The consumption frequency of large-sized prepackaged beverages among Chinese consumers has witnessed a surge this year. According to the feedback from offline convenience store owners across various city tiers, sales of these beverages experienced evident growth during this summer compared to previous years.[1] Nielsen's data also revealed a consistent upward trend in the growth rate of large-sized prepackaged tea products over the past two years. Notably, the growth rate of 800-1,000ml prepackaged tea products has surpassed that of the entire category, indicating its significant popularity among consumers.[2]
To meet the increasing demand, beverage brands have proactively launched a range of prepackaged products with large sizes. For instance, Nongfu Spring’s tea brand, Oriental Leaf, introduced two flavours of sugar-free prepackaged tea with a new size option of 900ml. Suntory, a Japanese alcohol and beverage brand, rolled out a 1.25L zero-sugar prepackaged oolong tea product. Eastroc Beverage, a Chinese energy drink giant, launched a prepackaged electrolyte drink of 1L.
However, in the past, small-sized products were more welcome on the market primarily due to China’s significant population of individuals living alone. In 2020, the number of single-person households in China reached 125 million, accounting for 25.4% of the total households nationwide.[3] For those who live alone, small-sized beverages like 300ml options, are more suitable for them. Additionally, some consumers are attracted to purchasing prepackaged beverages in small sizes, especially mini ones, because of their loveliness and convenience to carry.
Whereas, despite the large number of people living alone in China, this year has seen an increased frequency of consumers purchasing large-sized prepackaged beverages, which can be attributed to two main factors. Firstly, the lower prices of large-sized products played an essential role. According to Deloitte’s 2023 Chinese Consumer Insight and Market Outlook White Paper, the rising economic pressure and uncertainties in life since the COVID-19 prompt consumers to become more realistic and rational in purchasing choices. When making decisions, product’s cost-effectiveness is one of their priority concerns. [4] For instance, Oriental Leaf's 900ml sugar-free prepackaged tea product is currently priced at CNY 6, while the 500ml product is approximately CNY 4.3. Master Kong's 1L iced tea is priced at approximately CNY 4.58, compared to CNY 2.66 for the 500ml option.
Secondly, consumers’ fondness for sugar-free tea products also promote the rising frequency of purchasing large-sized prepackaged beverages. In recent years, on account of consumers growing health awareness, sugar-free tea products with clean ingredient lists and zero sugar content are welcomed in the Chinese market. This category has consistently exhibited a high growth rate since 2017, reaching a value of CNY 7.38 billion in 2022, with a compound annual growth rate (CAGR) of 28.6% from 2017 to 2021.[5] Besides, the zero-sugar characteristics of this product type also enable consumers to enjoy their drinks with little health concern or guilt. Therefore, health-conscious consumers are willing to drink sugar-free tea products in large quantities and at a high frequency, particularly during the summer. In this regard, large-sized products with lower prices offer a more cost-effective and convenient option. (For more information about China’s sugar-free tea market on ChemLinked.)
ChemLinked Insights
All in all, the roll-out of large-sized products is brands’ reform to cater for consumers’ shifting demands. However, despite the positive reception from consumers, some distributors are not enthusiastic about selling these products. This is because large-sized ones generate less profits on account of their lower unit prices compared to smaller-sized products. Currently, it is uncertain whether large packages will continue to be a future trend in the beverage industry. But industry insiders generally speculate that large-sized prepackaged products could potentially become the new driving force in China's sugar-free tea market. The consumer preference for this product type is likely to attract more sugar-free tea brands to strategically invest in this category. With brands’ further investment and initiatives, the sugar-free tea market may present new growth opportunities.
