According to the "2016 Global Tea Report" by food and beverage consulting firm Zenith, by 2015, global iced tea consumption surpassed USD 35 billion. Since 2010, market share of instant tea has increased by 44%, exceeding average growth rate of all soft drinks by 25%. Zenith predicts that the tea market will continue to grow at an annual rate of 4.4% to reach $44 billion by 2020 due to consumers’ continued pursuit of healthy lifestyle.
Thanks to tea-drinking tradition, Asia Pacific region still occupies the largest market share (as high as 72%). China and Japan still occupy the absolute leadership position. GroupM data shows that, by the end of 2015, China tea market size was nearly USD 81.1 billion.
According to Matthew Crabbe, director of Mintel's Asia Pacific Research Department, "more and more consumers begin to reject artificial ingredients and pursue natural ingredients. This healthy trend is strong in Asian. And China is usually faster in accepting new trends than other Asian countries. Regarding health maintenance, Asian people focus more on prevention rather than treatment. Tea fits perfectly with the health care perspective, which leads to rapid growth of the drink.
Instant tea focuses on function and heath
According to a report by Euromonitor International, China tea market begins to focus more on “additional function”. “Indigenization”, “traditional Chinese medicine” and “health” has become the key words. More and more manufacturers try to add other herbal ingredients (such as ginseng, liquorice, and Rhizoma Polygonati) in traditional tea to realize new functions. The newly presented Hengda ginseng tea and Huiyuan licorice drink belong to such trials. Although the products are still in testing phase, they enrich options for the consumers. 58% of consuners hope to try instant teas with more have health benefits.
In constant pursuit of healthy lifestyle, consumers care more about the proportion of sugar in food and drinks. So major beverage brands are reducing sugar content or looking for suitable sugar alternatives. Consumers like sweet taste, but do not need more sugar or calories. For example, two instant teas of Nestea brand use a new sugar substitute which reduces sugar content by 40% without affecting sweetness. “For the millennials and other adult consumers, instant tea has a very big attraction. Fresh, light, natural, healthy, inheritance and origin, low calorie… these are very important selling points for consumers”, said Richard Hall, chairman of Zenith.