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Our reporter Zhou Mengting (chinatimes.net.cn) reports from Beijing

This summer, the hot sugar-free tea has seen a price reduction trend. Recently, a reporter from the China Times visited many convenience stores and supermarkets in Beijing and found that most sugar-free teas that used to sell for 5-6 yuan per bottle have now dropped to 3-4 yuan per bottle. At the same time, some brands have launched small packages to move closer to the 2 yuan price range. Among them, leading brands such as Oriental Leaves, Wahaha, and Suntory have quietly reduced prices in terminal channels, and the price reduction methods are also diverse. In addition to simple promotions, there are also buy one get one free, half price for the second bottle, and 1 yuan for the second bottle.

Behind the fierce competition among brands is the increasingly fierce competition in the sugar-free tea industry. In the past two years, there have been many players entering the market, including Nongfu Spring, Suntory, Wahaha, Master Kong, Yuanqi Forest, and Uni-President China. Not long ago, Dayao Beverage’s official entry into the market once again added fuel to the competition. With fierce competition, the industry’s “big wave washing away the sand” process has also begun.

"Price war" in progress

Unconsciously, sugar-free tea has become a key category in the beverage areas of convenience stores and supermarkets, and in the battle for the peak market this summer, the sugar-free tea market is filled with smoke.

On July 15, our reporter visited a convenience store in Dongcheng District, Beijing and found that almost all brands of sugar-free tea in the store were reducing prices and promoting sales in various ways. Among them, five types of Oriental Leaves, 500ml in size, priced at 5.5 yuan per bottle, had the second bottle sold at half price; six types of sugar-free beverages from Suntory, priced at 5.5 yuan per bottle of the same size, had the second bottle sold at 1 yuan; two types of sugar-free tea from Master Kong, priced at 4.8 yuan per bottle of the same size, had the second bottle sold at 2.5 yuan; the second bottle of Wahaha sugar-free jasmine tea, priced at 6 yuan per bottle of the same size, had the second bottle sold at half price, and so on. Overall, the price of each bottle of sugar-free tea is basically between 3 and 4 yuan.

This is not just one convenience store, Convenience Bee, that is offering a promotion for sugar-free tea. At the end of June, when our reporter visited a Lawson convenience store in Haidian District, he found that the 900ml Oriental Leaves, which originally cost 9.4 yuan per bottle, was on special offer of 13 yuan for two bottles. At the same time, the store also had promotions for the original tea drinks Cha Li Wang and Ito En tea drinks under Uni-President China.

In addition to convenience stores, sugar-free tea in supermarkets is no exception. At the end of June, a supermarket in Haidian District sold 500ml of Yuanqi Forest's Qinggan Pu'er Burning Tea and Jasmine Tea, which originally retailed at 5.5 yuan, at a promotional price of 3.99 yuan.

In many Wumart supermarkets, the price of sugar-free tea products is competing to enter the 2 yuan price range. In mid-July, our reporter visited many Wumart supermarkets and learned that the manufacturer's suggested retail price of 335ml*6 Oriental Leaf Jasmine Tea Original Tea Beverage is 19.8 yuan, and the current promotional price is 12.8 yuan, equivalent to 2.13 yuan per bottle; the promotional price of 300ml*6 Cha Li Wang Sugar-Free Yunxiang Oolong is 13.9 yuan, equivalent to 2.3 yuan per bottle; the current promotional price of 330ml*12 Master Kong Sugar-Free Jasmine Green Tea is 15.9 yuan, equivalent to 1.3 yuan per bottle.

Why has a fierce "price war" started in the field of sugar-free tea in the hot summer? Wang Hongdong, director of Canbaodian Research Institute and catering analyst, told the China Times that the main reason is that competition has become more intense and brands need to attract consumers with price.

Lin Yue, chief consultant of Lingyan Management Consulting and analyst of the catering industry, told our reporter that "it takes some time to cultivate the market for sugar-free tea brands. Sugar-free tea is not easily favored by young people due to its taste. Lowering prices and positioning is a strategy to test the market temperature. We need to find a balance point that consumers are willing to accept."

Enterprises scramble to grab food

It is understood that the earliest sugar-free tea in the domestic market was launched by Suntory in 1997; Nongfu Spring later launched Oriental Leaves in 2011, becoming the first sugar-free tea brand in China. However, in the early years, sugar-free tea products were not very popular in China until the past two years, driven by the concept of health, when sugar-free tea began to become popular.

According to the "2024 China Beverage Industry Trends and Outlook" released by Nielsen (hereinafter referred to as "Trends"), the market size of sugar-free beverages will reach 24.1 billion yuan in 2023, of which sugar-free ready-to-drink tea will account for 49%, and the market size growth rate will reach 110%, far exceeding the national beverage market size of 6% year-on-year growth rate and ready-to-drink tea of ​​19% year-on-year growth rate.

At the enterprise level, the rapid growth of tea beverages has also significantly boosted the overall performance of the company. Taking Nongfu Spring as an example, according to the financial report, in the past three years, tea beverages to which Oriental Leaves belongs have been the most eye-catching category in the Nongfu Spring product system. From 2021 to 2023, the year-on-year growth rates of Nongfu Spring tea beverage products were 48.3%, 50.8%, and 83.3%, respectively. In 2023, the revenue of this category has reached 12.659 billion yuan, accounting for 29.7% of the company's total revenue in 2023. Although the performance announcement did not specifically distinguish between Oriental Leaves and Teaπ, according to Nielsen data, Oriental Leaves has grown rapidly for three consecutive years, with a year-on-year growth of 114% in 2023, and retail sales of approximately 10 billion yuan.

On July 16, a reporter from the China Times learned from relevant persons in charge of Yuanqi Forest that the sales of Burning Tea increased by 51% year-on-year in 2023. Suntory China told this reporter that the sales of its sugar-free tea products are currently growing steadily, which is in line with the company's expectations.

The hot track has also attracted many companies to join in. According to market information, in December 2022, Yuanqi Forest will remove sugar substitutes from its ready-to-drink tea brand Rancha and upgrade it to sugar-free tea; in September 2023, Dongpeng Beverage officially announced the launch of a new sugar-free tea product-Oolong Shangcha, entering the sugar-free tea track. A reporter from the China Times learned from the company that as of now, Dongpeng Beverage has a total of three sugar-free tea products; in June 2024, Dayao Beverage, a domestic soda brand that has attracted much attention in the past two years, launched three sugar-free tea products. According to the above-mentioned "Trend", in 2023, there will be 157 new players entering the sugar-free tea track, an increase of 64 year-on-year.

At present, the major players in the sugar-free tea market include Nongfu Spring, Suntory, Wahaha, Master Kong, Uni-President China, Dongpeng Beverage, Yuanqi Forest, Dayao Beverage, Coca-Cola and other beverage giants, as well as emerging beverage brands such as Rangcha, Guozishule, and Cha Xiaokai. It is an indisputable fact that the competition in the sugar-free tea market is fierce. On July 16, Dongpeng Beverage also told our reporter that "there are many participants in the sugar-free tea market, and the current market is in a white-hot stage of competition."

Competition for the next stop

As competition intensifies, how can enterprises remain invincible? Wang Hongdong analyzed to our reporter that "the key lies in products and pricing, among which products are the foundation. On this basis, we need to look at the brand marketing and channel strategy of the enterprise. For example, one of the main factors for Dayao Beverage to become popular in the past two years is that it is tied to the catering channel."

Dongpeng Beverage also responded to our reporter, saying, "After years of development, the price advantage of sugar-free tea drinks, which was supported by the concept, has gradually faded. In the absence of obvious competitive barriers, the competition among brands has shifted from the competition for industry dividends to the competition for the stock market marked by channels and prices. In addition, for consumers, brand and price, appearance and taste may all become reasons for their choice. Therefore, we believe that the company's brand needs to establish more competitiveness besides price."

In order to get a piece of the "cake" of sugar-free tea, companies are also making every effort to move forward. The reporter learned from the various brands that Dayao Beverage's three products are positioned as tea for catering, mainly sold in catering channels. At the same time, they will actively interact with consumers through innovative marketing strategies, social media and e-commerce platforms to enhance brand influence; Yuanqi Forest is more from the product level. In June this year, it launched two 900ml large-bottle products for its Burning Tea, and developed a new flavor this year - Gardenia White Tea; Dongpeng Beverage continues to exert its strength in brand marketing and channels. In the first half of this year, it cross-border cooperated with "Ni Shui Han" to reach young consumer groups, and further strengthened the construction of freezing. Through cooperation with sales terminals such as supermarkets and convenience stores, it has established a nationwide freezer network to increase the market coverage and sales opportunities of its products.

It is important to note that with new entrants constantly and continuously making efforts, how can old sugar-free tea companies maintain their "kingdom"? On July 16, Suntory China responded to our reporter, saying, "We are confident in the continued growth of the sugar-free tea market. To further expand the growth space of the sugar-free tea market, we need to closely follow the changes in market demand. In addition to consumers' continued attention to health, we have also observed more refined consumer demand. In the future, we will continue to track changes in consumer trends, promote the exploration and development of new tea varieties, new formulas, and new flavors, and meet consumers' expectations for more innovative sugar-free tea products. In the face of industry competition, Suntory will focus more on exploring consumer needs, improving product quality, and promoting product innovation, so as to maintain its overall competitiveness."

Editor-in-charge: Huang Xingli Editor-in-chief: Han Feng