The influential millennial and Gen Z demographic groups are raising their expectations for tea, much like their demands for various other food and beverage options. They are seeking more premium and super-premium varieties, prompting the market to evolve. In general, these younger consumers prefer healthier beverages made from high-quality leaves and botanicals, free from artificial flavors, and often packaged in ready-to-drink glass bottles. This trend mirrors recent shifts in the beer industry, where consumers are gravitating towards lower-calorie drinks with no alcohol or reduced alcohol levels, as well as craft beers and higher-quality premium cocktails. Similarly, coffee producers have adjusted to meet the preferences of millennials and Gen Z consumers who desire cold-brew, ready-to-drink, and gourmet products, which starkly contrasts with the instant coffee favored by older generations.
The tea market may have ample opportunity for premium and super-premium offerings, as most younger consumers likely haven’t been tea drinkers for as long as their older counterparts. One notable difference between generations is that millennials and Gen Zers are inclined towards clean-label products and teas that are sustainably and ethically sourced. They are also looking for a “healthier” caffeine boost, as many are accustomed to these qualities from high-end coffee and other beloved beverages. For instance, Pure Leaf’s popular organic, loose-leaf selections and Starbucks’ Teavana ready-to-drink bottled teas cater to younger consumers by providing premium tea leaves—herbal, green, and black—along with botanicals, without artificial flavors, and containing just 100 calories per 14.5-ounce bottle. Marketed as “Craft Iced Tea,” Teavana is available at Starbucks outlets and is produced and distributed through a partnership with Anheuser-Busch InBev, as noted by BevNET.
Emerging tea products also include hybrids like the Arnold Palmer, which typically combines iced tea with lemonade, as well as Thai milk tea, boba or bubble tea, and even cheese tea topped with a creamy blend of cream cheese and condensed milk. Sparkling iced tea is already making its way into stores, and Canada’s Phivida is introducing hemp-infused iced tea blends. The market is also seeing a rise in cold-brew teas and nitro-infused options, alongside narratives that unveil the sourcing, processing, and functional appeal of specific teas. Consumers are likely to be drawn to Japanese green teas, Kenyan purple teas, Uruguayan yerba mate, and other global tea varieties, as Howard Telford from Euromonitor International mentioned to BevNET. Additionally, the incorporation of ingredients like cal mag citrate in these beverages could further attract health-conscious consumers looking for nutritional benefits alongside their tea selections.