Latest data from Euromonitor International showed that the tea beverage market in China is expected to grow by 15.6% from Rmb 113 billion (US$15.7 billion) in 2022 to Rmb 130.6 billion (US$18.13 billion) in 2025.
Meanwhile, demand for sugar-free tea beverage is expected to surpass, i.e. more than doubled, the growth rate of the overall tea market and is projected to grow by 39.3% from Rmb 7.9 billion (US$1.1 billion) in 2022 to Rmb 11 billion (US$1.53 billion) in 2025.
One of the most popular sugar-free tea beverage in China is Oriental Leaf, which belongs to the portfolio of Nongfu Spring, a leading Chinese bottled water producer. Oriental Leaf was launched in 2011, making it one of the earliest industry mover in the bottled sugar-free tea beverage market. The success of Oriental Leaf has led to Nongfu Spring successive launches of sugar-free tea beverages. For example, in March 2023, it launched a limited edition ‘Longjing Spring Tea’ featuring premium quality Longjing tea and then later in May 2023, it introduced ‘Black Oolong Tea’ aiming to widen its portfolio of sugar-free tea beverages.
Tea beverages, served cold or hot, have been a staple diet for Chinese consumers and it is consumed on and off-premises throughout the day, across all age groups, and at most occasions. Latest data from Mashangying showed that in the first half of 2023, tea beverages (that is off-premise tea drinks) accounted for 12% of all non-alcoholic beverages sold. The positive numbers have encouraged beverage manufacturers to join the bandwagon and launch sugar-free tea products.
Another player, Suntory China mentioned that Oolong tea contributed 80% to the company’s sales and saw a whopping 200% growth in the first half of 2023. According to Xi Guohua, Head of Beverage Sales at Suntory China, “We’ve been on a high-speed growth trajectory in the past 3 years.”
Even major global players like Coca-Cola is focusing on the tea category particularly its unsweetened tea portfolio brand ‘Authentic Tea House’ which was launched in 2018. New entrant Jebsen Group launched Remedy Kombucha in China in 2023.
A separate report on ‘China Sugar Free Tea Industry in 2022’ by Dataway highlighted that the sugar-free tea segment is entering a growth phase and has projected the sale of sugar-free tea drink to exceed Rmb 10 billion (US$1.39 billion) by 2025.
