Milk Tea Market - Forecast(2023 - 2028)

Milk Tea Market Overview

The Milk Tea Market size is estimated to reach $26.4 billion by 2027, growing at a CAGR of 5.8% during the forecast period 2022-2027. Milk tea is nothing but any type of tea made with the inclusion of milk. It is simply prepared by adding a splash of milk in black tea (water that is boiled with tea powder and sugar) with an aim to extend its dairy flavor. However, several times herbs like cardamom, ginger, cloves, and basil leaves are added to it in order to enhance its aroma. Too often milk tea is confused or entangled with bubble tea because they almost look alike but there’s a difference between them. Besides milk bubble tea also contains ice and artificial chewy tapioca balls while milk tea only has milk. Furthermore, milk tea is better than bubble tea as it doesn’t contain extra add-ups like bubbles or boba. Milk tea exhibits less sugar content and it is home to nutrients like phosphorus, calcium, and protein. Therefore, milk tea extends several health benefits if consumed moderately. In addition to that, milk tea is low-priced and easier to prepare. Nevertheless, if someone is looking for taste and flavor, bubble tea is a better option which may act as a constraint to the Milk Tea Market. Soaring adoption of varied ranges of tea in the west, the rising middle-class income in developing countries, enlarging population, changing tastes and preferences of consumers, and easy availability of such beverages in corporate cafeterias are factors set to drive the growth of the Milk Tea Market for the period 2022-2027.

Report Coverage

The report: “Milk Tea Market Forecast (2022-2027)”, by Industry ARC, covers an in-depth analysis of the following segments of the Milk Tea Market.

Key Takeaways

• Geographically, Asia-Pacific Milk Tea Market accounted for the highest revenue share in 2021. The growth is owing to overwhelming consumption and production in Asian countries, improving quality of lifestyle, and a surge in the number of hospitality venues.
• Growing health awareness among people, the proliferating problem of stress because of eventful lifestyles of people, health benefits associated with milk tea such as fair skin, body strength, weight loss, and others (provided if consumed moderately), and rising purchasing power of consumers in low-income but populous countries like India, Bangladesh, China is said to be preeminent factors driving the growth of Milk Tea Market. 
• Health complications on immoderate consumption, plenty of alternatives, and negatively affected crop production by environmental calamities are said to reduce the market growth.
• Detailed analysis of the Strength, Weaknesses, and Opportunities of the prominent players operating in the market will be provided in the Milk Tea Market report.

Milk Tea Market Segment Analysis - By Herb

The Milk Tea Market based on the herb can be further segmented into Cardamom, Ginger, Mint, Basil, Thyme, Lavender, and Others. The cardamom segment held the largest share in 2021. The growth is owing to the health benefits offered by cardamon such as curing cough and cold, aiding digestion, lowering high blood pressure, detoxifying the body, and removing waste. Cardamom in tea can help streamline digestion and condense weight problems over time, extend protection against heart diseases, and promote oral health. Moreover, its aroma makes tea more soothing and tempting. However, ginger is estimated to grow with the fastest CAGR of 6.2% over the forecast period 2022-2027. Ginger in tea can extend health benefits like protection from heartburn, and indigestion, relieving motion sickness, and help in maintaining blood sugar levels under healthy limits. Moreover, it also helps in keeping the flu away in the winter seasons. Furthermore, rising health consciousness among consumers, changing tastes and preferences of people, and a devastating surge in CVDs and other key factors supporting the segment growth.

Milk Tea Market Segment Analysis - By End User

The Milk Tea Market based on end-user can be further segmented into Households and On-trade outlets (restaurants, hotels, cafes, street vendors, and others). The household segment held the largest share in 2021. The growth is owing to enlarging trend of milk tea among youngsters and adults. Moreover, the non-availability of café services with an aim to curb the infection rate during lockdowns has automatically strengthened the household demand for tea. However, the foodservice provider segment is also estimated to grow at an aspiring pace of 6.5% during the forecast period 2022-2027. This growth is owing to the reopening of various hospitality venues. In addition to that, the trend of having tea and coffee in cafes is deeply indulged in the lives of millions of consumers living in high-income countries. Also, these hospitality venues provide a conducive atmosphere for spending quality time with loved ones, interacting with strangers, and clinching business deals fueling the product demand.

Milk Tea Market Segment Analysis-By Geography

The Milk Tea Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. The Asia-pacific segment held the largest share of 41% in 2021. The growth is owing to the high production of tea in the region. For instance, India, Vietnam, China, Indonesia, and others are some of the biggest tea-producing countries in the world. According to Farrers Coffee, every year China produces nearly 2,400,000 tons of tea, whereas, India has over 900,000 tons of annual production. Unlike other parts of the world, Asian countries have a special connection with tea. In South Asian countries, it is a sort of norm to serve tea to guests and commence daily routines with a cup of tea. Moreover, Asia-Pacific is expected to be the fastest-growing segment over the forecast period 2022-2027. This growth is owing to the mounting GDP per capita income of developing countries in the region like China, Indonesia, and India. Thus, with expanding disposable income middle-class consumers have started reaching out to such products. In addition to that, with rising health complications like obesity and diabetes amongst the enlarging old-age population, the overall demand for milk tea has witnessed a sheer surge.

Milk Tea Market Drivers

Rising incidences of stress, obesity, and CVDs are anticipated to boost market demand.

In the world of cut-throat competition, stress has become a worldwide phenomenon. It is so common that no one is exempt from it. According to a survey by America Psychological Association, Millennials and Gen Xers report an average stress level of 5.4 on a 10-point scale where 1 is “little or no stress” and 10 is “a great deal of stress,” far higher than Boomers’ average stress level of 4.7 and Matures’ average stress level of 3.7. A highly stressful working environment, job loss because of the pandemic, body shaming issues, and many more have thrust stress problems into the limelight in recent years. A report by WHO has claimed that the anxiety and stress prevalence has heightened by 25 percent post-covid-19. In addition to that, swelling CVDs and obesity are likely to broaden the demand for milk tea.

The surging purchasing power of consumers in low-income countries is expected to boost market demand.

Developing countries like India, China, Indonesia, and others are becoming the new wealth center of the world as the exports of these nations are witnessing a sheer rise year after year. Owing to cheap labor, a vast network of quality expressways, skilled labor, and appealing government policies, China has emerged as a prominent exporter worldwide. As a result, China’s GDP per capita has recorded a sheer rise in the last decade and has reached over $12,551 in 2021. Similarly, Indonesia’s GDP per capita income was whirling around $4,256 (nominal) in 2021 and is anticipated to reach nearly $5,000 by 2023. On another hand, India is recording slow growth in terms of GDP per capita but the situation is likely to improve as it is projected that India will take over Japan to become 3rd largest economy in the world by the year 2030. These factors support the purchasing power of the consumer which in turn augments the market growth.

Milk Tea Market Challenges

Health problems linked with immoderate consumption and environmental problems are anticipated to hamper the market growth.

Immoderate consumption of milk tea can lead to constipation, gastric, pimples, and insomnia which can make people cut down their consumption. Also, extreme weather anomalies owing to climate change, global warming, and widespread pollution are anticipated to reduce the yield of the tea crop in foreseeable future. For example, with a reduction of 0.7 percent, the soil organic carbon (SOC) content of Indian soil has plummeted to 0.3 percent as of 2022, according to the National Rainfed Area Authority. Further, crippled production activities have resulted in a wide gap between demand and supply chains which is derailing the steady growth of the Milk Tea Market. Additionally, the presence of plenty of alternatives such as bubble tea and the soaring cost of living can obstruct the growth of the aforementioned market.

Global Milk Tea Industry Outlook:

Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the aforementioned Market. Milk Tea Market top 10 companies include-

1. Bubble Tea House Company
2. Bobabox Ltd.
3. Cupotee Fokus Inc
4. Torika JC.
5. Ten Ren’s Tea Time
6. Lollicup USA Inc.
7. T Bun International
8. Huey-Yuhe Enterprise
9. Gong Cha.
10. Sumos Sdn Bhd.

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