U.S. Tea Market Attracts China's Largest Tea Exporter

Nov. 10, 2015

Founded in 1950, Zhejiang Tea Group exports more than 40,000 tons of tea annually, showcasing a broad offering including: green, white, black, oolong, pu-erh as well as specialty gourmet teas. The company has developed over 10,000 high altitude tea farms and operates 10 tea processing factories including the world’s largest tea extraction facility.

The U.S. is now the fourth largest retail tea market in the world behind China, Russia and Japan. The $10 billion dollar plus U.S. tea market is experiencing robust growth across a number of categories including ready to drink (RTD) tea, specialty tea and foodservice. Consumer interest has been spurred by tea’s noted health benefits and demand for safe, affordable ways to improve personal wellness. Interest in ethically sourced, organic offerings has burgeoned with organic tea constituting over 10% of U.S. tea sales.

Zhejiang Tea Group was the first and is now the largest organic tea producer in China. “We are seeing increased demand in the US market for better quality tea as well as quality assurances from a reliable source,” says Shengyuan Chen, Executive Director of Firsd Tea North America. Also notable is tea’s broadening market penetration. Tea is now transcending gender lines as well as age cohorts. Among the emerging adopters for tea are millennials with as many millennials consuming tea as those consuming coffee. In fact, 42% of Americans under 30 drink tea while 27% drink tea exclusively.

U.S. consumers are also expanding their interest beyond black tea and are embracing tea’s many varieties, most notably green tea. Notwithstanding, preference for iced tea remains steadfast constituting over 85% of U.S. tea consumption. As soda and soft drink sales decline, iced and RTD teas are experiencing increased visibility both in retail channels as well as national restaurant and fast food chains. Recently, Wendy’s announced a partnership with Coca-Cola owned Honest Tea, adding Honest Tea’s Tropical Green Tea to their lineup and certifying the transition of organic green tea to the mainstream market. The RTD category is growing rapidly as a result of consumer demand for convenience as well as health. With a value in excess of $5 billion, the U.S. RTD market is expected to grow annually by 3-6% through 2018.

Firsd Tea is positioned to service needs across all categories given the company’s extensive capabilities. Leveraging a state of the art research and development infrastructure, Firsd Tea can produce a range of products spanning extracts, bagged tea, iced tea, RTD tea and specialty bulk tea. Because of the growing demand for premium green and other specialty teas, Firsd Tea continues to increase production capacity. “We are pleased to see the growing interest in green tea and other specialty teas in the U.S.,” says Shengyuan Chen. “Being the largest tea producer in China, we foresaw the trend years ago and have constructed several new factories to make different tea products to meet a variety of demands. One of these factories can produce 80 million pounds of tea annually, the largest in China.”

Firsd Tea’s value to U.S. customers is its ability to aggregate sourcing as well as its dynamic production and processing capability. “We offer customers a turnkey solution servicing needs in product development and private label as well as bulk procurement. Our size provides absolute reliability of supply and the most modern quality control available anywhere,” adds Ms. Chen.