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Herbal Tea Production in the US Industry Data and Analysis
Steady demand from wellness-conscious consumers and a growing cohort of health-focused and aging adults has supported consistent, if modest, expansion in the US herbal tea production industry over the five years through 2026. Revenue has grown at an annualized rate of 1.5% to reach $838.0 million, including a 1.5% increase in 2026, underpinned by rising consumer spending, up 2.1% in 2026, and sustained interest in herbal teas as functional, low-calorie beverages. Producers have benefited from strong marketing around health benefits, such as antioxidant content, cardiovascular support and relaxation properties, while flavor innovation, including fruit-infused and naturally sweetened blends, has broadened appeal as a healthier substitute for sugary drinks. Premiumization has also taken hold, with organic and specialty blends gaining traction among higher-income consumers. Despite stable demand, industry growth has remained subdued and relatively non-cyclical since 2022, reflecting mature consumption patterns and intensifying competition from low-cost imports, particularly amid a strong US dollar that has made imported teas more price-competitive. Profitability has been volatile; profit rose from 8.3% in 2022 to 12.0% in 2023 before easing to 10.6% in 2026 as tariff-driven input cost pressures intensified. With purchases accounting for 60.7% of revenue and most botanical inputs sourced internationally, a 4.9% decline in the trade-weighted index in 2026 amplified cost burdens. Producers have partially offset these pressures by passing costs through to buyers via price increases and surcharges.In response to rising input volatility and supply chain risk, consolidation has accelerated, with larger players leveraging acquisitions to strengthen procurement scale and sourcing resilience. Notable transactions, including TreeHouse Foods’ acquisition of Harris Tea in 2025 and Tata Consumer Products’ earlier purchase of Organic India, highlight the strategic importance of diversified ingredient networks. Larger, well-capitalized producers are better positioned to manage tariff exposure and invest in supply chain flexibility, while smaller independent brands face tighter profit. At the same time, a 6.3% increase in establishments in 2026 indicates that new entrants continue to enter the market, attracted by stable demand and low barriers to niche product differentiation.Looking ahead, industry revenue is projected to grow at a modest annualized rate of 1.1% to reach $886.7 million by 2031. Continued expansion in per capita disposable income and sustained health and wellness trends are expected to support demand, particularly for premium, organic and functional blends with targeted health benefits. Regulatory developments, including the FDA’s April 2025 extension of the “healthy” label to qualifying low-calorie, caffeine-free teas, further reinforce premium positioning opportunities. However, ongoing trade policy uncertainty and reliance on imported botanicals present downside risks to margin expansion, while a strong US dollar may encourage import penetration. As a result, future growth will likely hinge on product differentiation, certification credentials and supply chain resilience rather than significant volume expansion.
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What's included in this industry analysis
IBISWorld's research coverage on the Herbal Tea Production industry in the United States includes market sizing, forecasting, data and analysis from 2016-2031. The most recent publication was released May 2026.
About this industry
What's this industry report about?
The Herbal Tea Production industry in the United States operates under the NAICS industry code OD4198. Companies in this industry specialize in blending and packaging plant infusions, creating an array of herbal teas. These teas can be derived from any leaf, root, fruit or flower that comes from plants other than the traditional tea plant. This diverse industry harnesses various botanicals' natural benefits and flavors, providing consumers with a range of healthy and delicious beverage choices. Related terms covered in the Herbal Tea Production industry in the United States include tisane, rooibos and ready-to-drink (rtd).
What's included in this industry?
Products and services covered in Herbal Tea Production industry in the United States include Chamomile tea, Mint tea and Other herbal teas.
What companies are included in this industry?
Companies covered in the Herbal Tea Production industry in the United States include Unilever N V, The Hain Celestial Group, Inc. and Bigelow Tea Company.
Performance
What's included in the Performance chapter?
The Performance chapter covers detailed analysis, datasets, detailed current performance, sources of volatility and an outlook with forecasts for the Herbal Tea Production industry in the United States.
Questions answered in this chapter include what's driving current industry performance, what influences industry volatility, how do successful businesses overcome volatility, what's driving the industry outlook. This analysis is supported with data and statistics on industry revenues, costs, profits, businesses and employees.
Products & Markets
What's included in the Products and Markets chapter?
The Products and Markets chapter covers detailed product and service segmentation, analysis of major markets and international trade data for the for the Herbal Tea Production industry in the United States.
Questions answered in this chapter include how are the industry's products and services performing, what are innovations in industry products and services, what products or services do successful businesses offer and what's influencing demand from the industry's markets. This includes data and statistics on industry revenues by product and service segmentation and major markets.
Geographic Breakdown
What's included in the Geographic Breakdown chapter?
The Geographic Breakdown chapter covers detailed analysis and datasets on regional performance of the Herbal Tea Production industry in the United States.
Questions answered in this chapter include where are industry businesses located and how do businesses use location to their advantage. This includes data and statistics on industry revenues by location.
Competitive Forces
What's included in the Competitive Forces chapter?
The Competitive Forces chapter covers the concentration, barriers to entry and supplier and buyer profiles in the Herbal Tea Production industry in the United States. This includes data and statistics on industry market share concentration, barriers to entry, substitute products and buyer & supplier power.
Questions answered in this chapter include what impacts the industry's market share concentration, how do successful businesses handle concentration, what challenges do potential industry entrants face, how can potential entrants overcome barriers to entry, what are substitutes for industry services, how do successful businesses compete with substitutes and what power do buyers and suppliers have over the industry and how do successful businesses manage buyer & supplier power.
Companies
What's included in the Companies chapter?
The Companies chapter covers Key Takeaways, Market Share and Companies in the Herbal Tea Production industry in the United States. This includes data and analysis on companies operating in the industry that hold a market share greater than 5%.
Questions answered in this chapter include what companies have a meaningful market share and how each company is performing.
External Environment
What's included in the External Environment chapter?
The External Environment chapter covers Key Takeaways, External Drivers, Regulation & Policy and Assistance in the Herbal Tea Production industry in the United States. This includes data and statistics on factors impacting industry revenue such as economic indicators, regulation, policy and assistance programs.
Questions answered in this chapter include what demographic and macroeconomic factors impact the industry, what regulations impact the industry, what assistance is available to this industry.
Financial Benchmarks
What's included in the Financial Benchmarks chapter?
The Financial Benchmarks chapter covers Key Takeaways, Cost Structure, Financial Ratios, Valuation Multiples and Key Ratios in the Herbal Tea Production industry in the United States. This includes financial data and statistics on industry performance including key cost inputs, profitability, key financial ratios and enterprise value multiples.
Questions answered in this chapter include what trends impact industry costs and how financial ratios have changed overtime.
Industry Data
What's included in the Industry Data chapter?
The Industry Data chapter includes 10 years of historical data with 5 years of forecast data covering statistics like revenue, industry value add, establishments, enterprises, employment and wages in the Herbal Tea Production industry in the United States.
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Frequently Asked Questions
What is the market size of the Herbal Tea Production industry in the United States in 2026?
The market size of the Herbal Tea Production industry in the United States is $833.9m in 2026.
How many businesses are there in the Herbal Tea Production industry in the United States in 2026?
There are 328 businesses in the Herbal Tea Production industry in the United States, which has grown at a CAGR of 7.6 % between 2021 and 2026.
How may import tariffs affect the Herbal Tea Production industry in the United States?
The Herbal Tea Production industry in the United States is likely to be impacted by import tariffs with imports accounting for a moderate share of industry revenue.
How may export tariffs affect the Herbal Tea Production industry in the United States?
The Herbal Tea Production industry in the United States is likely to be impacted by export tariffs with exports accounting for a moderate share of industry revenue.
Has the Herbal Tea Production industry in the United States grown or declined over the past 5 years?
The market size of the Herbal Tea Production industry in the United States has been growing at a CAGR of 1.5 % between 2021 and 2026.
What is the forecast growth of the Herbal Tea Production industry in the United States over the next 5 years?
Over the next five years, the Herbal Tea Production industry in the United States is expected to grow.
What are the biggest companies in the Herbal Tea Production industry in the United States?
The biggest companies operating in the Herbal Tea Production industry in the United States are Unilever N V, The Hain Celestial Group, Inc. and Bigelow Tea Company
What does the Herbal Tea Production industry in the United States include?
Blending and packaging chamomile tea and Blending and packaging mint tea are part of the Herbal Tea Production industry in the United States.
Which companies have the highest market share in the Herbal Tea Production industry in the United States?
The company holding the most market share in the Herbal Tea Production industry in the United States is Unilever N V.
How competitive is the Herbal Tea Production industry in the United States?
The level of competition is moderate and steady in the Herbal Tea Production industry in the United States.
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