At the communication meeting held on June 26, 2024, the chairman of Suntory (China) Investment Co., Ltd., Mr. Yaren Youdai, led a group of senior executives of the group and beverage division to release the latest situation of the beverage business in China. This release is also a collective appearance of this low-key Japanese non-listed family company in China.
The chairman of Suntory (China) Investment Co., Ltd. is Yadai
Tetsuho Kikuchi, Managing Director of Suntory (China) Investment Co., Ltd., pointed out at the meeting that non-alcoholic beverages represented by oolong tea have become Suntory's largest business in China and an important growth driver.
"China is of very strategic importance to Suntory," he said. In 2023, Suntory's global sales will be about 150 billion yuan, and China's "Asia and Oceania market (note: excluding Japan)" will account for about 20% of the overall sales, compared with 16% in 2020, according to Aridaiyaren. Among them, the growth rate of the Chinese market is leading in the region.
Suntory oolong tea entered China in 1997 (file photo)
Tetsuho Kikuchi, Managing Director of Suntory (China) Investment Co., Ltd
With the rise of sugar-free tea, China's beverage business has also become a "conspicuous package" for the growth of the food and beverage leader.
FMCG has learned that in 2023, the volume of sugar-free tea will double, and the growth rate will be higher than the overall growth rate of the beverage industry and the growth rate of the ready-to-drink tea category in which it is located. According to data from the Tmall Strategy Center cited by Suntory, last year, the platform's sugar-free tea sales increased by 27% year-on-year, and the number of users increased by 68% year-on-year.
Kikuchi also noted that the Chinese market has "made an important contribution" to the growth of food and soft drinks in the region.
It is reported that in 2020, the overall sales of food and non-alcoholic beverages of the Suntory Group in the "Asian and Oceania markets" were about 260 billion yen, and this figure will reach 370 billion yen by 2023, about 17 billion yuan, with a three-year compound growth rate of more than 10%.
The company's tea beverage innovation will include three dimensions, namely, the introduction of more new flavors around oolong tea, the expansion of new tea varieties and the exploration of new tracks of plant tea. In the future, Suntory may also launch other botanical tea products.
In terms of youth marketing, Suntory actively interacts with young people, including naming music festivals, supporting graduation theme songs, sponsoring street culture exhibitions, creating artist collaborations, sponsoring sports events, and placing creative advertisements.
At present, the younger generation is the main group of people who drink sugar-free tea. According to the "2023 White Paper on China's Sugar-free Tea Industry" by Yiou Think Tank, according to the survey data, 70.8% of sugar-free tea consumers are under the age of 30 (including 30 years old); Among the new users in the past six months, consumers under the age of 30 (including 30) accounted for 84.1%.
"From insisting on quality to agile innovation, from deep cultivation of channels to younger marketing, Suntory's beverage business is committed to continuously presenting excellent products to Chinese consumers, and also contributing to the long-term and high-quality development of China's beverage market." Suntory said.
"To this end, we will unswervingly continue to invest in the Chinese market." According to Youdaiya, the Chinese market plays an "extremely important role and is the engine of business development". Currently, Suntory operates beverages, liquor, health food, gardening, and catering businesses in China.