Caraway Tea Company, a SQF Level 2-certified, USDA Organic wholesale tea manufacturer and private-label co-packer based in Poughkeepsie, N.Y., said Wednesday it has expanded production capacity for sleep and stress-support herbal blends, moving to capture a larger share of what the company characterises as one of the fastest-moving consumer wellness categories of 2026.
The announcement does not disclose capital expenditure figures or volume targets, but positions the capacity build-out as a direct response to accelerating retail and direct-to-consumer demand. Industry data cited by the company places chamomile at roughly 32% of the global herbal ingredient market, making it the single most consumed wellness botanical worldwide — a share that has drawn increasing attention from brand owners and co-packers alike.
Consumer research published earlier this year ranks sleep-supporting herbal teas among the highest-growth segments within the broader wellness beverage category. Brands operating across mass retail and DTC channels have increasingly structured full product lines around what the industry refers to as the "wind-down" occasion — an evening consumption ritual that blurs the line between functional nutrition and self-care. The trend has intensified competition among contract manufacturers able to offer certified-organic, traceable supply chains at commercial scale.
Caraway's women-owned structure and dual certifications — SQF Level 2 food safety and USDA Organic — position it among a relatively small tier of Hudson Valley producers capable of serving natural-channel retailers and specialty brands simultaneously. Demand for third-party co-packing from emerging wellness labels has grown sharply as startups seek to avoid the capital intensity of in-house blending and packaging infrastructure, a dynamic explored in recent private-label manufacturing coverage across the F&B sector.
The stress and sleep sub-segment sits within a wider herbal tea market that has outpaced conventional tea categories in both unit and dollar growth over the past two years, according to trade data tracked by Food & Beverage Magazine. Ingredient suppliers to the segment — including chamomile, valerian, ashwagandha and passionflower — have reported tightening procurement windows as brand volume commitments lengthen. Caraway did not specify which botanicals are included in the expanded line.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
