Flavoured tea market fast growing in India

With several organised players in the industry entering the fray, the flavoured tea market is fast growing in India, mostly among the youth, a Tea Board official said on Thursday.

The demand for such functional or herbal teas has increased in the country particularly after the onset of Covid-19, as tea with spices and natural herbs has proved to boost immunity against the virus, he said.

The size of the flavoured tea market in terms of volume and price is around 60 million kilograms and Rs 3600 crore respectively. This is, however, an approximate value taking the flavoured tea market to be 10 per cent of the entire packet tea consumption, the official said.

Kamakshya Singh, head (business development) of Luxmi Tea, said that functional and herbal tea consumption has gained momentum in recent years.
“The younger audiences are indulging in wellness that came due to the pandemic. Brands are now focussing on holistic wellness which covers an active lifestyle for which such tea blends are gaining popularity,” he said.

Singh said that e-commerce volumes for selling such tea online are rising 30 per cent each year while the estimated share of the herbal or functional tea market would be less than two per cent.

Luxmi Tea would shortly launch online channels for selling such teas.
He said that the functional tea market in India is around 0.5 per cent of India’s domestic consumption while growth in this category can be safely estimated at 40 per cent to 45 per cent per annum.

Sources in the industry said that many start-ups in the tea sector are betting big on such functional tea as they are getting a good response.