Herbal Tea Market: $47.8 Billion Untapped Opportunity by 2031

The herbal tea market continues to thrive and experts project it will reach between $4.76 billion and $6.18 billion by 2031. Consumer priorities have changed dramatically – specialty teas now make up 60% of all tea sales, compared to just 37% in 2000. Millennials lead this transformation as 87% of them drink tea products and strongly prefer herbal and wellness varieties.

People’s growing focus on health has transformed the tea industry, with the organic herbal tea segment leading the way. The Asia-Pacific region leads the global herbal tea market because of its rich cultural heritage and rising health awareness. The World Health Organization reports that global obesity rates have almost tripled since 1975, which pushes consumers toward healthier drink options. These market conditions suggest growth rates between 3.2% and 6.1% from 2024 to 2031.

This piece examines market size forecasts, popular herbal varieties, and health benefits. We also look at packaging innovations, distribution networks, and regional trends that shape this expanding market segment. The analysis covers both opportunities and challenges ahead.

Global Herbal Tea Market Size and Forecast to 2031

The herbal tea market keeps growing steadily. Market research shows it will expand substantially through 2031. The data reveals clear patterns that show people want more plant-based drinks with health benefits.

CAGR and Revenue Projections (2024–2031)

Market values show different estimates but all point upward. The herbal tea market reached between $3.52 billion and $4.15 billion in 2024. Experts predict it will grow to between $4.76 billion and $6.18 billion by 2031. This growth is remarkable for such a well-established drink category.

Reliable market research firms predict these Compound Annual Growth Rates (CAGR):

• 6.1% CAGR from 2025 to 2031 (Insight Partners and Verified Market Research)
• 4.3% CAGR from 2024 to 2031 (Cognitive Market Research)
• 3.2% CAGR from 2024 to 2031 (Data Bridge Market Research)

Different methods and market definitions lead to varied growth rates. Yet they all point to steady expansion. Multiple sources back the higher projections of 6.1% CAGR, which suggests stronger faith in faster growth.

The market’s regional breakdown tells an interesting story:

North America leads with about 40% of global revenue ($1.48 billion in 2024), growing at 2.5% CAGR. Asia Pacific holds 23% ($0.85 billion in 2024) but grows fastest at 6.3% CAGR. Europe claims 30% ($1.11 billion) with 2.8% CAGR. Latin America (5%, $0.18 billion) and Middle East/Africa (2%, $0.07 billion) grow at 3.7% and 4.0% respectively.

Several factors accelerate this growth. People care more about health now and want natural drinks with wellness benefits. New herbal blends and flavors attract consumers who want something different from regular options. Better packaging and processing technology has improved how long products last, making them more appealing.

Comparison with Traditional Tea Market Growth

The herbal tea segment shows impressive momentum compared to the broader tea industry. The global tea market reached $17.42 billion in 2024 and should grow at 6.0% CAGR through 2030. Black tea leads with 38.8% market share.

Herbal teas grow faster than traditional tea types. The herbal segment should grow at 8.2% CAGR—faster than all other tea varieties. This shows people want caffeine-free drinks with health benefits.

Herbal teas outpace traditional ones because:

1. Health perception differential: Traditional teas offer some health benefits. But people link herbal varieties to specific benefits like better digestion, less stress, and stronger immunity.
2. Demographic appeal: Both tea drinkers and non-tea drinkers enjoy herbal teas as healthy caffeine-free options.
3. Product innovation rate: Herbal tea makers create new flavors, blends, and functional drinks faster than regular tea companies.
4. Organic and clean-label growth: People want more organic and natural products, which helps herbal tea sales.

Traditional tea still sells more, but herbal varieties keep gaining ground. This matches how people now make healthier buying choices. Most herbal teas lack artificial ingredients, which matches what today’s consumers want.

Both segments will keep growing toward 2031, but herbal teas should maintain their faster growth rate in the global drink market.

Segmentation by Type: Chamomile, Ginger, Hibiscus and More

The herbal tea market splits into different segments based on plant varieties. Each variety comes with its own benefits and growth patterns. Chamomile leads the market with 34%, peppermint follows at 15%, and hibiscus holds 11%. Ginger, turmeric, and specialty blends make up the rest of the market.

Chamomile and Peppermint for Relaxation

Chamomile rules the herbal tea world because of its calming properties and gentle apple-like scent. People love it because it works well to promote relaxation and better sleep. Clinical studies from 2024 show that chamomile helps people sleep longer with fewer interruptions. Chamomile’s compounds offer several therapeutic benefits:

• Anti-inflammatory and antioxidant effects
• Pain-relieving and liver-protecting qualities
• Potential blood sugar management properties
• Relief from premenstrual syndrome symptoms

These versatile benefits help chamomile stay ahead despite tough competition. The tea’s flexibility makes it perfect for both hot and cold drinks, and it blends easily with other flavors. This versatility strengthens its position in the market.

Peppermint tea, the second most popular choice, combines relaxation benefits with digestive support. Research proves that peppermint helps with indigestion, nausea, stomach pain, and irritable bowel syndrome symptoms. Many people choose peppermint tea specifically for stomach comfort, creating a strong market focused on digestive wellness.

Ginger and Turmeric for Anti-inflammatory Benefits

Ginger dominated the functional herbal tea market in 2023. Its popularity comes from strong anti-inflammatory and digestive benefits. Ginger tea packs disease-fighting antioxidants that help with nausea—especially during early pregnancy and cancer treatments. Studies show that ginger also prevents stomach ulcers and reduces menstrual pain.

Turmeric has a smaller market share but grows faster than any other herbal tea. Its rising popularity comes from curcumin, the main active compound with strong anti-inflammatory properties. Research shows that mixing turmeric with ginger in a 5:2 ratio creates better anti-inflammatory effects than either herb alone. This happens because the mixture better blocks inflammatory markers like nitric oxide, tumor necrosis factor, and interleukin-6.

Hibiscus tea makes up 11% of the market with its unique health benefits. Studies suggest it can substantially lower total and LDL cholesterol while helping with blood pressure in people with hypertension. Research also shows that hibiscus extract reduces oxidative stress, making it popular among athletes and fitness enthusiasts.

Blends and Exotic Herbs Gaining Popularity

Multi-herb blends are becoming more popular as people look for teas that offer multiple benefits at once. Adaptogenic herbs like ashwagandha and tulsi (holy basil) are trending because they reduce stress and balance brain chemicals.

Elderberry blends have become another growing category. People value them for antioxidant properties and immune support. These blends are rich in Vitamin A, Vitamin C, calcium, and iron. Red raspberry leaf tea has found its place among women who want relief from menstrual discomfort.

Wellness-focused blends show a significant market trend. Brands now create innovative formulas targeting specific health issues. Companies like Organic India have launched special varieties such as Tulsi Detox Kahwa and infusions like Peppermint Refresh and Moringa Hibiscus.

People’s priorities now lean toward multi-functional drinks. Blends that mix traditional and exotic herbs will likely grab more market share. Yes, it is the combination of familiar relaxing herbs with newer adaptogens that creates products appealing to both traditional tea drinkers and health-conscious consumers seeking specific wellness benefits.

Functional Benefits Driving Herbal Tea Demand

Health benefits are driving the growth of herbal tea markets worldwide. People now want beverages that do more than just refresh – they look for drinks with proven wellness properties. Scientific evidence of health advantages has made herbal teas popular, and different herbs help with specific health issues.

Cognitive Health and Stress Relief

Health-conscious consumers love herbal teas because they work wonders for brain function. Daily tea drinkers score better in verbal fluency tests – reaching 10.7 compared to non-drinkers’ 9.0. Brain scans show that people who drink tea regularly have better connections between different parts of their brain.

Some herbs are great at reducing anxiety. The flavonoid apigenin in chamomile helps improve memory and mood. Lemon balm tea blends help people feel less stressed, anxious, and depressed. The aroma of black tea alone can create a calmer mood and lower stress.

These herbs have proven stress-fighting properties:

• Lavender: Stabilizes mood and acts as a natural sedative
• Valerian: Tackles insomnia and anxiety-related heart palpitations
• Holy basil: Lowers physical and mental stress
• Passionflower: Reduces anxiety and helps you sleep better

These herbs don’t just mask symptoms – they work by targeting the brain’s chemical pathways. The market for calming herbal teas keeps growing as people search for natural alternatives to medications.

Gut and Digestive Health Applications

Digestive wellness is another reason why herbal teas are becoming popular. Drinking 4-5 cups of green tea daily increases good bacteria (Bifidobacterium) in the gut. Black, oolong, and fermented teas help improve microbial diversity and balance gut bacteria ratios.

Different herbs target specific digestive problems:

Peppermint relaxes the digestive tract’s muscles. A 4-week study showed that 75% of IBS patients using peppermint oil felt better, while only 38% improved with placebo. Ginger leads the functional herbal tea market by helping with nausea and protecting against stomach ulcers.

Fennel has moved beyond its role as a cooking herb. A study of 86 elderly people with constipation found that drinking fennel tea daily for 28 days led to more frequent bowel movements than placebo.

Marshmallow and licorice protect irritated digestive tissues by forming a soothing coating. This scientific backing has created a special market for gut healing teas.

Multifunctional Blends for Holistic Wellness

Blends offering multiple benefits are the fastest-growing herbal tea segment. Ayurvedic combinations like turmeric with black pepper work better together, and adding ginger creates an even stronger anti-inflammatory effect.

Modern wellness blends often contain adaptogens – herbs that help fight various types of stress. These appeal to people who want complete health support. Blends with rooibos (which has six times more antioxidants than green tea), passionflower, and holy basil tackle both physical and mental stress.

The market now features specialized blends for specific health goals. Turmeric golden latte blends boost brain function, while hibiscus combinations help heart health by lowering cholesterol.

These multi-benefit options will keep growing as people learn more about how herbs work together. Their versatility and effectiveness make them the main growth drivers in the organic herbal tea market through 2031.

Packaging Trends in the Herbal Beverages Market

Packaging makes all the difference in the herbal tea market. It affects product quality, customer experience, and the environment. The last several years have shown new trends that match customers’ changing priorities and industry breakthroughs.

Tea Bags vs Loose Tea: Consumer Priorities

Tea packaging choices tell us a lot about different markets. Americans love their convenience – 51% only use tea bags at home. The UK market shows an even stronger preference, with 84% of people choosing tea bags for their black tea. Only 16% go for loose leaf. The age breakdown tells an interesting story. People between 30-44 are the biggest fans of loose-leaf black tea at 27%. Compare that to just 10% of those over 60.

The quality gap between these options is clear. Loose leaf teas come with bigger, better leaves that open up fully while brewing. This gives you more flavor. Tea bags usually contain smaller pieces that don’t have much room to expand. This can make the taste less complex. Tea bags do have one advantage – they give you the same taste every time, which many people appreciate.

Convenience remains the deciding factor for most people. Loose teas take longer to steep but you can often use them multiple times. Tea bags are quicker to prepare but might get bitter if left too long. This balance between quality and ease of use keeps shaping how companies package tea worldwide.

Rise of Eco-friendly and Compostable Packaging

Environmental worries have led to great breakthroughs in tea packaging. Regular tea bags often contain polyethylene terephthalate (PET), a plastic that won’t break down naturally. The UK uses 60 billion tea bags every year, which creates a huge environmental challenge.

Tea makers have started using plant-based options instead. PLA (polylactic acid) from corn or sugarcane has become the go-to material for compostable tea bags. Clipper Tea led the way in 2018 with the world’s first unbleached, plant-based, fully compostable tea bags. PG Tips and Tetley soon picked up on this trend.

The market for eco-friendly tea packaging keeps growing. It should expand from $832.1 million in 2024 to $1,183.32 million by 2032, growing at 4.5% yearly. Companies are thinking beyond tea bags too. They’re exploring:

• Biodegradable materials that break down naturally
• Compostable packaging that helps soil quality
• Recyclable options like glass jars and paper containers

One Earth shows what’s possible with their new product line. Their tea bags use non-GMO sugar cane and break down in 14-21 days. They’ve earned USDA 100% Biobased certification. In spite of that, these materials usually need industrial composting facilities. This creates a challenge since only 15% of Americans can access these facilities.

Ready-to-Drink Herbal Tea Formats

Ready-to-drink (RTD) herbal teas are becoming more popular faster than ever. These products give people the convenience they need without losing health benefits. Hrbvor offers RTD herbal iced teas that blend organic herbs in unique combinations, both still and sparkling.

Companies keep coming up with better packaging. NCP’s ginger drink shows this perfectly. They switched from powder to an RTD product in Tetra Prisma Aseptic 250 Edge DreamCap cartons. This eight-sided package lets people drink easily with a one-step cap that reseals. The aseptic technology keeps nutrients fresh for up to a year without preservatives.

RTD herbal teas target health-conscious people looking for better drink options. Most products use natural sweeteners like honey and focus on health benefits. Modern RTD packaging must do several things well:

1. Keep herbal compounds fresh
2. Make drinking easy
3. Stand out on shelves
4. Meet green standards

Glass bottles lead the premium market, as shown by Just Ice Tea’s Organic Iced Tea in 16 fl oz bottles. Carton packaging appeals to people who want less plastic.

These packaging changes show how the herbal tea industry adapts to what people want today. Companies balance quality, convenience, function, and sustainability as the market heads toward its expected $47.8 billion value by 2031.

Distribution Channels: Online vs Offline Sales

Distribution channels are the foundation of the herbal tea market. Different retail formats use unique strategies. The journey from manufacturer to consumer affects product positioning and how consumers view the products, which creates various opportunities to enter the market.

Supermarkets and Hypermarkets Shelf Strategy

Supermarkets and hypermarkets lead the herbal tea market distribution landscape with the largest revenue share in 2024. They dominate because they can showcase many brands under one roof and offer convenient one-stop shopping. Product placement on shelves matters a lot in these stores. Manufacturers work closely with retailers to get the best spots, focusing on:

• Premium products at eye-level
• Products in high-traffic areas to boost sales
• End-cap displays for new or seasonal items

Products placed in these visible spots attract more customers. These mass retailers also draw shoppers with competitive prices and regular promotions, which makes premium teas available to more people. The supermarket-hypermarket segment stays on top by giving consumers multiple brand choices in each category.

Growth of Online Retail and DTC Brands

Online channels show the fastest CAGR in the herbal tea market. E-commerce benefits both consumers and brands in several ways. Shoppers can read detailed product descriptions, check customer reviews, and choose from more teas—including unique and international varieties they won’t find locally.

Brands like Teeccino and Numi Organic Tea have changed the market map with their direct-to-consumer (DTC) approach that skips traditional retail channels. This model helps brands build direct relationships with customers and learn about consumer preferences while managing their brand story. E-commerce also helps create targeted ads and individual-specific shopping experiences.

Online tea sales started in developed markets but now reach emerging regions where traditional stores are scarce. People buy more tea online because it’s convenient, offers variety, and has competitive prices. Many platforms now offer subscription services for regular tea drinkers.

Role of Specialty Stores in Premium Positioning

Specialty tea shops remain the top choice for high-end herbal tea products. These stores excel at selling quality specialty teas because they educate customers about their products, which helps justify higher prices. As one industry expert says, “you need to give the consumer who buys high quality tea… a lot of information, otherwise they will not accept the high price”.

Face-to-face interactions between the core team and customers create perfect conditions to sell specialty tea varieties. Staff members can explain where teas come from, how they’re processed, and the right way to prepare them—all reasons that justify premium pricing.

Specialty food stores also play a vital role in the premium tea market. These stores naturally attract people who want high-quality food and drinks, which matches well with premium herbal tea offerings. Their carefully selected products appeal to customers who want something better than regular supermarket varieties.

These distribution channels create a detailed ecosystem that serves different types of consumers in the growing herbal tea market. Each channel meets specific needs—from convenience and good prices in supermarkets to education and exclusive products in specialty stores—which helps the market grow across all segments.

Regional Insights: Asia-Pacific, North America, and Europe

Regional patterns shape the global herbal tea market distinctly. Each geographic area shows unique consumption habits and growth patterns.

Asia-Pacific Leading with Cultural and Production Strength

The Asia-Pacific region shows remarkable growth in herbal tea consumption. People choose it more often than regular caffeinated drinks. The market reached USD 1.43 billion in 2023 and grows faster than any other region. Higher wages and greater wellness product acceptance propel this growth.

China leads global tea production with 47% of worldwide output. The country produced 3.1 million tons in 2021. India bounced back to 1.33 million tons in 2021 from 1.26 million tons in 2020. Cultural traditions keep demand strong, especially in Southeast Asian countries that show promising growth.

North America’s Change Toward Organic Herbal Tea

North America’s herbal tea market reshapes itself rapidly. The market value stands at USD 1,300 billion (2024) and could reach USD 2,700 billion by 2035, growing at 6.87% yearly. Health-conscious consumers want natural caffeine-free alternatives.

The organic tea segment shows strong potential. Experts predict growth from USD 141.40 million in 2024 to USD 365.10 million by 2030. People understand green, herbal, and fruit teas’ health benefits better now. The United States dominates this market, while Canada grows the fastest.

Wellness-focused beverages gain popularity across the region. CDC data shows 40% of U.S. adults were obese in 2017-2018, which creates demand for healthier drinks. Companies launch new products with creative packaging and flavors to attract more customers.

Europe’s Need for Clean Label and Functional Beverages

Europe ranks second in the global herbal tea market. Germany, France, and the UK emerge as major consumers. European buyers want natural products that boost immunity and reduce stress.

Half of all European consumers prefer natural or clean label healthy eating options. Fresh, natural, and unprocessed features top the list of health-related qualities. Clean label claims appear on 35% of European food and drink launches.

The pandemic boosted functional beverage sales across Europe. People wanted drinks that support immunity, stress management, sleep, vitality, and brain function. Benefit blends make up 34% of herbal and fruit infusions. Sleep-promoting varieties sell particularly well.

Herbal tea sales in Europe should grow 9% between 2023 and 2025. Consumers want tasty, healthy drinks with specific benefits. Companies expand their product lines with innovative blends that target different wellness needs.

Key Drivers and Opportunities in the Herbal Tea Industry

The herbal tea industry thrives on three key forces. These forces create opportunities for companies to tap into changing consumer priorities and retail trends.

Rising Health Consciousness and Natural Product Demand

Health awareness leads the herbal tea market’s growth. People are drawn to these beverages because of their healing properties. Many turn to herbal teas as healthier options instead of sugary drinks as global obesity rates climb. Different teas target specific health issues – chamomile helps women with premenstrual syndrome, while hibiscus works against certain bird flu strains.

Half of European consumers want natural ways to eat healthy. This has helped chemical-free beverages grow steadily. The trend goes beyond Europe. Health-conscious people worldwide look for caffeine-free options that offer antibacterial, antioxidant, and anti-inflammatory benefits.

Innovation in Flavors and Functional Ingredients

Product innovation plays a vital role in market growth. Consumers are learning about bold flavor profiles. Restaurants and cafés create unique blends that mix traditional tea with fruit, herbs, spices, and flowers. This creative approach strikes a chord especially when you have millennials and Gen Z who want tailored culinary experiences.

Functional ingredients lead product development. Companies add superfoods like turmeric, moringa, and ashwagandha to create drinks with extra benefits. These include anti-inflammatory, anti-stress, and digestive-support properties. Such value-added blends command higher prices while addressing specific wellness concerns.

Expansion of Organic Herbal Tea Market

The organic segment shows strong growth potential. It’s expected to grow from $820.8 million in 2019 to $3,307.78 million by 2032, with an 11.34% CAGR. Better consumer education about pesticide-free products has increased the demand for organically grown tea.

North America’s organic tea consumption grows rapidly due to trends favoring natural, safe, and clean-label products. U.S. and Canadian markets actively seek organic, non-GMO, and chemical-free tea beverages. This comes from better understanding of health benefits like antioxidants, detoxification, and immune system support.

Challenges in Scaling the Herbal Tea Market

The herbal tea market shows huge growth potential, yet several roadblocks slow its expansion. Industry players need strategic solutions to ensure eco-friendly development.

High Cost of Premium Herbal Ingredients

Premium herbs drive up production costs, which makes herbal teas pricier than regular varieties. Quality natural or ethically sourced herbs cost 2-3 times more than standard black or green tea ingredients. The processing techniques add to expenses – air-drying and hand-rolling need more workers and time. Some varieties cost even more due to their specific growing locations. Rare Darjeeling teas or Ginseng Oolong from China or Korea’s specific regions demand top dollar. Companies need over $100,000 to buy modern blending and packaging equipment when starting out.

Regulatory Barriers for Health Claims

Different markets face tough regulatory challenges. The European Union requires thorough safety checks under the Novel Food Regulation before new herbal ingredients hit the market. The US Food and Drug Administration offers more flexibility but has strict rules about labels. Many regions don’t recognize traditional use claims—the FDA usually sees these as drug claims. Companies must guide themselves through complex rules that change from country to country. These differences stop manufacturers from entering new markets or growing their product lines.

Price Sensitivity in Emerging Markets

Price sensitivity affects market growth, especially in developing countries. Regular teas can be 625% cheaper than eco-friendly options in markets like Turkey. Seasonal changes make things harder, with herbal tea sales moving up and down by 25% between peak and slow periods. Small farmers in export-focused countries feel the pinch when international prices change. Vietnam’s falling prices over recent decades have discouraged farmers from investing in tea crops. Budget-conscious buyers often choose cheaper options over health benefits, which limits the spread of premium herbal products.

Conclusion

The herbal tea market shows promising growth through 2031. Consumer priorities have changed toward functional beverages, and there’s substantial evidence to back this up. Health consciousness keeps pushing market expansion forward. Market values could reach between $4.76 billion and $6.18 billion by 2031. This creates a great chance for both 10-year old companies and new innovators in the industry.

Different regions show unique market maturity and growth potential. Asia-Pacific leads the market because of its strong cultural ties and production abilities. North American consumers are quickly embracing organic varieties. European buyers place high value on clean-label products that offer specific health benefits.

Health benefits are the life-blood of herbal tea’s appeal. People now look for specific benefits rather than just good taste. They choose chamomile to relax, ginger to reduce inflammation, and peppermint to help digestion. Young people especially prefer herbal varieties over traditional tea, which explains the faster growth rates.

Consumer habits shape how herbal teas reach the market. Supermarkets and hypermarkets sell the most tea right now. Online platforms are growing faster than any other sales channel. Specialty stores, while smaller, play a vital role by teaching customers about premium products.

Notwithstanding that, the market faces several challenges before reaching its full potential. Premium ingredients make prices too high for everyday buyers, especially in growing economies. Health claim regulations vary a lot between regions, which makes global expansion tough. On top of that, price sensitivity remains the biggest problem in developing markets where people often choose lower costs over health benefits.

Without doubt, the future belongs to brands that balance quality, function, access, and sustainability well. Companies that handle these factors while following regulations will get the largest market share. Herbal tea has changed from a small beverage category into a mainstream wellness product. This reflects how society is moving toward preventative health measures and natural solutions.

FAQs

Q1. What is driving the growth of the herbal tea market? 

The growth of the herbal tea market is primarily driven by increasing health consciousness among consumers, demand for natural and functional beverages, and the perceived wellness benefits of herbal teas. Consumers are seeking alternatives to caffeinated drinks and beverages with specific health benefits.

Q2. Which herbal tea varieties are most popular? 

Chamomile is currently the most popular herbal tea, holding about 34% of the market share. Other popular varieties include peppermint, hibiscus, ginger, and turmeric. Multi-herb blends targeting specific health concerns are also gaining popularity.

Q3. How is the packaging of herbal teas evolving? 

Herbal tea packaging is evolving towards more eco-friendly and sustainable options. There’s a rise in compostable tea bags made from plant-based materials, as well as recyclable outer packaging. Ready-to-drink formats are also becoming more popular, with innovative packaging designs for convenience and freshness.

Q4. What are the main distribution channels for herbal teas? 

Supermarkets and hypermarkets currently dominate herbal tea distribution. However, online retail is showing the fastest growth. Specialty stores play a crucial role in selling premium herbal tea products and educating consumers about their benefits.

Q5. What challenges does the herbal tea market face? 

The herbal tea market faces challenges such as the high cost of premium ingredients, which can make products expensive. There are also regulatory barriers for making health claims, which vary by region. Additionally, price sensitivity in emerging markets can limit the adoption of premium herbal tea products.