industry as a distribution channel has drawn the attention of a large number of manufacturers. The foodservice distribution channel consists of a network of distributors that supply products to cafeterias, hotels & restaurants, and industrial caterers, among others. The growth of café culture and the grab-and-go concept around the globe is projected to drive the demand for RTD tea and coffee products through this channel. These beverages are also offered at fast-food outlets and through vending machines for easy accessibility to consumers.

Convenience stores are thriving around the globe owing to rising urbanization and easy accessibility demanded by consumers. In most developing economies, convenience stores are typically located within a residential township or near offices, making them convenient for busy customers to make quick purchases. Convenience stores are a significant distribution network in countries such as Japan and China. These countries have been at the forefront of setting up convenience stores. The wide network of these stores is why manufacturers opt for them.

The online distribution segment is set to expand at the fastest CAGR of 6.7% from 2022 to 2030. Rising internet penetration and targeted consumer marketing by companies are factors likely to fuel the growth of this segment. Aggressive promotional activities by manufacturers on various social media platforms are boosting product visibility. Consumers can place orders effortlessly through online retail platforms and manufacturers/vendors can reach audiences present in remote locations. With an online presence, they now operate at minimal expense and increasingly invest in R&D.

Regional Insights

The Asia Pacific made the largest contribution to the global market, accounting for over 42.6% of the revenue in 2021. Countries such as India, China, and Japan, which have a high number of tea and coffee plantations, drive the demand for these products in the region. The market in the Asia Pacific is anticipated to witness healthy growth over the coming years, particularly in Indonesia and Thailand. In addition, the penetration of modern grocery retail chains in ASEAN countries, including Malaysia, Thailand, Indonesia, and the Philippines is boosting the sales of RTD tea and coffee.

The Middle East & Africa market is expected to expand at the highest CAGR of 7.5% from 2022 to 2030. Changing retail landscape coupled with high consumption of these products is expected to provide a boost to the market in the region. Moreover, the outgrowing foodservice sector in this region can further upthrust the demand for ready-to-drink tea and coffee. Product manufacturers are developing variants infused with fruity and floral flavors such as orange, apple, peach, rose, and lavender, as well as using plant-based milk, which is projected to fuel the demand.

North America is expected to witness moderate growth, majorly driven by the U.S. and Canada. The growth of RTD tea and coffee is supported by the rising importance given to health and improved dietary habits. Higher consumer spending power, increase in consumer awareness about wellness, and growing adoption of organically or naturally grown food & beverages over carbonated soft drinks are factors consolidating market growth in the region. Also, manufacturers in the region engage in constant competition to introduce new flavors and gain a competitive edge over each other.

Key Companies & Market Share Insights

The market includes both international and domestic participants. Key market players focus on strategies such as innovation and new product launches in retail to enhance their offering in the market. Some prominent players in the global ready to drink tea And coffee Market include: 

• Suntory Holdings Limited

• Nestlé

• The Coca-Cola Company

• Unilever

• Asahi Group Holdings, Ltd.

• PepsiCo

• Starbucks Coffee Company

• Monster Energy Company

• Danone

• AriZona Beverages USA

Ready to Drink Tea And Coffee Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the ready to drink tea And coffee market based on product, packaging, distribution channel, and region.

• Product Outlook (Revenue, USD Million, 2017 - 2030)

  • RTD Tea

    • Black

    • Green

    • Fruit

    • Kombucha

    • Others

  • RTD Coffee

• Packaging Outlook (Revenue, USD Million, 2017 - 2030)

  • Canned

  • Glass Bottle

  • PET Bottle

  • Others

• Distribution Channel Outlook (Revenue, USD Million, 2017 - 2030)

  • Supermarkets/Hypermarkets

  • Convenience Stores

  • Food Service

  • Online

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • Italy

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa