Iced Tea Market Industry Analysis and Growth Outlook 2025

Iced tea is a popular packaged drink in the form of cold tea that is chilled or cooled. It is sweetened usually using sugar or syrup. Furthermore, it is sweetened with flavored syrup, with an infusion of multiple common flavors that include lemon, peach and cherry. Iced tea is sometimes made by a particularly long steeping of tea leaves at lower temperature also known as sun tea.

Market Dynamics

Iced tea is considered as a healthy alternative due to its antioxidant and natural content along with its lower sugar content as compared to other carbonated soft drinks, which is expected to be a major factor driving growth of the iced tea market. According to the report published by Tea Association USA in 2015, tea compounds such as epigallocatechin gallate (EGCG), play an important role in the protection against cancer. Furthermore, popularity of tea as a beverage globally with increasing preference for iced tea is expected to drive growth of the global iced tea market. According to Tea Association of USA tea is the second most consumed drink after water with around 80% of tea consumed in iced form.

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However, utilization of artificial sweeteners in iced tea is expected to restrain growth of the global iced tea market. Hence, manufacturers are introducing to new sugarless iced teas in the market.

The lemon and peach flavors are currently the most popular flavored ice teas. Furthermore, tea companies are introducing new products and flavor combinations in order to improve their position in the market. For instance, Steaz introduced an iced tea without any sugar infused with passion and dragon fruit flavors, in addition to jasmine hibiscus with sweetened lime in 2017.

Market Trends

According to the India Brand Equity Foundation the global Ready To Drink tea market was valued at around US$ 24.5 Bn and the market is projected to witness significant growth during the forecast period. RTD teas are gaining significant traction among consumers due to their excellent properties as compared to other beverages. According to Tea Association of USA, the global RTD tea market witnessed around 40% growth from 2011 and 2016, which in turn is driving growth of the global iced tea market. Increasing consumer awareness regarding the sugar content in beverages is propelling adoption of healthier options such as iced tea. Furthermore, availability of low or sugar-free alternatives in iced tea is fueling market growth. For instance, Slo-Jo introduced a range of sugar-free iced teas in 2016, which is popular among health conscious consumers.

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Market Outlook

According to the Tea Association of the USA. Inc. report published in the December 2017, on an average, more than 158 million Americans drink tea every day. In 2016, ready-to-drink (RTD) tea accounted for around 80% of the tea category, a 4% increase since 2015. The iced tea market in Asia Pacific is expected to grow at the fastest rate during the forecast period. This is due to the rising popularity of RTD beverages in China and India. According to the IBEF, the ready to drink (RTD) tea and coffee market in India was valued at US$ 404.95 million in 2017. The growth of the iced tea market is expected to be driven by the popularity of different varieties such as herbal and ice tea coupled with increasing awareness regarding health benefits.

Key Players

Some of the key players operating in the global iced tea market include Arizona Beverages USA, BOS Brands, 4C Foods Corp., The Coca-Cola Company, Harris Freeman & Co, Unilever, Mother Parkers Tea & Coffee Inc., and Templar Food Products.

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