Tea is trending but novel innovation needed to entice younger consumers – Unilever, Asahi, YATE insights

28-Mar-2023 - Last updated on 28-Mar-2023 at 03:57 GMT

Tea-based beverages are emerging as a growing trend in APAC, but manufacturers need to integrate novelty and excitement into their beverage innovation. ©Getty Images

Related tags Tea Innovation

Tea-based beverages are emerging as a growing trend in APAC, but manufacturers need to integrate novelty and excitement into their beverage innovation in order to attract and maintain the attention of younger consumers.

Brewed tea as a hot beverage has been a popular and traditional drink for many years in many parts of the world, including in many East Asian markets like China and Middle Eastern ones like Turkey, and continues to gain traction with consumers in many APAC markets.

Many brands are focusing a good deal of effort on innovating within the tea category in recognition of this varying from refreshing to functional options, including big brand names such as Unilever.

“Our Red Label brand has launched a new premium tea, especially designed for pregnant and lactating women,” Hindustani Unilever Ltd (HUL) CEO Sanjay Mehta said when discussing the firm’s innovation strategy.

“It has 80% less caffeine content and its ayurvedic ingredients not only ensure a great taste, but also known to provide nourishment and energy.

“Tea is an important category for us as [although] we have seen commodity cost increases in many categories over the past year and had to take sequential price increases as a result, tea is [one of the] few categories where we have seen improvements on the commodity prices coming down and thus passed on the benefits by reducing our prices.

“Based on this, tea has continued its value and volume market leadership for us and seen continued growth for the business.”

Another brand that is seeing tea as an important business driver is Japanese beverage giant Asahi.

“We believe that in Japan, sales volumes of our non-alcoholic beverages will grow by 3.6% in 2023 with tea as one of the main drivers,” Asahi stated in its recent FY2022 financial results announcement.

“This will [help to overcome] a projected decrease in coffee and fruit juice sales, and will be driven by the renewal of core brands and innovation of new products.

“One such new product is our upcoming new green tea brand Sou, which is scheduled for launch on April 4 2023 – the plan is to sell five million cases of Sou in 2023.”

Convenience and novelty

Sou will be sold in bottled RTD format, a necessary format in the post-COVID-19 era today many consumers are on the lookout for more convenient options yet still crave the taste of tea.

In addition to Asahi, many other big brands have already entered the market with RTD tea products, from Coca-Cola’s Ayataka to Dilmah’s Ice Teas range to Pokka’s bottled teas range - but younger consumers today are looking for products that go a step further and also satisfy their search for novelty and uniqueness.

“Tea-based products are definitely trending globally with a lot of new teas coming up, whether it's fermented teas like kombucha or rooibos teas from South Africa,” yerba mate energy tea brand YATE Co-Founder and CEO Eric Hoang told Food-Navigator-Asia.

“There's also a strong growing popularity for traditional Chinese teams like pu-erh and oolong as well, and the overall tea category is very exciting, but a lot of the tea is presented as being very serious and not very fun.

“In today’s market, it is crucial to provide that novelty and innovation and infuse the fun element into innovation, especially if the aim is to connect with and attract younger consumers whether these be millennials or Gen Zs.

“They not only want something that tastes good but is also unique and functional and convenient and can be [shown off] on social media – and tea beverages can also be that choice [with] the right innovation.”