Organic Tea: Global Market and Forecast Sales

Abstract

The increasing demand from the consumers of Germany, United Kingdom, Japan and USA for organic teas, few conventional tea gardens of India, Sri Lanka and China have converted to organic processes during 1980s and subsequently it has been spread to different tea producing countries. Still the organic tea sector is a very small part of the tea industry, accounting of less than 1.3% by volume but the number of organic tea producers and the volume of organic tea traded in the world market have recorded high growth over the last couple of years. The annual growth rate has since cooled to 6%. It has a niche market where the produce sells at a premium price. The global organic tea market can be segmented into North America, Europe, Asia Pacific and rest of the world. Asia-Pacific region has the major market share followed by Europe. The domestic market for organic tea does not yet exist in India and Sri Lanka. But there is strong domestic market for organic green tea in China. China is exporting organic tea to Japan, the Europe and the United States. India leads the world in organic black tea output. Based on the higher demand for healthy beverages, the import and export of organic tea in the developed countries is found to rise at a steady growth rate. Around 75-80% of organic teas were exported to the United States and Germany followed by France, Denmark, the United Kingdom, Japan and Holland. In the US, organic tea is the fastest growing section of the tea industry and North America was at the peak of a growth burst in 2015, reinforcing its importance as the largest global market in terms of region, with Western Europe and Asia Pacific lagged slightly behind. Different global market research firm have predicted that the organic tea will continue to dominate and expected to increase by a CAGR of 5-13% next five years in U.S. In the present paper, the development of organic tea, global market and trade are discussed.