Tea Production in the US Industry Market Research Report from IBISWorld has Been Updated

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Demand for tea will continue to heighten over the next five years due to increased health awareness and new product offerings. Tea is becoming infused into the American diet as consumers become more health-conscious and look for alternatives to sugar-rich carbonated beverages. However, while the tea industry will continue to experience an upswing, strong demand for ready-to-drink teas and beverages, this industry's competitors, will somewhat limit revenue growth. For these reasons, industry research firm IBISWorld has updated a report on the Tea Production industry in its growing industry report collection.

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As consumers get older, they will increasingly demand tea for its health and antiaging benefits

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 annualized rate of 3.1% in the five years to 2012 to total $987.0 million. Revenue is expected to grow at a slower rate of 1.8% in 2012. Growth is expected to slow in 2012 due to uncertainty abroad; although exports will continue to generate a rising share of sales, accounting for about 29.9% of 2012 revenue, according to IBISWorld industry analyst Agata Kaczanowska. 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.

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. The high brand recognition and customer loyalty that major players in the Tea Production industry command have also contributed to high profit margins and sales growth. In particular, Unilever, a multinational conglomerate that makes up 48.3% of industry revenue, 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 serve increasingly fragmented consumer needs, such as the specialty and gourmet segment. Establishments have opened up at an average annual rate of 3.1% during the past five years to reach 42 locations in 2012, Kaczanowska says.

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 herbal teas (herbal tea does not contain tea plant leaves). In addition, the emphasis on innovation and new product introductions will further stimulate demand in the next five years. IBISWorld projects that industry revenue will grow through 2017. The top four players make up more than half of the Tea Production industry's revenue, with the top two companies making up the lion’s share of that, in 2012. This share has decreased since 2007 as small, specialized tea producers sprouted up nationwide. Despite being in the growth phase of its life cycle, the industry is dominated by a single brand, Lipton, which is owned by a multinational corporation, Unilever. For more information, visit IBISWorld’s Tea Production in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes businesses that blend and package tea, excluding iced and ready-to-drink tea.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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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