Promising new green tea markets offset maturing ones
Hangzhou tea garden. Image: Barbara Dufrene
China and Japan are not only the biggest green tea producers in the world but they are also the largest consumers of green tea globally. Although consumption in these two powerhouses has declined over the past few years, it has been offset by consumption growth in new markets such as Africa, India, and Western countries such as Europe and North America. By Eugene Gerden
The global green tea market is steadily growing these days thanks to maintaining stable consumption and its favourable image as a healthy drink.
Since the end of the pandemic, consumption of green tea has significantly increased with the best dynamics being observed in its major consuming regions, among which are primarily Asian and African nations.
Matthew Barry, insight manager, food and beverage at Euromonitor International said that presently, green tea is the second-most important segment of the global tea market, with most consumption occurring in either East Asia or North Africa. “In both of these areas, green tea has a very strong historical tradition associated with it, and it represents a large portion of overall tea consumption. China by itself is roughly half the global market, followed by Morocco, Indonesia, and Japan,” he explained.
“Outside of those two regions green tea has a presence virtually everywhere, but it is very unusual to see it rise much beyond a fifth of the total tea market. In the rest of the world there is not much of a historical tradition of green tea drinking so it tends to appeal mostly to wellness-oriented minorities of tea drinkers.”
China & Japan: green tea behemoths
China and Japan traditionally have been the largest producers and suppliers of green tea on a global scale. The level of their domestic consumption has declined in recent years but it has been compensated for by the increase in exports overseas.
In the case of China, since the beginning of the 2000s, the country has significantly increased its green tea exports, which are currently valued in the range of USD $1.3 to $1.4 billion annually. According to earlier data from the 2022 China Tea Import and Export Trade Analysis Report, among the major green tea-producing and exporting provinces in China, Zhejiang Province ranks first with an export volume of 147,000 tonnes and a value of $451.22 million, along with Fujian Province and Anhui Province.
As for the domestic market, according to China Tea Circulation Association data, sales of green tea in China in 2022-2023 were equivalent to 1.2-1.3 million tonnes annually, accounting for 58.1 percent of the total sales. In terms of the other teas China produces:
✦ Black tea – 314,800 tonnes, accounting for 14.3 percent;
✦ Dark tea – 313,800 tonnes, accounting for 14.2 percent;
✦ Oolong tea – 200 tonnes, accounting for 10 percent;
✦ White tea – 62,500 tonnes, accounting for 2.8 percent; and
✦ Yellow tea – 12,300 tonnes, accounting for 0.6 percent.
Japan’s green tea sector has also been experiencing a renaissance. Due to the impact of the Japanese food boom and increasing health consciousness, the amount of Japanese tea exports has more than doubled over the past ten years. According to Japanese Ministry of Finance Trade Statistics data, the demand for powdered tea, including matcha, has increased, and exports in 2023 reached a record high of approximately 21.9 billion yen (approximately $132.6 million). The bulk of exports goes to the United States, which accounts for about 34 percent of the total export volume, most of it is matcha, while leaf tea is popular in the European Union and Taiwan. The Ministry reports that organically grown tea accounts for nearly 80 percent of exports to the European Union and United Kingdom, the bulk of which is green tea.
The Ministry also noted that the current popularity of Japanese green tea in the US is also reflected by the fact that many Silicon Valley companies even offer Japanese green tea as a work conditioning drink in their employee welfare programmes.
Traditionally, most Japanese green tea is produced and grown in the Shizuoka Prefecture, Japan’s leading tea-producing area and its Shizuoka City is known as the ‘town of tea’.
The Japanese Ministry of Agriculture, Forestry and Fisheries is creating conditions for a further increase of exports of Japanese green tea internationally. By 2025, the export value of Japanese green tea should reach 31.2 billion yen (about $197 million), compared with about 25 billion yen (about $158.8 million) in 2023. This is part of the existing state strategy to increase the overall export value of Japan’s agricultural products to over 2 trillion yen in 2025 (circa $12.63 billion) and 5 trillion yen (circa $31.57 billion) in 2030.
Consumption grows in Africa
In recent years, the African region has become one of the major consumers of green tea. For example, Morocco, located in Northern Africa, currently ranks as the world’s sixth largest tea consumer. Green tea accounts for the bulk of tea consumed in the country and it is supplied by China, which leads in terms of tea exports to the region, well ahead of its major rivals.
Harvesting in West Java. Image: Barbara Dufrene
Official statistics of the Moroccan Association of Tea and Coffee Producers (AMITC), report that the kingdom alone accounts for nearly 25 percent of the overall volume of global exports of China green tea, including 46 percent of the ‘Gunpowder’ variety and 54 percent of the ‘Chunmee’ variety.
According to AMITC data, with an annual average of 82,000 tonnes, Morocco is considered one of the world’s leading importers of tea, most of is green tea varieties. Per capita consumption of green tea in the country is estimated at 1.85 kilos per year. AMITC plans to launch production of its own green tea brand as efforts to grow tea started in the 1970s in the Larache region of the country.
In general, green tea consumption in the North African region and in countries in the Sahara region such as Mauritania, Mali, Chad, Niger, Burkina Faso, Senegal, and Ivory Coast has significantly increased in recent years, and the growth is ongoing.
Most analysts expect that with the emergence of Northern Africa as one of the world’s major green tea-consuming hubs, the level of competition for its market among global producers will be heightened in years to come.
In addition to China and Japan, the African region is also under the radar of another major regional player — Indonesia.
Indonesia: growing production
In accordance with the Indonesian Tea Statistics Report from the Central Statistics Agency (BPS), the national tea production in the country varied in the range of 120,000-130,000 tonnes annually during the period of 2022-2023 with the possibility of an increase this year.
In geographical terms, West Java is the largest tea producer in Indonesia with a volume of 66.87 percent of total national production in 2023. Currently, tea is planted on an area of 108.75 hectares in Indonesia with an average productivity of 1.6 tonnes/hectares/year. Most of these areas are green tea. However, according to local experts, the capacity of Indonesia’s green tea processing industry is still limited.
Despite maintaining a high popularity, most analysts do not expect a sharp growth in demand for green tea in Indonesia, over the next several years. Per EM’s Barry, “we are anticipating a slight decline in global green tea consumption [between] 2024 and 2025 of around 1 percent in retail volume terms. That is primarily coming from declining consumption in China and Japan, both of which are very mature markets and facing challenging demographics.”
New green tea markets
In addition to the African nations, a major impetus for a further growth of green tea and its consumption is expected to be provided by India, as well as Turkey and some Arabian nations to a lesser extent.
“The standout in green tea consumption growth is absolutely India, which has been seeing consistent double-digit consumption increases for some time. There is little reason to expect that to slow down.
India is already of course a massive consumer of tea, but health and wellness trends have shifted an increasing number of Indian consumers towards green over the black tea that has historically dominated in India,” Barry explained. “A couple of other big historically black-drinking markets are also seeing similar shifts, such as Turkey and Saudi Arabia.” He said black tea is not seriously threatened in any of these countries but there is an increasing number of occasions shifting to green.
The green tea segment has always been of interest to global players, many of which have significantly expanded their presence in recent years.
An example is US-based Harney & Sons Teas, which has continued to increase its green tea offerings, most notably introducing additional specialty Japanese teas. Emeric Harney, a spokesperson for the company, said that one of its new green teas is called Wazuka Guricha and comes from the Wazuka Valley, the other Asanoka Sencha from the Miyakazi prefecture.
Harney believes the US will provide some major opportunities for growth in the coming years. “America will continue to grow its green tea consumption in 2024. We still find that our export markets show a tempered interest in green teas.”
The US market will remain a priority for another major player – The Republic of Tea. Kristina Tucker, minister of enlightenment and commerce at The Republic of Tea, said the brand continues to see demand for innovative green tea blends. “Our organic Double Green Matcha in tea bags consistently grows year over year since its launch in 2007. Demand for matcha is growing fast again as well as our green teas with a wellness benefit, such as our organic SuperGreen Brain Boost tea.”
Currently, The Republic of Tea offers over 50 varieties of green tea, and “we plan to continue to innovate new blends for green tea lovers. As our focus is on the American tea drinker, we certainly anticipate continued strong demand for green teas in the USA.”
- Eugene Gerden is an international freelance writer who specialises in covering the global coffee, tea and agricultural industries. He works for several industry titles and may be reached at [email protected].
