TRALAC - Trade Law Centre

US end-market analysis for Kenyan tea

The tea market in the United States (U.S.) is growing, with Americans consuming larger quantities of tea each year. In 2016, the U.S. imported nearly $760 million in tea (excluding herbal tea), making it the world’s third largest tea importer.1 According to the Tea Association of the USA, the sector projects compound annual growth rates of 3 to 5 percent over the coming years. This has been driven by an increase in volume, but especially value, of tea imports.

Approximately four out of five Americans drink tea. For Millennials, tea consumption reaches an estimated 87 percent. This population, in particular, is driving the upward trend in tea consumption and price. Consumers are becoming more health-conscious and are therefore willing to pay for better quality tea and innovations in flavors, packaging, and convenience.

Black tea, specialty teas, and Ready-to-Drink (RTD) tea are experiencing the highest rates of growth. Black tea, which accounts for 85 percent of U.S. tea consumption, achieved 2.3 percent growth in imports between 2015 and 2016. Sales of specialty teas, comprised of loose-leaf teas, single-estate teas, Fairtrade, organic, or rare teas, are increasing about 10 percent per year. Further, RTD tea is expected to grow 4 to 6 percent over the next five years.

The U.S. market is highly competitive. It is comprised of a handful of U.S. growers and numerous importers that are supplied by exporters from almost every tea producing country. In 2016, the U.S. imported approximately $26 million in tea products from Kenya, making it the eleventh greatest importer to the U.S. market.

Despite market competition and a lack of a duty advantage in tea exports, Kenya has an opportunity to capitalize on the U.S. market’s growth. Kenya distinguishes itself from other tea producing nations by hand- picking over 90 percent of its tea, giving the tea a higher quality. The country mainly exports black tea. This is the most popular type of tea in the U.S. The country also offers herbal teas and a unique purple tea variety that could appeal to consumers’ growing interest in specialty teas. Kenya’s tea plantations also provide an opening for developing specialized tea tourism and marketing stories.

In addition to offering an overview of U.S. export requirements, this report provides four recommendations and an action plan for Kenya to increase tea exports to the U.S. The report specifically recommends that Kenya pursue the following:

  1.   Develop new tea products for the U.S. market that builds off of Kenya’s success with black teas to include more purple, herbal, and medicinal teas and agri-tourism.
  2.   Do effective trade promotion and marketing in the U.S. that could include the introduction of all-Kenyan tea product lines and an agri-tourism promotion campaign.
  3.   Further improve trade logistics to reduce domestic and international transport costs, potentially using the services of a fulfilment house.
  4.   Become more competitive in the U.S. market through improvements to product quality and condition, cost at the port of entry, delivery time, service, financing, and promotion.
Author East Africa Trade and Investment Hub
Organisation USAID
Publish Date 07 December 2017

Related News

President Trump announces intent to negotiate trade agreement with Kenya

President Trump announces intent to negotiate trade agreement with Kenya

President Donald J. Trump today announced the United States intends to initiate trade agreement negotiations with the Republic of Kenya following a meeting at the White House with Kenyan President Uhuru Kenyatta.  “Kenya is a recognized leader across the continent, an important strategic partner of the United States, and there is enormous potential for us to deepen...

06 February, 2020
Kenya risks AU wrath as it seeks solo deal with America

Kenya risks AU wrath as it seeks solo deal with America

Kenya has broken ranks with other African countries as it pushes for a bilateral trade agreement with the US. The move, analysts reckon, could cause a diplomatic headache for East Africa’s leading economy. President Uhuru Kenyatta is set to fly to Washington next week where, according to a Bloomberg report, the two countries will announce negotiations on a trade pact...

31 January, 2020
US chooses Kenya for bilateral trade deal

US chooses Kenya for bilateral trade deal

The Trump administration has tapped Kenya as the first sub-Saharan nation to start talks with the US on a bilateral trade deal, the Bloomberg News agency reported on Tuesday. The prestigious designation is expected to be announced during President Kenyatta's visit to Washington next week, Bloomberg said. Kenya's Foreign Affairs Principal Secretary Macharia Kamau confirmed...

30 January, 2020
US, Kenya reportedly to start trade talks seen as template for Africa

US, Kenya reportedly to start trade talks seen as template for Africa

The U.S. and Kenya are expected to announce negotiations on a free-trade agreement next week, America’s first such deal with a sub-Saharan country, a person familiar with the plans said. The Trump administration wants the accord to be a model for future pacts with other nations in the region, one of the people said, declining to be identified because the talks are...

29 January, 2020
USAID Southern Africa to support upcoming Swakopmund international trade expo

USAID Southern Africa to support upcoming Swakopmund international trade expo

The USAID/Southern Africa will collaborate with the government and the Namibia Chamber of Commerce and Industry (NCCI) for the upcoming 7th Swakopmund International Trade Expo (SWAITEX). Dr Takele Tassew, Agriculture and Trade Advisor for the USAID/Southern Africa Regional Economic Growth Office, confirmed in a statement that this partnership is possible because of a...

03 October, 2019
Kenya: Businesswomen urged to form joint ventures to exploit US market

Kenya: Businesswomen urged to form joint ventures to exploit US market

Kenyan businesswomen have been urged to form joint ventures with American partners to exploit the US market and take advantage of the Africa Growth and Opportunity Act (AGOA). This was said during a US-Kenya business and networking summit, the African Women’s Entrepreneurship Programme (AWEP) held on Wednesday at United States International University – Africa. Themed,...

17 September, 2019