Tea in Hong Kong, China

PROSPECTS

Fruit/herbal tea benefits from health claims and new launches

Fruit/herbal tea witnessed the most dynamic growth in current value terms in 2018 with new products and flavour variations helping to stimulate interest. Furthermore, health and wellness is an important trend in Hong Kong and so products promoting benefits such as boosting immunity are proving popular.

Instant tea struggles from unhealthy image

Instant tea was first created to mimic the milk tea that is well-known in Hong Kong’s Cha Chaan Tang (tea restaurant) culture. The traditional ratio of evaporated milk to tea is important to consumers of this beverage and hence local producers such as Kampery Development Ltd have a stronger presence in instant tea than in some other areas of tea.

Consumers look for taste of loose tea but convenience of tea bags

Consumers in Hong Kong typically prefer to consume whole-leaf tea which they perceive to have a better taste, with tea bags generally containing finely broken tea leaves which are seen as being of a lower quality. For consumers with more leisure time the preference is still to consume high-quality loose black tea, which is often used to make the local milk tea.

COMPETITIVE LANDSCAPE

International brands prove popular with younger consumers

Traditional tea drinking in Hong Kong is based on Chinese tea, with tea shops and tea tasting workshops still seen. However, it has been international products and varieties that have been capturing the attention of a younger generation of consumers, with Darjeeling and Earl Grey growing in popularity for example.

Pukka on the rise with healthy range

UK company Pukka Herbs Ltd only entered Hong Kong early in the review period with its eponymous range of fruit/herbal tea, but it has seen dynamic growth since then. This culminated in the company being purchased by Unilever Group in 2017.

Local player Luk Yu sees strong performance but Unilever retains lead

Local player Multipak Ltd saw the largest increase in value share in 2018 with its widely popular Luk Yu tea. Luk Yu is also a famous traditional tea house and restaurant that is located in central Hong Kong, with it having a strong following of local consumers.

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