South Korea Tea Market Size, Share, Demand & Report | 2034

Dec 31, 2024 - 15:13
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South Korea Tea Market Size, Share, Demand & Report | 2034
South Korea Tea Market

South Korea Tea Market Outlook

The South Korea tea market size has experienced steady growth over the past several years, driven by evolving consumer preferences, increasing awareness of health and wellness, and a burgeoning demand for diverse tea varieties. According to recent reports, the South Korean tea market reached a valuation of approximately USD 346.94 million in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 4.2% between 2025 and 2034, with an estimated market value of USD 503.24 million by 2034. This growth is supported by a variety of factors, including the increasing consumption of herbal and green teas, a shift toward premium and organic tea products, and the rising inclination toward traditional beverages that align with healthier lifestyles.

Tea consumption in South Korea has deep roots in the country’s rich cultural heritage. However, in recent years, the market has evolved beyond the traditional green tea that has long been a staple of Korean society. Younger consumers, in particular, are seeking out more diverse and novel tea options, contributing to the growth of the overall market. Tea is increasingly being seen not only as a beverage but as an integral part of the health and wellness trend, with consumers prioritizing products that offer natural ingredients, antioxidants, and potential health benefits.

South Korea Tea Market Share

South Korea's tea market is primarily driven by the strong consumer demand for green tea, which has remained a popular beverage for centuries. However, the market is diversifying with an increasing demand for herbal teas, fruit teas, and premium blends. This diversification has allowed the market to grow beyond traditional preferences, providing opportunities for international tea brands to enter the market and cater to evolving tastes. Green tea remains the dominant category in South Korea, with consumers consuming it for its reputed health benefits, including antioxidants and its potential to aid digestion and weight loss.

In terms of market share, local brands dominate the traditional tea segment, while international players are focusing more on introducing organic, premium, and functional tea products. The younger, health-conscious demographic in South Korea is inclined toward such premium and functional tea products, such as herbal infusions, which have spurred the entry of several foreign tea companies into the South Korean market. The South Korean tea market remains competitive, with key players such as LG Household & Health Care, Hyundai Department Store, and various international brands contributing to the expansion of the market. Additionally, the market for bottled and ready-to-drink (RTD) tea has grown significantly in recent years, driven by the busy lifestyles of South Korean consumers.

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Drivers of Growth

Several factors are contributing to the expansion of the tea market in South Korea. One of the primary drivers is the growing awareness of health and wellness, which has led to an increase in the demand for products that offer natural ingredients, antioxidants, and low-calorie options. Green tea, in particular, is viewed as a healthy beverage, packed with antioxidants that help combat free radicals and support overall health. The global trend of consumers gravitating towards healthier drinks, such as tea, is reflected in South Korea, where many consumers are becoming increasingly health-conscious, seeking alternatives to sugary soft drinks and caffeinated beverages.

The rising popularity of functional teas is another driver of growth. Consumers in South Korea are increasingly turning to herbal and medicinal teas due to their purported health benefits, such as improved digestion, better sleep, and reduced stress. The wellness trend has given rise to a growing market for teas made with ingredients such as chamomile, ginger, peppermint, and various other herbs. Functional tea blends, offering benefits like immune system boosting and detoxifying properties, are gaining traction among the health-conscious population.

Additionally, South Korea's thriving café culture and the increasing availability of premium tea products have further fueled the market. In recent years, there has been a notable shift toward high-quality, premium tea blends, as South Korean consumers are willing to pay a premium for unique, artisanal, and organic tea products. With greater disposable income and a taste for high-end products, consumers are now seeking out rare, specialty teas, such as matcha, oolong, and other imported varieties.

The convenience factor also plays a significant role in driving the market’s growth. Ready-to-drink (RTD) tea products have become increasingly popular among busy South Korean consumers, particularly among young professionals who prefer a quick, easy beverage option. This growing demand for RTD tea has led to the development of a variety of products, from classic iced tea to exotic fruit-flavored blends, catering to a broad consumer base.

South Korea Tea Market Trends

Several notable trends are shaping the future of the South Korean tea market. One of the most significant trends is the growing demand for organic and premium tea. As consumers become more health-conscious, there is an increasing desire for products that are perceived as pure, natural, and free from chemicals. Organic teas, in particular, are becoming more popular, with both local and international brands offering a range of organic green, herbal, and fruit teas.

The rise of specialty and functional teas is another key trend. Consumers are becoming more discerning in their tea choices, moving beyond traditional offerings to explore blends that cater to specific health needs. Tea blends containing ingredients like ginger, turmeric, and ginseng are becoming particularly popular due to their potential health benefits, such as anti-inflammatory properties and boosting immunity. The demand for functional teas, such as those that aid digestion, promote sleep, or reduce stress, is expected to continue growing, driven by an increasingly health-conscious consumer base.

The premiumization of tea is also contributing to the growth of the market. Consumers, particularly younger generations, are looking for premium, artisanal tea products that offer unique flavors, sourcing, and packaging. The desire for a luxurious tea-drinking experience has spurred the growth of high-end tea brands, which emphasize quality, sustainability, and ethical sourcing.

Another trend is the increasing popularity of tea cafes and the expansion of tea culture in South Korea. Tea cafes have become an important aspect of the South Korean lifestyle, with consumers increasingly visiting these cafes to experience unique tea blends, enjoy a social gathering, or simply unwind. The emphasis on high-quality tea leaves, artisanal blends, and premium tea experiences is helping to shape the cultural perception of tea as a luxury and lifestyle product.

South Korea Tea Market Segmentation

The market can be divided based on Type, Packaging and Distribution Channels.

Based on type, the market is segregated into:

  • Green Tea
  • Oolang Tea
  • Black Tea
  • Fruit/ Herbal Tea
  • Others

On the basis of packaging, the market is classified into:

  • Tea Bags
  • Plastic Containers
  • Loose Tea
  • Paperboards
  • Aluminium Tins

Based on distribution channels, the market is segmented into:

  • Supermarkets/ Hypermarkets
  • Convenience Store
  • Speciality Stores
  • Online Stores
  • Others

Challenges and Opportunities

Despite the positive growth outlook, the South Korean tea market faces certain challenges. One of the main obstacles is the strong competition from other beverage categories, particularly coffee and carbonated soft drinks, which are deeply entrenched in South Korean culture. While tea consumption has been growing, coffee remains the dominant beverage in South Korea, with coffee shops and cafés becoming a central part of the country’s social fabric. As a result, tea brands must continuously innovate and differentiate themselves to attract consumers who might otherwise prefer coffee or other beverages.

Price sensitivity is another challenge for tea companies, especially for premium products. While the demand for high-quality, organic, and specialty teas is on the rise, price remains a key consideration for a significant portion of consumers. Companies must strike a balance between quality and price to appeal to both premium and price-conscious consumers.

At the same time, the market offers numerous opportunities. The increasing demand for functional teas, particularly those with health benefits, presents a significant growth avenue. The rising interest in wellness products provides tea brands with an opportunity to develop and promote new functional tea blends, such as detox, immunity-boosting, and weight-loss teas.

The growing popularity of ready-to-drink tea also offers opportunities for innovation. With South Korean consumers leading busy lives, the demand for convenient, on-the-go beverage options will continue to rise, creating opportunities for new RTD tea products that cater to this need.

Competitive Landscape

  • Osulloc Co. , Ltd.
  • Nokchawon Co. Ltd.
  • Kwangdong pharmaceutical co., ltd.
  • Dong Suh Co., Ltd
  • Ssanggye Myung Tea Co., Ltd
  • Lotte Chilsung Beverage Co.,Ltd.
  • Others

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