Tea drinks refer to the tea beverage made by soaking tea leaves with water, and the process of extraction, filtration, clarification, etc., or the product prepared by adding water, sugar liquid, acidulant, food flavor, fruit juice, or plant extract to the tea soup. Tea drinks refer to beverages processed with tea extracts, tea powders, and concentrated liquids as the main raw materials. They have the unique flavor of tea, contain natural tea polyphenols, caffeine and other effective tea ingredients, and have nutritional and health benefits. A refreshing and thirst-quenching multifunctional drink.
First, Industry chain
In the tea drinks industry chain, the upstream is the basic raw materials, and the main ingredients are water, tea soup, various food additives, etc.; the middle reaches are various types of tea drinks, mainly fruit-flavored tea drinks, milk tea drinks and carbonated tea drinks; downstream are various types of tea drinks. Consumption channels, and finally reach the end consumers.
Second, upstream analysis
- Tea leaf
Tea ingredients include catechins, cholestenone, caffeine, etc., which are good for health. There is a long record of tea drinking in Chinese history. It has developed into different tea drinks that can also be made from tea and is one of the three major beverages in the world. Data show that China’s tea production increased from 2.3133 million tons in 2016 to 2.97 million tons, with an average annual compound growth rate of 6.4%.
- Green tea
Drinking green tea regularly can prevent cancer, reduce fat and lose weight, and can also reduce the nicotine damage to smokers. China has a vast tea area that produces a variety of teas. The number of newly reclaimed tea gardens continues to increase, the yield per unit area has increased, and the output has also continued to increase. Data show that in 2019, China’s green tea production and sales were 1.85 million tons and 1.473 million tons respectively. The China Business Industry Research Institute predicts that China’s green tea production and sales will reach 2.040 million tons and 1.615 million tons in 2021, respectively.
- Black tea
The main black tea-producing areas in China mainly include Fujian, Yunnan, Anhui, Sichuan and other places. In recent years, the demand for black tea in the Chinese tea market has continued to increase, which has promoted the enthusiasm of black tea production in various tea-producing provinces. According to statistics, China’s black tea production in 2019 was about It was 258,000 tons, a year-on-year increase of 15.0%, and the internal sales of black tea were approximately 226,000 tons, a year-on-year increase of 19.6%.
Third, Midstream analysis
- Tea drinks market scale
The consumption of tea drinks in China has undergone structural upgrades, and the growth of per capita tea drink consumption in Japan and the United States is vast. With the birth of the new tea drinking experience, the Chinese tea drinking market has achieved rapid growth. In terms of retail consumption value, the total market size of China’s current tea drinks in 2020 was about 113.6 billion yuan, and it is expected to reach 478.9 billion yuan by 2021, with a compound annual growth rate of 24.5% by 2025.
- China’s tea drinks market scale
Tea contains caffeine, this alkaloid can make people refreshing and excited. In addition, the presence of rich ingredients and sugar in new tea drinks will make consumers unconsciously experience the euphoria after the brain secretes dopamine. In the stressful and fast-paced modern life, new tea drinks are no longer a drink for many people, but a mood regulator, reflecting a kind of “happiness.” The data shows that the scale of China’s new tea drink market has grown from 44.2 billion yuan in 2017 to 97.8 billion yuan in 2019, with an average annual compound growth rate of 48.75%. It is expected that the scale of China’s new tea drink market will exceed 110 billion yuan in 2021.
- Competitive landscape
Although there is no shortage of competitors and new products in the tea drinks market, in fact, the market is still dominated by several well-known brands. From the perspective of tea drinks brands, the leading companies in the market for traditional tea drinks are still Master Kong and Uni-President, accounting for 43.3% and 23.5% of the market respectively. In recent years, as Nongfu Spring has successively launched tea drinks products on the market, it also occupies a place in the traditional tea drinks industry, accounting for 7.9%.
- Brand Power Index
According to the data, judging from the ranking of China’s tea drinks brand power index in 2019, although Master Kong and Uni-President firmly occupy the top 2 positions in the industry, there are still new brands pouring into the list. With tea Ï€, a product that focuses on the young market, Nongfu Spring has gradually climbed from being unnamed in 2016 to No. 5 in 2019, indicating that the market still leaves opportunities for latecomers. Therefore, under the background that big brands cannot fully satisfy the new demands of consumers, the door of the tea drinks market is still opened for latecomers with potential explosives.
Fourth, downstream analysis
- Takeaway delivery
With the popularization of mobile Internet and mobile payment and the continuous digitalization of China’s catering industry, the retail consumption value of ready-made tea products through take-out services in all terminal apps has increased from 700 million yuan in 2015 to 28.4 billion yuan in 2020. The compound annual growth rate was 107.6%, accounting for approximately 25.0% of China’s total retail consumption of current tea products by 2020.
- Brand stores
In recent years, the number of new-style tea-drinking stores and the number of new-style tea consumers in China has risen sharply. In 2019, there will be 500,000 new-style tea drink stores. Affected by the epidemic, some of the stores will close in 2020, and the number of new-style tea beverage stores will be reduced to 480,000. As the epidemic improves, the number of new tea shops will increase to 550,000 in 2021.
- Consumption
According to relevant survey data, Chinese consumers consume an average of about 44 cups per person per year, which is equivalent to buying once every 8 days, while only 14% of heavy tea buyers can provide up to 50% of the consumption. Customer stickiness and high repurchase rate also mean that new tea consumption habits are gradually formed, contributing to the long-term growth driver of the industry.
Source: China Business Intelligence