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Brewing growth: The wellness opportunity in RTD tea
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Thursday, 08 October, 2026, 08 : 00 AM [IST]
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Vanessa Neo
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Scroll through almost any major social media platform and it won’t be long before you start seeing wellness-related content. Consumers are looking beyond workouts and fitness routines to support their wellbeing through everyday choices, including what they eat and drink. This is influencing purchasing decisions: for example, 52 per cent of shoppers in US say they are willing to pay more for beverages that support those ambitions.
In turn, this growing appetite is helping to fuel a global wellness industry worth has helped to turn $2 trillion. For beverage producers, this creates a significant opportunity to develop products that combine health and wellbeing credentials with the convenience consumers increasingly expect. RTD (ready-to-drink) tea, including iced tea, is particularly well placed to meet both demands, bringing together convenient formats with carefully selected ingredients.
In fact, RTD tea is already the third largest still and concentrate beverage category globally, behind juices. However, there remains considerable scope to broaden its appeal. Flavour possibilities now extend far beyond familiar lemon and peach varieties, encompassing everything from fruits such as raspberry and botanicals such as hibiscus to more unexpected confectionery-inspired combinations. This gives beverage producers the flexibility to respond to different tastes, needs and consumption occasions.
Tapping into health-conscious choices
Part of RTD tea’s appeal lies in how consumers perceive the category itself. For some, it offers an alternative to coffee, alcohol and soft drinks that feels more aligned with their health priorities. One in four consumers say they choose RTD tea because they perceive it as healthy, with sugar reduction emerging as the leading purchase driver.
Separately, tea's association with ritual and authenticity resonates for consumers seeking mindful moments in their fast-paced lives. UK tea manufacturer Twining’s often quotes market research showing more than half of its younger customers reached for tea to prepare for a big moment such as a driving test, important meeting or the finale of their favourite TV series. Many of those Gen Z customers thought of tea as a blend of history and mindfulness. Even the preparation of the drink was seen as a calming ritual.
An interest in wellness and sustainability often go hand in hand, as consumers consider the impact of their food and beverage choices on themselves and the world. In Tetra Pak’s research, 74 per cent of respondents said environmentally sound packaging increases intention to buy. In UK alone, 4 out of 5 consumers would prefer to receive a product in paper or cardboard packaging.
A format for every occasion
Another strength of RTD tea is its ability to move between different moments in consumers’ lives. Lightweight, resealable packs can provide convenient refreshment while travelling to school or work, while the same category can play a very different role at social gatherings and music festivals. At home, larger multi-serve formats can cater to shared occasions such as family meals, BBQs and movie nights.
This flexibility opens up an endless range of possibilities for flavour, texture and function. Traditional tea types and regional favourites such as oolong, black or green tea can now be joined by novel varieties like barley teas, or scented and herb-flavoured teas like osmanthus, chrysanthemum or chamomile.
As RTD tea competes with coffee and soft drinks, a premium sensory experience is also key. Producers can appeal to younger demographics with an indulgent positioning of creamy milk teas or sweet fruit teas, and cross-category hybrid concepts that combine tea with chocolate, coffee, mocktail and cocktail-inspired flavours. The influence of bubble tea brands has also accelerated experimentation in texture, with fruit pulp, jelly and tapioca pearls conjuring a more indulgent drinking experience. And, returning to the health trend, functional ingredients can be tailored to relaxation or an energy boost. The endless potential variations and combinations for novelty and innovation make tea ideal for producers looking to diversify, differentiate, and capture premium price points.
Turning category growth into commercial value
RTD tea’s global trajectory offers a significant commercial opportunity. Global consumption is projected to reach 40 billion litres by 2029, growing at an estimated CAGR of 1.2 per cent. Asia-Pacific currently accounts for close to 70 per cent of consumption, with markets across the region providing inspiration in formats, flavours and hybrid concepts that could translate elsewhere. Beyond China and Japan, US is now the world’s third-largest RTD tea market, while health and functional appeal are also helping to drive growth across European and North American markets.
The good news for beverage producers is that innovation is scalable and future-proof. After starting with basic formats, producers can strengthen portfolios by adding higher-margin premium options. The opportunity is open to beverage producers that are already making tea products or looking to diversify a portfolio of juice, dairy or plant-based products. Existing players in juice, dairy, coffee or low alcoholic beverages probably already have much of the equipment needed to seamlessly shift into RTD tea. For new entrants, a partnership with a co-packer makes it possible to test market potential with lower risk rather than going all in on capital investments.
A category built to evolve
RTD tea’s strength lies in its ability to evolve alongside consumer expectations. Its established heritage provides a strong foundation, while the breadth of possible flavours, functions, formats and occasions gives producers considerable room to experiment and differentiate. For beverage producers, that combination creates scope to respond to wellness priorities while continuing to adapt as tastes change. Whether extending an existing tea range or diversifying into the category for the first time, RTD tea offers a flexible category from which to build future growth
(The author is global category leader at Tetra Pak)
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