CHINA WILL BE A SLAM DUNK MARKET FOR ROCKY MOUNTAIN HIGH BEVERAGES AND EAGLE SPIRIT WATER.
Beverage Market in China – What will the Chinese Drink next year?
The size of the Chinese beverage market has led multinationals to consider China as an essential market in their strategies. Profits and rewards in the beverage industry are very high. Currently, the revenue rate is over 30% despite the high segmentation and competition in the Chinese market. The beverage market in China is expected to become the biggest worldwide this year according to the Jihong He, Chairman of the Association for China Food Circulation. In China, the consumption level of soft drinks is one of the lowest in the world and tap water isn’t potable. The potential growth of the beverage industry in China is, as a result, amongst the highest worldwide. As an example, in 2012 the beverage consumption per person was 96 litters in China, compared to 263 litters in the US; meaning that the US drank 2,74 times more beverage than China. Since 1979, the beverage industry has been through three district periods, each marked by the introduction of new beverage products. Carbonated beverages were the first to be introduced in China, such as Coca-Cola & Pepsi. Then bottles of water emerged with the rise of large groups like Wahaha, Tobust, and Nongfushangquan. Since 2001, Master Kong tea and fruit juices have become the trend but more than 14 years have gone and the Chinese are searching for new beverages. What beverage will be the next successful phenomenon?
Choosing the healthiest Beverage Market in China
The average growth rate of the production of beverages in China is about 13%, but the growth of each category varies a lot according to the product: water, carbonated drinks, fruit juice, milk, tea and many others.
The beverage market in ChinaWater
Water is the largest segment of the beverage industry in China. The packaging design and size is playing an important role in the consumer’s choice however after recent food scandals, the health and security criteria has become the priority for the Chinese. Nongfu Spring and Master Kong share 65% of the mineral water market that is growing at a rate of 16,1%. Currently, the trend is favoring high-end mineral water that is expected to reach a growth rate of 40% this year. This market will be essentially supplied by Baisuishan, Kunlun Shan and the French premium water: Evian. In 2013, the volume of bottled drinking water was estimated at 55 million tons.
Carbonated beverage
In comparison, the quantity of carbonated drink reached a consumption 13 million tons in 2012, those beverages represent 20% of the quantity of water drank in China. Carbonated beverages growth is quite slow in comparison and brought the market share from 36% in 2000 down to 25% in 2014. The young generation trends to stay away from carbonated drinks for health concerns. This drop seems to be unstoppable since it is persisting despite large investments in emotional marketing from Coca-Cola and Pepsi.
Fruit juice
Green products in China have become the trend in China. Consumers are valuing healthy and environmentally friendly products. The high-quality fruit juices are benefiting from this trend and will be raising the market up to 26 billion dollars this year suggesting an increase of over 16% compared to the previous year, equivalent to the mineral water market.
Milk
The growth rate of milk and protein beverages has increased a lot more than all other types of products, with consumption increasing by 23.46%, producing a revenue estimated at $14.5 billion. This market is lead by Wahaha with its successful “Nutrient Express” product valuing the health benefits of its consumption. Six Nuts, Lulu, Island of Coconuts and Yinlu are the main players in the protein beverage market. Those products’ popularity relies mainly on strong marketing strategies such as Huiyuan’s “Loving small time”. This higher growth is explained by the established trend of parents selecting milk beverages for their children to encourage healthy development.
Tea and coffee
More than 10.000 brands of tea are on the market in China, but Master Kong and Uni-President both hold 40% of the tea beverage market. Even further segmentation is expected in the coming years as brands are struggling to acquire new loyal consumers.
The Next Beverage in China
The current beverage market in China, the segmentation, and the Chinese preferences illustrate clearly that certain trends will be benefiting a new kind of beverage in China. The beverage market in China will be affected by changes in products characteristics, distribution, and marketing. Health function will be essential to a rise in the Chinese market. Products with a light flavor, light color, and simple packaging will attract more consumers as they give the allusion to customers that there are very few additives and low sugar. This kind of product is associated with healthy drinks. Small & special beverages have an opportunity as well, and will, as a result, get more attention as they are produced locally, favoring trust and reliability. The coarse grain beverage is also expected to boom in the coming years as the Chinese discover its healthy functionalities. In addition to those products, vitamin functional, nutrient and energy drinks such as Red Bull are about to become very successful in China. Imported foods are developing very fast in China as those are high end and quality products for the Chinese. As the number of rich Chinese and upper middle class is rising, the demand for better and international products is expanding through online sales. Online sales are getting more popular than ever since it is reaching previously inaccessible region of China. In the coming years, beverage consumers will be demanding more online availability but also customization possibilities.
Sources:
Internal Daxue Consulting market research: Beverage Industry in China 2015
Beverage Market in China – What will the Chinese Drink next year?
The size of the Chinese beverage market has led multinationals to consider China as an essential market in their strategies. Profits and rewards in the beverage industry are very high. Currently, the revenue rate is over 30% despite the high segmentation and competition in the Chinese market. The beverage market in China is expected to become the biggest worldwide this year according to the Jihong He, Chairman of the Association for China Food Circulation. In China, the consumption level of soft drinks is one of the lowest in the world and tap water isn’t potable. The potential growth of the beverage industry in China is, as a result, amongst the highest worldwide. As an example, in 2012 the beverage consumption per person was 96 litters in China, compared to 263 litters in the US; meaning that the US drank 2,74 times more beverage than China. Since 1979, the beverage industry has been through three district periods, each marked by the introduction of new beverage products. Carbonated beverages were the first to be introduced in China, such as Coca-Cola & Pepsi. Then bottles of water emerged with the rise of large groups like Wahaha, Tobust, and Nongfushangquan. Since 2001, Master Kong tea and fruit juices have become the trend but more than 14 years have gone and the Chinese are searching for new beverages. What beverage will be the next successful phenomenon?
Choosing the healthiest Beverage Market in China
The average growth rate of the production of beverages in China is about 13%, but the growth of each category varies a lot according to the product: water, carbonated drinks, fruit juice, milk, tea and many others.
The beverage market in ChinaWater
Water is the largest segment of the beverage industry in China. The packaging design and size is playing an important role in the consumer’s choice however after recent food scandals, the health and security criteria has become the priority for the Chinese. Nongfu Spring and Master Kong share 65% of the mineral water market that is growing at a rate of 16,1%. Currently, the trend is favoring high-end mineral water that is expected to reach a growth rate of 40% this year. This market will be essentially supplied by Baisuishan, Kunlun Shan and the French premium water: Evian. In 2013, the volume of bottled drinking water was estimated at 55 million tons.
Carbonated beverage
In comparison, the quantity of carbonated drink reached a consumption 13 million tons in 2012, those beverages represent 20% of the quantity of water drank in China. Carbonated beverages growth is quite slow in comparison and brought the market share from 36% in 2000 down to 25% in 2014. The young generation trends to stay away from carbonated drinks for health concerns. This drop seems to be unstoppable since it is persisting despite large investments in emotional marketing from Coca-Cola and Pepsi.
Fruit juice
Green products in China have become the trend in China. Consumers are valuing healthy and environmentally friendly products. The high-quality fruit juices are benefiting from this trend and will be raising the market up to 26 billion dollars this year suggesting an increase of over 16% compared to the previous year, equivalent to the mineral water market.
Milk
The growth rate of milk and protein beverages has increased a lot more than all other types of products, with consumption increasing by 23.46%, producing a revenue estimated at $14.5 billion. This market is lead by Wahaha with its successful “Nutrient Express” product valuing the health benefits of its consumption. Six Nuts, Lulu, Island of Coconuts and Yinlu are the main players in the protein beverage market. Those products’ popularity relies mainly on strong marketing strategies such as Huiyuan’s “Loving small time”. This higher growth is explained by the established trend of parents selecting milk beverages for their children to encourage healthy development.
Tea and coffee
More than 10.000 brands of tea are on the market in China, but Master Kong and Uni-President both hold 40% of the tea beverage market. Even further segmentation is expected in the coming years as brands are struggling to acquire new loyal consumers.
The Next Beverage in China
The current beverage market in China, the segmentation, and the Chinese preferences illustrate clearly that certain trends will be benefiting a new kind of beverage in China. The beverage market in China will be affected by changes in products characteristics, distribution, and marketing. Health function will be essential to a rise in the Chinese market. Products with a light flavor, light color, and simple packaging will attract more consumers as they give the allusion to customers that there are very few additives and low sugar. This kind of product is associated with healthy drinks. Small & special beverages have an opportunity as well, and will, as a result, get more attention as they are produced locally, favoring trust and reliability. The coarse grain beverage is also expected to boom in the coming years as the Chinese discover its healthy functionalities. In addition to those products, vitamin functional, nutrient and energy drinks such as Red Bull are about to become very successful in China. Imported foods are developing very fast in China as those are high end and quality products for the Chinese. As the number of rich Chinese and upper middle class is rising, the demand for better and international products is expanding through online sales. Online sales are getting more popular than ever since it is reaching previously inaccessible region of China. In the coming years, beverage consumers will be demanding more online availability but also customization possibilities.
Sources:
Internal Daxue Consulting market research: Beverage Industry in China 2015
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