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by Peter Guyer & Kimberly Maloney
Tea and specialty beverages have a long-standing position in the global market and are rising rapidly in popularity. The Middle East and North America have grown into large well-established tea markets such as China, Japan and the United Kingdom. U.S. tea brands can look outward and create a global brand strategy that includes countries which focus on healthy and natural drink choices and fall in line with current health and wellness lifestyle trends. Tea is becoming a popular drink choice as an alternative to higher sugar beverages such as colas and energy beverages.
For U.S. food and beverage companies, exporting is an important aspect to continue growth and create diversification in their product portfolio. Being able to recognize trends, such as the increasing consumer health awareness, is vital to creating successful exporting strategies. “Hot tea is forecasted to grow by a CAGR of 4% in constant value terms between 2015 and 2020.” (Euromonitor International, Global Tea: Consumer Trends Converge Around Brewed Beverages, 2016). Exporting is a means for U.S. tea and beverage companies to create this diversification, understand worldwide trends, improve their packaging and promotion, and increase sales. Tea and natural beverages are also able to be a premium and standard product, so it allows companies to access a wide range of sales channels, trade customers and consumers. 
Tea is a versatile product that is consumed for various reasons. Ranging from health benefits, energy boosts, taste preferences, and cultural ties, tea has a global reach that caters to a wide variety of consumers. “Tea is the most consumed packaged beverage overall worldwide. It is consumed across markets, including by consumers who have not fully entered formal consumer markets.” (Euromonitor International, Global Tea: Consumer Trends Converge Around Brewed Beverages, 2016). Tea can be purchased and sold as a retail product as well as “on premise” in the foodservice industry. The combination of a variety of consumers and channels gives tea more access to a wide range of exporting opportunities. The major tea brands that lead the global industry are Lipton of Unilever, Twining’s from the UK, Tazo Tea and the American owned brand The Republic of Tea (Top Tea Brands in the World, marketing.91, June 2018).
Herbal and green teas have been increasing in popularity. A new generation of consumers is on the rise who are conscious of their health habits. The health benefits that come with green and herbal tea are increasing sales as an alternative drink to pop, sugary juices, and energy drinks. “A variety of brewed beverages – hot and cold, tea based and herbal – align with what the global consumer is increasingly seeking from beverage occasions in terms of healthy, functionality and lighter (less sweet) flavors.” (Euromonitor International, Global Tea: Consumer Trends Converge Around Brewed Beverages, 2016). Green tea has shown results of increased energy, arthritis relief, calorie burning, and anti-aging, (Int J Obes Relat Metab Disord, 2000; Am J Clin Nut, 1999; Proc Natl Acad Sci USA, 1999). Black teas can help reduce bad cholesterol, boost the immune system and improve cardiovascular health (Am J Epidemiol 1999;149(2):162-7) As health-conscious consumers move towards more natural drink choices and avoid sugar and preservatives, it is important for beverage companies to understand to the dynamic and fast-growing export markets.

The lucrative East Asian countries are now enjoying rising tea consumption. Although these countries enjoy their own long-standing tea infrastructure and culture, they also have rapidly-growing young populations and are major importers. Japan is a U.S. $3.4 billion retail tea market, with specialty tea the fastest growing segment with a forecasted 5% increase by 2021. South Korea is a U.S. $178 million retail market with specialty black tea growing by 25.9% in volume and 37.2% in value by 2021. Greater China, a tea-growing country, is a U.S. $12.9 billion retail tea market with retail growth expected to hit 45% by 2021. “Herbal chilled teas or ‘cooling’ teas have an important role as a flavorful hydration beverage, particularly in East Asian markets, where the category is best established.” (Euromonitor International, Global Tea: Consumer Trends Converge Around Brewed Beverages, 2016). Japan, South Korea, Middle East and the United Kingdom all have large tea drinking populations as well as current import and export relations with the U.S., creating an ideal trade relation partner to U.S. companies.
Tea is not the only beverage that offers health benefits and has been increasing in the natural beverage market. Ready to drink beverages, spring water, sparkling water and cold brew continue to grow along with the tea markets. Sparkling and spring water compete for “share of throat” with traditional carbonated soft-drink beverage products, prompting companies such as Coca-Cola and Pepsi to acquire smaller, fast-growing alternative beverages. Spring water gives consumers the natural flavor and minerals that are found in water, and sparkling water gives consumers carbonation and flavor without the sugar. Alternative beverages are aligned with the worldwide movement to a healthier lifestyle, and U.S. natural beverage brands huge opportunities to explore global markets.

The bottled water category will reach nearly US$350 billion by 2021 following 10% year-on-year growth.” (The Global Bottled Water Market: Expert Insights & Statistics, by The Business Research Company, 2018). As bottled water rises so do other alternative drinks such as Kombucha with brands like Buchi Kombucha, Gt’s Kombucha, Kevita and Red Bull as the major players in the Kombucha market. “The Kombucha market is poised for huge growth by 2020, growing 25% each year” (, 2018).  Cold brew coffee is another drink trend that has seen major increases in sales in recent years, “In 2017, sales of cold brew coffee jumped to $38.1 million, a 370% jump from the $8.1 million in sales the category saw in 2015.” (From Cafes to Restaurant Menus, Cold Brew Coffee is Heating Up,, 21 May 2018).
Companies are recognizing this health trend and taking action to acquire other beverage companies that can put them in the center of the rising beverage market. In 2017 Starbucks chose to focus more on their own Teavana brand, so Unilever purchased Tazo Tea from Starbucks for $384 million (Why Starbucks decided to sell Tazo to Unilever,, 2017). Major soda beverage company, Dr. Pepper, and coffee company, Keurig Green Mountain, merged in June 2018, with a deal worth $18.7 billion (Dr. Pepper Issues Updates on Keurig Merger & Special Dividend,, 2018), and soon after the newly branded Keurig Dr. Pepper planned to acquire Core Nutrition LLC, for $525 million (, 27 Sept 2018). Core Nutrition is a bottle watered brand that has both core “hydration” water and core organics beverages as healthy alternatives to sugary drinks. Large multinational companies are seeing the potential for alternative natural beverages as a rising profitable industry and market.
The importance of exporting tea and other natural beverages to strategic foreign markets can benefit U.S. beverage brands and help to expand and solidify their presence in high-growth global markets.  Foreign markets offer excellent opportunities for U.S. beverage brands to stay abreast of worldwide consumer trends and stay relevant.
Reprinted from the Fall 2018 issue of  The Natural Food Exporter Magazine