Introduction:Domestic dairy giant Yili’s third-quarter report for 2024 shows that although dairy sales saw a slight decline, the beverage market continued to expand, with sugar-free tea drinks emerging as a significant growth driver. Yili’s sub-brand Yike Huoquan’s ready-to-brew tea series has rapidly risen thanks to its innovative technology and differentiated product positioning. This article delves into the characteristics of its ready-to-brew tea products, distribution strategies, and explores the future of the sugar-free tea drink market to help readers grasp new trends in the tea beverage sector.
China’s leading dairy enterprise Yili recently held its 2024 third-quarter earnings briefing. Data revealed that the company achieved total revenue of 89.039 billion RMB in the first nine months, with a net profit attributable to shareholders of the parent company at 10.868 billion RMB, maintaining its position at the top of the industry. Notably, while the overall dairy market shows a contracting trend, Yili clearly stated it will ramp up efforts in developing the sugar-free tea drink market. Its Yike Huoquan brand’s ready-to-brew tea series, with its innovative technology and differentiated product design, has demonstrated significant growth potential.
According to information disclosed by Yili during the briefing, among its water and tea beverage products, the ready-to-brew tea series has performed particularly outstandingly. Centered around sugar-free tea drinks, this series utilizes an innovative tea-water separation packaging design that delivers a flavor experience closer to that of freshly brewed tea. This strategy not only meets today’s consumers’ demand for healthier beverages but also greatly enhances product convenience and market competitiveness.
Yili’s ready-to-brew tea series currently offers two flavors: “Huangshan Maofeng Jasmine Tea (Green Tea)” and “Wuyi Da Hong Pao Oolong Tea (Black Tea),” both made from premium tea leaves sourced from renowned production regions, including Huangshan Maofeng, Guangxi Hengxian jasmine, and Wuyi Da Hong Pao. The selection of ingredients is extremely meticulous, and the product specifically uses natural mineral water from the Arxan volcano to maximize the restoration of the tea leaves’ original aroma and taste, offering consumers a purer tea-drinking experience.
The biggest technological highlight of this series lies in its tea-water separation freshness-locking cap design.The product employs freeze-dried tea powder sealed inside the bottle cap.When the consumer twists the cap, the tea powder automatically falls into the water,taking only about 3 seconds to brew, delivering instantly enjoyable ready-to-brew tea flavor.This design not only solves the issue of flavor loss due to long-term storage common in traditional tea drinks but also significantly improves drinking convenience—making it highly suitable for today’s busy urban consumers.
In terms of health and nutrition, Yili emphasizes that the ready-to-brew tea series adheres to a “triple-zero” formula: no sugar, no fat, and no calories.It does not add artificial flavors, colors, or preservatives or other food additives.This aligns with current consumers’ pursuit of “clean-label beverages.” The brand promotes the concept of “health without compromise” as a key message, further reinforcing its differentiated market positioning.
However, Yili also admits that ready-to-brew tea is still in the market introduction and consumer education phase.Product sales channels are mainly concentrated in convenience stores, e-commerce platforms, and O2O home delivery services in first-tier and key cities.Due to limited production capacity at this stage, it has not yet been fully rolled out to all types of retail outlets nationwide. Yili further explained: “We are gradually expanding our production scale and will strengthen full-channel distribution and brand promotion based on market feedback in the future.”
Looking at the overall industry landscape, Yili’s active expansion into the sugar-free tea drink market is closely related to the challenges faced by the dairy industry. According to NielsenIQ data, from January to August 2024, China’s dairy products saw a year-on-year decline of 2.1% in total omnichannel sales, while the beverage market grew against the trend, with sales increasing by 6.9%. This clear market divergence has prompted dairy companies like Yili to actively seek new growth drivers.
Regarding specific corporate financial performance, Yili’s three main business segments—liquid milk, milk powder and dairy products, and ice cream—recorded revenues of 20.637 billion RMB, 6.821 billion RMB, and 1.022 billion RMB, respectively, in the third quarter, showing year-on-year declines of 10.31%, growth of 6.56%, and a decline of 16.61%. Other major dairy companies such as Bright Dairy, New Dairy, and Sanyuan Shares also recorded revenue declines of 12.66%, 3.82%, and 17.59%, respectively, indicating that the overall dairy market still faces certain pressures.
On the tea drink market front, China’s bottled tea drinks have evolved from early offerings of just black and green tea to a mature market encompassing diverse categories such as oolong tea and herbal tea. With rising consumer health awareness, sugar-free tea drinks are rapidly gaining popularity and becoming the new darlings of the market. According to research forecasts by Yiou Think Tank, the sugar-free tea drink market size is expected to exceed 10 billion RMB by 2025 and further grow to 12.4 billion RMB by 2027. Facing such vast market potential, Yili’s accelerated move into this field can be seen as a strategic move to align with trends and seize early opportunities.
The above content is compiled by CoffeeHunters, a coffee news website.
