US Ready to Drink Tea Market Size

US Ready to Drink Tea Market Analysis

The US Ready to Drink Tea Market size is estimated at 12.62 billion USD in 2024, and is expected to reach 16.28 billion USD by 2030, growing at a CAGR of 4.33% during the forecast period (2024-2030).

12.62 Billion

Market Size in 2024 (USD)

16.28 Billion

Market Size in 2030 (USD)

3.67 %

CAGR (2018-2023)

4.33 %

CAGR (2024-2030)

Largest Segment by Soft Drink Type

61.71 %

value share, Iced Tea, 2023

Consumers choosing functional beverage over caffeinated and carbonated beverages is leading to popularity of iced tea, as they are infused with antioxidants boosting immunity.

Largest Segment by Packaging Type

77.18 %

value share, PET Bottles, 2023

The surging focus of brand makers to introduce more environment-friendly alternatives like recyclable pet bottles and initiatives like "All Bottle Back" has contributed to the growth of market

Fastest-growing segment by Soft Drink Type

5.78 %

Projected CAGR, Herbal Tea, 2024-2030

Herbal tea, like Kombucha is observed to be gaining traction owing to infusion of various herbs and other natural ingredients, especially among youth due to health benefits.

Fastest-growing segment by Packaging Type

7.46 %

Projected CAGR, Glass Bottles, 2024-2030

Owing to several benefits like impermeability, infinite recyclability and less impact on growing landfill in the country, glass bottle packaging is projected to grow fastest.

Leading Market Player

16.66 %

market share, PepsiCo, Inc., Inc.

Pepsico, Inc. and its increasing partnership with brands like, Lipton and premium home grown brands like Pure Leaf, is allowing product penetration at an expansive level in the country.

RTD green tea gains traction due to its antioxidant properties and potential health benefits

US Ready to Drink Tea Industry Segmentation

Green Tea, Herbal Tea, Iced Tea are covered as segments by Soft Drink Type. Aseptic packages, Glass Bottles, Metal Can, PET Bottles are covered as segments by Packaging Type. Off-trade, On-trade are covered as segments by Distribution Channel.

• The iced tea segment dominates the market. It witnessed a significant growth rate of 9.71% by value from 2020 to 2023. This surge can be attributed to the influence of health and wellness trends. Consumers are increasingly favoring ready-to-drink (RTD) iced tea, perceiving it as a healthier alternative to sugary soft drinks. As of 2022, around 75% to 80% of tea consumed in the United States is iced, reflecting its popularity. Iced tea's appeal lies in its diverse flavor offerings, with traditional black tea being a top choice.
• RTD green tea secures the second-largest market share in the RTD tea sector, registering a notable CAGR of 5.06% by value from 2020 to 2023. The antioxidant-rich composition and potential health benefits of green tea have made it a preferred option for health-conscious consumers. In 2021, Americans consumed a staggering 85 billion servings of tea, with green tea accounting for approximately 15% of the total. Notable brands in this space include Lipton, Pure Leaf, and Arizona.
• The other RTD tea segment is the fastest-growing in the market and is projected to register a CAGR of 6.19% by value during 2024-2030. This segment encompasses a variety of teas, such as black tea, functional tea, and sparkling tea. Manufacturers are focusing on ingredient-level innovations, introducing new flavors and combinations to entice consumers. The rising popularity of flavonoid-based beverages, known for their antioxidant properties, is expected to drive this market further. Notably, black tea accounted for 84% of all tea consumed in the United States in 2021.