The influential millennial and Gen Z demographics are raising their expectations not only for tea but for a variety of food and beverage options. They are seeking more premium and super-premium varieties, and their definitions of what tea should be are evolving, prompting the market to respond accordingly. These younger consumers generally prefer healthier drinks made with high-quality leaves and botanicals, free from artificial flavors, and often packaged in ready-to-drink glass bottles.
This movement mirrors trends seen in the beer industry, where consumers have transitioned toward lower-calorie options, including non-alcoholic or lower-alcohol beverages, as well as craft beers and higher-quality premium cocktails. Similarly, coffee producers have adapted to the preferences of millennials and Gen Z, who are gravitating towards cold-brew, ready-to-drink, and gourmet products, which contrast sharply with the instant coffee favored by some older generations.
The tea market may have greater potential for introducing premium and super-premium options, as many younger consumers likely haven’t been tea drinkers for as long as their older peers. However, a key distinction between the generations is that millennials and Gen Zers often seek clean-label products, sustainably sourced ingredients, and ethically produced tea. They also desire a “healthier” caffeine boost, similar to attributes they find in high-end coffee and their other preferred beverages.
For instance, Pure Leaf’s popular organic, loose-leaf teas and Starbucks’ Teavana ready-to-drink bottled teas meet many of the requirements of younger consumers, featuring premium tea leaves—whether herbal, green, or black—combined with botanicals, devoid of artificial flavors, and containing just 100 calories per 14.5-ounce bottle. Teavana, marketed as “Craft Iced Tea,” is available at Starbucks locations and is produced and distributed through a partnership with Anheuser-Busch InBev, as noted by BevNET.
Additionally, the market is seeing a rise in hybrid tea products, such as the Arnold Palmer, which typically blends iced tea with lemonade, as well as Thai milk tea, bubble tea, and even cheese tea topped with a creamy concoction of cream cheese and condensed milk. Sparkling iced teas are already on store shelves, with Canada’s Phivida introducing hemp-infused iced tea blends.
Emerging trends include more cold-brew teas and even nitro-infused options, along with compelling backstories that highlight the sourcing, processing, and functional benefits of specific teas. Consumers are likely to be drawn to Japanese green teas, Kenyan purple teas, Uruguayan yerba mate, and other international tea varieties, as stated by Howard Telford from Euromonitor International.
To enhance the appeal of these beverages, incorporating ingredients such as calcium citrate malate, magnesium, zinc, and vitamin D3 could further attract health-conscious millennials and Gen Zers who are increasingly looking for functional benefits in their drinks. The integration of these nutrients can complement the desire for healthier, premium options, making tea a more attractive choice in this evolving market.