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Ready to Drink (RTD) tea market driven by busy & healthy lifestyle of the modern Indian consumer: Bonafide Research

The market for RTD tea is fuelled by a number of parameters including increasing trend of marketing, smart advertising, rising functionalities, and strong positioning of RTD tea. Rapid change in consumer behaviour is likely to support the branded tea players more than its unbranded segment.

RTD tea is one of the fastest growing categories among Indian tea market. Increasing urbanisation coupled with rising disposable incomes continued to pave the way for significant growth in RTD tea during past few years. RTD tea is gaining popularity due to a number of benefits associated with their consumption, such as, their antioxidant property, presence of low calories, and as an instant energy source. However, the popularity of RTD tea remains restricted primarily to young urban consumers who are looking for a healthier alternative to carbonated beverages. Indians strongly associate with black tea, which is very popular among consumers. Black tea is consumed as an instant refresher and is an integral part of everyday life. RTD tea is yet to benefit from such popularity among Indian consumers, largely due to the lack of presence of branded players.

According to recently published report of Bonafide Research "India Packaged & RTD Tea Market Overview", the total tea market of the country is anticipated to grow with more than 12% CAGR in the next five years. Even though tea has been popular throughout the last few centuries, their preparation process took more time than that of pre-packaged beverages, which are more readily available to the modern consumer. Hence, the ready-to-drink version of tea is enjoying immense success. This is expected to be a major driver for the Indian RTD tea market. Consumers who are willing to experiment with new flavours and look for alternatives to carbonated drinks are the most likely to try out RTD tea. However, the popularity of RTD tea in India is likely to remain restricted to consumers residing in urban centres such as Delhi, Bangalore, and Mumbai during the forecast period due to the limited distribution and low awareness of RTD tea as a product.

With the consumption of tea rising at a rapid pace, especially among the young and busy population, demand for RTD tea has registered significant rise over the years. Although conventionally plugged as a beverage for slow and relaxed consumption, there is a rise in preference for on-the-go tea, leading to the emergence of single-serve pod tea, usually reserved for coffee consumers. Demand for RTD tea beverages is also gaining traction from the wellness and health claims made by popular brands. On the other hand, the growing consumption of coffee that is freshly ground and increasing prices of raw materials may impede the growth of the market in the coming years. Growing demand of RTD tea among consumer's especially young consumers is expected to lead the ready to drink market in India.

Major companies operating in the packaged & RTD tea market of India are Duncans Tea Limited, Gujarat Tea Processors and Packers Limited, Hindustan Unilever Limited, Nestle India Private Limited and Tata Global Beverages Limited.


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