Market Introduction

The global tea extract market was valued at USD 4 billion in 2023 and grew at a CAGR of 6.50% from 2024 to 2033. The market is expected to reach USD 7.50 billion by 2033. The evolving health trends will drive the growth of the global tea extract market.

Tea extract is a powerful product prepared from Camellia sinensis leaves, boasting of polyphenol, catechins, flavonoids, and caffeine. The principal active ingredients in tea extract are polyphenols and the main catechin is epigallocatechin gallate (EGCG) associated with weight loss, cardiovascular health and anti-carcinogenic effects. There are various sorts of tea extracts such as green tea extract, which contains catechins useful in weight loss supplements; black tea, containing theaflavins effective in heart health products; white tea useful in anti-aging cosmetics; and oolong tea that is a mixture of catechins and flavonoids. Tea extract is useful because it is considered to promote numerous health benefits. Having antioxidant effects, it strengthens to scavenge free radicals to decrease the chances of contracting diseases such as heart ailments and cancer. This facilitates effective, outcome-based weight management through elevated metabolic level and fat loss because of EGCG and caffeine. Tea also has a positive effect on the cardiovascular system. Furthermore, it combines the effect of accelerating mental activity of caffeine and the calming action of theanine. Organic teas are used in skin care to minimize the signs of aging, for instance by treating wrinkles, and reducing inflammation on the skin’s surface. the use of tea extract is relatively flexible as it can be used in food and beverages, dietary supplements, cosmetics, and medicine.

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Recent Development

• James Finlay Kenya, a Kenyan tea estates company, has been fully acquired by Browns Investments PLC from Finlays. The transaction was initially publicized in May 2023. Finlays chose Browns Investments PLC as the authorized bidder because of the latter's proven track record of directing its tea farms towards sustained growth while assisting its employees and the community. Kenyan tea is grown, produced, and supplied by James Finlay Kenya.

Market Dynamics

Drivers

Rising health awareness – An increase in health consciousness among consumers is the main driver for the increasing demand of tea extract as people shift focus on early disease prevention, natural remedies and healthy eating. As consumers become more interested in the prevention of diseases, such as heart disease, cancer, and obesity, demand grows for the incorporation of antioxidants and other useful compounds into foods/diets. Green tea extract is preferred because of the rich concentration of catechins, polyphenols, and especially EGCG all of which offer rich antioxidant, anti-inflammatory and, most importantly, thermogenic effects. This is in line with the global shift to plant-based ingredients in foods and beverages owing to the clean-label ingredient philosophy/health trend. This shift is seen in the sectors of food and beverages, dietary supplements, and skin care where tea extract is used for metabolism promoting, anti-aging and immune building. Additionally, knowledge of mental and cognitive well-being, focus on post-pandemic rebuilding of health has led to the consumption of immunity boosting products which are other drivers for the tea extract market.

Restraints

The high production costs – Tea extract is an expensive product primarily due to multiple intricate and labour-intensive processes involved in the production of the same. High value compounds like the catechins and polyphenols require more elaborate procedures such as super critical fluid extraction employing carbon dioxide gas, which though effective, is capital intensive and demands high level technical proficiency. Also, procuring certified or premium organic tea leaves for the preparation of high-yield extracts increase costs, especially when production/yields suffer in the extremely volatile weather conditions driven by climate change. Third, complex labour harvesting techniques, costs of quality control also hinder the market’s growth. Furthermore, the pressure for creating environmentally friendly and sustainable, contributes to certification costs which create value but add to the cost of production. There are also costs in packaging and distribution.

Opportunities

The expanding applications of tea extract – tea extract is gaining popularity among manufacturers, especially in the cosmetic and pharmaceuticals industries, as it possesses many health benefits, including antioxidants, anti-inflammatory, and skin improving factors. In cosmetics, tea extract especially green and white tea extracts are common ingredients which are used due to their skin protective effect and antioxidant properties, anti-ageing, and anti-inflammatory effects. Some of these ingredients help eliminate free radicals thereby reducing effects such as early aging signs, fine lines and wrinkles. It also helps in healing skin related problems such as acne, rosacea and any kind of skin irritation. Furthermore, caffeine from tea extracts is also well applied as ingredients for eye cream that helps shrink the puffy area, reduces wrinkles, fight against aging thus widely used in skin care products. Intensified global concern for natural, sustainable, and clean label ingredients has stepped up its application in environmentally non-harsh and socially responsible cosmetics. Currently in pharmaceutical industry, bioactive compounds derived from tea extract specifically the catechins including EGCG are being employed for treatment purposes. Therefore, the expanding applications of tea extract contribute to the future growth and development of the market.

Segment Analysis

Regional Segmentation Analysis

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Asia Pacific emerged as the most significant global tea extract market, with a 41% market revenue share in 2023.

China, Japan, India and Sri Lanka are some of the major producers of tea extracts. It includes myriad types of tea extracts ranging from green tea extracts to black tea and herbal teas. Health-conscious customer base in the region has contributed significantly towards the increasing demand for tea extracts in the form of dietary supplements and functional foods. Wellness trends lead consumers to look for products possessing antioxidant characteristics and other kinds of healthy influences. Moreover, Asia-Pacific countries are more focused on innovation and improvement of these extraction techniques, as well as on product development to cater to the changing consumer trend. With an emerging of the middle class in countries such as China and India, increased disposable income results in a higher client base demanding quality, and healthy products.

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• Over the past five years, researchers from the Tea Research Association of Assam have been experimenting with different ways to use tea leaves. As a result, they have created a range of products, such as inexpensive soft drinks made with black and green tea, tea pills that you can add to hot water, and even toffees. The association was given a project to investigate the non-traditional applications of tea by the Tea Board of India, and that is how the studies got started in 2002. Tea infusions are used to make both the pill and the soft drink.

Product Type Segment Analysis

The product type segment is divided into green tea extract, black tea extract, white tea extract, oolong tea extract, herbal tea extract, and matcha extract. The green tea extract segment dominated the market, with a market share of around 35% in 2023. Green tea extract leads the market because of its benefits that are already well proven by research and can be used in a wide variety of products and in various different ways. It is popular for its beneficial properties that assist in reducing body weight, enhancing metabolic rate, and minimizing the likelihood of the development of numerous chronic illnesses like cardiovascular diseases and cancer. Its sales are also bolstered by the consumer shift towards healthy lifestyles across the world and people’s preference for natural foods and drinks. Because green tea extract can be used in various forms such as capsules, tablets, functional food and beverages, cosmetics, it has a large market potential. This tape has been utilised in the traditional medicine especially in Asian regions in addition to copious scientific analysis strengthening its health benefits. The demand has been bolstered by education and awareness campaigns. Green tea extract also has widespread approval with regards to regulation. Ongoing research and development of new products contributes to the strong market for green tea extract.

• In laboratory tests, matcha was found to suppress P. gingivalis growth, according to Japanese researchers. Furthermore, in a clinical trial comprising forty-five individuals with periodontitis, saliva samples from matcha mouthwash users revealed noticeably lower concentrations of P. gingivalis than those at the beginning of the study. The green tea plant Camellia sinensis has long been researched for its possible antibacterial properties against viruses, fungus, and bacteria. Green tea extract has been shown to suppress the growth of infections, such as Escherichia coli, in a previous study conducted on mice.

Form Segment Analysis

The form segment is divided into powdered extract, fine powder, liquid extract, capsules/tablets, tea bags, tinctures, and granulated extract. The powdered extract segment dominated the market, with a market share of around 38% in 2023. Powdered tea extract is essentially a refined preparation made from the leaves of the Camellia sinensis plant and is easy to use due to its flexibility. This form conserves a high proportion of bioactive compounds – catechins, polyphenols – that can help in the delivery of beneficial effects. Its versatility makes it easy to use in products such as smoothies, baked foods, nutrition supplements and health foods to boost taste and quality. It is also commonly in powdered form due to its longer shelf life than the liquid extracts because powdering minimizes water content which causes spoilage. Also, it is portable; it does not consume much space and can, therefore, be transported at a lower cost. Powdered extracts help innovative product development including instant tea mixes, energy bars, and nutritional supplements.

Application Segment Analysis

The application segment is divided into food and beverages, dietary supplements, cosmetics and skincare, pharmaceuticals, functional foods, and aromatherapy and wellness products. The dietary supplements segment dominated the market, with a market share of around 34% in 2023. A result of people becoming more concerned with health and fitness has seen most people embrace tea extracts in the form of dietary supplements. Due to the awareness of the importance of prevention in diseases, most of the consumers are using food supplements to enhance their health. The ever-growing body of works relating to the beneficial effects of tea extracts encourages the development of new products which also augments the market’s growth.

• With a line of iced tea drinks in black and green, Dilmah, the well-known Sri Lankan tea brand, is making its debut in Israel. Peach, lemon-Louisa, ginger-lemon, and honey are some of the flavors. As the only tea company providing real iced tea made with natural tea extracts, Dilmah distinguishes out and precisely satisfies the desire for authentic, premium dining experiences around the world.

Some of the Key Market Players

• Associated British Foods plc
• DuPont de Nemours, Inc.
• Green Leaf Foods, Inc.
• Herbalife Nutrition Ltd.
• Nippon Tea
• Suntory Holdings Limited
• Tate & Lyle
• Tazo Tea Company
• The Hain Celestial Group, Inc.
• The Republic of Tea
• The Tea and Herbal Infusions Association (THIA)
• Yogi Tea

Report Description