Tea sales in the United States have shown strong growth in 2016, continuing the upswing in ready-to-drink (RTD) and refrigerated categories, according to Rockville, Md.-based Packaged Facts. In its new report “Tea and Ready-to-Drink Tea: U.S. Retail Market, 6th Edition,” the market research firm estimates tea sales slightly exceeded $7 billion in 2015, up almost 6 percent. By 2020, Packaged Facts expects retail sales of tea in the United States to close in on $9 billion for the first time, it says. 

Continued growth will come from the RTD and refrigerated tea markets, as well as consumers' ongoing recognition of tea's healthy properties and their switch to tea from carbonated soft drinks. Most importantly, the category features  innovative new products and creative new players that engage consumers, the market research firm says. 

"The tea industry is known for both established brands in tea bags and ready-to-drink categories, with names like Lipton and AriZona joining traditional beverage heavyweights PepsiCo and Coca-Cola at the top of the tea chain," said David Sprinkle, research director at Packaged Facts, in a statement. "The overall health of the industry can largely be measured by how those companies' brands are performing. But much of the industry's innovation still comes from smaller operators who introduce new ingredients and flavors that consumers are eager to try."

Eighteen companies account for at least 1 percent of the tea market, a tribute to the variety of tea available on shelves, Package Facts says. However, the Top 5 marketers still account for 56 percent of all tea sold in supermarkets, drugstores, mass merchandisers, military commissaries, and select club and dollar stores, as calculated by dollar sales, Packaged Facts says.