The living standards are changing every now and then which is significantly influencing the consumers’ buying behavior, driving them towards the consumption of green tea and other variants that resonate with their personal and lifestyle choices. The China hot drinks sector is expected to grow from C¥204.4bn (US$30bn) in 2019 to C¥326.7bn (US$48.6bn) in 2024, recording a compound annual growth rate (CAGR) of 9.8%, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘China Hot Drinks – Market Assessment and Forecasts to 2024’, reveals that the sector growth is primarily driven by hot tea category, which is projected to register the fastest value CAGR of 10.2%, during 2019–2024. The category will be closely followed by hot coffee and other hot drinks categories, which are forecast to record CAGRs of 8.4% and 7.2%, respectively, during the same period.

Anchal Bisht, Consumer Analyst at GlobalData, says: “The growing exposure to non-traditional tea varieties are driving the demand for a range of premium teas originating from different parts of the world, thus fueling the sector growth.”

The report further reveals that ‘hot tea’ category accounted for the highest volume sales of 1,345.8 million kg in 2019. However, the hot coffee category is forecast to register the fastest volume growth at a CAGR of 11.5% during 2019–2024.

The per capita expenditure (PCE) on hot drinks in China stood at US$21.4 in 2019, which was comparatively higher than the Asia-Pacific (APAC) level of US$19.8 but was lower than the global level which stood at US$30.1 in the same year.

Convenience store was the most popular channel for the distribution of hot drinks in China, followed by hypermarkets and supermarkets. These two leading channels accounted for a combined value share of 68% in 2019, while on-trade transactions held 24.3% share in the same year.

Nestle SA, China Tea Co. Ltd and Zhejiang Xiangpiaopiao Co. Ltd were the top three market players in the China hot drinks sector. Private labels accounted for a significant presence in the sector and held a value share of 17.2% in the same year.

Ms Bisht concludes: “With rising health concerns among the Chinese consumers, there is an upsurge in demand for healthy alternatives in beverages. With the burgeoning middle class placing healthy lifestyle as their major priority, abundant opportunities lie ahead for health-targeted hot drinks in the country.”