With August's arrival, summer is halfway through.
The surge in popularity of unsweetened ready-to-drink (RTD) Tea has led to a rapid increase in market supply. At the back end, Brand products; at the mid-end, distribution and marketing; and at the front end, retail displays – all are working at full capacity to provide the market with unsweetened teas, hoping to gain a share of the growth.
Image Source: Weibo @Suntory Beverages, Guozi Shule (Unsweetened Tea), Dongfang Shuye (Oriental Leaf Tea)
However, the market composed of consumers, both physical space defined by geography and business types and virtual space shaped by consumer willingness, cannot grow indefinitely. At this point, most players have played their cards and are beginning to experience diminishing marginal returns or even outright failure.
This week, we will continue our specialized research on unsweetened RTD tea categories. This week's focus will be on overall trends, price analysis, and in-depth studies of typical “star products.”
The data used in this article is sourced from CT Brand by MaxWin. CT Brand by MaxWin covers cities of all levels above the county level across China, with business formats including hypermarkets, supermarkets, small supermarkets, convenience stores, and grocery stores. MaxWin uses AI and big data technology to automatically clean the full POS transaction data from sample stores in real-time. Currently, CT Brand by MaxWin covers over 300,000 brands, more than 14 million product barcodes, and over 5 billion orders per year.
This study of unsweetened RTD tea focuses specifically on “pure tea” products. Therefore, fruit tea products (including Sugar-free lemon tea), herbal teas, and other types like Job's tears water and mung bean water were excluded from the product samples. This exclusion is particularly noted here.
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Overview of the Unsweetened Tea Category: Still Hot, but Growth Slows Down
Firstly, based on the data from CT Brand by MaxWin, let's look at the growth situation and composition of players in the unsweetened RTD tea category in June-July 2024.
1. Overall Category: Continued Growth, but Slower Increase
Image Source: WeChat Official Account @MaxWin Intelligence Station
In June-July 2024, the sales of the unsweetened RTD tea category maintained a growth rate of over 10% compared to June-July 2023. Both sales volume and number of units sold showed double-digit year-over-year growth, with sales value growing slightly faster than unit sales. This suggests an increase in the proportion of larger-sized products. The share of unsweetened RTD tea in the beverage market Rose to 5.24%, an increase of over 18% year-over-year.
In addition to year-over-year comparison, we also looked at the month-over-month changes from April-May 2024. With the increasing heat, sales volume and units sold both increased by over 30%. Unlike the year-over-year scenario where sales value grew more than units sold, in the month-over-month comparison, unit sales grew slightly more than sales value. This suggests that intensified promotions led to higher unit sales compared to the previous period. Compared to April-May, the share of unsweetened RTD tea in the beverage category continued to expand, growing by 7.61% month-over-month, further increasing the importance of the category.
Looking back at the review of April-May 2024, we found that in June-July 2024, there were signs of slowing growth in both the year-over-year sales growth rate and the year-over-year growth rate of the share in the beverage market. This might be one reason why the category began to engage in price wars and volume-for-price strategies.
2. Top Group Share: Slight Increase in Concentration, Intensified Competition for Third Place and Below
Under the backdrop of double-digit overall growth in the category, let's further examine the share of the top group.
In terms of ranking, compared to April-May, Kweichow Moutai entered the top three, while Guozi Shule dropped to fourth place. Uni-President moved up to fifth, while Yuanqi Forest dropped one spot to sixth. Yili entered the top ten with its innovative product, Yike Huoquan, while Dae Il Do slipped out of the CR13 list.
Distribution of shares among the CR13:
Nongfu Spring + Suntory, combined group market share exceeds 78%, an increase of about +3% month-over-month;
The above two plus Kweichow Moutai Holdings and Guozi Shule, combined group market share exceeds 86%, an increase of about +1% month-over-month;
The above four plus Uni-President and Yuanqi Forest, combined group market share exceeds 91%, an increase of about +1% month-over-month;
The above six plus Chaxiaokai and Coca-Cola, combined group market share exceeds 94%, a decrease of about -1% month-over-month;
In June-July 2024, the combined market share of the CR13 group was 98.12%, an increase of +0.47% month-over-month;
From the changes in ranking and distribution month-over-month, it can be seen that market share continues to converge towards the leading group. For groups after the leading group, the pressure to maintain and grow their share may further intensify, and the degree of competition within the entire category will also increase.
3. New Product Situation: Who Is Still Entering the Market?
From 2023 to 2024, new unsweetened tea products emerged continuously, but during the peak season for beverages from April to July this year, we observed a rapid decline in the number of new entrants.
In terms of quantity, the number of new products launched in the category from April to July 2024 basically showed an exponential decline. In July 2024, only three new products were introduced into the category.
Although the end of July means that half of this year's peak season has passed, and typically fewer new products are launched during the peak season, this number is still lower than some other beverage categories. This might suggest that both participating and non-participating groups are not optimistic about future growth and the survival of new products in this category.
In terms of the groups launching new products, they can be broadly divided into two categories: large factories are busy introducing new flavors and sizes to better respond to market demands; smaller factories are seizing the last opportunity to enter the category, quickly launching products to carve out a piece of the market in regions and channels where they excel. Taking Kweichow Moutai, Suntory, and Jinmai Lang as examples:
Suntory, building on the success of its 1250ml bottle, launched 900ml series products from May to July, further segmenting the market by size;
Kweichow Moutai launched its new unsweetened tea product line, Chade Chuanren (