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RTD Tea Drinks - China

Abstract

Introduction

"China's RTD tea market experienced strong double-digit annual growth from 2006-11 with a noticeable slowdown in 2011 due to a combination of factors including unfavourable weather, food safety issues such as the plasticiser incident and high input costs. However, compared to Japan and Taiwan, the two leading RTD tea markets with a per capita consumption of over 40 litres per person, China's per capita consumption of RTD tea is still low at 11.5 litres per person, which shows further growth in the market.

RTD tea is seen by many consumers as a healthy and natural beverage. The growing popularity of RTD herbal tea indicates that consumers want more out of their RTD tea and are increasingly looking for functional products that have obvious benefit to 'health' such as slimming.

Apart from functionality, consumers' adventurousness in taste provides opportunities for foreign tea and well-known domestic tea varieties to drive consumer engagement. Opportunities for RTD tea can also be found in meeting the beverage requirements of an increasingly mobile population. As a beverage that draws most of its sales during warm weather and the risk stemming from a cooler than usual summer, making RTD tea suitable for off-season consumption has become increasingly imperative to ensure a healthy growth of the sector."

-Tan Heng Hong - Senior Research Analyst

In this report we answer the key questions:

  • Are there prospects for foreign RTD tea given the domination of local RTD tea in the market?
  • What types of functional RTD tea drinks will appeal to consumers?
  • Where are the opportunities in the "on the go" market?
  • How can RTD tea's dependence on summer sales be reduced?

Definition

This market covers packaged black, green and other RTD tea drinks. Other RTD tea drinks include herbal tea, milk tea and other tea such as oolong tea and jasmine tea. The market comprises liquid sales of products only. It excludes teas which require the addition of water. Market size is based on sales through all retail channels (off-trade) and non-retail sales (hotel, restaurant and catering or HoReCa, also known as the on-trade).

Report structure

The report is split into four sections and an Appendix. The Appendix has the full market size, segmentation, share data, all consumer data tables (including demographics), brand and company product data, all Global New Product Database (GNPD) used in the report, macroeconomic and country data. The five sections tackle the major issues that are challenging and impacting the market, and assess how the market will evolve over the next five years.

Table of Contents

INTRODUCTION

  • Definition
  • Report structure

EXECUTIVE SUMMARY

  • The market
  • The forecast
    • Figure 1: Forecast - Volume sales of RTD tea, 2006-16
    • Figure 2: Forecast - Value sales of RTD tea, 2006-16
  • Companies
    • Figure 3: Manufacturer total volume share, 2008-11
  • Market segmentation
    • Figure 4: RTD tea total sales volume, by flavour, 2006-11
  • Issues
  • Opportunities to differentiate through geographical distinction
    • Figure 5: Attitudes towards drinking purely imported brands of RTD tea, by gender and age, January 2012
  • Functional-driven RTD tea has growth potential
  • Unlocking opportunities from increased mobility
    • Figure 7: Locations of drinking RTD tea, by gender, January 2012
  • More efforts can be done to reduce dependence on crucial summer months

MARKET BACKGROUND

  • Tingyi leads overall growth
    • Figure 9: Manufacturer total volume share, 2008-11
    • Figure 10: RTD tea drinks bought most often, by brand and tier city, January 2012
  • Growth momentum weakens
    • Figure 11: China's total RTD tea sales, by volume, 2006-11
    • Figure 12: Beverage sales value of Uni-President China Holdings and Tingyi (Cayman Islands) Holding, 2008 and 2009
  • Low per capita consumption presents opportunities
    • Figure 13: Per capita consumption of RTD tea, by country, 2009-11
  • Rising raw material prices putting pressure on prices
    • Figure 13: China's total RTD tea sales, by value, 2006-11
    • Figure 14: Prices of PET resin and sugar in China, Q4 2007-Q4 2011
    • Figure 15: Beverage margins of Tingyi (Cayman Islands) Holding and Uni-President China Holdings, 2006-11
  • Challenging competitive environment
    • Figure 16: Usage of soft drinks, January 2012

DIFFERENT TEA VARIANTS CREATE OPPORTUNITIES

  • Issues at a glance
  • Black tea dominates the RTD tea category
    • Figure 17: RTD tea total sales volume, by flavour, 2006-11
    • Figure 18: Flavours of RTD tea ever bought, by gender, January 2012
  • Consumers are happy to experiment
    • Figure 19: Repertoire of flavours of RTD tea ever bought, by gender and age, January 2012
    • Figure 20: RTD tea new launches, by launch format, 2009-11
  • RTD tea with fruit components grows in popularity
    • Figure 21: New RTD tea launches, by flavour component subgroups, 2009-11
  • Rich tea resources not fully exploited
    • Figure 22: Protected geographical indication (PGI) for tea, by flavour, March 2012
  • Geographical attributes can drive consumer engagement
    • Figure 23: New RTD tea launches, by local geographical identification, 2009-11
    • Figure 24: Attitudes towards food and drink, January 2012
  • Interest in imported teas has not been met
    • Figure 25: China's tea imports and exports, by volume*, 2009-11
    • Figure 26: New RTD tea launches, by foreign geographical identification, 2009-11
    • Figure 27: Attitudes towards drinking purely imported brands of RTD tea, by gender and age, January 2012
    • Figure 28: Brands of RTD tea ever bought and bought most often, January 2012
    • Figure 29: China's top ten tea imports, by country*, 2009-11
    • Figure 30: New RTD rooibos tea launches worldwide, by claims, 2009-11
    • Figure 31: Percentage of new RTD tea launches worldwide, by tea varieties, 2009-11
  • What does it mean?

FUNCTIONALITY DRIVES SECTOR GROWTH

  • Issues at a glance
  • RTD tea claims the 'natural' high ground
    • Figure 32: Attitudes towards RTD tea, January 2012
  • Return herbal tea to its roots
    • Figure 33: Attitudes towards RTD herbal tea, by gender and age group, January 2012
    • Figure 3434: Attitudes towards RTD herbal tea, by city, January 2012
    • Figure 35: New RTD herbal tea launches, by claims, 2009-11
    • Figure 36: Top five claims in new RTD tea launches, 2009-11
    • Figure 37: Attitudes towards food and drinks, by age, 2009-11
    • Figure 38: Attitude towards tea drinks, by age, January 2012
  • Opportunities exist in slimming/beauty functional drinks
    • Figure 39: Attitudes towards RTD tea with slimming/beauty effect, by age and gender, January 2012
    • Figure 40: New RTD tea launches with beauty benefits and weight control claims, 2009-11
  • Youqie concept failed to gain credibility
    • Figure 41: RTD barley tea flavour ever bought or bought most often, by age and gender, January 2012
  • Credibility can be improved through co-branding
  • What does it mean?

INCREASED MOBILITY IS DRIVING GROWTH

  • Issues at a glance
  • Commuting opens opportunities for RTD tea
    • Figure 42: China's total passenger traffic, 2006-10
    • Figure 43: Locations of drinking RTD tea, by gender, January 2012
    • Figure 44: China's total urban public transport traffic volume, 2006-10
    • Figure 45: Packaging sizes of new RTD tea launches, 2009-11
  • Milk tea to fulfil morning rush needs of commuters
    • Figure 46: Time of the day drinking RTD tea, January 2012
    • Figure 47: Milk tea ever bought, by city, January 2012
    • Figure 48: Flavour of RTD tea ever bought, by age and gender, January 2012
  • What does it mean?

MARKET STRUGGLES TO COPE WITH DEPENDENCE ON SUMMER

  • Issues at a glance
    • Figure 49: Tingyi (Cayman Islands) Holding beverage* sales breakdown, by quarter, 2006-11
    • Figure 50: Average monthly temperature of 31 cities* in China, 2007-10
  • Lack of heated displays slows market growth
    • Figure 52: Uni-President China Holdings tea drinks sales value, 2009-11
  • Limited edition to spur sales in off-seasons
  • What does it mean?

THE FUTURE OF THE MARKET

  • Figure 54: Fan chart forecast for RTD tea, at best-worst-, and central-case scenario, by volume, 2006-16
    • Figure 55: Fan chart forecast for RTD tea, at best-worst-, and central-case scenario, by value, 2006-16
    • Figure 56: China's RTD tea actual and forecast volume and value, 2006-16
  • Methodology

APPENDIX - MARKET SIZE, SEGMENTATION AND SHARE

  • Figure 57: China's total RTD tea sales, by volume, 2006-11
    • Figure 58: China's total RTD tea sales, by value, 2006-11
    • Figure 59: RTD tea total sales volume, by flavour, 2006-11
    • Figure 60: RTD tea total sales value, by flavour, 2006-11
    • Figure 61: Manufacturer total volume share, 2008-11
    • Figure 62: Manufacturer total value share, 2008-11
  • Market forecast
    • Figure 63: China's RTD tea actual and forecast volume and value, 2006-16

APPENDIX - COMPANIES AND BRANDS

  • Figure 64: RTD tea brands and their ultimate owners

APPENDIX - CONSUMER RTD TEA CONSUMPTION HABITS

  • Figure 65: Frequency of buying soft drinks, January 2012
  • Figure 66: Frequency of buying soft drinks, January 2012
  • Figure 67: Most popular frequency of buying ready to drink tea/Iced tea, by demographics, January 2012
  • Figure 68: Next most popular frequency of buying ready to drink tea/iced tea, by demographics, January 2012
  • Figure 69: Locations of drinking tea drinks, January 2012
  • Figure 70: Locations of drinking tea drinks, by demographics, January 2012
  • Figure 71: Time of drinking a tea drink, January 2012
  • Figure 72: Time of drinking a tea drink, by demographics, January 2012

APPENDIX - CONSUMER RTD TEA PURCHASING HABITS

  • Figure 73: Person RTD teas are bought for, January 2012
  • Figure 74: Person RTD teas are bought for, by demographics, January 2012

APPENDIX - THE CONSUMER - FLAVOURS BOUGHT

  • Figure 75: Flavours of tea drink ever bought, January 2012
  • Figure 76: Most popular flavours of tea drink ever bought, by demographics, January 2012
  • Figure 77: Next most popular flavours of tea drink ever bought, by demographics, January 2012
  • Figure 78: Other flavours of tea drink ever bought, by demographics, January 2012
  • Figure 79: Flavours of tea drink bought most often, January 2012
  • Figure 80: Most popular flavours of tea drink bought most often, by demographics, January 2012

APPENDIX - THE CONSUMER - LOCATIONS OF PURCHASING TEA DRINKS

  • Figure 83: Locations of purchasing tea drinks, January 2012
  • Figure 84: Most popular locations of purchasing tea drinks, by demographics, January 2012
  • Figure 85: Next most popular locations of purchasing tea drinks, by demographics, January 2012
  • Figure 86: Other locations of purchasing tea drinks, by demographics, January 2012

APPENDIX - THE CONSUMER - PACKAGE SIZES OF TEA DRINKS USUALLY BOUGHT

  • Figure 87: Package sizes of tea drinks usually bought, January 2012
  • Figure 88: Any package sizes of tea drinks usually bought, by demographics, January 2012
  • Figure 89: Small can (under 330ml) of tea drinks usually bought, by demographics, January 2012
  • Figure 90: Regular can (330-355ml) of tea drinks usually bought, by demographics, January 2012
  • Figure 91: Small bottles (less than 500ml) of tea drinks usually bought, by demographics, January 2012
  • Figure 92: Medium bottles (500ml - up to 1l) of tea drinks usually bought, by demographics, January 2012
  • Figure 93: Large bottles (1l to less than 1.5l) of tea drinks usually bought, by demographics, January 2012
  • Figure 94: Extra-large bottles (1.5l or more) of tea drinks usually bought, by demographics, January 2012

APPENDIX - THE CONSUMER - RTD TEA BRAND PREFERENCE

  • Figure 95: Brands of tea drinks ever bought, January 2012
  • Figure 96: Most popular brands of tea drinks ever bought, by demographics, January 2012
  • Figure 97: Next most popular brands of tea drinks ever bought, by demographics, January 2012
  • Figure 98: Other brands of tea drinks ever bought, by demographics, January 2012
  • Figure 99: Brands of tea drinks bought most often, January 2012
  • Figure 100: Most popular brands of tea drinks ever bought, by demographics, January 2012

APPENDIX - CONSUMER ATTITUDES TOWARDS RTD TEA

  • Figure 103: Attitudes towards tea drinks, January 2012
  • Figure 104: Agreement with the statements 'I like to drink RTD tea drink mainly because I like its ads or my idol endorsing the brand/product' and 'I like to drink RTD tea drink as it makes me feel fresh', by demographics, January 2012
  • Figure 105: Agreement with the statements 'I prefer RTD tea drink over mineral water' and 'People drinking tea drink are leading a natural and simple lifestyle', by demographics, January 2012
  • Figure 106: Agreement with the statements 'I drink RTD tea drink because it is popular among my friends and peers' and 'I have a strong habit of drinking tea', by demographics, January 2012
  • Figure 107: Agreement with the statements 'I am actively trying out those new types of RTD tea drinks, be it new packaging or flavour etc' and 'I am keen to drink purely imported brands of RTD tea', by demographics, January 2012
  • Figure 108: Agreement with the statements 'I choose RTD tea drink because it is low in sugar' and 'I would like to buy some RTD tea drink with slimming/beauty effect', by demographics, January 2012
  • Figure 109: Agreement with the statements 'I believe drinking RTD herbal tea can drive away heat inside the human body' and 'I believe RTD herbal tea has less calories and sugar than carbonated soft drinks', by demographics, January 2012

APPENDIX - THE CONSUMER - REPERTOIRE ANALYSIS

  • Figure 110: Repertoire of flavours of tea drink ever bought, January 2012
  • Figure 111: Flavours of tea drink ever bought by repertoire of flavours of tea drink ever bought, January 2012
  • Figure 112: Repertoire of flavours of tea drink ever bought by demographics, December 2011

APPENDIX - NEW PRODUCT INNOVATION

  • Figure 113: RTD tea new launches, by launch format, 2009-11
  • Figure 114: New RTD tea launches, by flavour component subgroups, 2009-11
  • Figure 115: New RTD tea launches, by local geographical identification, 2009-11
  • Figure 116: New RTD tea launches, by foreign geographical identification, 2009-11
  • Figure 117: New RTD rooibos tea launches worldwide, by claims, 2009-11
  • Figure 118: Percentage of new RTD tea launches worldwide, by tea varieties, 2009-11
  • Figure 119: Top five claims in new RTD tea launches, 2009-11
  • Figure 120: New RTD herbal tea launches, by claims, 2009-11
  • Figure 121: New RTD tea launches with beauty benefits and weight control claims, 2009-11
  • Figure 122: Packaging sizes of new RTD tea launches, 2009-11
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