Note: definitely true, especially my aesthetic preferences, and the speculative historical synthesis.

There are some hedonic treadmills which, even after I've climbed them, let me enjoy the entry-level experience.  In the case of tea, the entry-level experience^[1] is a cheap tea bag of black tea.  Sadly, tea does not have one of the nicer treadmills.  Having spent the last few years exploring high-quality Chinese tea of various stripes, a cup of tea brewed from a mass-market tea bag is relegated to emergency situations where I'm unable to brew my own.  My claim is that this is not driven by obvious economic factors, but is an accident of history that is quickly righting itself.

Bottom-shelf tea bags produce low-quality black tea.  (The proof is trivial and is left as an exercise to the reader.)

Why so?

CTC stands for "crush, tear, curl", and is a mechanical method of rapidly oxidizing^[2] tea invented in 1930.  The resulting brews tend toward the astringent, tannic, and unsubtle.  Fine if you're adding milk to it, but sort of unpleasant otherwise.  If you're drinking black tea from a mass-market brand, it's almost certainly CTC tea.

Americans, today, are not buying CTC tea because it's cheaper.  I mean, it is a bit cheaper, but it turns out that tea - the raw material, not the retail good - is really cheap.

Unprocessed tea leaves usually sell for between $0.15 and $0.70 per kilogram^[3].  Processed tea, the kind that's purchased by the producers that you're more likely to be familiar with (those that have their brands on tea sold in supermarkets), wholesales for between $1 and 4 per kilogram^[4].  (It takes 4 to 5 kilos of raw tea leaves to make a kilo of processed tea^[5].)

The tea bag you're drinking has ~2g of tea in it.  Ignoring the bag itself^[6], the raw materials cost is, like, a penny.  CTC tea is a bit cheaper than orthodox (whole leaf) tea.  Maybe like a dollar or two per kilo^[7].  That's a small fraction of a cent per tea bag.  Obviously, "a small fraction of a cent" adds up when you're talking about hundreds of millions (or billions) of units moved annually, but the quality difference is so large that I don't think it pencils out^[8].  Also, China's tea consumption is illustrative.  Almost half of all tea in the world is consumed in China^[9].  Most tea consumed in China is loose-leaf; entry-level retail prices are on the order of $10/kg.  The majority of tea consumed in China is green tea, but even among black tea drinkers, CTC tea has very little market share^[10].  If Chinese consumers - who have less purchasing power, on average, than Americans, and drink more tea - have no interest in those cost-savings...

And so we turn to history.  For a few decades between the 1880s and 1920s, Robert Hellyer describes how Americans drank a lot of green tea.  Andrew Coletti summarizes Hellyer as suggesting that they shifted back to black tea because of a "combination of socioeconomic factors and increasing anti-Japanese sentiment".  This other review of Hellyer claims:

The negative advertising campaigns by the India-Ceylon lobbies set the groundwork for the dominance of black tea once imports was blocked during WWII and well… after that America never really regained its taste for green tea.

Coincidentally, tea bags started gaining popularity in the 1950s^[11].  Tea bags are highly synergistic with CTC tea, both from the manufacturer's side (easier to pack and store) and from the consumer side (faster to brew, more homogenized and predictable product).  The 1950s were, in many ways, an era of convenience.

So, as best as I can figure out, Americans started drinking CTC tea because of a combination of historical contingencies, and they didn't have the long-standing tea culture of e.g. China to protect them from being tempted by unscrupulous marketers pushing narratives of health and racial animosity.

But given the rapid rise in popularity of matcha and bubble tea^[12] among the youth, I think we might be seeing a light at the end of the tunnel.  Soon, our long national nightmare may be over.

Thanks to gwern for the tip-off about America's history of green tea consumption, and eukaryote for feedback on the draft.

1. ^{^}

   For many Americans, this might be iced tea, but even if it's made in-house, it'll probably still be brewed from a tea bag.

2. ^{^}

   Black tea is generally fully oxidized, and is basically the only kind of tea that is produced by CTC.

3. ^{^}

   https://www.iisd.org/system/files/2024-01/2024-global-market-report-tea.pdf

4. ^{^}

   It can of course go for more, but this is a rough floor.  Some sources:

   https://www.teaboard.gov.in/pdf/Monthly_Price_2024_2023-24_website.pdf

   https://ycharts.com/indicators/kenya_tea_auction_price

5. ^{^}

   https://www.dethlefsen-balk.de/ENU/63564/Tea_Harvest_Production.html

6. ^{^}

   And manufacturing, storage, distribution, etc - all very important inputs into getting the tea from "a bunch of leaves" to "in your kitchen", to be clear.

7. ^{^}

   https://stir-tea-coffee.com/tea-coffee-news/kenya-historic-first-orthodox-tea-auction/

8. ^{^}

   Of an investment, to make sense financially or to be expected to generate the desired returns.

   https://en.wiktionary.org/wiki/pencil_out#Verb

9. ^{^}

   Consumption in China, the largest consumer of tea, reached 3 million tonnes in 2022, representing a share of 46 percent of global consumption.

   https://openknowledge.fao.org/server/api/core/bitstreams/c1cad039-4e40-4888-bc74-3073d3ed7963/content

10. ^{^}

    Wildly inferred from here:

    In the world market, red (black in English) tea is the main tea item, and its share is about 91 %. Of which China has only 10% share. In the red (black in English) tea market, main product is CTC broken type tea, however, quality-wise it has no advantage and the price is cheap. China has only small amount of CTC red tea for export.

11. ^{^}

    Tetley was the first company to sell tea in tea-bags in the United Kingdom in 1953.

    https://en.wikipedia.org/wiki/Tetley#History

12. ^{^}

    Surprisingly often made with pretty decent loose leaf, especially when the base isn't a cheap gunpowder green, though not always (and maybe not even "most of the time").