Table of Contents
Executive Summary
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- The market
- Growth in market value of RTD tea driven by premiumisation and chilled versions
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- Figure 1: Central forecast for value sales of RTD tea drinks (taking COVID-19 into account), 2014-24
- Multi-sensory drinking experience brought by teabags driving its fast growth
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- Figure 2: China central forecast for value sales of teabags (taking COVID-19 into account), 2014-24
- Impact of COVID-19 on tea drinks
- Short-term disruptions do not change long term growth
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- Figure 3: Short, medium and long term impact of COVID-19 on tea, May 2020
- Companies and brands
- Leading RTD tea players are being challenged
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- Figure 4: Market share of leading RTD tea players, by value, China, 2018 and 2019
- Chilled RTD segment is growing thanks to advanced technology
- Premium teabags use ingredients and functional support to differentiate
- The consumer
- Tea drinking tradition continues during and after COVID-19
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- Figure 5: Consumption frequency, February 2020
- Potential for teabag innovations with functional benefits post COVID-19
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- Figure 6: Types of teabags, by gender, February 2020
- Target the affluent with elevated nutrition, convenience, and functionality
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- Figure 7: Consumption occasion, February 2020
- Chilled segment features new packaging that accentuates freshness
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- Figure 8: RTD tea packaging, February 2020
- COVID-19 lockdown shifts focus to online retail to manage risks
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- Figure 9: New product channel, February 2020
- Premium varieties, functional blends, and fashionable packaging helps drive teabag popularity
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- Figure 10: Perception of tea drinks, February 2020
- What we think
The Impact of COVID-19 on Tea Drinks
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- Figure 11: Short, medium and long term impact of COVID-19 on tea, May 2020
- Opportunities and threats
- Leverage increased adoption of e-commerce to promote chilled RTD tea
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- Figure 12: Grocery shopping channel, February to May 2020
- Elevated needs for convenience driving product innovation
- Unearthing the emotional needs during chaotic times
- Impact on the market
- Limited impact on tea drinks
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- Figure 13: Central forecast for value sales of RTD tea drinks (taking COVID-19 into account), 2014-24
- Figure 14: China central forecast for value sales of teabags (taking COVID-19 into account), 2014-24
- Shifts in consumer behaviour
- Overall non-alcoholic drinks see little change in consumption
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- Figure 15: Consumer spending changes – non-alcoholic drinks, monthly comparison – made any spending, 2020
- Figure 16: Worry about being exposed to COVID-19, Feb – Jun 2020
- Yearning for stronger immunity
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- Figure 17: Frequencies of doing different activities, by those who have done it, monthly comparison, 2020
- High income households are less impacted financially
- How COVID-19 will reshape the industry
- Limited impact on essential spending categories
- Product positioning will diverge into premium and reasonably-priced options
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- Figure 18: Financial situation – any ‘worse off’, by selection demographics, Feb – Jun 2020
- Impact on marketing mix
- Leaning more towards healthfulness rather than indulgence
- Guiding consumers to think big on building healthy environment
- Embracing the power of social e-commerce to stay agile
- COVID-19: China context
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- Figure 19: Accumulative confirmed cases of COVID-19 in China, January to May 2020
- Figure 20: Status of returning to work, China, March, April and May 2020
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Issues and Insights
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- Teabags diversify in functionalities with better-for-you ingredients
- The facts
- The implications
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- Figure 21: Hu Qing Yu Tang’s teabags with TCM ingredients and throat-soothing function
- Chilled RTD tea drinks have better chance to go premium in tub and carton packaging
- The facts
- The implications
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- Figure 22: Chilled RTD tea drinks in can, carton, and tub
- Explore new consumption occasions to differentiate from competition
- The facts
- The implications
The Market – What You Need to Know
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- Decreased concentration in RTD tea market
- Active innovation in teabags sub-category brewing competition and market growth
- Maturing cold-chain logistics to elevate drinking experiences
Market Size and Forecast
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- Market value of RTD tea drinks seeing steady growth due to product upgrades
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- Figure 23: Central forecast for value sales of RTD tea drinks (taking COVID-19 into account), 2014-24
- Innovation targeting health-conscious minds could resist market volume shrinkage
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- Figure 24: China central forecast for volume of RTD tea drinks (taking COVID-19 into account), 2014-24
- Premium ingredients fuelling teabags’ fast-track market growth
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- Figure 25: China central forecast for value sales of teabags (taking COVID-19 into account), 2014-24
- Figure 26: China central forecast for volume sales of teabags (taking COVID-19 into account), 2014-24
Market Drivers
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- Advancing cold-chain logistics enabling chilled innovation
- COVID-19 outbreak driving healthy, natural, functional tea consumption
- Government promoting sugar reduction as part of healthy dietary guideline
Market Segmentation
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- Herbal tea
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- Figure 27: China central forecast for value sales of RTD herbal tea (taking COVID-19 into account), 2014-24
- Non-herbal tea
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- Figure 28: China central forecast for value sales of RTD non-herbal tea (taking COVID-19 into account), 2014-24
- Teabags
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- Figure 29: China central forecast for value sales of teabags (taking COVID-19 into account), 2014-24
Key Players – What You Need to Know
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- Top market players resisting market share loss through branding and cost optimisation
- Newcomers eyeing chilled segment expansion
- Japanese tea brands positioned as premium occupying more shelf space
Market Share of RTD Tea
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- Tingyi’s growth credited to cost management; Unif dragged down by lack of innovation
- Guangzhou Pharmaceutical dominates herbal tea; JDB suffers from uncertainty
- Other players continue to take cut from leading companies with premium RTD tea
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- Figure 30: Market share of leading RTD tea players, by volume, China, 2018 and 2019
- Figure 31: Market share of leading RTD tea players, by value, China, 2018 and 2019
Competitive Strategies
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- Tea war brewing with imported premium tea drinks in the mix
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- Figure 32: Top 5 claims in RTD tea new launches, China, Mar 2015 – Apr 2020
- Figure 33: Coca-Cola’s Ayataka sugar-free RTD tea drink
- Caring for emotional wellbeing through poetic names and functional benefits
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- Figure 34: Chali ‘Peace of Mind’ tea made with multiple TCM herbs
- Blurring the line to re-imagine tea
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- Figure 35: Nongfu’s new product TOT sparkling tea drink
- Sponsorship building brand awareness while increasing traction
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- Figure 36: Unif sponsoring BilibiliWorld offline tea party
Who’s Innovating?
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- Clean label becoming standard; market is ripe for L/N/R sugar RTD tea
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- Figure 37: Top 5 claims in RTD tea new launches, China, May 2015 – Apr 2020
- Influence consumers with environmental awareness through biodegradable seal teabags
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- Figure 38: New launches with environmentally friendly package claims in tea, China, May 2015 – Apr 2020
- Figure 39: % of ethical-related* claims in new launches in teabags, global, May 2015 – Apr 2020
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- Figure 40: PG Tips switch to plastic-free teabags
- Refrigerated shelf space breeding packaging innovation
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- Figure 41: New RTD tea launches in different storage types, China, May 2015 – Apr 2020
- Figure 42: New RTD tea launches in different storage types, China, May 2015 – Apr 2020
- Fusion tea blends providing multi-sensory and functionality in drinking experience
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- Figure 43: RTD tea drinks made with two or more flavours
- Peach flavour on the rise credited to its popularity in tea shops
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- Figure 44: % of selected flavour in RTD tea new launches, China, May 2015 – Apr 2020
- Figure 45: RTD tea or teabags with peach flavour
- Birth of instant tea following coffee trends
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- Figure 46: Powdered instant tea
- Figure 47: Powdered instant tea
- Figure 48: Powdered instant blended tea and coffee by Yong Pu
- Decaf tea drinks helping to unwind and relax
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- Figure 49: RTD tea drinks or teabags with decaf feature
- Caring for women’s holistic wellness at all times
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- Figure 50: % of selected flavour in RTD tea new launches, China, May 2015 – Apr 2020
- Figure 51: Female user-oriented teabags
The Consumer – What You Need to Know
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- Niche teabags varietals welcomed by young females and affluent consumers
- Young consumers under 25 prefer convenience stores for new product dabbling
- Re-imagine drinking occasions with functional ingredients
Consumption Frequency
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- Loose tea leaves enjoy the highest popularity, followed by teabags and RTDs
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- Figure 52: Consumption frequency, February 2020
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- Figure 53: Consumption frequency, February 2020
- Males aged 25-39 showing loyalty towards RTDs
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- Figure 54: Consumption frequency, by gender and age, February 2020
- Consumers aged 25-29 showing loyalty towards milk tea
Types of Teabags
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- Males sticking to black or green tea, females exploring variations
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- Figure 55: Types of teabags, by gender, February 2020
- Females aged 18-24 seeking sparks of joy through diverse tea varietals
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- Figure 56: Types of teabags, by gender and age, February 2020
- Oolong, fruit, and barley teabags gaining attention from high income consumers
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- Figure 57: Types of teabags, by monthly personal income levels, February 2020
- Strengthening healthy and relaxation appeal to parents
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- Figure 58: Types of teabags, by family structure, February 2020
Consumption Occasion
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- Casual usage has the most popularity; functionality could expand into more occasions
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- Figure 59: Consumption occasion, February 2020
- Less popular occasions are welcomed by parents and consumers with high income
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- Figure 60: Consumption occasion, by family structure, February 2020
- Figure 61: Consumption occasion, by personal income levels, February 2020
RTD Tea Packaging
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- Packaging innovation attracting more female users
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- Figure 62: RTD tea packaging, February 2020
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- Figure 63: RTD tea packaging, by gender, February 2020
- Figure 64: RTD tea packaging, % of non-users who are interested in trying, February 2020
- Usage is divided by income and education level
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- Figure 65: RTD tea packaging, by monthly personal income levels who have bought it, February 2020
- Figure 66: RTD tea packaging, by education, February 2020
- Mass market’s needs are yet to be unearthed
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- Figure 67: RTD tea packaging, by monthly personal income levels by who haven’t bought it but interested in trying, February 2020
New Product Channel
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- Offline retailers maintaining good foot traffic
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- Figure 68: New product channel, February 2020
- On-the-go and convenience element attracting younger or single consumers
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- Figure 69: New product channel, by gender and age, February 2020
- Figure 70: New product channel, by family structure, February 2020
- Parents with kids adopting multiple channels to find solutions to satisfy family members
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- Figure 71: New product channel, by family structure, February 2020
Perception of Tea Drinks
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- Tea drinkers value convenience, taste, and freshness the most
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- Figure 72: Perception of tea drinks, February 2020
- Healthy and convenient teabags are known to high income consumers and those from high tier cities
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- Figure 73: Perception of tea drinks, impression on teabags by monthly personal income, February 2020
- Figure 74: Perception of tea drinks, impression on freshly brewed tea leaves by monthly personal income, February 2020
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- Figure 75: Perception of tea drinks, impression on teabags by monthly personal income, February 2020
- Freshness driving male users’ loyalty to RTD herbal tea
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- Figure 76: Perception of tea drinks, impression on RTD herbal tea by gender and age, February 2020
- Quality nutrients, freshness and trendiness attracting parents to RTDs
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- Figure 77: Perception of tea drinks, impression on RTD tea drinks by family structure, February 2020
- Figure 78: Perception of tea drinks, impression on RTD herbal tea by family structure, February 2020
Meet the Mintropolitans
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- Mintropolitans enjoy tea drinks for both casual and functional purposes
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- Figure 79: Consumption occasion, by consumer classification, February 2020
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- Figure 80: RTD tea packaging, by consumer classification, February 2020
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- Figure 81: MinTs’ perception of tea drinks, February 2020
Appendix – Market Size and Forecast
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- Figure 82: Total market value of RTD tea, China, 2014-24
- Figure 83: Total market value of teabags, China, 2014-24
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Appendix – Market Segmentation
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- Figure 84: Total market value of RTD non-herbal tea, China, 2014-24
- Figure 85: Total market volume of RTD non-herbal tea, China, 2014-24
- Figure 86: Total market value of RTD herbal tea, China, 2014-24
- Figure 87: Total market volume of RTD herbal tea, China, 2014-24
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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