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The Tea Industry and COVID 19

Updated: Jun 9, 2021

While 2020 was a difficult year for everyone from all walks of life, the new year 2021 still remains a tough year. Even though vaccinations have just begun, the rolling out is still not in full force and the risks associated with COVID 19 are still out on the open. Infact we see a new variant of the disease running rampant in United Kingdom right now. However, I am certain with the vaccinations taking center stage we will soon be able to completely eradicate this from the world. I sincerely hope things will bounce back life will return to normalcy very soon.

I would like to take this opportunity to share a few of my ideas on the tea industry. While my ideas may not be accurate, it will be a good read for anyone in the industry. My ideas and insights generate through the extensive conversations I have had with the connections I have from a plethora of leading top level and mid level executives who actively engage with us for our pyramid tea bag packing machines and packing material.

In 2019 the global tea market reached a volume of 6.4 Million Tons (Inmarc Group), while the exact numbers for 2020 are still to be published. Originating in China, tea currently represents one of the widely consumed beverages in the world. Tea is a rich source of antioxidants and offers numerous health benefits such as reducing the risk of heart attack and stroke, weight loss, maintaining bone health, boosting immunity, and enhancing digestion. At present, there are numerous formats in which tea products are manufactured and sold which include loose tea, teabags, bottled and canned ice tea, ice tea powders and milk tea powders.

Being a pioneer in the tea packaging business, Tecpacking works closely with many tea companies across the globe, mainly in Europe, Australia, Middles East, Sri Lanka, India and many more. I have had the privilege to personally speak to many industry veterans to gain great insights into the current tea market which has had a direct impact from COVID 19. Few of the ideas shared with me are as follows:

● Having a large consumer base and a large consumer acceptance, the tea industry has seen a growth in consumption in 2020. Only seconded to water, tea is a widely popular beverage among many Asian and European nationals with people in these regions consuming tea on a daily basis.

● Tea is an inexpensive beverage which is consumed by people belonging to all types of socio economic consumer groups. This means that people of all income groups have access to consume tea. This has been a catalyst that has supported the popularity of tea further - as the mass population has had the capability of consuming it. With COVID 19, the price elasticity of demand for tea was high meaning that tea was one of the products people did not consider cutting down on due to lower income levels as the price was low.

● COVID 19 has motivated many individuals to be health oriented. As a result the health variants of tea have experienced a surge in demand by many consumers. Some of them include herbal tea, green tea and other types of health focused tea variants. This has led to increased consumption in tea.

In addition to the above, we have seen certain countries driving innovation to this traditional tea industry. I am talking about Sri Lanka in this instance. Sri Lanka tea auction has successfully transitioned its auction to an e-auction as a counter measure against COVID 19. Being a very traditional industry in Sri Lanka, this innovation has driven the tea industry in Sri Lanka to greater heights.

Also, we have seen certain trends in the tea industry change in certain countries. For example - in the USA 48% of the tea consumption occurs in food service outlets, while the balance is at residencies (Euromonitor, 2020). The reason for food service outlets to perform so well is because ice tea is popular among Americans. With COVID 19, many were restricted from purchasing from food service outlets. This impacted negatively on the food service. However, this enforced many to consume herbal teas at home as a result of no access to tea from food service coupled with the health benefits that herbal tea posed to consumers.

While these are some of the changes we have seen in the tea industry, I would like to share my ideas on some of the trends I expect from the industry in 2021:.

● Tea consumption at home will rise in 2021. This is because many are now used to drinking tea at home coupled with the financial struggles people face when consuming from food service outlets. Also, given that work from home will be popular in 2021 - many will be having their cup of tea at home.

● Herbal tea will see a growth in consumption relative to other type of teas. This is because people are now focused on leading healthy lives.

● The demand for global tea will experience a further improvement as it has even been regarded as a catalyst to fight corona virus and any other diseases

In conclusion, it is clear that COVID 19 has had many negative impacts in a multitude of facets. It is the responsibility of each one of us to reflect on COVID 19 and understand how this came about. We as responsible individuals should see how we can put a stop to COVID 19 and how we could ensure that such a crisis do not emerge in the future. We should stay calm and take one step at a time during these uncertain times - as it is clear we all have only this one planet called “Earth” to live in. With that said, coming back to the tea industry - while there have been many obvious negatives, there have been positives in the tea trade as well. While we hope that this pandemic comes to a halt soon, we can see that there is hope for a brighter future for the tea industry as a whole. Let everyone in this wonderful tea industry come together to build a sustainable way forward from the lessons learnt, so that our future generations could take this on for many more years.

Paul Zhang

Co-Founder at Tecpacking Group

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