According to FAO Intergovernmental Group (IGG), growing consumption of tea is driven by the increasing awareness of it’s antioxidant, inflammatory, and weight loss effects.

- Global tea production and consumption are anticipated to keep rising over the next decade, driven by the robust demand from emerging economies of China and India among others, owing to higher incomes and efforts to diversify production to include specialty items, such as herbal teas, fruit fusions, and flavored gourmet teas.

- Sustainability is also one of the primary concerns in the tea bag packaging industry. As a result, packaging equipment manufacturers are increasingly adopting automation in their production line and adhering to Sustainable Trade Initiatives throughout the globe.

- The RTD (Ready-to-Dink) tea and instant tea market are burgeoning across the world, with Asia-Pacific, the United States, and Europe as the largest consumers of RTD products. These teas are convenient and offer a healthy alternative to other ready-to-drink beverages. The RTD market for tea has witnessed strong growth with several entrants looking to tap this opportunity. For instance, in 2018, 8th Wonder Tea, a US-based company launched ready-to-drink teas to meet the rising demand for high-quality teas on-the-go.

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Key Market Trends

Pyramid Tea Bag Packaging is Expected to Hold a Significant Share

- The pyramid-shaped tea bag is gaining popularity because of its tetrahedral shape that allows more significant pieces of broken leaf teas to be bundled into a single pocket. This shape allows the ingredients to expand properly, releasing maximum flavor into the cup. With the increasing consumption of tea in countries such as India as a refreshment beverage has further created opportunities for pyramid tea bags market globally. Companies in the country such as Teabox offers TeaPacs packaged in pyramid-shaped tea bags. The pyramid-shaped tea bag allows adequate space for the loose leaves to unfurl, thus, resulting in a cup of tea steeped with rich flavor.

- Increasing environmental concerns among consumers have further resulted in a growing demand for sustainable packaging solutions. Companies such as PG Tips, in 2018, launched a new tea bag made from 100% biodegradable plant-based materials.

- The demand for premium tea is on the rise, and the pyramid tea bag is moving into the mainstream with the larger brands, including Lipton and Twinings, rolling out new premium lines to tap into the trend. Fuso International, a Japanese Brand, provides automatic equipment for pyramid tea bag packaging, which is predominantly used in the Asia-Pacific. All these factors have driven the growth of the packaging market for tea, thus directly impacting the market studied.

Europe is Expected to Hold the Largest Share

- Europe is one among the largest importer of tea and can be characterized as a mature tea market. Within Europe, the United Kingdom has always been a country of tea-drinkers, despite the rising growth of coffee shops in every street and shopping street. As per the UK Tea & Infusions Association, 84% of the British population drink tea and herbal infusions every day. Although the use of loose-leaf is increasing, 96% percent of British tea is consumed from tea bags.

- The tea market in the region is facing competition from other beverages, particularly coffee. Coffee consumption in the United Kingdom continues to grow with about 70 million cups drunk daily, according to the UK Tea & Infusions Association. However, with the introduction of different varieties of quality and specialty teas, such as green, as well as herbal and fruit teas are gaining popularity in the different markets, especially in Europe, owing to their perceived health benefits. Thus, augmenting the market for the packaging of tea bags.

- The region represents a comparatively low share of tea bag manufacturing companies. However, the demand is expected to rise owing to the use of specialty papers to fabricate porous sachets for tea. Attributes of specialty paper, such as its ability to retain flavor, its sustainability, and its biodegradable feature are significant advantages contributing to the growth of the specialty paper market for tea bags in Europe.

Competitive Landscape

The automatic tea bag packaging equipment market consists of several players. These players are continuously striving to make their market presence by introducing new products, entering into partnerships, or by entering into strategic mergers and acquisitions.

January 2019 - Tetley parent company Tata Global Beverages installed fully automated and bespoke machine made by Sewtec, to accommodate the launch of its latest fruit tea product line to market. This machine can pack 2,000 tea bags per minute.

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