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RTD Tea in Asia Pacific

June 2019

Asia Pacific dominates the RTD tea market, accounting for three quarters of global off-trade volume sales. With the leading Chinese and Japanese markets reaching maturity, growth is seeing a shift from pure volume to premium and healthier RTD tea beverages. Moving forward, a desire among millennials for quality and experience will see off-trade RTD tea sales facing competition from foodservice outlets like bubble tea shops.

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Key Findings

Asia Pacific dominates global sales of RTD tea

Three quarters of RTD tea globally is sold in Asia Pacific, with East Asia being a massive market. China is the largest RTD market globally, while Japan, Hong Kong and Taiwan have the highest per capita RTD tea consumption. With volume consumption in the mature East Asia region slowing, growth has increasingly come from other regions, such as Southeast Asia, notably Vietnam and Indonesia.

Renewed interest from millennials provides both opportunities and challenges

The rise of millennials has provided growth opportunities in South Korea, where manufacturers regularly develop novel tastes and flavours which might appeal to the desire for sophistication among this group. On the other hand, China’s off-trade RTD volume sales face a challenge from millennials with rising disposable incomes, who are increasingly turning to foodservice outlets to fulfil their craving for premium quality beverages and a consumption “experience”.

Differing RTD tea health perceptions lead to contrasting outcomes

Differing consumer attitudes and health perceptions account for the contrasting RTD tea performances across the region. In Japan, predominantly unsweetened RTD tea continues to see stable growth, as health-conscious consumers value its health benefits. On the other hand, consumers in Vietnam and Singapore perceive RTD tea to be sugary and thus unhealthy. This has led to reduced growth in Vietnam and a decline in Singapore, as consumers have switched to non-sweetened beverages, like bottled water.

Sugar tax in the Southeast Asian region will have a bearing on future performance

The implementation of a sugar tax in Southeast Asian countries like Thailand has resulted in price rises, which have impacted volume sales. With Malaysia expected to implement a sugar tax in mid-2019 and more countries, like Singapore and Vietnam, considering doing so, government regulations could have a bearing on the future consumption of RTD in Southeast Asia.

Introduction

Scope
Key findings

Regional Overview

Asia Pacific dominates globally in terms of volume consumption
East Asia enjoys the highest per capita consumption
Fluctuations in China skew overall growth
Healthy living trend boosts growth in Japan
Indonesia and Vietnam drive growth in Southeast Asia
Japan tops volume growth despite slow historic CAGR
Carbonated RTD tea has a negligible impact on overall RTD tea
China’s decline offset by Japan and Southeast Asia
Supermarkets and independent small grocers remain the key channels
Supermarkets’ share increases in developing markets

Leading Companies and Brands

Market fragmentation differs across Asia Pacific
Taiwanese players head the pack due to sales in China
Leading companies have major interests in China and Japan markets
Large Chinese market determines the leading brands

Forecast Projections

Healthy living trend will drive growth in Asia Pacific
Rise of Japan and South Korea will more than offset decline in China
Off-trade RTD tea faces competition from foodservice channels
Southeast Asia: volume growth to be driven by Vietnam and Indonesia
Differing growth forecasts across Southeast Asian markets

Country Snapshots

China: market context
China: competitive and retail landscape
Japan: market context
Japan: competitive and retail landscape
Indonesia: market context
Indonesia: competitive and retail landscape
Vietnam: market context
Vietnam: competitive and retail landscape
Taiwan: market context
Taiwan: competitive and retail landscape
Thailand: market context
Thailand: competitive and retail landscape
Philippines: market context
Philippines: competitive and retail landscape
Hong Kong, China: market context
Hong Kong, China: competitive and retail landscape
South Korea: market context
South Korea: competitive and retail landscape
Uzbekistan: market context
Uzbekistan: competitive and retail landscape
Kazakhstan: market context
Kazakhstan: competitive and retail landscape
Malaysia: market context
Malaysia: competitive and retail landscape
Singapore: market context
Singapore: competitive and retail landscape
India: market context
India: competitive and retail landscape
Azerbaijan: market context
Azerbaijan: competitive and retail landscape
Pakistan: market context
Pakistan: competitive and retail landscape
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