The Sugar-free Tea Beverage Market Is Booming, Could It Become A Future Trend?

As the temperature gradually rises, the peak season of the beverage industry has quietly arrived. Sugar-free tea drinks have become a trend, attracting various beverage brands to compete for layout.

Recently, reporters from the Securities Daily visited many supermarkets and convenience stores in Beijing and saw that sugar-free tea drinks have been placed in the center of the shelves. A supermarket staff member told reporters that there are many new types of sugar-free tea drinks recently, and sales have increased compared with the past.

With consumers' continuous pursuit of health, sugar-free tea drinks have become the hottest category in the beverage track, and have attracted tea brands to accelerate the launch of new products. It is understood that many beverage companies including Yuanqi Forest, Nongfu Spring, Dongpeng Special Drink, Master Kong, Uni-President, Wahaha, etc. have launched new sugar-free beverages. Emerging brands such as Youcongqi, Guozishuole, Rangcha, and Cha Xiaokai have also emerged.

The broad prospects of sugar-free tea drinks have also attracted many players to cross the track to enter the game and want to get a piece of the pie. Among them, the tea brand Bama Tea Industry has entered the track and launched two "Bama Pure Teas" of tangerine peel white tea and oolong tea. Dayao Beverage, which started out as a soda brand, also announced its entry into the sugar-free tea market this summer, launching three new sugar-free tea products: Jingui Oolong, Bailan Oolong, and Oolong Tea.

Dayao Beverage told the Securities Daily reporter that the layout of this market is to broaden the product line, seek new market growth points, and meet diverse consumer needs.

Why are sugar-free tea drinks so popular? Zhu Danpeng, vice president of the Guangdong Food Safety Assurance Promotion Association, told the Securities Daily reporter that under consumer demands such as health management, nutrition management, weight management, and appearance management, the sugar-free beverage market has been further released.

Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, said in an interview with the Securities Daily reporter that the rapid development of the sugar-free tea market reflects the improvement of consumers' health awareness and the pursuit of a low-sugar lifestyle. The layout of tea brands reflects the huge potential of the sugar-free tea market and the market's recognition of its prospects.

At present, China's sugar-free tea market is not saturated and there is still a lot of room. The "2023 China Sugar-Free Tea Industry White Paper" released by iResearch shows that the compound annual growth rate of the sugar-free tea market is expected to reach 10.9% from 2022 to 2027. In 2025, the scale of the sugar-free tea market will officially exceed the 10 billion yuan mark, reaching 10.21 billion yuan, and will reach 12.4 billion yuan by 2027.

According to Mashangying data, from April to May 2024, the growth momentum of the sugar-free ready-to-drink tea category continued, with overall sales increasing by 14.26% year-on-year. In terms of market share, the market share of sugar-free ready-to-drink tea in the overall beverage category increased by 26.17% year-on-year.

The company is full of confidence in the future development of sugar-free tea. Nongfu Spring believes that the sugar-free tea market is still a blue ocean, which will bring new growth space to the beverage market in the future. The relevant person in charge of Bama Tea also told the reporter of Securities Daily that as people pay more attention to health and quality of life, it will further promote the evolution and iteration of consumer concepts, consumer demand, and consumer fields, making the development prospects of sugar-free tea more and more broad.

Capital is also optimistic about the sugar-free tea beverage market. The tea beverage brand "Youcongqi" has completed an angel round of financing of several million yuan; Guozishule has obtained two rounds of financing, with the investors of the Pre-A round being Tiantu Investment, Weiyi Capital, and Dongfang Venture Capital, and the investors of the A round being Qicheng Capital, Tiantu Investment, Weimu Capital, Sanqi Interactive Entertainment Venture Capital Fund, Weiyi Capital, and Dongfang Venture Capital.

Zhan Junhao said that in the future, the sugar-free tea beverage market has broad development prospects, but it also requires brands to continue to work hard and innovate to stand out in this fiercely competitive market.