China's extensive tea industry is expected to see a decline within the next five years but experts predicted that non-dairy milk products, particularly nut-based milk, could drive growth in the slowing market.
According to Food Navigator-Asia, Mintel China Reports predicted that China's tea industry will grow at a slower pace "in the next five years" due to inadequate space for growth in unit price bases. Adding to this is "an increasingly competitive marketplace" that puts some businesses in a stagnant position.
On the other hand, Mintel's Food and Drink Analyst, Belle Wang noted that "the tea shops category still has potential to grow further, with more opportunities for new entrants." Wang particularly cited nut-based kinds of milk as one of the strongest contenders in the industry.
The group further explained that one of the key drivers for nut-based and non-dairy milk products to experience growth in the Chinese tea industry is the high percentage of nut drinks consumers among women.
Recent data revealed that over two in five female customers who have had a taste of nut-based milk drinks have shown willingness to get in line for their orders even if it takes them two hours to be on queue.
Furthermore, experts pointed out that nut-based milk is an established growth driver because of its popularity among the new generation's more health-conscious consumers. Wang suggested that tea shops should capitalize on the opportunities that non-dairy milk products have to offer, especially since women are now more inclined to purchase products with anti-aging or antioxidant properties.
While the nut-based milk drink market has a comparatively low penetration rate at only 22 percent compared to other milk beverages, it is expected that this new entry will lead the way for milk drink options that could boost further growth in the Chinese tea industry.
Meanwhile, China's tea industry continues to explore expansion opportunities overseas as it was reported that Chinese tea makers are set to forge partnerships with Morocco, a country that is particularly fond of tea.
The African News Network noted that Moroccans do not produce tea. On the other hand, the country's population of 30 million consumers around 60,000 tons of tea on a yearly basis. To help fix demand problems, some Chinese tea providers have announced plans to build factories in the North African region.
In 2015, the Moroccan government slashed import tariffs to allow for more tea investments in the country, allowing for China and other interested investors to consider doing business with Moroccan tea providers and groups.
