South Koreans, known for their love of coffee, are increasingly embracing the charm of tea. Once considered the preserve of the middle-aged, the traditional tea ceremony, or “Dado,” is now seen as a moment of “healing” by the younger generation seeking respite from their busy lives. As the age group enjoying tea diversifies, the related market is also expanding.
According to market research firm Euromonitor, the domestic tea market reached 1.5818 trillion won last year, an 8.78% increase from the previous year. The tea market has grown by approximately 44% in just four years, from 1.0973 trillion won in 2020. Industry experts are cautiously predicting that the tea market could grow into “the second coffee.”
Amorepacific's tea specialty subsidiary, Osulloc, reported sales of 93.7 billion won and operating profit of 9.2 billion won last year, up 11.7% and 68.7% respectively from the previous year. Both sales and operating profit increased due to improved profitability from marketing cost and offline channel efficiency. Osulloc has been expanding its “Tea House” stores, which sell premium tea products. These stores offer experiential programs such as “Make Your Own Tea” and “Tea Brewing Class Using Tea Utensils.” Last year, Osulloc established the “Osulloc Tea Factory” in Jeju, building a production system capable of handling everything from green tea raw material cultivation to processing and product shipment.
The number of consumers seeking tea at coffee shops is also increasing. According to Starbucks Korea, three “tea beverages” – Grapefruit Honey Black Tea (3rd), Starbucks Classic Milk Tea (8th), and Yuja Mint Tea (9th) – were among the top 10 best-selling beverages last year. Two years ago, in 2022, only one tea beverage was among the top 10 best-selling beverages. A Starbucks official analyzed, “The clean taste of tea beverages is replacing some coffee demand, showing continuous growth.” Starbucks decided to permanently sell peach tea, which was launched as a limited-time sale in May last year, from January this year.
“Tea Omakase,” which aligns with the “small luxury” trend, is also steadily attracting consumers. Tea Omakase is a term combining “Omakase,” which means “to entrust” in Japanese, and “Tea,” referring to a service where a tea expert provides customers with various teas and related services. Le Méridien Seoul Myeongdong operates a six-course tea omakase program. It offers six types of tea from major tea categories and pairing foods inspired by the works of leading European artists.
Experts analyze that the Korean tea market has the potential for further growth. Professor Seo Yong-gu of Sookmyung Women's University's Department of Business Administration said, “Cultures that reduce anxiety and stress, such as meditation and tea ceremony, will continue to spread, especially among the younger generation. If the growth of the coffee market slows down, there is room for the tea market to grow relatively.”
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