South America Tea Market - Growth, Trends, and Forecasts (2023 - 2028)

South America Tea Market - Growth, Trends, and Forecasts (2023 - 2028)

The South America Tea market is forecasted to register a CAGR of 2.2% over the next five years.

Countries in South America, such as Brazil, Argentina, and others are exhibiting a healthy demand for hot tea. Consumers in the regions are becoming more health conscious and their preference for herbal tea, green tea, and organic tea is also increasing. The increasing prevalence of obesity is a major issue in the region. According to World Obesity Atlas, the 2022 report predicted that the prevalence of obesity in Argentina will be 35.8% by 2030. As consumer awareness is increasing, consumption of green tea is increasing as it helps in weight loss. The market players are launching new campaigns and advertisements to make people aware of the benefits of tea consumption. The prominence of health campaigns coupled with the steady demand for green tea is driving the demand for tea in this region.

Demand for herbal tea is also increasing in the region owing to its health benefits and several old age population in the region. According to World Bank data from 2021, 10% of Brazil's population is of age 65 or older. Additionally, owing to the millennial population in the region, the demand for iced tea is also increasing. new flavors of iced tea like peach, mango, strawberry, and many more are attracting young consumers in the region. Premiumization of tea products is gaining prominence among consumers owing to its functional properties, which in turn is expected to boost the growth of the market. The expansion of food service channels has also facilitated the growth of the tea market in South America. Over the medium term, the market is expected to grow owing to the rising disposable income, more working population, and product innovation.

Increasing awareness about the health benefits of ready-to-drink tea is driving consumers to opt for a healthy lifestyle. Consumption of ready-to-drink tea causes weight loss and helps in reducing cholesterol, body pain, and headache. Due to rising health problems like frequent headaches, body pain, and fatigue, consumer preference for black tea is increased. black tea contains polyphenols and antioxidants which are beneficial for health and skin. Furthermore, the availability of a variety of ready-to-drink tea like iced tea, flavored tea, green tea, and many more is grabbing consumer attention, due to vigorous advertisements and promotions of the products, the product is reaching the consumers which is increasing the sales of products. Additionally, import exports of tea products are also driving the growth of the market. According to UN Comtrade data from 2021, Argentina Imported 89941Kg of Black Tea from Canada in 2021.

In Brazil, the consumption of tea is increasing owing to its herbal benefits, convenience, and variety. Consumers are willing to pay more for the variety of tea products that are available in the market. Consumers prefer black tea, green tea, herbal tea, and other tea types. The millennials in the country are attracted to the variety of flavors that are present in iced tea beverages. Market players have been innovating new products with different fruit flavors like peach, pear, and many more. Furthermore, a rise in disposable income, changes in taste preferences, and healthy ingredients added to the tea are other factors that fuel the market growth. Brazil imports tea from other countries like the United States, China, Japan, and others. According to UN Comtrade data from 2021, Brazil imported 2,11,505 Kg of tea from the United States.

Innovation in new products and flavors, as well as mergers and acquisitions, are the major competitive strategies followed by the key players in the tea market. Changing consumer preferences have intensified the competition among global players. Several companies find it important to meet the local regulatory requirements apart from meeting their standard safety and quality criteria. The major players in the South American tea market include Dilmah Ceylon Tea Company PLC., The Wiltshire Tea Company, Unilever Plc, Bigelow Tea Company, and The Coca-Cola Company (Honest Tea)

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