Hard Tea Volumes Rose 5% in the United States in 2025

Tea is moving from a familiar nonalcoholic drink into a broader flavor platform for beverage alcohol, as producers look for new ways to reach younger legal-drinking-age consumers seeking wellness cues, premium products and more distinctive tastes.

A report published July 27 by IWSR says tea is now shaping innovation across ready-to-drink alcohol, spirits and low- and no-alcohol beverages. The shift goes beyond traditional black and green tea and includes matcha, hojicha, oolong, jasmine, pu’er and yerba mate, among other styles. Analysts say the trend is being driven by a mix of premiumization, interest in authenticity and growing demand for drinks that feel lighter or more functional.

“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,” Jennifer Creevy, director of food and drink at WGSN, said in the report.

The strongest commercial example so far is hard tea. In the United States, volumes in the category rose 5% in 2025, according to IWSR data, after expanding at a compound annual growth rate of 22% from 2021 to 2025. Canada, the second-largest market for hard tea, posted 6% volume growth in 2025 and a 6% CAGR over the same period.

Those figures have prompted questions about whether hard tea can spread beyond North America. Susie Goldspink, head of RTD insights at IWSR, said the category’s recent path resembles the rise of hard seltzer, but with one possible advantage: tea is already better understood than seltzer in many international markets.

“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,” Goldspink said. She added that hard tea may perform best in places where iced tea is already well established.

The report argues that the opportunity extends well beyond hard tea. According to IWSR’s RTD Innovation Catalogue, 3% of new RTD launches in 2025 included tea-related ingredients, up from 2% in 2021. That increase points to broader experimentation by producers trying to connect tea’s flavor range with different drinking occasions.

In Brazil, IWSR analysts cited a viral cocktail trend combining rum, yerba mate and guaraná that has led to copycat RTD products. The mix of caffeine and alcohol has gained traction at carnivals and other high-energy events. In Switzerland, yerba mate has an established role as a mixer with vodka on the nightclub scene and is also growing in Austria, where it appears in early-evening drinks as well as at festivals and parties.

Elsewhere, sparkling tea is gaining ground as an aperitif-style drink and as an alternative to nonalcoholic sparkling wine. In Italy, tea-based liqueurs remain small but are expanding through new serves aimed at showing how tea can work in cocktails. In China, green tea became a popular mixer for Scotch whisky after early promotion by brands that used the familiar flavor to make whisky more approachable. Tea-flavored spirits-based RTDs are now common there.

Industry researchers say tea’s appeal lies not only in taste but also in what it signals to consumers. Tea carries associations with lower sugar, natural caffeine and functional ingredients at a time when many drinkers are moderating alcohol intake or looking for products that fit daytime social settings. That makes it useful for brands trying to build products around brunches, café culture, bakery gatherings or early-evening aperitif occasions rather than late-night drinking alone.

The Asia-Pacific region remains the center of much of this innovation. Tea has deep cultural roots there, and analysts say Chinese tea culture in particular is influencing product development well beyond its home market. New-style Chinese tea drinks have helped reposition tea as a premium lifestyle beverage tied to craft, wellness and cultural identity. That movement is also feeding newer social formats such as matcha-centered gatherings and café-driven consumption trends in cities including Singapore.

“China’s new-style tea movement reframes tea as a premium, low-sugar lifestyle beverage rooted in craft, wellness and cultural expression,” Creevy said. “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.”

WGSN research cited by the report indicates that social media and influencer activity place tea among leading wellness and indulgence trends for Gen Z. That matters for alcohol companies because younger adult consumers are often looking for novelty without abandoning cues linked to health or moderation. Tea gives producers a way to offer bitterness, complexity and regional identity while avoiding some of the negative perceptions attached to synthetic energy ingredients or heavily sweetened drinks.

Goldspink said tea now offers producers more than a niche flavor idea. It can support premium strategies across spirits, RTDs and no- and low-alcohol products while also opening occasions that beverage alcohol has not fully developed.

“Tea is much more than a niche; it is a flavour architecture that can underpin premiumisation strategies across spirits, RTDs and no/low,” Goldspink said in the report. She added that tea’s overlap with caffeine occasions creates opportunities similar to energy drinks but without the same baggage around synthetic stimulant positioning.

For producers watching where growth may come next, analysts point to markets where iced tea already has broad consumer acceptance and to the continued spread of Chinese-inspired tea formats. As those influences move outward, they are expected to introduce flavor profiles such as oolong, pu’er and cheese tea into Western product pipelines that have so far remained relatively narrow.