---
title: "Unsweetened Tea Faces a 'Bloody Battle'"
description: "The booming unsweetened tea segment cannot be monopolized by Oriental Leaf alone. Since the first half of this year, unsweetened tea products have proliferated, with sizes ranging from small to large and prices dropping ever lower. No beverage subcategory has ever been this lively. In a very short time, issues such as product homogenization and accelerated iteration cycles have already surfaced in the unsweetened tea industry. When a category's room for innovation is exhausted, all parties on both the offensive and defensive sides of the market will face a brutal 'bloody battle.' The 'worst-tasting beverage' is now a hit. Nongfu Spring (09633.HK) has once again tasted the sweetness of tea. In the first half of this year, the company's packaged drinking water business took a sharp downturn, while unsweetened tea became the backbone driving growth."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-09-13"
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# Unsweetened Tea Faces a 'Bloody Battle'

> The booming unsweetened tea segment cannot be monopolized by Oriental Leaf alone. Since the first half of this year, unsweetened tea products have proliferated, with sizes ranging from small to large and prices dropping ever lower. No beverage subcategory has ever been this lively. In a very short time, issues such as product homogenization and accelerated iteration cycles have already surfaced in the unsweetened tea industry. When a category's room for innovation is exhausted, all parties on both the offensive and defensive sides of the market will face a brutal 'bloody battle.' The 'worst-tasting beverage' is now a hit. Nongfu Spring (09633.HK) has once again tasted the sweetness of tea. In the first half of this year, the company's packaged drinking water business took a sharp downturn, while unsweetened tea became the backbone driving growth.

The booming unsweetened tea segment cannot be monopolized by Oriental Leaf alone.
Since the first half of this year, unsweetened tea products have proliferated, with sizes ranging from small to large and prices dropping ever lower. No beverage subcategory has ever been this lively.
In a very short time, issues such as product homogenization and accelerated iteration cycles have already surfaced in the unsweetened tea industry.
When a category's room for innovation is exhausted, all parties on both the offensive and defensive sides of the market will face a brutal 'bloody battle.'
**The 'worst-tasting beverage' is now a hit**
Nongfu Spring (09633.HK) has once again tasted the sweetness of tea. In the first half of this year, the company's packaged drinking water business took a sharp downturn, while unsweetened tea became the backbone driving growth.
During the period, the company's tea beverage business generated revenue of 8.430 billion yuan, a year-on-year increase of 59.48%, accounting for 38.0% of the company's total revenue.
Oriental Leaf is undeniably a blockbuster product. According to Nielsen data, **in the first six months of this year, Oriental Leaf's sales grew by over 90%, and its market share in unsweetened tea exceeded 70%.**
More than a decade ago, Nongfu Spring began cultivating this bottle of tea, which was once dubbed the 'worst-tasting beverage' by consumers.
In recent years, it has finally seen the clouds part and the moon shine. From 2020 to 2023, the company's tea beverage business revenue was 3.088 billion yuan, 4.579 billion yuan, 6.905 billion yuan, and 12.659 billion yuan, respectively.
Following Oriental Leaf's exemplary effect, numerous beverage manufacturers have followed suit, with new products and new brands emerging one after another.
Dongpeng Beverage (605499.HK), which started with functional drinks, has made unsweetened tea its second growth curve. In the first half of this year, the company's 'other beverage business,' which includes unsweetened tea, saw sales volume grow by 89.62% year-on-year; revenue reached 238 million yuan, up 88.89% year-on-year.
Tingyi Holding (00322.HK) has dominated the market with its iced black tea for years, winning consumer favor with its refreshing and exhilarating experience, and is now transitioning from sugary to sugar-free.
In the first half of this year, the company launched sugar-free oolong tea, sugar-free jasmine tea, and other unsweetened tea products. During the period, the overall beverage business revenue was 27.065 billion yuan, a year-on-year increase of 1.7%.
Among Uni-President China's (00220.HK) tea beverage products, there was already the 'Tea Lee King' unsweetened tea brand in early years. This year, it launched Chunfu Green Tea to join the fray. In the first half of the year, the company's overall tea beverage revenue was 4.647 billion yuan, up 11.8% year-on-year.
**Competition has reached a fever pitch**
Now, unsweetened tea is increasingly popular, but the category has not been on the rise for long.
Starting in 2017, sugary drinks fell into low growth, and unsweetened tea products such as Suntory Oolong Tea and Oriental Leaf gradually gained consumer acceptance.
When the wind of opportunity arrived, various new and old players rushed into this blue ocean.
There are traditional beverage manufacturers such as Nongfu Spring, Wahaha, and Coca-Cola; there are also companies from outside the industry, such as Yili and Tsingtao Brewery; and there is no shortage of new forces like Guozishule, Rangcha, and Youcongqi.
Multiple forces are chasing each other on the unsweetened tea track, making the market increasingly lively, but problems such as product homogenization and shortened iteration cycles are also quickly emerging.
Current unsweetened tea products have expanded from oolong tea to green tea, jasmine tea, black tea, Dahongpao, and more, covering all six major Chinese tea categories and even niche varieties. Among them, oolong tea leads, with its combined market share with jasmine tea exceeding 30%.
**Not all Chinese teas are suitable for unsweetened tea.** For example, unsweetened tea made from ripe Pu'er has too strong a flavor, making it less acceptable to the general public; while Tieguanyin and Xinyang Maojian, which have lighter flavors, have overly distinct regional characteristics.
After exhausting product competition without a clear winner, **a price war is on the verge of breaking out.**
In the past, the mainstream price range for unsweetened tea was around 5 yuan. Around April this year, various brands launched promotions and discounts one after another, with actual retail prices dropping below 5 yuan. In some cases, you could buy 3 bottles of Suntory Oolong Tea for 11 yuan or 2 bottles of Oriental Leaf for 7 yuan. At the most intense moments, some 500ml single-bottle unsweetened tea brands could be purchased for as little as 3 yuan.
Another focus of this summer's unsweetened tea battle is the competition for large-format packaging.
After launching 900ml large bottles last year, Oriental Leaf continues to focus on large-capacity products. Major brands immediately followed suit: Genki Forest launched 600ml bottles, and Suntory introduced 1.25L and 900ml unsweetened tea products, offering more volume and better value.
According to Mashangying, replacing small-format products with large-format ones to lower the price per 100ml is essentially a disguised price war. The unsweetened tea industry has entered a growth phase of trading price for volume.
Data shows that since February this year, the average price per 100ml for unsweetened ready-to-drink tea has been declining at a month-on-month rate of about 2%, dropping to 0.85 yuan per 100ml by July.
**As supply increases and prices fall under competition, the unsweetened tea market will further expand.**
According to a research report from China Galaxy Securities, the current retail scale of unsweetened tea is approximately 22 billion yuan, with conservative/optimistic assumptions for long-term space at around 54.5 billion yuan/188.5 billion yuan.
Looking at the current competitive landscape, it presents a pattern of duopoly plus north-south regional competition. As the market expands and channels sink, multiple blockbuster products will emerge in different price ranges, gradually evolving into a market structure of 'one superpower and multiple strong players.'
**Recommended Reading**


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