news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

This year's beverage battle began with the rising temperature. If you walk into any store's beverage shelf, you will find that sugar-free tea occupies more space than iced black tea and other sugared teas. In addition to the familiar Oriental Leaves and Suntory, there are dozens of sugar-free tea brands on the shelf, including Yuanqi Forest, Uni-President, Master Kong, and Guozishule.

This shows that:Sugar-free tea is an important battlefield for beverage brands this year.

In June this year, Suntory's senior management in China sent out a signal at a communication meeting that the company would focus on sugar-free tea. Specific measures include promoting new sugar-free tea products and expanding the market in third- and fourth-tier cities.

Brands other than the two giants are also preparing to break through, as evidenced by the continuous flow of new sugar-free tea products on the market. According to incomplete statistics from ShowCha, in the first four months of this year, at least 32 brands launched new sugar-free tea products.

New brands are looking forward to leapfrogging into the top brands during this window of opportunity. Yan Li, CEO of the new sugar-free tea brand Cha Xiao Kai, once said in a media interview: "I hope to become a top brand in the near future."

In the history of domestic beverage development, there have been at least two cases of new brands successfully breaking through. One happened in the functional beverage category, where Dongpeng Special Drink found blue-collar workers, a group not occupied by Red Bull, and became a dark horse in the market with its cost-effective advantage. The other was Yuanqi Forest's impact on traditional carbonated beverage brands with its 0 sugar and 0 calorie concept.

So, this summer,Can sugar-free tea become the next breakthrough opportunity?

The “Thousand Tea War” kicks off, and brands are poised to break through

Regarding the development and competition of the sugar-free tea market, I found two market data from April to May this year that are worth noting:

First, the market share of the two giants, Nongfu Spring and Suntory, has increased from over 84% in the same period last year to over 75%.

Second, the market share of the emerging brand Guozishule has soared from 12th place in the same period last year to third place, just after the two giants, surpassing brands with a deeper tea beverage foundation such as Yuanqi Forest, Master Kong, and Uni-President (the above two data are from Mashangying).

That is to say,The market concentration of sugar-free tea is loosening. Apart from the two giants, other sugar-free tea brands still have room for growth.

What's more,The entire sugar-free tea market will continue to expandAs more and more people drink sugar-free tea, the frequency of purchase is also increasing. According to Euromonitor data, the sugar-free tea market will continue to maintain a high growth trend, with an annual compound growth rate of 10.2% in 2027 and a market size of 12.4 billion yuan.

In this market context, the eagerness of latecomers is more worthy of attention:

Guozishuile continues to bet on the sugar-free tea series and focuses on the convenience store channel. This year, it also invited Yang Zi to be the spokesperson;

Coca-Cola Chun Tea House, Fruit Ripe Unsweetened Tea

Master Kong has added sugar-free versions to its original strong products "Jasmine Tea" and "Jasmine Green Tea", directly reducing the price range of sugar-free tea from more than 5 yuan to less than 4 yuan. The relatively high-end "Heirs of Tea" series focuses on tea varieties and origins, and focuses on tea culture.

Wahaha sugar-free tea is priced at 3.5 yuan for members in a RT-Mart store

Veteran beverage brands such as Yuanqi Forest, Uni-President, Coca-Cola, Dongpeng Beverage, Wahaha, Dali, Ito En, and Dayao, as well as new brands such as Cha Xiaokai, Rangcha, and Ke Yang, and ready-made tea brands such as Heytea and Nayuki are also ready to hunt...

In terms of price range, the price of a 500ml bottle of Oriental Leaves, Suntory, and Fruit Ripe is more than 5 yuan, while some products of Master Kong and Uni-President are less than 5 yuan, and the sugar-free tea launched by Wangzai is even priced at 3 yuan. At the same time, brands frequently promote sales in channels, and each brand attracts consumers to buy and try by offering multiple-bottle discounts.There is quite an atmosphere of price war.

Uni-President Chunfu Green Tea (left), Wangzai Sugar-Free Tea (right)

Image source: Taobao

It is worth mentioning that Oriental Leaves, Suntory Oolong Tea, and Fruit Ripe, which are relatively high in the price range, have all launched new products based on a few main flavors.Large bottles ranging from 900ml to 1250ml, the cost performance has been improved.

Fruit Ripe 970ml Sugar-Free Tea (left), Oriental Leaves 900ml Sugar-Free Tea (right)

Image source: Taobao

In terms of product innovation, various brands currently focus on adding floral scents to the base of green tea and oolong tea, or exploring the flavors of niche tea varieties such as Pu'er, Longjing, and Dahongpao.The scope of development is limited to a certain extent by the type of tea.

Tea Xiaokai Unsweetened Tea

Image source: Taobao

Therefore, the current sugar-free tea market has also been criticized for being homogenized. If consumers have not tried it themselves, it is difficult to feel the difference between sugar-free tea products of different brands.This will also make consumers' choice path become: either driven by brand effect or price.There is a chance for latecomers to break through, but it is not easy.

The competition is becoming more chaotic, and new products are being launched continuously. According to incomplete statistics from Xinou, as of mid-June,There are more than 300 types of sugar-free tea on the market.

This competition is reflected on the consumer side in the form of more and more unnamed sub-brands and increasingly difficult to pronounce and distinguish product names. This summer's tea war is an important node, and looking back at the essence of the sugar-free tea category may help us return to rationality.

In other words: when consumers buy sugar-free tea, what needs are being met?

Sugar-free tea

bottledWater is an expensive substitute × freshly brewed tea is a cheap substitute

Many people buy sugar-free tea to drink, but it is actually an expensive substitute for bottled water.People need to replenish water and quench their thirst, but they don't want to drink plain water, so they look for "tastier water". In contrast, traditional high-sugar drinks generally make people thirstier the more they drink, and some people even feel psychologically "guilty" after drinking them.

In fact, this "want both" demand has led to the rise of many "near-water beverages" around the world. In the past, Suntory Lemon Water, Master Kong Sea Crystal Lemon, Uni-President Ocean Words, and the entire sugar-free sparkling water category driven by Yuanqi Forest later, are actually closer to the sequence of "water substitutes" rather than traditional beverages. In the European and American markets, "flavored water" focusing on people with "difficulty drinking water" has long formed an independent category. Perrier and Coca-Cola's vitamin water are both classic longevity products.

Sugar-free tea is a water substitute that is more suitable for the physique of Chinese babies.

I often joke that if iced American coffee runs in the blood of young Koreans, then strong tea must run in the blood of middle-aged and elderly people in China. Elderly people at home still entertain guests with strong tea at 8 or 9 in the evening, without worrying about insomnia; relatives and friends always greet each other with "drink tea when you have time". For Chinese people, the habit of drinking tea is as strong as engraved in their genes.

Today, young people’s enthusiasm for sugar-free tea is more like a “blood awakening”. Their evaluation of sugar-free tea did not suddenly change from “unpalatable” to enthusiasm, but rather they experienced a process that I call “awakening”.

Young people have been tasting tea since various freshly brewed tea drinks became popular. However, the earliest milk tea was mainly for tasting, more like a beverage. But soon, the traditional highly sweet non-dairy milk tea was no longer popular, and fruit tea, light milk tea, and pure tea became the mainstream. This means that even when drinking milk tea, young people are increasingly pursuing the flavor and refreshing taste of tea itself.

In particular, the emphasis on tea varieties and their origins by brands such as Bawang Chaji, which focus on "Oriental tea drinks", also plays a role in popularizing tea culture. A young person can now say when placing an order that the tea base he wants is not ordinary oolong tea, but Tieguanyin, Dancong, Jinxuan and other niche tea varieties. These oriental tea brands convey a certain style - tea is a way of life and also an aesthetic.

On the other hand, the rise of Yuanqi Forest has led young people to pursue 0 sugar and 0 calories, pay attention to the ingredient list and nutritional content. As a result, young people are increasingly accepting "bland" sugar-free drinks in terms of taste.

The 180-degree change in the reputation of sugar-free instant tea occurred against the dual background of pure tea and sugar-free beverages.Compared with freshly brewed tea, instant tea is more portable, easier to obtain, and cheaper, making it more suitable for home, office and other scenarios as well as for people with high repurchase rates.

The category characteristics of "water substitute + freshly brewed tea substitute" have promoted the rise of sugar-free tea, but it also puts forward certain requirements for the brand.

On the one hand, consumers who use sugar-free tea as a "water substitute" would like the price of sugar-free tea to be lower. A colleague once told me that she would buy a whole box of 900ml Oriental Leaves and bring a bottle to the office every day. Although it is a bit heavy, 900ml is enough for a day, and buying a whole box will be much cheaper. Now, some sugar-free teas priced in the 3-5 yuan range are already close to the price of high-end bottled water.

On the other hand, consumers also hope that ready-to-drink sugar-free tea tastes closer to freshly made or brewed tea, rather than simply making traditional tea drinks sugar-free.

Previously, a brand created a "screw-top instant tea" where consumers can make the tea powder dissolve instantly by "twisting and shaking" and claiming to restore the taste of instant tea. However, some industry insiders believe that this is more like a "pseudo-innovation" and cannot improve the taste. Upgrading the refreshing taste, the persistence of the tea aroma, the content of tea polyphenols, etc. may be what consumers are pursuing.

EastOther than Fang Shuye and Suntory

How else can brands “break through the margins”?

According to the time machine theory and the development history of the Japanese sugar-free tea market, the domestic sugar-free tea market is actuallyIt has just begun to transition from the growth stage led by oligopoly to the mature stage of category prosperity.

Today, the Japanese sugar-free tea market is a "one super and many strong" situation. Each brand wins by relying on its own differences, and the category shows the characteristics of segmentation. In addition to the "one super" Ito En, which has the first-mover advantage, Suntory focuses on the tea culture, Kirin emphasizes the "raw taste", and Kao focuses on functionality. Then, in the Chinese sugar-free tea market, more brands may emerge by meeting the potential needs of consumers.

The current sugar-free tea market shows a tendency towards homogenization and price wars. Rather than imitating the existing big single products on the market, finding a path that suits you and conforms to the logic of the category may be a more effective solution.

With reference to the current market trends, we have summarized the following successful experiences of some brands, which may provide reference for other brands:

• "Dead-line" with young people, breakthrough from circle marketing

Young people are still the largest consumer group of sugar-free tea. According to iResearch, in 2023, the proportion of people born in the 1990s, 1995s and 2000s in the consumer group of sugar-free tea will reach 70.8%. In the past, the main consumers of sugar-free tea were fitness enthusiasts and "ingredient parties", but now the habit of drinking sugar-free tea has become more popular among young people.

One of the reasons why the brand that is not strong in distribution can become a dark horse in the market is that it focuses enough on young people.

Many people first became familiar with Guozishuile in convenience stores. Convenience stores are one of the channels with the largest number of young people. Through deep integration with convenience store channels, Guozishuile has more accurately reached the target group of young people.

This year, Guozishule has launched channel-limited new products with convenience store brands such as FamilyMart and 711 more than once, and has carried out offline activities in the channels. For example, the "Sakura White Tea × FamilyMart" activity launched in March this year, consumers can post on Xiaohongshu with topics such as Guozishule sugar-free tea at FamilyMart stores to receive a free cherry blossom bouquet. If you buy multiple bottles of cherry blossom white tea in the store, you can also receive limited-edition peripherals such as cherry blossom aromatherapy pendants.

Image source: Xiaohongshu @SuSu's Cherry

Buying drinks and giving away peripherals is also a common practice of Guozishu. Especially for products endorsed by celebrities, many fans buy a lot of products because of the peripherals. After Yang Zi was officially announced as the spokesperson for sugar-free tea this year, Guozishu produced a series of Yang Zi-related peripherals, including small cards, refrigerator magnets, postcards, canvas bags, etc., and corresponding peripherals can be given away when buying different quantities of sugar-free tea.

Image source: Xiaohongshu@小悠悠的阿巴, Xiaohongshu@紫炭火

• Growth towards large scale

Large-scale standardization has become a small trend in the beverage category. According to NIQ, from 2019 to 2023, the proportion of large-scale ready-to-drink beverages of 600-1249ml in the entire industry will increase from 6.4% to 11.3%. For many consumers, it is not that they cannot afford small and medium-sized bottles, but that large bottles are more cost-effective. The popularity of "diaosi beverages" since last year proves that cost-effectiveness has been given higher priority in today's consumers' beverage choices.

The sugar-free tea category is also showing such a trend - some large-bottle products are growing faster, even squeezing out medium-bottle products, so launching large-bottle products may be a growth opportunity. Data from Mashangying from April to May this year showed that in multiple formats, Oriental Leaves' 900ml products, 335ml*6 sets of products, and some 1.25L products of Suntory have all seen good growth; some 500ml products have declined to a certain extent.

• Enhance functionality to meet the diverse health needs of young people

Light efficacy is another reason why sugar-free tea is loved by young people today. Tea polyphenols contained in tea have certain antioxidant and lipid-lowering effects. Today's young people are more and more health-conscious, and they pay more and more attention to the impact of daily diet on the body. We have also observed in other food and beverage categories that "functionality +" is an increasingly common trend. Following the various health needs of young people, further emphasizing the product's support for health may also be a solution for brands to make sugar-free tea.

This is also the experience accumulated by the Japanese sugar-free tea market. After 2005, the dividends of the Japanese sugar-free tea category gradually disappeared. One of the driving forces that extended the life cycle of this category is the functionalization of sugar-free tea; at the same time, the fastest-growing subcategory has changed from green tea to barley tea, which is a herbal tea beverage that helps clear away heat and fire, strengthen the spleen and nourish the stomach. In addition, Kao has gained a firm foothold in the sugar-free tea market by relying on a sugar-free tea called Healthya, which claims to help reduce body fat. As of December 2023, this sugar-free tea has sold a total of 3.1 billion bottles.

Kao Healthya Green Tea

Image source: Kao official website

Conclusion

At present, the argument about the involution of the sugar-free tea market is almost endless. However, after sorting out the basic logic and growth path of the entire category, I found that there is not only one logic of "volume", but also some scattered opportunities left for new brands.

As mentioned above, the domestic sugar-free tea market is likely still in its growth stage. The characteristics of this period include: the audience has just moved from the source population to a wider group of young people in first- and second-tier cities, and the growth is still driven by first-mover brands. The broader sinking market and other age groups are still to be explored, and the new market may bring new competition logic.

In addition, after successfully "breaking through the siege", Dongpeng Special Drink and Yuanqi Forest have continued to improve their basic channel skills. This also reminds new brands that if they want to stand out and go long-term, product concepts, price power, and channel capabilities are all indispensable.

As this year's beverage peak season arrives, we look forward to what new brands will emerge and what new situations will be formed in the sugar-free tea market.

References:

Today, Suntory's senior management in China made an appearance: the focus is on building a sugar-free tea brand matrix and will unwaveringly invest in the Chinese market.

"Special Research Report丨In the early summer of 2024, sugar-free tea staged a "Three Kingdoms Killing", Mashangying Intelligence Station

"Sugar-free tea: consumption classification and category prosperity - in-depth report on the soft drink industry (series 1)", China Galaxy Securities

Content editor: Xiao Xiao