ABOUT THIS REPORT
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.
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.