Why Tea is the New Coffee
Life + Money

Why Tea is the New Coffee

With coffee prices doubling this year, Americans are increasingly turning to tea and a whole industry is flourishing as a result.

Arabica-coffee prices surged amid lower supply due to erratic rainfall, which affected output from Brazil, The Wall Street Journal reported last week. Earlier, the drought was the major disruptor affecting coffee prices.  In recent years, coffee prices have also gone up because of a fungus ravaging crops in Mexico and Central American and beetles attacking plantations around the world.

Related: 9 Reasons You’re Paying More for Groceries

However, the rising cost of coffee isn’t the only reason tea has become so popular. Americans have been gravitating more toward healthier, which has prompted a whole range of types of tea to emerge, including green tea and white tea.

More recently, kombucha, a fermented tea drank cold and usually sold in a bottle, has become a trendy healthy alternative. Kombucha and other ready-to-drink teas in bottles such as iced tea have made it easier for consumers to purchase and drink on the go. This search for healthy alternatives and for convenience has fueled the tea industry in the past 10 years.

The total wholesale value of tea sold in the U.S. has grown from under $2 billion dollars 10 years ago to well over $10 billion in 2013, according to the Tea Association of the USA.

While tea has been widely available at coffee shops and grocery stores (mostly in packaged dry tea bags), specialized tea parlors are sprouting everywhere in the country, and the one company that revolutionized the way we drink coffee is now trying to do the same with our tea.

Starbucks, which owns Tazo tea brand, purchased Teavana in December 2012, and has already opened 366 stores in 2013, including its first “tea bar” in New York City. Meanwhile Argo tea chain has been growing steadily for the past decade. It’s also been hard to avoid the thousands of independent teahouses popping up around the country, especially in San Francisco’s Bay Area.

Even supermarkets are expanding their tea offering. Last week, Supermarket News reported that some Haggen Food & Pharmacy and Whole Foods stores have added kombucha stations where customers can fill out growlers with their favorite flavored fermented tea.

Related: 8 Things You Didn’t Know About Coffee

“While kombucha is still somewhat of a niche trend, its popularity has been growing,” the article said. “SN sister publication New Hope, which focuses on the natural foods industry, calls functional beverages like kombucha one of the next decade’s top food and beverage trends.”

With so much happening in the tea category, the industry is likely to experience another decade of growth.

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