The Off-Trade in China Continued to Dominate Volume Sales of Hot Drinks in 2006

DUBLIN, Ireland--(Business Wire)--Research and Markets
(http://www.researchandmarkets.com/reports/c75973) has announced the
addition of "Tea in China" to their offering.

Our Tea in China report offers a comprehensive guide to the size
and shape of the market at a national level. It provides the latest
retail sales data (2001-2006), allowing you to identify the sectors
driving growth. It identifies the leading companies, the leading
brands and offers strategic analysis of key factors influencing the
market - be they legislative, distribution or pricing issues.
Forecasts to 2011 illustrate how the market is set to change.

Product coverage includes: black standard tea; black speciality
tea; green tea; fruit/herbal tea; instant tea.

Data coverage: market sizes (historic and forecasts), company
shares and brand shares.

Why buy this report?

-- Get a detailed picture of the hot drinks industry.

-- Pinpoint growth sectors and identify factors driving change.

-- Understand the competitive environment, the market's major
players and leading brands.

-- Use five-year forecasts to assess how the market is predicted
to develop.

Rising incomes boost growth

Hot drinks continued to see strong growth in 2006, being buoyed by
rising consumer income levels. These encouraged higher consumption
levels, a trading up to higher quality products and also a shift away
from unpackaged tea. Growing health awareness also encouraged sales
growth, benefiting traditional leader green tea and also a range of
tea variants with a healthy positioning and also supporting growth in
fortified/functional "other" plant-based hot drinks.

Convenience drives growth for instant drinks

Instant tea and instant standard coffee both saw strong growth in
2006. With growing urbanisation and a greater focus on working long
hours and socialising, time-strapped consumers were attracted by the
convenience offered by these products. In addition, players attempted
to position instant tea and instant standard coffee as an indulgent
treat, with the launch of flavoured variants of coffee and instant tea
containing jelly.

Heavily fragmented shares with a large number of specialists

Hot drinks is heavily fragmented, with many of the leading players
being present in only one product area. Leading player VV Group is,
for example, only present in soyabean powder with Wei Wei Soyabean
Milk Powder. Third-ranked Guangzhou Kraft is only present in instant
standard coffee, while fifth-ranked Unilever is only present in tea.
The forecast period is expected to see an increasing number of
competitors enter this dynamic area. Nonetheless, the leading players
may well gain share as they continue to expand distribution and invest
in marketing and new product development.

On-trade dynamic with new chained entrants

The off-trade continued to dominate volume sales of hot drinks in
2006. However, the on-trade proved considerably more dynamic. Growth
in the on-trade was boosted in general by rising income levels, which
encouraged consumers to socialise more away from home. In addition,
however, on-trade sales of coffee were boosted by the expansion of
Starbucks and a number of independent cafes following a similar
formula. On-trade sales of tea were meanwhile supported by strong
expansion of chained tea houses by Tenfu Group, Beijing Zhangyiyuan
Beverage Co Ltd and Beijing Wuyutai Tea Co Ltd.

Growing maturity but growth to continue in forecast period

Sales growth is expected to slow for hot drinks during the
forecast period. During the review period, expansion focused on the
major cities, where an affluent and sophisticated consumer base
responded enthusiastically to new trends. During the forecast period,
however, players will be attempting to grow sales in smaller cities
and rural areas, where consumers often have a preference for
traditional products, such as unpackaged green tea. Nonetheless,
growth will continue at a good rate, being largely supported by
widening interest in coffee and in healthy tea variants such as Oolong
and Pu-Erh.

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Companies Mentioned:
Yunnan Xiaguan Tuocha (Group) Co Ltd
Starbucks Coffee Co Ltd
VV Group
Guangdong Yashili Co Ltd
Nestle China Ltd
Shantou Gold Roast Food Ind Co Ltd
Guangzhou Kraft Food Co Ltd
Unilever China Ltd
Tenfu Group
Shanghai Associated British Foods & Beverage Co Ltd
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Source: Euromonitor International

Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com

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