top of page

Premiumisation of Tea: Price-point, Branding, and Consumer Behaviour

With the global tea market projected to keep growing, the surge in consumer demand for healthier, unique, and ethically produced teas is reshaping industry dynamics. This shift towards premium tea is fuelled by a growing preference for diverse flavours, health benefits, and sustainable practices. From matcha's rise to herbal teas' wellness appeal, the market is embracing teas that offer more than just a daily refreshment—they promise an experience of luxury, craftmanship, and exclusivity. This blog will explore current trends in the tea market, examine branding and marketing strategies within the tea industry, delve into price-point dynamics for premium teas, analyse consumer behavior influenced by socioeconomic and cultural factors, provide market insights into specialty tea in Europe, and review the teaware market.

Photo: Baisa Nakamura, Uji, Kyoto, Japan.

The Rise of Premium Tea

The global tea industry's worth was around $220.7 billion in 2022 and is projected to rise to $268.5 billion by 2025. This growth is driven by emerging trends reshaping the market landscape. Consumers are increasingly seeking healthier beverage options, leading to a surge in demand for herbal and specialty teas. Factors contributing to this shift include the rising awareness of the adverse health effects of carbonated drinks and a growing consumer interest in unique flavours, health benefits, and ethical production practices. Premium teas, often sourced from specific regions and produced using traditional methods, cater to this growing demand for luxury and exclusivity. Key trends include:

Photo: San Tea.
- Increasing Demand for Loose-Leaf Tea: Loose-leaf tea offers a more well-rounded flavour and authentic tea experience. Consumers prefer its nutritional potency and the ability to create custom blends, leading to a shift from branded products to private-label options.

- Booming Market for Matcha Tea: The global matcha tea market is expected to reach $3.8 billion by 2028, growing at a CAGR of 6.6% from 2023 to 2028. Matcha's health benefits, including increased energy and improved mental clarity, drive its rising popularity.

- Growing Trend of Herbal Teas: The global herbal tea market was valued at $3,962.7 million by the end of 2023. Herbal teas, known for their health benefits, such as aiding in better sleep and relaxation, are increasingly popular among health-conscious consumers.

- Surging Interest in Functional Teas: Functional teas, which offer specific health benefits, are gaining traction. Green tea and turmeric tea, known for boosting metabolism and energy levels, are particularly popular among a new generation of health-focused consumers.

- Growing Commitment to Sustainability: Consumers are increasingly prioritising products with environmental and social responsibility claims. Authentic and meaningful information on product labels about sustainability practices influences purchasing decisions.
Photo: Satemwa Tea Estate, Malawi.

The Power of Branding

Effective branding in the tea market hinges on understanding your target audience's preferences, which range from millennials seeking unique flavours like matcha and bubble tea to baby boomers loyal to classic varieties such as Earl Grey and English Breakfast. A clear Unique Selling Proposition (USP) sets a brand apart. Emphasising organic or fair-trade sourcing, innovative blends, and unique flavour profiles can resonate with consumers increasingly interested in ethical and sustainable products. Brand identity and packaging are crucial, with memorable names, distinctive logos, and eco-friendly, eye-catching designs that reflect the brand’s values and attract health-conscious and environmentally aware consumers. Offering a diverse product line that includes standard teas, limited editions, and seasonal varieties caters to a wide range of tastes and preferences. This approach not only differentiates the brand but also creates excitement and exclusivity. Pricing strategies should balance cost analysis and profit margins with competitive pricing and a value-based approach. This ensures products are priced to reflect their unique qualities and perceived value, fostering brand equity and consumer loyalty. Distribution channels include traditional retail outlets, online sales, and specialty stores, each offering distinct advantages. Traditional outlets like supermarkets and specialty tea shops provide accessibility, while e-commerce platforms and online marketplaces broaden reach and offer direct consumer engagement. Specialty stores and tea houses cater to tea enthusiasts who appreciate high-quality tea and the art of its preparation, enhancing brand loyalty. In essence, strong branding, combined with a thoughtful pricing and distribution strategy, can attract a loyal customer base and elevate a tea brand in the dynamic tea market.

Photo: Avantcha.

Price-Point Strategy

Premium tea brands strategically set higher prices to align with consumer perceptions of value and quality. This pricing strategy emphasises the exceptional quality, rare ingredients, and meticulous production processes involved in crafting these teas. A study done in Sri Lanka showcased that consumers are particularly willing to pay more for teas offering unique sensory experiences and health benefits, reflecting their preference for products that meet higher standards of taste and intrinsic quality attributes. This consumer behaviour underscores the importance of both intrinsic factors like taste and aroma, as well as extrinsic cues such as brand reputation, in shaping purchasing decisions for premium teas (Fernando & Padamali, 2016).

Photo: Lumbini Tea Valley, Sri Lanka.

Consumer Decision-Making: Influencing Factors

Consumers' decisions to purchase branded teas are shaped by a variety of factors that reflect their preferences and values. Key determinants include brand reputation, perceived product quality, packaging attractiveness, and the overall consumer experience. Studies indicate that these factors vary regionally, emphasising the importance of tailored marketing strategies to resonate with diverse consumer expectations. Beyond product attributes, the distribution channels significantly influence consumer behaviour within the tea market, catering to different customer segments such as those preferring supermarkets, specialty stores, convenience outlets, or e-commerce platforms. Consumer purchasing behaviours are driven by convenience, choice, and access to information, prompting companies to enhance their online presence to meet evolving consumer preferences. Moreover, socioeconomic factors like income and education level play a crucial role in shaping brand loyalty among tea consumers. Higher income groups and consumers with tertiary education levels tend to exhibit greater loyalty towards specific tea brands, reflecting their ability to prioritise quality and value in their purchase decisions. Understanding these factors is essential for tea companies to develop effective marketing strategies that resonate with their target audiences and foster long-term consumer loyalty (Bandara et al., 2021).

Photo: The Bartleby, Jens de Gruyter of “Paper and Tea”.

Case Study: Marketing Nepali Tea

Nepali tea has gained international recognition due to effective marketing strategies that highlight its unique origin and quality. By focusing on the distinct characteristics of Nepali tea, marketers are gradually positioning it as a premium product in the global market (Bailey, Tea Journey). A great example of successful branding and strategic marketing efforts would be Nepal Tea Collective's approach in the US. By leveraging the unique characteristics of Nepali tea, such as its distinct flavour profiles and ethical production practices, the brand effectively differentiates itself from previously more familiar teas like Darjeeling. Highlighting the terroir, which contributes to muscatel and malty flavours, and the traditional, often organic, farming methods, Nepal Tea Collective creates a compelling narrative that appeals to quality-conscious consumers. Their marketing strategy includes direct-to-consumer (D2C) sales via a robust online presence, storytelling that emphasises the rich cultural heritage and the artisans behind the tea, and the implementation of transparent supply chains through QR codes on packaging. This transparency allows consumers to trace their tea from farm to cup, fostering a deeper connection with the product and its origins. Additionally, the brand employs influencer marketing and SEO to increase visibility and engagement, while also exploring B2B partnerships to expand their reach. The combination of these strategies not only promotes the unique identity of Nepali tea but also supports the local economy by providing fair compensation to farmers and promoting sustainable practices.

Specialty Tea in Europe

The European specialty tea market is experiencing notable growth, driven by a rising consumer preference for high-quality, ethically sourced products. Market analysis indicates a significant increase in demand for organic and fair-trade certified teas, underscoring a strong inclination towards sustainable and premium offerings (CBI, 2023). This growth trend is supported by a burgeoning tea culture deeply rooted in European traditions, with a particular fondness for whole-leaf orthodox loose teas and single estate varieties. The UK is by far the largest consumer of tea in Europe, however, they are traditional tea bag drinkers: 96% of tea is sold in tea bags in which, generally, the lower quality teas (fannings and dust) are packed. While, the Germans are said to have the largest market for specialty tea in Europe as they are known for their affinity towards loose teas, hence, leading this trend, consuming approximately 60% of their tea in loose form (Teeverband, 2015). The market's expansion is further propelled by an emerging cohort of affluent, health-conscious consumers who seek out unique flavours and organic options, driving interest in teas beyond the conventional black and green varieties. However, the European market for specialty tea is still relatively small compared to the US: experts estimate that around 10% of tea (Camellia sinensis) consumed in Europe is specialty tea. In the US, the (wholesale value) share is 17.5% (Market Realist, 2015). In the Czech Republic, there is a high and growing number of tea rooms: here, the classic tea bags commonly used at home are not found (Progetto, 2014). This evolving landscape presents opportunities for brands to innovate in product offerings and engage with a discerning consumer base increasingly inclined towards sustainable and high-quality tea experiences.

Photo: Ogata Paris, Joann Pai.

Cultural Influences on Tea Consumption

Cultural factors significantly influence tea consumption patterns. In countries like China, tea is deeply embedded in cultural practices and social norms, affecting consumer behavior. Concepts like renqing (relationship), which involves social obligations and reciprocity, and mianzi (face), referring to an individual's public image, play crucial roles in Chinese tea purchasing decisions. Collectivism, emphasizing social order and group norms, often leads to conformity in consumer choices. Additionally, the man-nature unity philosophy, rooted in Daoism and Confucianism, promotes sustainable and harmonious living, influencing preferences for eco-friendly tea products. Understanding these cultural motives can help brands tailor their marketing strategies to resonate with local consumers, ensuring their messages align with these deeply held values (Tong et al., 2021). Therefore, it is crucial to factor in the local culture when marketing tea to effectively engage and appeal to the target audience.

The Classic of Tea (CE 760) by Lu Yu (733–804).

The Sentimental Side of Tea Purchasing

Tea holds a special place in the hearts of consumers, often associated with emotional and social experiences. Tea breaks during meetings, meaningful late-night talks, and gatherings with family and friends are moments where the presence of tea enhances joy and connection. The classic Hindi movie Bawarchi (1972) beautifully illustrates how tea is intertwined with daily life and family emotions, depicting its role in fostering warmth and togetherness. In India, tea continues to play a significant social role, underscored by slogans like “India runs on tea” from the popular brand Chai Point, highlighting its enduring appeal and emotional resonance. This sentimental aspect of tea consumption underscores the importance of considering emotional connections when marketing tea products.

Photo: Kulhar Chai.

Trends in Teaware

The rise in premium tea consumption has also boosted the market for high-quality teaware. Consumers are increasingly investing in aesthetically pleasing and functional teaware that complements their premium tea experience. The European market, which can be applied generally worldwide, provides a comprehensive view of these trends (CBI, 2023).

Photo: UNEARTHED Gallery, Marcel Karcher. Yufeng Wang Gaiwan and Pitcher.

On-the-Go vs. Slow Tea Phenomenon: Tea-drinking moments can be categorized into 'on-the-go' and 'slow' experiences. On-the-go tea drinking caters to busy consumers who need functional and affordable teaware for quick and convenient consumption, such as basic mugs and glasses used during rushed mornings or at work. In contrast, slow tea drinking involves more leisurely and intimate moments, such as afternoon tea with friends, Chinese gong fu cha, or Japanese tea. This trend emphasises the use of decorative and specialised teaware, enhancing the overall experience and highlighting the importance of quality time and increased awareness of tea culture and brewing knowledge.

Photo: Eater.

Tea Pairing Trend: Another emerging trend is tea pairing, where different teas are matched with various courses of a meal, similar to wine pairing. This practice allows consumers to showcase their tea knowledge and elevate their dining experience. Each round of tea is served in an appropriate teapot and poured into special cups or even wine glasses, potentially boosting the market for a diverse and innovative range of teaware.
Photo: Photo: Dinosaur-themed ceramics based on fossils from the Mesozoic Era in Tokoname, Aichi, Japan. Instagram of the artist @takawogama (たかを窯). Katrina Wild.

Identity and Eclectic Teaware: Millennials and Gen Z consumers have introduced new needs to the teaware market, emphasizing independence and eclectic styles. These consumers often mix and match different styles of teaware, such as combining a casual mug with a formal Japanese teapot. This approach reflects their preference for personalized and unique tea experiences.

Collecting and Gifting: Many consumers enjoy creating themed collections, often from a single brand, based on specific decorations. Brands like Blond Amsterdam, known for its cartoon-style drawings, cater to this trend, while tea enthusiasts might collect items like Yixing teapots, antique ceramics, and handcrafted teaware tailored for specific types of teas. Collectible teaware is frequently presented in gift wrapping, making it a popular choice for gifting and adding to birthday wish lists. A traditional example is the Japanese “kiribako” (桐箱), a box made from paulownia wood, used to store high-quality handmade ceramics such as chawans, often featuring the artist's signature and other inscriptions. Additionally, craftsmanship and knowing the artisan behind the teaware are becoming increasingly important among tea aficionados.

Photo: Seiji Ito’s flat Tokoname Kyusu with a mogake pattern, Jeff Fuchs.


The evolution towards premium tea marks a significant trend in the global beverage industry, driven by consumer aspirations for quality, health, and sustainability. As brands innovate with unique flavors, ethical sourcing, and engaging narratives, they forge deeper connections with discerning consumers. From cultural influences shaping preferences to the allure of specialty teas and the art of tea pairing, the future of tea lies in its ability to blend tradition with innovation. Embracing these trends not only enhances market presence but also elevates tea consumption into a realm of lifestyle and wellness, meeting the evolving tastes and values of today’s tea enthusiasts.


Bailey, M. Marketing Nepal Tea. Tea Journey. Available HERE.

Bandara, A.M.K.R., Gayathri, H.M.M. and Lankapura, A.I.Y. (2021). Factors Affecting the Consumer’s Branded Tea Purchase Decision: A Case Study in the Western Province, Sri Lanka. Asian Journal of Economics, Business and Accounting, pp.67–73. Available HERE.

CBI. (2023). The European market potential for teaware. Available HERE.

CBI Product Factsheet. Specialty tea in Europe. Available HERE.

Dhingra, G. (2023). 4 Benefits of Branding in Tea & Coffee Marketing. Refresh Ideas. Available HERE.

Fernando, P.I.N., Padamali, G.M.P. (2016). Product attributes and premium price strategy: A study of tea consumers in middle and high-end market. Available HERE.

FHA Food & Beverage. (2023). Latest Trends in the Tea Sector. Available HERE.

Have Ignition. Go-to-Market Strategy for tea. Available HERE.

Johnson, A. (2023). Brewing Success: The Secrets of Effective Tea Branding. Canny Creative. Available HERE.

SlideShare. (2015). Global State of the Industry: A Review of the Top Tea Trends and Markets Around the World. Available HERE.

Sooni, S.B. (2019). Tea emotion is an addictive sentiment since irrespective of status, race and culture, people love…. Medium. Available HERE.

Tong, L., Toppinen, A. and Wang, L. (2021). Cultural motives affecting tea purchase behavior under two usage situations in China: a study of renqing, mianzi, collectivism, and man-nature unity culture. Journal of Ethnic Foods, 8(1). Available HERE.

Walker, John. Tea Market. Claight Corporation. Available HERE.

Wild, K. (2024). Himalayan Treasures: Tea from Nepal. Masters Talk Online. Available HERE.


bottom of page