'New Style Tea' Trending in Bubble Tea Lands

By Dan Bolton

Healthier tea options threaten Asia’s bubble tea dominance as young tea drinkers transition to xiandai cha (modern tea).

Modern tea brands, sold in new style tea (xinxing cha) shops, and backed by financial giants including Alibaba, are gaining market share in a segment that earned nearly $15 billion (RMB100 billion) last year. The artificially colored, caffeinated, and syrup-sweetened black tea is mixed with milk and tapioca pearls with a chewy texture.

The drink, which originated in Taichung in the 1980s, was blended in a martini shaker as one of the early examples of iced teas, similar to Thai tea. The tea is heavily promoted by chains that include Yi Dian Dian (a Taiwan-based retailer with 600 locations) and Coco Fresh (a 20-year-old venture with 2,000 locations). Bubble tea is available at some 450,000 locations in China, according to market research company Daxue Consulting.

In 2017 HeyTea (formerly Royal Tea) capitalized on the bubble trend but differentiated its menu by including a broader range of flavorful but less sweet iced tea. HeyTea's fruit and juice blends are topped with fresh whipped cream cheese from New Zealand and a sprinkle of sea salt, a style trending in Western markets (including New York, San Francisco, London, and Los Angeles). Daxue's researchers cited several non-fruit flavors, including avocado, ginger, mango green tea, taro or mocha that are very often available and toppings such as tropical fruits, lychee, coco cubes, aloe jelly, coffee jelly, coconut jelly, pudding or chia seeds.

The company recently received $75 million (RMB500 million) in second-round funding from investors.

Nayuki, a Shenzhen-based cheese tea and bakery chain with 400 locations in China and three in Singapore, recently released a Chinese-language white paper on consumer trends researched by 36Kr, a publicly-traded database and market research venture that tracks and advises startups.

“Monthly consumption of new-style tea drink reached a new high in 2019,” according to 36Kr. Consumer surveys reveal “that 83% of drinkers purchase 5-14 cups of freshly brewed tea every month, and 72% of customers spent RMB200 ($29) on their monthly tea fix,” according to the36Kr’s 2019 New-Style Tea Drinks Consumption report.

Women are the core patrons across all age groups, accounting for more than 70% of purchases, followed by post-90s males (ages 21-30). Customers prefer cold-brewed tea served with fruit, topped with cheese, and sold with a soft “euro-bake” pastry.

At Nayuki, fruit teas are the most popular drink, ordered by 83% of customers, followed by milk tea (65%). A consumer survey from November 2019 to January 2020 for the first time showed sales of non-sweetened products outselling calorie-rich cheese tea. Cheese is the preferred topping of 75.4% of customers.

High-sugar beverages average 7.5 grams per 100 grams by weight, according to 36Kr. Nayuki sells drinks that average 5.9 grams per 100 grams along with six sugar-free teas.

The data suggest that innovative tea brands across China are changing perceptions about a drink traditionally consumed by older generations, observes co-founder Peng Xin.


Credit. STiR coffee and tea magazine, Volume 9, Number 1 

Posted on: 21.04.2020


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