Untapped potential of China's premium RTD tea market
The ready-to-drink tea market in China, worth about $29 billion, remains largely untapped on the upper end and offers great opportunities for companies such as Teavana, according to a research note. While tea is a national beverage and part of everyday life in China, RTD tea consumption is lagging behind neighboring countries like Hong Kong and Taiwan. Furthermore, Euromonitor expects rising disposable incomes and a growing middle class to boost demand for premium beverages. Foodservice is a particular area of interest, since the country's 60,000 tea rooms are more focused on the beverage, as opposed to the customer experience, which is a strength of many Western companies. Starbucks has recently partnered with RTD tea market leader Tingyi Holding to manufacture coffee beverages, but the deal is likely to expand to tea beverages, as the company tries to fill in the gap left by the departure of Nestle and Coca-Cola in 2013.