In drinks innovation, tea is being transformed into a versatile flavour platform, its huge diversity enabling it to encompass everything from hard tea to mate- and matcha-based RTDs, sparkling tea and tea-infused spirits. As well as lending itself to daytime social occasions, tea’s natural image enables it to tap into highly influential health & wellness trends.
“As consumers increasingly embrace the uncomfortable pleasure of bitter complexity, tea is rapidly evolving from a traditional beverage to a dynamic ingredient and flavour anchor across food and drink categories,” says WGSN’s director of food & drink, Jennifer Creevy.
“Driven by consumer demand for wellness, sensory novelty and global influences, the most innovative brands are leveraging a diverse range of tea varieties – often with regional provenance, functional benefits and layered flavour profiles – to create new experiences in drinks, snacks, dairy, bakery and more.”
The trend is exploring tea’s enormous spectrum of flavours, moving beyond classic black and green varieties into oolong, matcha, hojicha, jasmine, pu’er and regional specialities.
The Asia Pacific region is the natural epicentre in terms of tea innovation, but there are clear signs of growth in North America and Europe, the Middle East & Africa, with WGSN research indicating that social and influencer data places tea among the top wellness and indulgence trends for Gen Z.
Could hard tea become more scalable than hard seltzer?
Hard tea – meaning tea with an ABV – has become one of the fastest-growing sub-categories in the RTD space, driven primarily by the US market. In 2025, volumes in the country grew by 5%, according to IWSR data, and expanded between 2021 and 2025 at a CAGR of +22%.
Canada is the second-largest global market, with volumes there increasing last year by 6%, echoing the 6% CAGR rise recorded between 2021 and 2025 – and raising the question of whether hard tea’s success can be replicated beyond North America.
“The recent trajectory of hard tea mirrors the way in which hard seltzer scaled, but tea is better understood in Europe than seltzers, suggesting that hard tea could have more potential for global growth,” says IWSR‘s head of RTD insights, Susie Goldspink. “It’s also possible that hard teas will only truly thrive in places where iced tea already performs well.”
Beyond hard tea – Mate, matcha and more
Hard tea isn’t the only opportunity, with increasingly clear signs of growth for a wide range of products, from mate- and matcha-based RTDs to tea-based liqueurs and tea-flavoured wines and spirits, such as gins that use tea as a botanical ingredient.
According to IWSR’s ‘RTD Innovation Catalogue’, 3% of new RTD launches in 2025 had tea-related ingredients, up from 2% in 2021.
IWSR’s research analysts also report a number of instances where tea is playing a key role in successful innovations around the world, including:
- In Brazil, a viral trend for cocktails combining rum, yerba mate and guaraná has spawned a number of copycat RTDs. The combination of caffeine and alcohol – with echoes of energy drink crossovers – is proving popular at carnivals and other high-energy events
- The use of yerba mate as a mixer with vodka is well established on the nightclub scene in Switzerland and is growing in Austria. It’s also used as a pre-going-out drink, early in the evening, and at festivals and parties
- Sparkling tea is increasingly finding a foothold as a drink suited to the aperitif moment, acting as an alternative to alcohol-free sparkling wine
- Tea-based liqueurs have entered the Italian market. While they remain niche, they’re growing and innovating in terms of serves, creating alternatives to classic cocktails that display tea’s versatility as an ingredient in mixology
- Green tea was one of the more popular mixers for scotch whisky in China, based on the early promotion of the combination by brands, aiming to give consumers the reassurance of a familiar flavour. Tea-flavoured spirits-based RTDs are very common now
The health & wellness and occasion opportunities
Tea is transcending its status as a flavour to become a positioning platform, with tea-based products naturally mapping to daytime consumption moments and occasions when consumers are looking for lower alcohol levels or functional drinks.
Tea’s low-sugar, natural caffeine and functional ingredient story aligns with broader health-conscious drinking trends, while also benefitting from the growing culture around shared interest gatherings, such as the café and bakery social spaces.
In Asia Pacific, Chinese tea is acting as an originating cultural movement, alongside the emergence of trends such as matcha raves and café culture in Singapore.
“China’s new-style tea movement reframes tea as a premium, low-sugar lifestyle beverage rooted in craft, wellness and cultural expression,” explains WGSN’s Creevy. “Rising Chinese soft power will accelerate its global spread, pushing flavours and rituals beyond tea and unlocking a new category scalable across RTDs and adjacent beverage formats.”
One to watch
“Tea is much more than a niche; it’s a flavour architecture that can underpin premiumisation strategies across spirits, RTDs and no/low,” says Goldpsink. “The caffeine overlap opens up energy drink occasions, but without the baggage of synthetic stimulant positioning – and tea also bridges the gap with daytime and aperitif occasions, which remain under-developed for beverage alcohol.
“There could be further potential for hard tea and other tea-based products where iced tea is already a well-established category, while the new-style Chinese tea movement is one that should be watched closely: its global spread will introduce new flavour codes – oolong, pu’er, cheese tea – that are not yet reflected in western innovation pipelines.”
The above analysis reflects data from IWSR’s 2026 data release. For more in-depth data and current analysis, head here to request a callback from IWSR.
