Wellness is reshaping the way consumers think about what they drink, creating new opportunities for beverage brands to combine health, convenience and enjoyment. Few categories are better placed to tap into this shift than ready-to-drink (RTD) tea. From familiar fruit flavours to botanical blends and functional ingredients, Vanessa Neo, global category leader at Tetra Pak, explores how this convergence of wellness, premiumisation and flexibility is turning a long-established beverage into a compelling opportunity for growth.

Spend 10 minutes on most major social media channels, and you’ll quickly realise that ‘wellness’ is a hot topic. Increasing consumer interest in the intersection between health and wellbeing and food and drink means that in the US alone, 52% of shoppers are willing to pay more for drinks that support health and wellness goals.

Purchase drivers like these have made ‘wellness’ and the category surrounding it into a $2 trillion global industry, and that makes beverages like RTD (ready-to-drink) tea, such as iced tea, with their perfect combo of convenient packaging and carefully curated ingredients, the perfect wellness lifehack.

Already, RTD tea is the third-largest still and concentrate beverage category globally, behind juices. With a wide range of potential flavour combinations beyond the usual lemon and peach (from classic fruits like raspberry and botanicals like hibiscus, to unexpected confectionery pairings), there’s plenty of room to cater to different tastes and consumption occasions. Rooted in centuries of cultural tradition yet perfectly packaged to suit busy lifestyles, RTD tea's versatility makes it a huge opportunity for beverage consumers looking to capitalise on this next wave of wellness.

The healthier, mindful alternative

RTD tea is increasingly being chosen by consumers as a healthier alternative to coffee, alcohol and soft drinks. One in four consumers choose RTD tea because they perceive it as healthy, with sugar reduction as the leading purchase driver.

Tea's association with ritual and authenticity resonates for consumers seeking mindful moments in their fast-paced lives. UK tea manufacturer Twining’s will happily quote market research showing more than half of its younger customers reached for tea to prepare for a big moment such as a driving test, important meeting or the finale of their favourite TV series. Many of those Gen Z customers thought of tea as a blend of history and mindfulness. Even the preparation of the drink was seen as a calming ritual.

An interest in wellness and sustainability often goes hand in hand, as consumers consider the impact of their food and beverage choices on themselves and the world. In Tetra Pak’s research, 74% of respondents said environmentally sound packaging increases intention to buy. In the UK alone, 4 out of 5 consumers would prefer to receive a product in paper or cardboard packaging.

Flexible flavour and function

The beauty of RTD formats is that, as well as aligning with wellness and sustainability considerations, they amplify how versatile tea is. Lightweight, resealable RTD packages are perfect for on-the-go hydration while travelling to school or work. But they can also be a treat at social gatherings and music festivals. At home, larger multi-serve packs are ideal for family meals, BBQs and movie nights.

This flexibility opens up an endless range of possibilities for flavour, texture and function. Traditional tea types and regional favourites such as oolong, black or green tea can now be joined by novel varieties like barley teas, or scented and herb-flavoured teas like jasmine, osmanthus, chrysanthemum or chamomile.

As RTD tea competes with coffee and soft drinks, a premium sensory experience is also key. Producers can appeal to younger demographics with an indulgent positioning of creamy milk teas or sweet fruit teas, and cross-category hybrid concepts that combine tea with chocolate, coffee, mocktail and cocktail-inspired flavours. The influence of bubble tea brands has also accelerated experimentation in texture, with fruit pulp, jelly and tapioca pearls conjuring a more indulgent drinking experience. And, returning to the health trend, functional ingredients can be tailored to relaxation or an energy boost.

The endless potential variations and combinations for novelty and innovation make tea ideal for producers looking to diversify, differentiate, and capture premium price points.

Brewing up commercial success

RTD tea's health credentials, versatility and suitability for premiumisation are feeding a significant commercial opportunity. The category is projected to grow at an estimated 1.2% CAGR, reaching 40 billion litres by 2029. Asia-Pacific accounts for close to 70% of global consumption and provides inspiration in formats, flavours and hybrid concepts for other markets. Behind China and Japan, the US is now the third-largest RTD tea market. In European and North American markets, RTD tea is growing due to its health and functional appeal.

The good news for producers is that innovation is scalable and future-proof. After starting with basic formats, producers can strengthen portfolios by adding higher-margin premium options.

The opportunity is open to producers that are already making tea products or looking to diversify a portfolio of juice, dairy or plant-based products. Existing players in juice, dairy, coffee or low-alcohol beverages probably already have much of the equipment needed to seamlessly shift into RTD tea. For new entrants, a partnership with a co-packer makes it possible to test market potential with lower risk rather than going all in on capital investments.

Tea around the world

The long-standing heritage of tea means RTD tea’s popularity is far from a fad. RTD tea combines global scale, cultural depth and innovation potential in a way few categories can match.

For younger demographics and those looking to feel healthier, it is well positioned to provide a balanced alternative to coffee and soft drinks. Crucially, producers can offer wellness benefits with both convenience and a premium sensory experience.

For beverage producers looking to future-proof portfolios, now is the time to invest in a category that honours tradition while meeting the evolving demands of modern-day consumers.