RTD Tea in Japan

2020 IMPACT

Sales suffer as consumers remain at home

Still RTD tea accounts for most sales within the category, with these products being popular option among busy commuters, students and other consumers looking for a convenient on-the-go drinks option. As such, COVID-19 has dealt a heavy blow to sales in 2020 with consumers spending more time at home and thereby reducing the number of consumption occasions.

Postponement of Tokyo Olympics and Paralympics disrupts new product launches

Japan was due to host the Tokyo Olympics and Paralympics in 2020, but due to the outbreak of COVID-19 the games were postponed until 2021. Nonetheless, before this decision was taken several players within RTD tea had been developing products and marketing tied to the games.

Mugicha RTD tea falls out of favour as COVID-19 limits consumption occasions

Mugicha (barley tea) was a growing trend in Japan prior to the outbreak of COVID-19. With its rich mineral content, mugicha is widely enjoyed especially during the summer months at school and at sports events with it seen as a good way to rehydrate.

RECOVERY AND OPPORTUNITIES

FFC products appearing the market as consumers look for health benefits

Even prior to the outbreak of COVID-19 tea had a healthy image in Japan, with this being one of the drivers behind the growth of RTD tea during the review period. In the wake of COVID-19 there is an even stronger focus on health and wellness, with consumers expected to look for products with specific health claims.

Companies may look for new consumption occasions to stimulate demand

The challenges posed by COVID-19 could result in players refocusing their strategies to reposition RTD tea as a drink for other occasions aside from for consumption when on the move. For example, a consumption occasion with potential for development is mealtimes.

Wide product variety expected to help maintain popularity of RTD tea

In 2019, there was a boom in tapioca milk tea in foodservice which had a positive impact on demand for RTD black tea with several players launching new products in response to this trend. Although the market is relatively small compared to other RTD tea categories such as green tea and mugicha, demand was less impacted by COVID-19 and RTD black tea is projected to continue seeing steady growth in 2021 and beyond.