Time for Tea
The growing clout of the younger generation of Chinese mainland tea drinkers is opening new opportunities for traditional tea producers.
25 July 2017
According to figures released by the Guangdong Tea Profession Association in March, the 2017 spring tea harvest was slightly down compared with the same period last year, resulting in an overall rise in the average price of spring tea.
At the May 2017 Tea Expo in Guangzhou, it was widely noted that mainland consumers, more than ever, want value for money. As a result, the more expensive teas are being left on the shelves in favour of those in the mid-market price range.
Other trends include a widespread movement for producers to develop proprietary brands, while many established retailers/distributors in the sector were looking to diversify their operations. In another change – and one seen as having long-term and widespread significance – young tea drinkers are now seen as driving the sector.
It was clear this year that connoisseurship was prevalent among tea drinkers, with many visitors at the expo keen to exchange views with exhibitors and learn more about the tea on offer. Products in the Rmb100-1,000 per 500g price range were most in demand.
Well within this range were the mid- and high-end black teas from Yingjiuhong, a leading Guangdong-based tea producer. According to General Manager Wang Guangping, Yinghong No 9 was the company's most popular product, with most of its range selling for between Rmb200 and Rmb500 per 500 grammes.
In line with the growing product knowledge of many consumers, Mr Wang noted that the black tea produced in Yingde, Yingjiuhong's home city, has become increasingly popular in recent years. In fact, Yingde is now one of the three best-regarded varieties of black tea, along with Qimen (Anhui) and Dian Hong (Yunnan).
"We believe, as a consumer product, tea should be priced so as to be affordable to the general public,” said Mr Wang. “It should not be exclusively accessible by the rich, like some rare antique."
Still, Yingjiuhong also offers a range of teas priced at about Rmb3,000 per 500 grammes, with Mr Wang acknowledging that only a very small number of high-end customers are tempted to buy these premium products. He also emphasised that black tea – unlike pu'er tea – only has a limited shelf life and has to be consumed within a few years, rather than kept as an investment for future trading purposes.
Unlike in previous years, pu'er no longer commands the excessive prices it did just a few years ago. Zeng Shuyan, General Manager of Chensheng Fuyuanchang, a Yunnan-based pu'er tea producer, believed that the current aficionados of the blend buy more on the basis of quality and taste rather than just opting for the tea with the highest price tag.
"Pricey pu'er is the product of the speculative market. True pu'er drinkers, however, savour the taste of the tea, rather than flaunting its price tag."
Diversification and Brand-building
For many exhibitors, the past few years have been a period of diversification, with many tea producers and distributors branching out to set up teahouses and tea kiosks, developing e-commerce channels, supporting rural tourism programmes and promoting Zen tea culture.
One company at the forefront of these initiatives is Guangxi-based Wuhuangshan, which bills itself as a new form of eco-agricultural technology company. Operating from the Wuhuangshan National Geopark, the business provides an eco-agriculture demonstration platform for innovative farming and breeding programmes, as well as forest tea production and rural tourism.
According to Ding Jianghu, Wuhuangshan's Sales Director, the company plans to build a four-star hotel inside the 33 square-kilometre geopark to attract tourists looking to explore the rural environment, help harvest tea leaves, watch how tea is processed or just learn about the process of nurturing the crop. The promotion of rural tourism is not only likely to boost tea sales, but may also promote economic development and relieve poverty. Similarly, it is hoped that the opening of a temple complex in the park will pique interest in Zen tea culture and, again, drive tourist footfall.
Apart from developing tea-related rural tourism, other exhibitors diversified into setting up teahouses and tea kiosks in prime city districts. Chensheng Fuyuanchang now operates a tea kiosk in Zhujiang New Town, the central business district of Guangzhou's Tianhe quarter.
Targeted at the area's high proportion of white-collar workers, the outlet was set up for customers looking to talk business or meet friends in a quiet and relaxing environment. In line with the franchise agreement with Yunnan-based Yiwu Fuyuanchang, the outlet largely serves pu'er tea, with options ranging from the entry-level Fucha series, through the more expensive Mingshan, Classic and Legend ranges.
Such diversification, however, has not necessarily led to brand dilution. Formerly a home appliance distributor, Yingjiuhong moved into the tea trading sector five years ago, with a focus on the black-tea market. Mr Wang said the company has made considerable effort to develop its brand, substantially upgrading its operating system while continually refining the quality of its tea.
Young Tea Drinkers
At the fair, a substantial number of exhibitors opted for more contemporary and stylish-looking booths, largely to woo younger consumers.
Bosizhuo, a Guangzhou-based food company, for instance, adopted an Alice in Wonderland theme for its stand. According to staff at the show, the company operates the Alice branding under license from Walt Disney. This has seen it launch Wonderland-themed afternoon teas, complete with New Zealand best butter, exotic Madagascan herbs, Sri Lankan tea and an assortment of biscuits.
Similarly looking to attract young tea tipplers was Yulin Guchafang, a Yunnan-based pu'er tea producer. Its stand and products were emblazoned with images of monkeys, elephants, peacocks and parrots, with some of its packaged items resembling exotic lunch boxes. It also offered a range of tea cakes, finely wrapped and lovingly illustrated. According to staff on its stand, the company sees young consumers as a growing force in the tea market and one with huge spending capacity.
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