Tea is one of the most widely consumed beverages in the world. In fact, owing to China's massive population, tea is also often ranked among the top three most consumed beverages in the world, coming second only to water and oftentimes also taking the top place if one were to believe National Geographic. This popularity isn't going anywhere, as according to the Food and Agriculture Organization of the United Nations (FAO) global tea production is higher than $17 billion and tea consumption per capita grew by 2.5% over the last decade.
The Tea Industry: An Analysis
Like most other agricultural products, tea is generally produced in regions with low human development index scores, and the market is shifting towards demanding products that are made organically. Additionally, the FAO also explains that the growth in tea demand is fueled by its health benefits. At the same time, global tea prices are responding to the demand and supply environments, as a kilogram of black tea cost $2.42 in 2019, after dropping by 12%, and further slipping to $2.28 per kilogram in the first quarter of 2021. The price then soared to $2.60 and then closed at $2.62 in the final quarter of 2021, as the market adjusted to the shortages ushered in by the coronavirus pandemic. Additionally, a crucial insight into the global tea market comes from the fact that the economic crisis in Sri Lanka - one of the world's top three tea producers - ended up impacting tea prices as well. Sri Lanka, which defaulted on its debt obligations in 2022, saw its Colombo tea auction market raise prices during the turbulent economic environment, and this led to the global tea prices soaring to $2.85 per kilogram at the start of the second quarter of 2022.
In terms of total production, data from the International Tea Committee (ITC) reveals that China, India, and Kenya were the world's largest tea producers in 2021. Out of these, China was the dominant player, as it produced a whopping 3 million tons of tea in 2021, almost half of the global production of 6.45 million tons. Indian tea production stood at 1.3 million tons while Kenya ended up producing 537 million kilograms. Exports wise, however, the picture is slightly different. Kenya was the world's largest tea exporter in 2021, having sold 558 million kilograms on the global markets, with China and Sri Lanka coming in at second and third places, with 369 million kilograms and 282 million kilograms of exports. India, the world's second largest tea producer, stood at number fourth. Finally, in terms of prices, Sri Lankan tea was the most expensive in the world, having auctioned for $3.11 per kilogram in 2021.
When it comes to market value, the global tea market was worth $62.6 billion in 2021 according to research from Maximize Market Research. From then until 2029, the firm believes that the tea market will grow at a compounded annual growth rate (CAGR) of 6.6% to sit at an estimated $104 billion.
In terms of market segmentation by product type, black tea holds the dominant position, as it is expected to account for 42.7% of the market by 2027. Maximize Market Research divides the market into four categories, namely black tea, green tea, herbal tea, and oolong tea. Regionally, Asia Pacific and Europe will be the largest markets for the beverage in 2027. However, the Middle East and Africa will be the strongest growing regions, outpacing the broader market by experiencing a 7.3% CAGR. This is due to the fact that some of the largest per capita tea consumers, like Turkey and Iran, are in the region, and a growing purchasing power will leave larger chunks of the population able to afford the beverage. At the same time, green tea will also grow faster than the market, registering a strong 9.8% CAGR. According to the Maximize Market, this growth will be fueled by a rising public perception of the health benefits of the drink, with celebrity endorsement also contributing to green tea's popularity.
Broadly speaking, the global tea production industry is dominated by small farmers, as is the case with some other sectors such as tobacco. However, there are several large players as well, with some of these being Tata Consumer Products Limited (NSE:TATACONSUM.NS), Associated British Foods plc (LON:ABF.L), Apeejay Surrendra Group, and DILMAH CEYLON TEA COMPANY PLC (CSE:CTEAN0000.CM).
Our Methodology
For this article we decided to go with a subjective methodology and incorporate the opinion of actual tea consumers. For that we consulted several threads on top forums like Reddit (1,2) and Quora and scoured the comments of thousands of people who gave their opinion on tea quality of different brands and countries. We also consulted web resources like Fresh Cup, Traveller Magazine, Justin+Lauren and HuffPost to compile the list of the world's best tea producing countries. Each time a country appeared on a source, it was given one point, and ties were broken through global tea exports in 2021.
Countries that Produce the Best Tea in the World
12. Federal Democratic Republic of Nepal
Insider Monkey's Score: 1
Tea Exports in 2021:$24 million
The Federal Democratic Republic of Nepal is a landlocked South Asian country with a GDP per capita of $4,677. Due to its geography, its main trading partners are India and China. In addition to steel and textiles, Nepal is also a strong exporter of agricultural products, including tea. Nepal has several different kinds of tea, such as oolong tea, white tea, and black tea. All these are grown from the same plant (the Camellia sinensis plant), but differ in how they are processed. This processing primarily differs on the amount of oxidation that the tea has gone through, with black tea being the most oxidized.
11. Argentine Republic
Insider Monkey's Score: 1
Tea Exports in 2021:$76.9 million
The Argentine Republic, or simply Argentina, is a South American country with a GDP per capita of $26,074. Its top exports are soybean products, and Argentina also exported $76.9 million of tea in 2021. Like Nepal, Argentina also produces a large amount of Camellia sinensis tea. Additionally, a popular tea in Argentina is Mate, which is a herbal tea. The Mate has an entire drinking culture based around it, with people in gatherings drinking it from a large mug that is passed between the group. Some popular tea brands are Nobleza Gaucha, Cruz de Malta, and Rosamonte.
10. Russian Federation
Insider Monkey's Score: 2
Tea Exports in 2021:$115 million
The Russian Federation is one of the largest countries in the world and a key player in the global energy markets. Russia is known for its traditional Caravan Tea. This tea has a smoky taste that comes from the time when caravans brought the tea from China and their campfires lent the tea a distinct taste. Tea is mostly consumed with milk in the country, and Russia is also known for a special tea brewing method called the Samovar which involves a traditional Russian kettle used to keep water hot and serve tea through a tap.
9. United Kingdom of Great Britain and Northern Ireland
Insider Monkey's Score: 3
Tea Exports in 2021:$135 million
The United Kingdom of Great Britain and Northern Ireland, or the U.K., is a prosperous European country. It has a strong tea culture, which it acquired through its colonization of India. However, green tea made its way to the U.K. in the 1600s. Tea is widely considered to be Britain's national drink, and naturally, it also has several different kinds of teas such as English Breakfast, Irish Breakfast, and Earl Grey. Some large British tea companies are Associated British Foods plc (LON:ABF.L), R Twining and Company Limited (an Associated British Foods subsidiary), and Taylors of Harrogate Yorkshire Tea.
8. Kingdom of Morocco
Insider Monkey's Score: 4
Tea Exports in 2021:$32 million
The Kingdom of Morocco is a North African country with a GDP per capita of $9,808. Morocco also has a strong tea culture, with its tea ceremonies often being held to welcome guests. Morocco's most famous tea is its mint tea, which isn't really that common in other major tea consuming countries of the world. Some common Moroccan mint tea types are Nana and Atay, and other teas unique to the country are Louiza, Sheeba, and Flio.
7. Taiwan
Insider Monkey's Score: 4
Tea Exports in 2021:$113 million
When it comes to tea, Oolong tea is Taiwan's major tea product, which accounts for a large proportion of global production. Naturally, this also lends the region with some unique Oolong teas, such as Dongding Tea, Dongfang Meiren, Gao Shan, and Gao Shan. Tea shops are located all over the country, with one of the largest tea companies being the Taiwan Tea Corporation (TPE:2913.TW).
6. Republic of Türkiye
Insider Monkey's Score: 5
Tea Exports in 2021:$22 million
Turkey is the largest tea consumer in the world, with a per capita tea consumption of 4 kilograms as of 2021. The Turks consume a variety of herbal teas such as Apple Tea, Yarrow Tea, and Sage Teas. Tea consumption dates back to the 5th century when Chinese traders brought the beverage to Turkey, with consumption picking up due to high coffee prices after the fall of the Ottoman Empire.
