The Australian Tea Drinking Report 2026: How a Nation of Coffee Lovers Is Quietly Rediscovering Tea

Published by O2H TEA | April 2026

Data sources: Roy Morgan Research, Statista, ABS, CHOICE, Google Trends, IMARC Group, FaBA, TeaVision, and O2H TEA proprietary retail data (2024–2026)

Key Findings at a Glance

• 9.8 million Australians drink tea at least once a week — that is half the adult population
• The Australian tea market is valued at AUD $690 million in 2025, growing at 5.1% annually
• Traditional black tea bag sales are declining, while specialty loose leaf, matcha, and botanical blends are surging
• Australian consumers aged 25–45 are driving the shift — choosing tea for wellness, flavour exploration, and lifestyle alignment rather than habit
• Retailer data from O2H TEA shows 85% of online sales go to East-meets-West blended teas, with only 15% choosing traditional single-origin varieties
• The November–December gifting season is the dominant purchasing period for specialty tea brands, with the rest of the year showing a clear winter uptick
• Sydney has overtaken Melbourne as the top city for online specialty tea purchases

1. The State of Tea in Australia

Australia is a coffee country. Everyone knows that. Melbourne alone has more specialty roasters per capita than almost any city on earth, and the flat white is practically a national export.

But here is the number most people miss: 9.8 million Australians — roughly 50% of the population aged 14 and over — drink tea at least once a week (Roy Morgan, 2019). That is not a niche. That is half the country.

The Australian tea market was valued at approximately AUD $690 million in 2025, with a projected compound annual growth rate (CAGR) of 5.1% through 2035 (Expert Market Research, 2025). The IMARC Group estimates the market at USD $512 million in 2024, forecasting growth to USD $761 million by 2033 at a 4.51% CAGR.

Where Australia sits globally tells an interesting story. Per capita tea consumption is approximately 0.75 kg per year — well behind Turkey (3.16 kg), the United Kingdom (1.82 kg), and New Zealand (1.19 kg), but ahead of the United States (0.23 kg) (Wikipedia, citing FAO/Euromonitor data). In other words, Australians drink more tea than Americans, but far less than the British. There is room to grow — and the growth is happening, just not in the categories you might expect.

What is growing and what is not

The clearest trend in Australian tea is the decline of the traditional black tea bag and the rise of everything else. CHOICE's blind taste test of 32 supermarket black teas (2024) found that the category is increasingly commoditised — Aldi's house brand scored highest, beating established names like Twinings and Dilmah on taste alone.

Meanwhile, the specialty tea segment is expanding rapidly:

• Matcha has moved from niche Japanese cafes to mainstream menus. Google Trends data for "matcha" in Australia shows a sustained upward trajectory since 2020, with search interest in 2025 more than double the 2019 level.
• Herbal and botanical blends are growing as consumers seek caffeine alternatives with functional benefits.
• Loose leaf tea is gaining share as premium positioning and sustainability concerns push consumers away from conventional tea bags.
• Bubble tea has become a cultural phenomenon among younger Australians, introducing an entirely new demographic to tea-based beverages — even if purists might debate whether it counts.

TeaVision's 2025 trend report identifies functional teas, cold brew tea, and tea-based cocktails as the fastest-growing subcategories in the Australian hospitality channel.

2. Who Drinks Tea in Australia? A Demographic Snapshot

The stereotype of the Australian tea drinker — an elderly person with a teapot and a packet of Bushells — is outdated, but not entirely wrong. Age remains the strongest demographic predictor of tea consumption.

According to Roy Morgan Research:

• 64% of Australians aged 65+ drink tea weekly — the highest of any age group
• Only 25% of Australians aged 14–17 drink tea weekly — the lowest
• Women (55%) are more likely to drink tea than men (45%)
• The average Australian tea drinker consumes 9.5 cups per week, rising to 10.9 cups for those aged 65+

Note: Roy Morgan's consumer data is from 2016–2019 surveys, the most recent publicly available Australian tea consumption study at this scale. While the absolute numbers may have shifted, the demographic patterns remain broadly consistent with current industry observations.

The 25–45 shift

What the Roy Morgan data does not fully capture — because it predates the post-2020 wellness movement — is the rapid adoption of specialty tea among Australians aged 25 to 45.

This is the cohort driving matcha sales, buying loose leaf online, and discovering oolong and pu-erh through social media. They are not replacing coffee. They are adding tea as a second daily ritual — often positioned around wellness, mindfulness, or afternoon energy management rather than the traditional morning cuppa.

Retailer data from O2H TEA's online store (2024–2026) provides a window into this demographic:

• The core customer base is women aged 25–45, predominantly white-collar professionals
• Sydney generates the most online traffic and sales, followed by Melbourne, Brisbane, Perth, and Adelaide — despite O2H TEA being a Melbourne-based brand
• Canberra and regional Victorian towns (Geelong, Ballarat, Bendigo) show disproportionately high engagement relative to population size
• International visitors from Singapore, the United States, and China account for a small but consistent share of sessions, suggesting diaspora-driven discovery

The geographic spread challenges the assumption that specialty tea is a Melbourne-only phenomenon. Sydney's dominance in O2H TEA's data aligns with broader e-commerce patterns — Sydney has Australia's largest population and highest online spending per capita — but also suggests that the specialty tea wave has already gone national.

3. The Great Shift: From Black Tea Bags to Specialty Tea

If there is one chart that tells the story of Australian tea in the 2020s, it is the divergence between traditional black tea (declining) and specialty categories (growing).

Canstar Blue's consumer research finds that brand loyalty in black tea is weakening. Consumers are trading down to supermarket house brands for their everyday cuppa, while trading up to premium brands for the teas they actually get excited about.

What Australians are discovering

Three categories are driving the specialty tea expansion:

Botanical and floral blends — Teas that combine traditional tea bases (green, black, oolong) with flowers, fruits, and herbs. These are the gateway products for consumers who find pure Chinese or Japanese teas intimidating.

O2H TEA's retail data illustrates this starkly:

• 85% of sales were from the H Collection — East-meets-West blended teas combining oolong, green, or black tea bases with ingredients like sakura, white peach, gardenia, grape, and grapefruit
• Only 15% were from the O Collection — traditional single-origin Chinese teas including aged pu-erh, phoenix oolong, and the tangerine (xiao qing gan) series
• The top-selling product by a wide margin was a sakura strawberry oolong blend, followed by a white peach oolong — both East-meets-West flavour profiles

This 85:15 ratio is a data point worth sitting with. It suggests that Australian consumers — even those actively seeking premium Asian tea — overwhelmingly prefer accessible, flavour-forward blends over traditional varieties. The entry point matters. Consumers are not starting with aged pu-erh; they are starting with peach oolong and working their way deeper.

Matcha — Once confined to Japanese restaurants and health food stores, matcha is now a mainstream cafe staple. Google Trends shows Australian search interest for "matcha latte" has increased roughly 150% since 2019. The matcha market has its own dynamics — driven as much by cafe culture and Instagram aesthetics as by tea appreciation — but it is unquestionably expanding the number of Australians who think of tea as something beyond a Bushells bag.

Aged and fermented teas — Pu-erh, a fermented tea from China's Yunnan province, is beginning to appear on Australian specialty menus and in online retail. While still a niche category in the Australian market, pu-erh benefits from strong storytelling — the ageing process, the terroir, the comparison to wine vintages — that resonates with Australia's food-and-wine culture.

The premiumisation trend

Average price points are rising. Consumers who previously spent $5–8 on a box of 50 tea bags are now spending $15–35 on 50–100g of loose leaf tea. This premiumisation extends beyond the leaves themselves — dedicated brewing equipment (teapots, kettles, brewing sets) is a growing category, suggesting that a meaningful segment of customers is investing in the full tea experience.

4. Seasonality: When Australians Buy Tea

One of the least discussed aspects of the Australian tea market is its extreme seasonality — and how that seasonality differs from the Northern Hemisphere pattern that dominates global tea industry discussion.

The Australian tea calendar

Analysis of O2H TEA's online purchasing patterns (2024–2026) reveals two distinct peaks:

Peak 1: November–December (gifting season)

The largest purchasing spike by far, driven by Christmas and end-of-year corporate gifting. This period dominates the annual sales calendar for specialty tea brands.

Peak 2: July–September (winter)

A secondary but consistent uptick during the Australian winter months, when hot beverage consumption naturally increases. This aligns with the global pattern of tea being a cold-weather drink, but shifted six months from the Northern Hemisphere calendar.

The quiet months: January–April

Post-holiday fatigue and the transition into Australian summer create a predictable trough.

This pattern has practical implications for anyone in the Australian tea industry:

• New product launches are best timed for October (building momentum into the gifting peak) or June (ahead of winter)
• Content marketing and SEO should ramp up in September–October, when purchase intent begins to climb
• The January–April trough is the best time to invest in brand building, content creation, and operational improvements — not sales pushes

Year-over-year growth

Despite the seasonal swings, the underlying trend is clearly upward. O2H TEA has seen consistent year-over-year growth since launch, with both customer acquisition and repeat purchase rates accelerating — a pattern consistent with the broader industry growth rate of 5.1% CAGR reported by market research firms, adjusted for the fact that specialty and online channels are growing significantly faster than the overall market.

5. The Wellness Connection

Tea's resurgence in Australia is inseparable from the broader wellness movement. The same consumers buying organic produce, practising yoga, and tracking their sleep are also reaching for tea — specifically, teas marketed around functional benefits.

What the data shows

Google Trends data for Australia reveals sustained growth in searches for:

• "Green tea benefits" — consistent high interest, driven by weight management and antioxidant claims
• "Chamomile tea for sleep" — seasonal spikes in winter months
• "Oolong tea benefits" — growing from a low base, driven by metabolism and weight management interest
• "Pu-erh tea benefits" — small but steadily increasing, associated with digestion and gut health

TeaVision's 2025 trend report identifies functional teas — teas marketed with specific health benefits like stress relief, digestion support, or immune boosting — as one of the fastest-growing subcategories in Australian hospitality.

The evidence gap

It is worth noting that many health claims associated with tea remain scientifically contested. While tea contains well-documented compounds like catechins (green tea), theaflavins (black tea), and L-theanine (most teas), the clinical evidence for specific health benefits varies widely. Responsible brands in this space are careful to distinguish between "contains beneficial compounds" and "will cure your ailments."

What is clear is that consumer perception of tea as a healthy beverage is a powerful growth driver, regardless of the nuances in the clinical literature. Tea is positioned as the antithesis of sugary soft drinks and energy drinks — natural, low-calorie, and associated with mindfulness and calm.

6. Sustainability and Packaging

Sustainability has moved from a nice-to-have to a purchase driver in Australian food and beverage. The Food and Beverage Accelerator (FaBA) Sustainable Packaging Trends Report 2025 estimates the Australian sustainable packaging market at AUD $4.1 billion, growing at 8.2% CAGR.

For tea brands, packaging is both a practical challenge and a brand opportunity:

• Conventional tea bags often contain polypropylene (a plastic used to heat-seal the bags), which does not fully biodegrade. This has become a growing consumer concern.
• Loose leaf tea avoids the tea bag problem entirely but requires different packaging and brewing equipment, creating a higher barrier to entry for new consumers.
• Biodegradable and compostable packaging is increasingly expected by the premium tea consumer. Brands that can demonstrate genuine sustainability credentials — not just greenwashing — gain a competitive advantage.

O2H TEA's approach — fully biodegradable packaging, Australian-packed — reflects this market direction. But the broader industry still has significant room for improvement. Many mainstream tea brands continue to use non-recyclable materials for individual sachets, outer wrapping, and shipping.

The opportunity for Australian tea brands is to lead on packaging sustainability in a way that the global tea giants, constrained by scale and legacy supply chains, cannot easily replicate. This is a competitive advantage that small brands can credibly claim.

7. The East-Meets-West Opportunity

Perhaps the most underreported trend in Australian tea is the growing appetite for Asian tea varieties — but with a distinctly Australian twist.

Australia's multicultural population means that Chinese, Japanese, Korean, and South-East Asian tea traditions are not foreign imports — they are part of the country's cultural fabric. What is new is the crossover: non-Asian Australians discovering these teas, and Asian-Australian entrepreneurs repackaging traditional teas for a broader audience.

What the retail data tells us

O2H TEA's 85:15 split between blended and traditional teas is the clearest signal. Australian consumers are interested in Asian tea — but they want it translated, not transplanted. A sakura strawberry oolong blend outsells a pure phoenix oolong by a wide margin.

This does not mean traditional teas have no market. It means the pathway to traditional tea runs through accessible blends. Consumers who start with a peach oolong may, over time, develop the palate and curiosity to explore a single-origin oolong or an aged pu-erh. The blend is the on-ramp.

For brands and retailers, this suggests a clear product strategy:

1. Lead with flavour-forward blends that lower the barrier to entry

2. Educate through content, not through product complexity — blog articles, brewing guides, and comparison content that helps consumers navigate unfamiliar categories

3. Offer a pathway to depth for customers who want to go further — curated sets, tasting flights, and premium single-origin options for returning customers

The design factor

Australia's specialty tea market is also being shaped by design and branding in ways that traditional tea has never experienced. The aesthetic expectations set by specialty coffee — clean packaging, minimal design, Instagram-ready presentation — now apply to tea as well.

Several Australian tea brands have recognised this, investing in packaging design that signals quality and modernity rather than the faux-Asian aesthetic that dominated tea packaging for decades. Design awards from international competitions are beginning to appear in Australian tea brand portfolios — a signal that the industry is maturing beyond commodity tea into a design-conscious premium category.

8. What Is Next: Five Predictions for 2026–2027

Based on the data and trends analysed in this report, we offer five specific predictions for the Australian tea market over the next 12–18 months:

1. Matcha will peak as a trend — and stabilise as a category.

The explosive growth in matcha cafe menu appearances will slow, but matcha itself will remain a permanent fixture. Expect market consolidation as low-quality matcha powder brands are replaced by premium Japanese-sourced options.

2. Oolong will be the next "discovery" tea for Australian consumers.

Oolong occupies the sweet spot between green tea (which many Australians already know) and pu-erh (which remains niche). Its range of styles — from light and floral to dark and roasted — gives it broad appeal. Google Trends shows "oolong tea" search interest in Australia growing steadily since 2023.

3. The gifting market will drive premiumisation further.

Tea is increasingly positioned as a premium gift alternative to wine and chocolate. Expect more brands to develop gifting-specific packaging and seasonal collections, particularly targeting the November–December and Mother's Day windows.

4. Sustainability claims will face greater scrutiny.

As more brands make environmental claims, Australian consumers (and regulators) will demand specifics. "Eco-friendly" will not be enough — brands will need to demonstrate biodegradability, recyclability, or compostability with third-party certification.

5. AI-powered search will change how consumers discover tea.

As more Australians use ChatGPT, Perplexity, and Google AI Overviews to research products, brands that publish authoritative, data-rich content will gain disproportionate visibility. The tea brands that invest in content today will be the ones that AI recommends tomorrow.

Methodology and Sources

This report draws on the following data sources:

Source	Data Type	Period
Roy Morgan Research	Consumer surveys (AU population 14+)	2016–2019
Expert Market Research	Market sizing and forecasting	2025
IMARC Group	Market sizing and forecasting	2024–2033
Statista	Revenue and per capita data	2025
CHOICE Australia	Black tea blind taste test	2024
Google Trends	Search interest data (AU)	2019–2026
FaBA	Sustainable packaging market data	2025
TeaVision	Hospitality channel trend analysis	2025
Canstar Blue	Consumer satisfaction research	2024–2025
Wikipedia / FAO	Per capita consumption data	Various
O2H TEA	Proprietary Shopify retail data	Feb 2024 – Apr 2026

About O2H TEA's retail data: O2H TEA is a Melbourne-based premium tea brand. The purchasing pattern and product mix data cited in this report is drawn from shop.o2htea.com (2024–2026). As a single brand's data, it reflects the specialty online tea segment rather than the total market. All market figures are in Australian dollars unless otherwise noted.

Data limitations: Roy Morgan's consumer data is from 2016–2019 and may not reflect post-pandemic shifts. Market sizing varies across sources due to different scope definitions (retail vs manufacturing vs full supply chain). Where sources conflict, we have cited the most conservative estimate and noted discrepancies.

This report will be updated annually. For questions, corrections, or data collaboration inquiries, contact info@o2htea.com.

Frequently Asked Questions

How big is the Australian tea market?

The Australian tea market is valued at approximately AUD $690 million in 2025, with a projected annual growth rate of 5.1% through 2035 (Expert Market Research). Other estimates range from USD $512 million to AUD $1.8 billion depending on whether the measurement includes retail sales only or the full supply chain.

How many Australians drink tea?

Approximately 9.8 million Australians — about 50% of the population aged 14 and over — drink tea at least once a week, according to Roy Morgan Research. The average weekly consumption among tea drinkers is 9.5 cups.

What type of tea is most popular in Australia?

Traditional black tea remains the most consumed category by volume, but its market share is declining. Specialty categories including matcha, herbal blends, botanical teas, and loose leaf varieties are growing rapidly. Among online specialty retailers, flavour-forward blended teas (combining traditional tea bases with fruits and flowers) significantly outsell traditional single-origin varieties.

Is tea consumption growing or declining in Australia?

Overall tea consumption is growing, driven by specialty categories and younger demographics. Traditional black tea bag consumption is declining, particularly among consumers under 45. The net effect is market growth of approximately 5% annually.

When do Australians buy the most tea?

Online specialty tea sales peak sharply in November and December (driven by Christmas and corporate gifting), with a secondary peak during the winter months of July through September. The quietest period is January through April.

What is the most popular specialty tea in Australia?

Based on O2H TEA's retail data, floral and fruit-blended teas — particularly those combining oolong or green tea bases with ingredients like sakura, white peach, and gardenia — are the strongest sellers in the online specialty segment. Matcha dominates the cafe channel.

The Australian Tea Drinking Report is published annually by O2H TEA, a Melbourne-based premium tea brand. O2H TEA has been recognised with the Golden Pin Design Award (Taiwan) and the Asia Design Prize (South Korea) for its packaging design. Learn more at shop.o2htea.com.