sugar-free tea is facing a "bloody battle"
2024-09-09
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it is impossible for oriental leaves to monopolize the hot sugar-free tea market.since the first half of this year,there are more and more sugar-free tea products, with specifications increasing from small to large and prices getting lower and lower.the beverage segment has never been so lively.in a very short period of time, problems such as product homogeneity and accelerated iteration cycles in the sugar-free tea industry have emerged.when there is no room for innovation in a category, both the offensive and defensive parties in the market will face a brutal “blood battle”.during the period, the company's tea beverage business achieved operating income of 8.43 billion yuan, a year-on-year increase of 59.48%, accounting for 38.0% of the company's revenue.oriental leaves is a well-deserved big single product. nielsen data shows that in the first six months of this year,oriental leaves' sales have grown by more than 90%, and its share of the sugar-free tea market has exceeded 70%.more than 10 years ago,nongfu springthis bottle of tea that was cultivated was once called "the most unpalatable drink" by consumers.in recent years, the clouds have finally cleared and the moon has appeared. from 2020 to 2023, the company's tea beverage business revenue will be 3.088 billion yuan, 4.579 billion yuan, 6.905 billion yuan and 12.659 billion yuan respectively.under the demonstration effect of oriental leaves, many beverage manufacturers followed suit, and new products and new brands emerged in an endless stream.started as a functional beveragedongpeng beverage(605499.hk), has taken sugar-free tea as its second curve. in the first half of this year, the company's "other beverage business" including sugar-free tea saw a year-on-year sales increase of 89.62%; revenue was 238 million yuan, a year-on-year increase of 88.89%.master kong holdings(00322.hk) has dominated the market with iced black tea for many years, winning the favor of consumers with its refreshing experience. it is currently moving from sugar-containing to sugar-free.in the first half of this year, the company launched sugar-free tea products such as sugar-free oolong tea and sugar-free jasmine tea. during the period, the overall revenue of the beverage business was 27.065 billion yuan, a year-on-year increase of 1.7%.uni-president china(00220.hk) has a sugar-free tea brand called "cha li wang" in its tea beverage products. this year, it launched chunfu green tea to join the battle. in the first half of the year, the company's overall tea beverage revenue was 4.647 billion yuan, a year-on-year increase of 11.8%.competition has become fiercesugar-free tea is becoming increasingly popular, but the category’s rise is relatively recent.since 2017, sugary drinks have fallen into a period of slow growth, and sugar-free tea products such as suntory oolong tea and oriental leaves have gradually been accepted by consumers.when the opportunity comes, all kinds of new and old players flock to this blue ocean.there are both traditional beverage manufacturers, such as nongfu spring, wahaha,coca colaetc.; there are also non-industry enterprises, such as yili,tsingtao beeretc.; there are also new forces such as ripe fruits, tea, and bush aroma.multiple forces are competing with each other in the sugar-free tea market, which is becoming more and more lively. problems such as product homogeneity and shortened iteration cycle are also rapidly emerging.today's sugar-free tea products have extended from oolong tea to green tea, jasmine tea, black tea, dahongpao, etc., involving china's six major tea types and even niche varieties. among them, oolong tea leads the way, and its combined market share with jasmine tea exceeds 30%.not all chinese teas are suitable for making sugar-free teafor example, the sugar-free pu'er tea has a strong taste and is not widely accepted by the public; while the lighter-tasting tieguanyin, xinyang maojian and the like have too obvious regional characteristics.after rolling up the products, it is still impossible to determine the winner.a price war is imminent.in the past, the mainstream price range of sugar-free tea was around 5 yuan. around april this year, various brands offered discounts and promotions one after another, and the actual retail price has been reduced to less than 5 yuan. in fact, you can buy 3 bottles of suntory oolong tea for 11 yuan, and 2 bottles of oriental leaves for 7 yuan. at the most intense time, some single bottles of 500 ml sugar-free tea brands can be purchased for as low as 3 yuan.another focus of this summer's competition for sugar-free tea is the competition for the large-format packaging market.after launching the 900ml large bottle last year, oriental leaves continued to focus on large-volume products. major brands followed suit immediately, with yuanqi forest launching 600ml bottles and suntory launching 1.25l and 900ml sugar-free tea products, which are large in quantity and affordable.in mashangying's view, replacing small-sized products with large-sized ones and lowering the unit price of 100 ml is actually a disguised price war. the sugar-free tea industry has entered a growth stage of exchanging price for volume.data shows that since february this year, the average price of sugar-free ready-to-drink tea per 100 ml has continued to decline at a month-on-month rate of about 2%, and has dropped to 0.85 yuan per 100 ml in july.as supply increases and prices fall due to competition, the sugar-free tea market will further expand.according to a research report by china galaxy securities, the current retail scale of sugar-free tea is about 22 billion yuan, and the cautious/optimistic assumption of the long-term space is about 54.5 billion yuan/188.5 billion yuan. from the current competitive landscape, it presents a situation of duopoly + north-south regional competition. with the expansion of the market and the sinking of channels, multiple large single products will be born in different price bands, gradually evolving into a market structure of "one super and many strong".
