Report Highlights

Herbal Tea in the United States: Market Overview

The United States herbal tea market was valued at USD 2.4 billion in 2024 and is forecast to reach USD 3.6 billion by 2032. Grocery and mass merchandise channels dominate retail sales, where national brands and private label compete for shelf space. Federal regulation treats herbal infusions as conventional foods under the Federal Food, Drug, and Cosmetic Act rather than under the Tea Importation Act of 1897, which governs only Camellia sinensis products.

Government has set the rules but private firms have set the demand. Federal policy defines what can be claimed, how ingredients enter the country and which organic standards apply, while the National Organic Program under the Organic Foods Production Act of 1990 created the certification that Numi Organic Tea and Yogi Tea use as a core premium signal. Growth from flavour innovation and wellness positioning came almost entirely from private brands such as Celestial Seasonings, which built the category before regulators defined its boundaries.

Policy-Driven Growth in U.S. Herbal Tea

The USDA organic certification cost-share programme, authorised under Section 10606 of the Agriculture Improvement Act of 2018, reimburses producers 75 percent of certification costs up to USD 750 per certified scope each year. This lowers the cost of entering certified organic supply for small blenders, expanding the pool of organic chamomile, peppermint and hibiscus available to brands. Demand follows because retailers prioritise certified organic shelf sets, which the programme makes economically viable for smaller brands.

Section 204 of the FDA Food Safety Modernization Act establishes the Food Traceability Rule, with compliance now required by July 20, 2028, after FDA extended the original deadline. Traceability obligations push brands toward lot-level data across supply chains, which drives investment in tracing software and supplier audits. Separately, the Specialty Crop Block Grant Program under the Agricultural Marketing Act of 1946 funds state-level projects that expand domestic herb production, shifting sourcing toward U.S.-grown material.

Regulatory Barriers and Compliance Costs

Proposition 65, the California Safe Drinking Water and Toxic Enforcement Act of 1986, requires a clear warning before products expose consumers to listed chemicals such as lead, and the California Office of Environmental Health Hazard Assessment maintains the list. Lead and cadmium in botanicals have triggered 60-day notices of violation, and private enforcers file these notices at volume. Compliance requires lot-level heavy-metal testing and label changes, adding per-SKU costs that small brands struggle to absorb.

Import barriers add further delay. U.S. Customs and Border Protection applies IEEPA reciprocal tariffs under Executive Order 14257 to many herbal ingredients, while the Environmental Protection Agency sets pesticide tolerances under Section 408 of the Federal Food, Drug, and Cosmetic Act. Shipments exceeding tolerance are detained at port, creating demurrage and reshipment costs and forcing blenders to qualify suppliers against residue thresholds before each harvest.

Policy-Created Opportunities in U.S. Herbal Tea

Domestic herb cultivation presents the clearest opening. Specialty Crop Block Grant funds and organic cost-share support allow growers in states such as Oregon and Washington to convert land to organic peppermint and spearmint, displacing imports with certified domestic supply. Brands that contract local supply early secure tariff insulation and organic premiums simultaneously.

Traceability compliance creates a second opening for software and testing providers. Brands preparing for the July 2028 deadline require lot-level data systems, and Proposition 65 exposure rewards accredited heavy-metal laboratories. The FDA front-of-package nutrition information proposal, published in January 2025, also favours low-sugar and unsweetened blends, which can display favourable panel ratings.

Market at a Glance

Leading Market Participants

• Celestial Seasonings
• Traditional Medicinals
• Bigelow Tea
• Twinings
• Yogi Tea
• Numi Organic Tea
• Stash Tea
• The Republic of Tea
• Pukka Herbs
• Tazo

Regulatory and Policy Environment

The primary legislation is the Federal Food, Drug, and Cosmetic Act of 1938, as amended by the FDA Food Safety Modernization Act of 2011, administered by the Food and Drug Administration's Human Foods Program. Herbal teas are regulated as conventional foods, so they require facility registration, preventive controls under 21 CFR Part 117, and labelling compliant with 21 CFR Part 101. Structure-function claims require substantiation and a disclaimer under Section 403(r)(6), a provision added by the Dietary Supplement Health and Education Act of 1994.

Upcoming changes include the FSMA Section 204 Food Traceability Rule, with compliance required by July 20, 2028, and the FDA front-of-package nutrition labelling proposal from January 2025, which remains pending final rulemaking. Compared with regional peers, the U.S. framework is more permissive: the EU Traditional Herbal Medicinal Products Directive 2004/24/EC requires registration for herbal products marketed with medicinal claims, and Health Canada's Natural Health Products Regulations (SOR/2003-196) require product licences for most herbal health claims. American brands therefore reach market faster but face greater post-market enforcement through Proposition 65 litigation and FDA warning letters.

Long-Term Policy Outlook for U.S. Herbal Tea

By 2032, traceability compliance will consolidate supply among brands that can fund lot-level systems, favouring Hain Celestial and Associated British Foods' Twinings over smaller blenders. Tariff policy will determine whether Egyptian hibiscus and Chinese chrysanthemum remain economical imports or shift toward domestic and Mexican supply. Sourcing decisions made in 2026 will therefore lock in cost structures for the rest of the forecast period.

Front-of-package labelling, if finalised, will reward herbal blends with low added sugar and penalise sweetened flavoured products, reshaping formulations across the category. Expect Proposition 65 heavy-metal thresholds and testing requirements to tighten through California OEHHA rulemaking, raising testing costs per lot and accelerating exits by small importers that cannot spread laboratory expenses across volume.