Healthy drinks turn into new battleground in China
By Zhang Shixuan
Zero sugar, zero calories, zero fat... People are seeing these labels more often on the beverage bottles and cans in the supermarkets, aimed directly at China's increasingly health-conscious shoppers.
Research firm Kantar Worldpanel China reports the beverage sector has marched into the sugar-free era, with sales of low-sugar and sugar-free drinks up 13 percent last year, while in the overall beverage sector, sales grew less than 1 percent.
Sugar-free drinks are not new to the market. In 2011, Nongfu Spring became one of China's first beverage producers to release a sugar-free tea drink. But it is only recently that the competition in the healthy drinks market has become so tough.
And big beverage brands are jumping on that bandwagon by bringing out more drinks with a focus on healthy content.
Guangzhou-based milk tea chain Hey Tea, Inner Mongolian milk drink producer Yili, as well as beverage brands Uni-President and Jianlibao, all launched new sugar-free drinks this year. Established in 2016, Genki Forest's healthy drinks now have a presence in more than 53,000 convenience stores nationwide.
"A lot of the new emerging brands are trying out bubbling energy drinks or sports drinks. That is a small market compared to other bigger sub-categories in China," said Xu Wenxin, senior research analyst of food & drinks at Mintel.
The supermarket chain in Shanghai sells around 1,000 bottles of drinks with healthy features like low sugar or fats. That's twice or even three times the amount they were selling at this time last year.
"We now sell 20 branded drinks, and ten percent of them are healthy drinks, like seltzer water, carbonated water, or juice. And the figure is still rising. More products now emphasize health, and some have added minerals, protein, or fiber. Some have lower sugar," said Jimmy Zhang, head of the retail food business of Shanghai Market at City Super Group.
Xu also says that more than 50 percent of consumers surveyed say they prefer lower sugar or sugar-free drinks, especially in categories like sparkling drinks or tea drinks. And Xu considers that adding more functionality and bubbling texture, as well as the low sugar or sugar-free elements to the bottle, "will definitely help more consumers to get attracted to this category."
Consumers in overseas markets are also showing a strong interest in Chinese beverages with less sugar, fat, or calories.
Alibaba's e-commerce provider Tmall shows during the past three months, sales of Beijing-based Genki Forest waters on its overseas platform have jumped nearly 70 percent compared to the same period last year.