Iced Tea Market- By Type , By Flavor , By Form , By Distribution Channel , By Geography - Opportunity Analysis & Industry Forecast, 2025-2031

Iced Tea Market Overview

The Iced Tea market size is forecast to reach US$75.8 billion by 2031 after growing at a CAGR of 4.7% during 2025-2031. In the beverage sector, iced tea plays a crucial role in providing a refreshing and healthier alternative to carbonated drinks, driven by evolving consumer preferences for natural and low-calorie beverages. The growing emphasis on health-conscious lifestyles, demand for functional beverages, and innovation in flavor profiles are expected to drive the market during the forecast period.

A major trend in the market is the consumer demand for global flavors. As consumers seek diverse and exotic taste experiences, brands are introducing iced tea varieties inspired by international flavors. In November 2023, a major beverage company launched a new iced tea line featuring flavors such as matcha from Japan, hibiscus from Mexico, and chai spices from India to cater to evolving consumer preferences. A notable trend in the iced tea market is the rise of functional beverages, with consumers seeking added health benefits such as antioxidants, probiotics, and adaptogens. In July 2023, RYL Tea launched a functional iced tea line in four flavors: Original Green Tea, Peach Black Tea, Raspberry Black Tea, and Lemon Black Tea. These beverages are crafted with all-natural ingredients, including botanicals and vitamins, aiming to provide a blend of taste and health benefits. 

Market Snapshot:

Iced Tea Market - Report Coverage:

The “Iced Tea Market Report - Forecast (2025-2031)” by IndustryARC, covers an in-depth analysis of the following segments in the Iced Tea Market.

Key Takeaways

Black Iced Tea is the Largest Segment

Black iced tea is the largest segment in the iced tea market due to its rich flavor, widespread consumer preference, and perceived health benefits. This tea variant is known for its high antioxidant content and moderate caffeine levels, making it a popular choice for both refreshment and functional health benefits. Black iced tea is widely available in various formulations, including sweetened, unsweetened, and flavored versions, catering to diverse consumer tastes. Its versatility allows brands to experiment with innovative blends, including herbal infusions and low-calorie options, further driving demand. In March 2024, Pure Leaf introduced the Pure Leaf Zero Sugar Sweet Tea, a high-quality sweet, iced tea with zero sugar and zero calories made from freshly picked, high-quality black tea leaves. Additionally, the growing focus on natural and organic beverages has boosted the adoption of black iced tea made from sustainably sourced ingredients. 

Ready-to-Drink Beverages are the largest segment 

Ready-to-drink (RTD) beverages represent the largest segment in the iced tea market due to their convenience and growing consumer demand for on-the-go solutions. The busy lifestyles of consumers have fueled the demand for RTD beverages, providing a convenient and refreshing option without requiring preparation. According to a report by the International Food Information Council (IFIC), RTD beverages, including iced tea, are among the top preferences for millennials and Gen Z consumers. Innovations such as functional iced teas with added vitamins and antioxidants have further driven demand in this segment. RTD iced teas require specialized packaging to maintain their freshness and flavor during transportation and storage, ensuring a premium consumer experience.

APAC Dominates the market

The Iced Tea market is dominated by the Asia Pacific region primarily due to the high consumption of tea and increasing demand for innovative beverage products. Major countries such as China, India, Japan, South Korea and Thailand have strong tea-drinking cultures, which have evolved into a growing preference for iced tea. According to data from the Tea Board of India, India produced over 1.3 billion kilograms of tea in 2022, reaffirming its position as one of the largest global producers. In 2023, production increased slightly to approximately 1.37 billion kilograms. Provisional data for 2024 indicates that from January to October, India produced around 1.38 billion kilograms of tea, suggesting a consistent production trend. Similarly, China is the largest exporter of tea worldwide, with its iced tea segment rapidly expanding in urban markets. The growing popularity of health-conscious beverages, coupled with APAC's robust tea culture, has made the region a dominant force in the iced tea market.

Growing Health Awareness to Drive the Market

The increasing awareness of health and wellness among consumers has significantly driven the iced tea market. With a global shift towards low-sugar and natural beverage options, iced tea has become a preferred alternative to carbonated drinks. According to the World Health Organization (WHO), the growing incidence of lifestyle diseases such as obesity and diabetes has prompted consumers to choose beverages with functional benefits. Iced teas, infused with natural flavors and health-enhancing ingredients such as green tea and herbal extracts, have gained immense popularity. This trend is expected to continue, fueling market growth.

Growing Concerns Over Sugar to Hamper the Market

The high sugar content in many iced tea formulations is a significant challenge for the market. Rising health concerns about sugar consumption, including its contribution to obesity and diabetes, have prompted consumers and regulatory bodies to demand healthier alternatives. According to estimates, more than 40% of ready-to-drink iced teas contain added sugars, leading to scrutiny from health advocates. Several countries have implemented sugar taxes to curb consumption. For instance, the UK introduced a Soft Drinks Industry Levy in 2018, which has prompted beverage manufacturers to reformulate products with reduced sugar content. As consumer demand shifts towards sugar-free and natural sweetener-based iced teas, traditional sugary variants are likely to witness a decline.              

For more details on this report - Request for Sample

Key Market Players

Global Iced Tea top 10 companies include:

1. Unilever
2. Nestlé
3. The Coca-Cola Company
4. PepsiCo, Inc.
5. Arizona Beverage Company
6. Dr Pepper Snapple Group, Inc.
7. Tata Global Beverages
8.  BOS Brands
9. 4C Foods Corp.
10.  Harris Freeman & Co., Inc.

Scope of the Report:

For more Food and Beverage Market reports, please click here