Organic Oolong Tea Market Size (2024 - 2030)

In 2023, the market for organic oolong tea reached a valuation of USD 1.26 billion and is forecasted to attain a market size of USD 2.68 billion by the year 2030. Over the forecast period spanning from 2024 to 2030, the market is expected to experience a Compound Annual Growth Rate (CAGR) of 11.4%. The surge in demand is attributed to the growing adoption of healthier lifestyles and the increasing awareness of the health benefits associated with organic oolong tea. The market's expansion is further fueled by elevated consumer spending on tea-based beverages and the introduction of novel flavor combinations.

Industry Overview:

Oolong tea, a partially oxidized green tea ranging from green to black, is extensively cultivated in China. Its popularity has grown in recent years, particularly in parts of Europe and North America. Varieties such as Dan Cong, considered a premium grade and often offered at a premium price, and the more oxidized huge red robe, resembling black tea, are contributing to the widespread availability of oolong tea. The global oolong tea market is poised for robust growth, driven by the increasing preference for organic oolong tea flavors and the surge in health-conscious eating and drinking habits. Among its various forms, the cold-brew oolong tea, recognized as a green tea drink, is particularly favored, especially among millennials.

Consumption of organic oolong tea contributes to diabetes prevention, enhances neural and brain function, regulates cholesterol levels, promotes cardiac health, aids in weight management, strengthens teeth and bones, facilitates body detoxification, and offers other health benefits. The introduction of innovative flavors is expected to generate significant opportunities, propelling the market's growth for oolong tea. Consumers are increasingly mindful of the adverse effects of chemically treated food products, leading to a growing preference for organic alternatives.

COVID-19 Pandemic Impact on the Organic Oolong Tea Market:

Oolong tea has emerged as a sought-after, health-conscious choice during the COVID-19 pandemic, aligning with the trend of consumers adopting healthier food options. The demand for organic oolong tea experienced a surge during this period. However, it is essential to acknowledge the disruptions caused by the pandemic, including lockdowns, supply chain interruptions, and product supply challenges. The oolong tea market faced setbacks due to lockdowns, impeding the workforce and industrial facilities' closures. Supply constraints were significant as a result. Only after the relaxation of restrictions did the industry gradually resume operations with reduced staffing levels, bringing balance to the supply and demand ratio. In 2021, the supply rate returned to normal, and the demand-to-supply ratio was effectively proportioned, resulting in increased sales and rapid revenue growth.

MARKET DRIVERS:

Growing Health Consciousness and Demand for Organic Oolong Tea:

The market for organic oolong tea is profoundly influenced by the increasing preference for healthier lifestyles and the recognition of the health benefits associated with organic oolong tea. The market is expected to witness growth in the coming years due to the rising significance of foods and beverages with flavonoid content, known for their antioxidant properties. Increased awareness of the adverse effects of cadmium on human health is also anticipated to drive the demand for food products made from organic crops. Organic tea, with its digestive health benefits and the presence of theanine, which reduces anxiety, is expected to witness increased adoption among health-conscious consumers. Additionally, the expansion of oolong tea applications in nutraceuticals is contributing to the global organic oolong tea market's growth.

Increased Consumer Expenditure and Introduction of New Flavors:

Market participants are accelerating production to meet the growing demand, with major industry players expanding their flavor offerings. Cold-brewed oolong tea, a popular variant made with green tea, is gaining traction. Companies like Ito En are ramping up production and marketing of ready-to-drink (RTD) teas, including oolong tea. The use of the Internet and social media is fostering self-medication trends, further driving the global expansion of the oolong tea market. The growing awareness of the negative health impacts of chemically processed food products is prompting more individuals to opt for organic alternatives like oolong tea.

MARKET RESTRAINTS:

High Cost of Organic Tea:

The anticipated growth of the organic oolong tea market may face hindrance due to the comparatively high cost of organic tea compared to conventional tea. Products derived from organic tea are more expensive, primarily attributed to the costlier production process that avoids the use of synthetic chemicals. The certification process for organic products adds to the expense, making organic tea 10-15% more costly than conventional tea. The increasing global demand for organic tea or tea free from pesticides is also impacting export prices, posing a challenge to the sector's expansion.

Lack of Consumer Awareness in Developing Economies:

A lack of consumer awareness regarding the benefits of oolong tea poses a significant obstacle to market expansion, particularly in developing economies. The unawareness of oolong tea's advantages, particularly in nations that have not fully tapped into their market potential, is impeding growth. The market faces challenges in expanding smoothly, as consumer acceptance of oolong tea varies compared to other tea varieties. Country-specific import markets heavily influence the growth of the oolong tea market.

Increased Competition from Substitute Products:

While oolong tea is recognized for its health benefits, its popularity is challenged by the continued dominance of black and green tea. The limited scope for marketing oolong tea across different regions is contributing to this decline. Major players are striving to highlight the advantages of both black and green tea to showcase the effectiveness of oolong tea. Addressing this challenge requires a balanced approach to emphasize the unique benefits of oolong tea in the face of increased competition from substitute products.

Organic Oolong Tea Market – By Form

• Loose Leaf
• Tea Bag
• Powdered
• Others

The categorization of the Organic Oolong Tea Market by form includes Loose Leaf, Tea Bag, Powdered, and Others. Recognizing the diverse preferences of consumers, key industry players aim to offer a variety of options within their production units. Projections indicate a significant demand for powdered and tea bag forms in the current forecast period, while the nuanced flavor of loose leaf oolong tea is acknowledged for its distinct characteristics.

Organic Oolong Tea Market – By Flavor

• Flavored
• Plain

The segmentation of the Organic Oolong Tea Market by flavor results in two categories: Flavored and Plain. Acknowledging that certain consumers are deterred by the natural taste of tea, major companies introduce flavored variants by infusing tea granules and bags. A separate customer base prefers the simplicity of plain tea, prompting industry leaders to balance the production of flavored and plain oolong tea.

Organic Oolong Tea Market – By Distribution Channel

• Supermarkets & Hypermarkets
• Specialty Stores
• Online Retail

The distribution channel categorization of the Organic Oolong Tea Market comprises Supermarkets & Hypermarkets, Specialty Stores, and Online Retail. In 2021, supermarkets and hypermarkets held the majority share, exceeding 35.0%. The wide array of products in the market makes finding specific tastes challenging, making supermarkets and hypermarkets the practical choice due to their extensive options. Online retail, experiencing a 17.1% CAGR from 2022 to 2030, is gaining momentum, offering convenience and immediate access to health teas, especially during the COVID-19 pandemic. Specialty stores are also poised to expand their revenue shares, driven by establishments in Western European and North American regions.

Organic Oolong Tea Market - By Region

• North America
• Europe
• Asia-Pacific
• Rest of the World

Geographically, North America is expected to contribute significantly to the organic oolong tea market, with consumers favoring robust herbal tea flavors. Asia-Pacific is predicted to dominate the market, led by high production and consumption rates in countries like Japan, China, and India. China, in particular, has witnessed substantial growth in organic oolong tea consumption over the last decade. To cater to evolving consumer preferences, major players in these regions continually adjust their production strategies.

Major Players in the Market:

The key participants in the Organic Oolong Tea Market include:

1. Twinings Ceylon Organic Ltd
2. Bigelow Tea Company
3. Teas and Theas Ltd
4. Sierra Tea
5. Arbor Teas
6. Republic of Tea
7. Dilmah
8. Townshend's Tea Company
9. The Hain Celestial Group
10. Harney & Sons.

Notable Developments in the Global Organic Oolong Tea Market:

Collaboration: In September 2021, The Republic of Tea collaborated with Calm, a leading mental wellness company, to launch a new tea line, featuring blends designed to promote focus, relaxation, and rest.

Product Launch: In October 2020, The Republic of Tea introduced the Mandalorian Tea Collection, a limited-edition specialty tea line created in partnership with Disney and Lucasfilm, inspired by the second season of The Mandalorian available on Disney+.