Revenue in the Tea Industry will Heat up as the Wave of Health Consciousness Supports Growth

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The United States is witnessing a health shift, with millions of Americans being swept up by the wave of healthy eating and living habits. Scientific findings and media reports are constantly reminding consumers to adopt better and healthier lifestyles. Consumers are changing their dietary patterns to incorporate low-fat and low-sugar products while seeking alternatives to staples like soft drinks and coffee. As a result of this trend, the Tea Production industry has sustained increases in revenue and consumption over the past five years, according to IBISWorld, the nation’s largest publisher of industry research. The overwhelming evidence and promotion of tea's health benefits have fostered positive perceptions among the public, increasingly making tea the healthy beverage of choice.

IBISWorld Market Research

IBISWorld Market Research

Tea is also becoming more popular thanks to the increasing variety of flavors, strengths and sweeteners

The United States is witnessing a health shift, with millions of Americans being swept up by the wave of healthy eating and living habits. Scientific findings and media reports are constantly reminding consumers to adopt better and healthier lifestyles. Consumers are changing their dietary patterns to incorporate low-fat and low-sugar products while seeking alternatives to staples like soft drinks and coffee. As a result of this trend, the Tea Production industry has sustained increases in revenue and consumption over the past five years, according to IBISWorld, the nation’s largest publisher of industry research. The overwhelming evidence and promotion of tea's health benefits have fostered positive perceptions among the public, increasingly making tea the healthy beverage of choice. These trends are expected to persist in the five years to 2016. IBISWorld projects revenue to reach $1.1 billion. The gourmet and specialty tea segments will likely be the largest beneficiaries of the health trend.

Emerging from the long shadow of the Coffee Production industry, the Tea Production industry is beginning to come into its own. Despite rising unemployment and waning consumer confidence, IBISWorld estimates industry revenue will increase at an average annualized rate of 4.7% in the five years to 2011 to total $955.5 million. Revenue is expected to grow at a slower rate of 1.1% in 2011.

An increased emphasis on healthy living is changing consumer dietary patterns, helping to drive the industry's growth. Backed by the scientific community, tea manufacturers are marketing the various health benefits of tea consumption, especially tea's effect on lowering cholesterol. Additionally, as Americans have become more health-conscious, they have looked for alternatives to sugar-rich carbonated beverages.

According to IBISWorld analyst, Agata Kaczanowska, Tea is also becoming more popular thanks to the increasing variety of flavors, strengths and sweeteners. “The high differentiation of teas has enabled the industry's major players to earn high profit margins and perform well despite recessive economic conditions,” says Kaczanowska. “High brand and customer loyalty major players command has also contributed to high profit margins and sales growth.” In particular, Unilever, a multinational conglomerate, has the distinction of longevity with its Lipton brand. On the other hand, as members of a growth industry, niche players have had some significant opportunities to service increasingly fragmented consumer needs, such as the specialty and gourmet segment.

“The Tea Production industry's future is bright. America's aging population, which embraces tea's antiaging and health attributes, will be a strong source of future demand and will drive sales of specialty products, especially for green and other herbal teas,” says Kaczanowska. In addition, the emphasis on innovation and new product introductions will further stimulate demand over the next five years. IBISWorld projects that industry revenue will grow through 2016 to total $1.1 billion.

For more information, download the full report from IBISWorld on the Tea Production Industry

IBISWorld Industry Market Research Reports Contain:

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Industry Definition
Main Activities
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Industry at a Glance

Industry Performance
Executive Summary
Key External Drivers
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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James Karklins
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