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Tea Drinks - China - July 2015

Consumers in the RTD tea drinks market have become savvier. Simple extrinsic cues such as product prices achieve limited impact on consumers’ perception and purchase decision-making process. The era of having simple one-for-all products is long gone. Consequently, finding the right communication channels combined with specific claims to target various groups of RTD tea drinkers has become of paramount importance. Wisely using health and beauty claims can help RTD tea brands gain a foothold in booming new territories.”

David Zhang, Senior Drink Analyst

The following report looks at the following:

  • How to attract the hard-to-capture young consumers?
  • How to target female drinkers using occasion- and location-based strategies?
  • How to tap into the premium segment?
The decline in demand for flavoured iced tea reflects the fact that consumers are moving away from products based on flavour-driven product innovation. Instead, they are looking for tea drinks offering functional benefits.
 
This gives RTD tea brands the hope to expand their user base by tapping into other soft drink markets using category blurring strategies.
 

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Table of contents

  1. Introduction

      • Definition
        • Methodology
          • Abbreviations
          • Executive Summary

              • The market
                • Figure 1: Retail market value of RTD tea drinks in China, 2010-20
                • Figure 2: Retail total volume of RTD tea drink market in China, 2010-20
              • Innovations in the market
                • Targeting young consumers with premium products
                  • Category blurring starts to emerge in the RTD tea market
                    • Added health benefits become an important pathway for premiumisation
                      • Size matters: Large bottles growing fast
                        • Ethical claims gaining momentum across East Asia market
                          • Figure 3: Claims of newly launched products in the RTD tea drink market in East Asia, 2010-15
                        • Iced tea is under threat
                          • Figure 4: RTD tea consumption change, April 2015
                        • RTD tea drinks remain a drink for causal occasions
                          • Figure 5: RTD tea drinking occasions, April 2015
                        • RTD tea drink market remains dominated by retail channels
                          • Figure 6: Usage of RTD tea purchase channels, April 2015
                        • Word-of-mouth plays a key role
                          • Figure 7: Information channels for RTD tea drink buyers, April 2015
                        • Brand equity remains strong
                          • Figure 8: Attributes associated with premium RTD tea drinks, April 2015
                        • Tea drinks are suitable all-year-round
                          • Figure 9: Attitudes towards seasonality of RTD tea drinks, April 2015
                        • Consumers are seeking new types of RTD tea drinks
                          • Figure 10: Attitudes towards taste and flavours, April 2015
                        • Natural ingredients as a claim enjoy price premium
                          • Figure 11: Attitudes towards health of RTD tea drinks, April 2015
                        • What we think
                        • Issues and Insights

                            • How to attract the hard-to-capture young consumers?
                              • Facts
                                • Implications
                                  • Figure 12: Agreement with the statement “manufactured by well-known brand” as an attribute associated with premium image of RTD tea drinks, by age, April 2014
                                  • Figure 13: The association of high-end packaging with premium image of RTD tea drinks, by age, April 2014
                                  • Figure 14: Xiaoming Tongxue tea drink launched by Uni-President in China, Q2 2015
                                • How to target female drinkers using occasion- and location-based strategies?
                                  • Facts
                                    • Implications
                                        • Figure 15: Penetration of chained health and beauty retailer, by gender and age, April 2015
                                      • How to tap into the premium segment?
                                        • Facts
                                          • Implications
                                          • Trend Application

                                            • Trend: Extend My Brand
                                              • Figure 16: Beauty tea with 16 herbs from Asahi launched in Japan, Q2 2013
                                            • Trend: Influentials
                                              • Trend: The Real Thing
                                              • Market Size and Forecast

                                                • Key points
                                                  • Growth in the market is slowing down
                                                    • Figure 17: Retail market value of RTD tea drinks in China, 2010-20
                                                    • Figure 18: Retail market value of RTD tea drinks in China, 2010-20
                                                    • Figure 19: Retail total volume of RTD tea drinks in China, 2010-20
                                                  • Forecast methodology
                                                  • Market Segmentation

                                                    • Key points
                                                      • The shares of black and green tea are being eroded
                                                        • Figure 20: Segment performance of RTD tea drinks in China, by value, 2010-15
                                                        • Figure 21: Segment performance of RTD tea drinks in China, by volume, 2010-15
                                                        • Figure 22: Year-on-year growth rate of different types of RTD tea drinks in China, by value, 2011-15
                                                        • Figure 23: Year-on-year growth rate of different type of RTD tea drinks in China, by volume, 2011-15
                                                    • Market Share

                                                      • Key points
                                                        • The market becomes more consolidated
                                                          • Figure 24: Market share of leading companies in the RTD tea drink market in China, 2013-14
                                                        • JDB group continues to grow despite losing court battles
                                                          • Figure 25: Market shares of two leading brands in the herbal tea drink segment, 2013-14
                                                      • Who’s Innovating?

                                                        • Key points
                                                          • Targeting young consumers with premium products
                                                            • Figure 26: Xiaoming Tongxue, Cold brewed green tea from Uni-President, Q2 2015
                                                          • Category blurring starts to emerge in the RTD tea market
                                                            • Figure 27: Lychee black tea from Ito EN, launched in China, Q2 2015
                                                            • Figure 28: Ito En’s Healthy Ginseng Tea, launched in Japan, Q4 2014
                                                          • Added health benefits become an important pathway for premiumisation
                                                            • Figure 29: Selected RTD tea drinks with specific health claims, Q2 2015
                                                          • Size matters: large bottles growing fast
                                                            • Figure 30: Bottle sizes of new product launched in East Asian market, 2010-14
                                                          • Ethical claims gaining momentum across East Asia market
                                                            • Figure 31: The claims of newly launched products in the RTD tea drink market in East Asia, 2010-15
                                                            • Figure 32: The claims of newly launched products in the RTD tea drink market in China, 2010-15
                                                        • Brands and Companies

                                                          • Key points
                                                            • Tingyi Holding Corporation
                                                              • Product innovation
                                                                • Marketing campaigns
                                                                  • Uni-President China Holdings, Ltd.
                                                                    • Product innovation
                                                                      • Marketing campaigns
                                                                        • JDB Group
                                                                          • Product innovation
                                                                            • Marketing campaigns
                                                                            • The Consumer – Changes in Purchase Behaviour

                                                                              • Key points
                                                                                • Iced tea is under threat
                                                                                  • Figure 33: RTD tea consumption change, April 2015
                                                                                • Green tea is losing young consumers
                                                                                  • Figure 34: Green tea consumption change, by age, April 2015
                                                                                • Men in their 40s are more likely to drink traditional Chinese tea
                                                                                  • Figure 35: Consumption change in traditional Chinese tea, by gender and age, April 2015
                                                                                  • Figure 36: Aromatic Jasmine and Oolong Tea Blend from Fancl launched in Japan, Q2 2013
                                                                                  • Figure 37: Beauty tea with 16 herbs from Asahi launched in Japan, Q2 2013
                                                                              • The Consumer – Drinking Occasions

                                                                                • Key points
                                                                                  • RTD tea drinks remain as a drink for causal occasions
                                                                                    • Figure 38: RTD tea drinking occasions, April 2015
                                                                                    • Figure 39: Seulgi tea launched in South Korea by Lotte Chilsung Beverage, Q3 2014
                                                                                  • Women tend to drink RTD tea when eating out and socialising at home…
                                                                                    • Figure 40: Selected RTD tea drinking occasions, by gender, April 2015
                                                                                    • Figure 41: Muni Pu-er tea launched in Hong Kong, Q3 2011
                                                                                    • Figure 42: Every Morning’s Oolong tea launched in Hong Kong, Q2 2015
                                                                                    • Figure 43: Supreme Meta Tea, Tao Ti from Telford International, Launched in Hong Kong, Q2 2015
                                                                                  • …and men are more likely to drink RTD tea when participating in sports activities
                                                                                    • Figure 44: Selected by RTD tea drinking occasions, by gender, April 2015
                                                                                  • Young consumers tend to drink RTD tea when working and studying
                                                                                    • Figure 45: Drinking RTD tea when study/working, by age, April 2015
                                                                                    • Figure 46: RTD tea drinks using new harvest and new tea leaves of the year as the key selling point, Launched in Japan, Q2 2015
                                                                                  • Regional difference plays a key role
                                                                                    • Figure 47: Selected RTD tea drinking occasions, by city, April 2015
                                                                                  • On-trade channels facing difficulties to attract experience with RTD tea drinks
                                                                                    • Figure 48: Penetration of drinking RTD tea drinks in on-trade channels, by occasion repertoire, April 2015
                                                                                • The Consumer – Purchasing Channels

                                                                                  • Key points
                                                                                    • RTD tea drink market remains dominated by retail channels
                                                                                      • Figure 49: Usage of RTD tea purchase channels, April 2015
                                                                                    • Supermarket and hypermarket attract most RTD tea drinkers
                                                                                      • Figure 50: RTD tea purchasing channels, April 2015
                                                                                    • Supermarkets more attractive to male drinkers, hypermarkets appeal to female drinkers
                                                                                      • Figure 51: Selected purchasing channels of RTD tea drink, by gender, April 2015
                                                                                    • Beauty retailers present a rare opportunity to reach young female drinkers
                                                                                      • Figure 52: Penetration of chained health and beauty retailers, by gender and age, April 2015
                                                                                      • Figure 53: Aromatic Jasmine and Oolong tea drink, launched in Japan, Q2 2013
                                                                                    • Online market is yet to be fully developed but shows potential
                                                                                      • Vending machines only attract single and young drinkers
                                                                                        • Figure 54: Usage of vending machines, by gender, April 2015
                                                                                    • The Consumer – Information Channels Used

                                                                                      • Key points
                                                                                        • Word-of-mouth plays a key role
                                                                                          • Figure 55: Information channels for RTD tea drink buyers, April 2015
                                                                                        • Passive communication strategies works better to reach male consumers
                                                                                          • Figure 56: Selected information channels, by gender, April 2015
                                                                                        • High earners tend to use niche information channels
                                                                                          • Figure 57: Selected information channels, by household monthly income, April 2015
                                                                                      • The Consumer – Attributes Associated with Premium Products

                                                                                        • Key points
                                                                                          • Brand equity remains strong
                                                                                            • Figure 58: Attributes associated with premium RTD tea drinks, April 2015
                                                                                            • Figure 59: Ginger tea drink, launched in Japan by Nagatanien, Q1 2014
                                                                                          • Well-known brands find it hard to attract young consumers
                                                                                            • Figure 60: Agreement with the statement “manufactured by well-known brand” as an attribute associated with premium image of RTD tea drinks, by age, April 2014
                                                                                            • Figure 61: Association of high-end packaging with premium image of RTD tea drinks, by age, April 2014
                                                                                            • Figure 62: Ignite baijiu product launched in China, Q1 2015
                                                                                            • Figure 63: Xiaoming Tongxue tea drink launched by Uni-President in China, Q2 2015
                                                                                          • Sophistication works well in premiumisation
                                                                                              • Figure 64: Kirin’s Ogon Tekkan green tea, launched in Japan, Q3 2014
                                                                                              • Figure 65: Ito En’s Deep steamed green tea, launched in Japan, Q3 2014
                                                                                            • Tea leaves as a claim works better when targeting higher tier cities
                                                                                              • Figure 66: Selected attributes associated with premium image in the RTD tea drink market, by city tier, April 2015
                                                                                            • RTD tea drinks with health benefits encourage female drinkers to trade up
                                                                                              • Figure 67: Association between additional health benefits and premium image of RTD tea drinks, by gender, April 2015
                                                                                              • Figure 68: Pokka’s relaxing tea product launched in Japan, Q2 2012
                                                                                            • Older consumers prefer pure tea taste without added flavours
                                                                                              • Figure 69: Association between no added flavour and premium image of RTD tea drinks, by age, April 2015
                                                                                          • The Consumer – Attitudes towards Seasonality

                                                                                            • Key points
                                                                                              • Tea drinks are suitable all-year-round
                                                                                                • Figure 70: Attitudes towards seasonality of RTD tea drinks, April 2015
                                                                                                • Figure 71: Ginger tea drink launched in Japan by Nagatanien, Q1 2014
                                                                                              • Seasonal RTD tea drinks tend to be a lifestyle statement
                                                                                                • Figure 72: Agreement with the statement “I would like to see more RTD tea drinks designed for different seasons” by consumer classification, April 2015
                                                                                                • Figure 73: Selected products with seasonality claims, Q1 2015
                                                                                                • Figure 74: Kirin’s Spring Blossom peach tea, launched in Japan, Q1 2014
                                                                                            • The Consumer – Attitudes towards Taste and Flavours

                                                                                              • Key points
                                                                                                • Consumers are seeking new types of RTD tea drinks
                                                                                                  • Figure 75: Attitudes towards taste and flavours, April 2015
                                                                                                  • Figure 76: Tenwow’s Golden Pu’er and Golden Guanyin RTD tea drinks launched in China, Q2 2015
                                                                                                  • Figure 77: Suntory’s New Harvest green tea product, launched in Japan, Q2 2015
                                                                                                • Young consumers find sweet taste acceptable
                                                                                                  • Figure 78: Agreement with the statement “Most of the RTD tea drinks available are too sweet”, by age, April 2015
                                                                                              • The Consumer – Attitudes towards Health and Functionality

                                                                                                • Key points
                                                                                                  • Natural ingredients as a claim enjoy price premium
                                                                                                    • Figure 79: Attitudes towards health benefits of RTD tea drinks, April 2015
                                                                                                    • Figure 80: Grape rose tea from The Wizardry, launched in China, Q2 2015
                                                                                                    • Figure 81: Lemon green tea from Dailyherb, launched in China, Q2 2014
                                                                                                  • Functionality drives the future development of the RTD tea drink market
                                                                                                    • Figure 82: Attitudes towards the functionality of RTD tea drinks, April 2015
                                                                                                    • Figure 83: Catechin green tea from Ito En, launched in Japan, Q4 2014
                                                                                                • The Consumer – Meet the Mintropolitans

                                                                                                  • Key points
                                                                                                    • Why Mintropolitans?
                                                                                                      • Who are they?
                                                                                                          • Figure 84: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
                                                                                                          • Figure 85: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
                                                                                                        • Seasonal RTD tea drinks tend to be lifestyle statement
                                                                                                          • Figure 86: Agreement with the statement “I would like to see more RTD tea drinks designed for different seasons” by consumer classification, April 2015
                                                                                                          • Figure 87: Kirin’s Spring Blossom peach tea, launched in Japan, Q1 2014

                                                                                                      Tea Drinks - China - July 2015

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