---
title: "Oriental Leaf Makes a Comeback, China's Richest Man Rakes It In"
description: "The taste of tea hasn't changed; it's consumers' mindset and palate that have evolved. A beverage distributor told me that Oriental Leaf is the only brand that's truly hot, with people seeking it out rather than the other way around. After researching its history, I concluded that the only long-termism in the world is having money."
author: "IC实验室"
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published: "2023-12-03"
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# Oriental Leaf Makes a Comeback, China's Richest Man Rakes It In

> The taste of tea hasn't changed; it's consumers' mindset and palate that have evolved. A beverage distributor told me that Oriental Leaf is the only brand that's truly hot, with people seeking it out rather than the other way around. After researching its history, I concluded that the only long-termism in the world is having money.

The taste of tea hasn't changed; it's consumers' mindset and palate that have evolved. Not long ago, I happened to meet a beverage distributor and chatted about the food and beverage industry. I mentioned how certain brands were hot and new products were launching, but he immediately said, "What you call hot is just superficial hype, driven by online ads. I can't even sell twenty cases a year." So I asked him what's actually selling well. He said, "The hottest brand right now is Oriental Leaf. Other brands have to chase customers, but for Oriental Leaf, customers come looking for it. Everyone wants to stock it, and it sells itself."

Oriental Leaf's success isn't new; I'd heard about it before. But I didn't expect it to be as hot as he described. So after our chat, I did some research on Oriental Leaf's history. My conclusion: there's only one kind of long-termism in the world, and that's having money.

When Oriental Leaf launched in 2011, China's tea beverage market was still a sugar-water business. The best sellers were from Uni-President and Master Kong—iced black tea and iced green tea, the sweeter the better. As an unsweetened tea, Oriental Leaf was swimming against the tide. Before and after its launch, most unsweetened teas failed in the market. In 2004, Uni-President launched "Tea Master," which got lukewarm reception and even exited the mainland market for a while (it's back now, with wide distribution). In 2010, Coca-Cola launched "Yuanye" to test the unsweetened tea market, but it also flopped. In 2012, Master Kong introduced "Benwei Tea House" unsweetened tea, which has since been discontinued. So, business requires going with the flow; counter-cyclical moves usually end badly.

Among these unsweetened teas, Oriental Leaf was the most criticized, for several reasons. First, it advertised heavily, with large TV campaigns, making it the most high-profile marketer—the nail that sticks out gets hammered. Second, it wasn't just unsweetened; it was quite bitter. It was once dubbed one of the "five worst-tasting drinks" along with Kvass, Hei Song Sarsaparilla, Red Scream, and Laoshan White Flower Snake Grass Water. Online complaints were rampant: "tastes like stale overnight tea," "like eating grass," and one netizen even said, "It looks like urine and tastes like urine." Third, its price wasn't cheap. At launch, it retailed around 3.5 yuan in most areas, and within a few years, some places raised it to 4.5 yuan—high-end for bottled drinks at the time. Its packaging was also more attractive than competitors, drawing in consumers with high expectations. When they found it wasn't sweet and didn't taste good, it backfired. In short, Oriental Leaf had a rough start, and unsweetened tea had no place in the bottled beverage industry.

So how did this rejected brand become a market darling? According to financial media, it's because young people now prefer unsweetened tea, so Oriental Leaf became popular again. But it's not that simple. Consumer markets need education, and the education for unsweetened tea happened in three steps over ten years.

Step one: getting young people to love tea. Although Xurisheng iced tea created the tea beverage category in 1993, and Master Kong and Uni-President later dominated with iced black tea, most consumers didn't see iced black tea as related to traditional "tea." They bought it as a sweet, lemon-flavored drink to quench thirst in summer. This ties to marketing strategies. Early iced tea brands focused on "ice," not "tea." Their ads typically showed energetic scenes like sports fields or concerts, with celebrity endorsers drinking iced tea and looking refreshed. This was no different from ads for other drinks or even ice cream—all about cooling off. Tea marketing, in contrast, emphasizes origin, aroma, taste, quality, and even tea culture—not the lively style of iced tea. So consumers didn't associate iced tea with real tea; it was more like cola or Sprite. The first brand to break this perception was actually Wanglaoji, but herbal tea and tea are considered different categories, so I won't dwell on that.

So who made young people switch from "sweet water" to "tea"? In my view, it was the new-style tea drinks, like Heytea and Naixue. Some might say milk tea is also sugar water—I go to Mixue or 1点点 for the sweetness, not the tea. But the difference isn't in substance; it's in marketing. New-style tea drinks distinguish themselves by using quality ingredients: real fruit instead of flavorings, fresh milk instead of powdered creamer, and real tea leaves instead of tea powder. At least before the recent cost-cutting, they were quite generous with ingredients, which is why we talk about the intense competition in this sector. Good ingredients also justify premium pricing. Moreover, these brands are marketing masters; they never hide their ingredient highlights. They heavily market the "tea" itself. Even though consumers drink milk tea for the toppings, cheese foam, and fruit, tea is the foundation of these brands—their names include "tea" (e.g., Lelecha, Heytea, Naixue's Tea). So they work hard to convey "we use real tea" and "our tea leaves are high quality." For example, Heytea displays transparent jars filled with different tea leaves in stores, like a lab, letting customers see the real tea and building trust. Through such marketing and rapid growth, young people gradually realized: this sweet drink I'm having is actually a tea beverage. This distinguishes it from iced black tea in consumers' minds. So I believe the first step of young people falling in love with tea was accomplished by new-style tea drinks.

But that's just step one. Consumers who love milk tea claiming to like tea is like Lord Ye's love of dragons—they wouldn't buy tea without sugar. So step two: getting young people to accept the concept of "sugar-free." There are two paths: using sugar substitutes or reducing sugar. Beverage companies explored both. Let's talk about "not sweet." In 2015, Xiaoming Tongxue launched, focusing on cold-brewed tea. In 2016, Tea Pie launched, focusing on fruit tea. These products did well and shared common traits: lower sweetness than traditional lemon tea, and an emphasis on richer flavors like fruitiness, astringency, aroma, and mouthfeel. But the real driver of the "sugar-free" concept was the sugar-substitute route, specifically Genki Forest. In 2016, Genki Forest launched its first hit: Ran Tea. This product was interesting—it was the first tea drink to succeed on a "health" concept. Its two selling points were: rich in dietary fiber to aid digestion, and containing erythritol, with only about 20 calories per bottle but a slightly sweet taste. It sold very well, establishing Genki Forest. This led to their sparkling water, which created a new category in bottled drinks. The success of Genki Forest's sparkling water ushered in the "sugar-free era" or "substitute-sugar era" in beverages.

Now, let's discuss the changing views on nutrition behind sugar-free. Reducing sugar intake originated from weight loss. The weight-loss concept entered China's consumer market in the late 1990s. Initially, obesity was blamed on fat, so the first targets were fried foods. That's why many instant noodles and snacks advertise "non-fried," and fast-food chains like KFC started incorporating "baking" into core processes to replace some frying. They were avoiding being hit by the weight-loss trend. Sugar was also affected, but the main attack was on fat; sugar was mainly linked to rising diabetes rates. It wasn't until the mid-2010s that the consumer market truly began to see sugar, not fat, as the top threat. And the accusations against sugar came not only from health experts but also from the beauty and skincare industry. People discovered that aging is closely linked to sugar, leading to a new trend called "anti-glycation" alongside antioxidant skincare. In recent years, anti-aging has become the No.1 keyword in beauty, which in turn fueled the "sugar-free movement" in food and beverages. Genki Forest was the chosen one in this movement. Although Ran Tea is now losing to Oriental Leaf, Oriental Leaf's resurgence owes a debt to Ran Tea and Genki Forest for making "sugar-free" a household concept.

Once consumers widely accepted sugar substitutes as the solution for "sugar-free," the next step was to give up substitutes altogether. By then, the trend was clear. Once health concepts enter a market, consumers evolve faster, seeking ever-healthier options. Sugar substitutes soon couldn't keep up. As "sugar-free" was promoted more aggressively, consumers began choosing lighter flavors—like ordering milk tea with 30% sugar or desserts that are "not too sweet." Once they adapted to lighter tastes, why would they need substitutes? In this path, substitutes dug their own grave. A few years ago, there was an insightful observation: young people just want a flavored water. I think that's accurate. The beverage market has always had two categories: unflavored water and flavored water. Unflavored water rarely changes. Flavored water has been dominated by sweetness for decades, but now that's being challenged. Tea drink consumers realized they could drink unsweetened tea. When other tea drinks finally climbed to the top of the mountain, Oriental Leaf was already waiting. At that point, Oriental Leaf found itself in an unprecedented advantageous position: brand recognition, mature distribution channels, and market trends. Everything was in place. Moreover, China's beverage market had segmented, with premium products (over 3 yuan) gaining popularity. Oriental Leaf, priced a bit above the core price band, perfectly captured the premiumization dividend. A flood of fortune hit an established brand, and Oriental Leaf couldn't lose. Of course, Oriental Leaf was also keenly aware of trends. It launched with four flavors and didn't introduce new ones for a decade, as if dead. But in 2021, it suddenly revived with two new flavors: Qinggan Puer and Genmaicha, followed by Black Oolong. Among these, Qinggan Puer was an instant hit, driving sales. Additionally, Oriental Leaf invested in brand building. During my chat with the distributor, he mentioned that other unsweetened tea brands are also strong, like Suntory's oolong tea, which sells well and has been around for over 20 years. It was lukewarm for years but recently surged. However, as a competitor, Suntory still lags behind Nongfu Spring. One reason is distribution capability; another is brand. Suntory has more than just oolong tea, but consumers only recognize their oolong; other products like clear tea don't sell. Oriental Leaf is different: if one flavor is sold out, customers buy another flavor, but they always buy Oriental Leaf. If Suntory is a single-product champion, Oriental Leaf dominates across the board. Clearly, the brand "Oriental Leaf" has become deeply ingrained in consumers' minds.

Finally, let's consider: is Oriental Leaf really that bad? Personally, taste is subjective. The "five worst-tasting drinks" label was more about consumers' natural rejection of an outlier in a sugar-dominated market, just as five years ago, many couldn't stand American coffee. In essence, Oriental Leaf tastes like tea—not great, but not bad. The taste of tea hasn't changed; it's consumers' mindset and palate that have evolved. Oriental Leaf persisted for a decade and finally saw its moment. That's indeed a long-termist approach. As Han Han said, "Trends can only be waited for, not chased. It's like waiting for a train at the station: stay put, and a train will come. But the train that just left—we ordinary folks can't catch it." However, I'd argue that time has a cost. Brands that choose long-termism naturally need the capital to sustain it. Behind Oriental Leaf is the massive Nongfu Spring. Even if Oriental Leaf failed, there's Tea Pie, Nongfu Orchard, and bottled water. How many companies would allow a brand that barely makes money to stay in the market for a decade? In the FMCG sector, about 80,000 new products launch each year, 70% of which are food and beverages. Their one-year survival rate is under 30%, and those achieving over 1% penetration are rare. Why do these new products disappear so quickly? Is it because they don't want to be long-termist? Look at Genki Forest—the most successful new consumer brand—it still relies on rapid iteration and trial-and-error through online stores. If a new product doesn't sell well in a few months, it's permanently shelved. Doesn't it want long-termism? I recall a common saying in investment circles: never leave the table. As long as the game is ongoing, there's hope for a comeback. But for ordinary folks, playing the game itself has a cost, and staying at the table is the biggest cost. In the end, there's only one kind of long-termism in the world, and that's having money.


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