February 10, 2025 – The growing health awareness and shifting beverage preferences are driving consumer interest in iced tea. It balances refreshment with natural ingredients and functional benefits. Innova’s 360 research into iced tea market trends highlights the latest product launches, innovations, top flavors, and what may develop in the future.
Iced Tea Market Size and Trends
North America is the second largest region for iced tea sales value in the iced tea market over the past year. In the US and Canada, the iced tea subcategory has grown by 5% in value and 3% in volume over the past five years, driven by increasing demand for globally inspired flavors.
In the iced tea market, 35% of consumers value a diverse range of food and beverages that represent different cultures. Following this, iced tea made from tea leaves imported from various countries like India, Sri Lanka, Italy, and Japan offers diverse flavors influenced by local climates.
Furthermore, iced tea recipes inspired by diverse regions like Thai milk tea, Indian chai, Japanese matcha, Moroccan mint, and Spanish sangria reflect the growing interest in flavors from across the world. This aligns with Innova’s top food trend of 2024, ‘Local Goes Global,’ consumers are progressively looking for products influenced by various regional cuisines.
Iced Tea Market and Product Launch Trends
Iced tea is the second largest subcategory within the soft drinks category in the US and Canada. It displays a fluctuating launch trend with a notable rise in 2023.
In the iced tea market, 23% of consumers opt for low/no/reduced sugar claims when purchasing iced tea. Responding to this demand, 26% of iced tea launches in the past year feature sugar-related claims, including low sugar, no added sugar, and sugar-free varieties. Brands are using natural sweeteners like monk fruit and stevia while offering varying levels of reduced sugar content, such as 25%, 30%, 35%, and 40%, to cater to diverse dietary preferences.
Leading Regions in The Iced Tea Market
The United States dominates the iced tea subcategory. Meanwhile, Canada shows the highest growth in the iced tea market over the past four years.
Nearly 1 in 5 consumers in the US consistently choose products with probiotics. Recognizing this preference, iced tea launches in the region formulated with live probiotic cultures like Bacillus subtilis and Bacillus coagulans are aimed at promoting optimal gut health. This inclusion highlights the growing demand for iced tea that combines refreshments with added digestive/gut health benefits, which has pushed the new product development.
Top Brands and Companies in The Iced Tea Market
In the US and Canada, Davids Tea is the market leader for iced tea launches. 25% of consumers indicate that the innovation of products is of utmost importance to them.
In line with this, Davids Tea has launched an iced cappuccino cold brew tea, a blend of black tea with cocoa and coffee, which is inspired by the traditional cold brew. This product represents an innovative crossover between the coffee and tea categories, offering a unique blend that combines elements of both beverages, supporting the product development.
Other notable companies include Pepsi Lipton, Coca-Cola, Arizona Beverages, and Snarky Tea in the market.
Iced Tea Claims and Positionings Trends
Organic, gluten free, vegan, GMO free, and no additives or preservatives are the top 5 positionings for iced tea subcategory launches in the US and Canada.
Iced tea trends reveal that in the US and Canada, 30% of consumers consider maintaining energy and stamina levels their primary physical health concern. Recognizing this, products with energy/alertness claims display a growth of 16% CAGR over the past four years.
Energy/alertness offering options formulated with ingredients such as L-theanine, caffeine, ashwagandha, guayusa, yerba mate, and Schisandra collectively support improved focus, increased energy levels, and enhanced stamina. These ingredients help to reduce stress and improve overall cognitive function, making them ideal for individuals seeking to boost their daily performance and wellbeing in the US and Canada.
Iced Tea Flavor Trends
Lemon, peach, ginger, lemonade, and hibiscus are the top 5 flavors in the market.
Iced tea trends show that in the US and Canada, nearly half of consumers prefer lemon-flavored iced tea, making it the leading flavor with 8% of launches in the past year. To enhance the taste experience, brands are blending lemon with spice flavors like ginger and turmeric, offering a refreshing and dynamic flavor profile.
What’s Next in the Iced Tea Trends?
In the US and Canada, 23% of consumers have increased their iced tea consumption, driven by variety and novelty. Brands are responding to iced tea trends with diverse product bases, including black, green, herbal, matcha, and rooibos teas. These are available in powder, ready-to-drink, and tea bag formats, with textures ranging from smooth to creamy and velvety.
Transparency is also key, with 51% of consumers emphasizing that honesty and transparency of products are important in their diets. Brands can emphasize clean-label claims such as organic, GMO-free, no additives or preservatives, and natural ingredients to align with this growing demand. As consumer preferences evolve, the iced tea market is likely to have an opportunity to expand with innovative formulations that balance authenticity, health benefits, and unique sensory experiences.
This article is based on Innova’s Overview in Iced Tea in the US & Canada report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more
