Asia Pacific

A cold spell: cold brew tea soars across Asia

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Cold brew beverages are gaining in popularity, but the market is still wide open for manufacturers, reports Frances Ball

There is constant innovation in the foodservice sector around the experience of food, and the look and texture of a product can make or break it. Consumers are drawn in by new and exciting trends that change the status quo. Across Asia, we’re seeing a lot of development in the ready-to-drink (RTD) beverages market as tea drinks grow in popularity.

Retail following foodservice trends

Foodservice trends can act as a precursor to retail trends. In the RTD drinks market, the excitement in foodservice around cold brew tea and brown sugar milk tea could lead to a major take-up in the retail space as customers become more and more interested.

Brown sugar milk tea in particular has a visually pleasing element, as well as tapping into a trend for creamy beverages that – as Mintel reports – is an element of many recently launched drinks. It’s an almost artistically elaborate drink to look at, and appeals to a taste for sweetness.

Cold brew tea, though, has an advantage in that it is thought of as an artisanal product. Traditionally a Japanese practice of steeping tea leaves in cold water for hours, cold brew tea is starting to be associated with premium quality in foodservice.

An untapped market

Analysts at GlobalData explained the potential that cold brew tea has in the market. “Asia Pacific has undoubtedly been one of the major areas of interest for global players with the majority of product launces concentrated in this region,” says Kambu Ninad, a foodservice analyst at GlobalData.

“Market penetration for cold brew tea is still in its nascent stages and holds huge untapped opportunities for manufacturers.”

Of course, its limited presence in retail means that the product is priced high. According to GlobalData it is around 6-12 times the price of hot tea, but as a likely popular product for consumers, the cost would stabilise at a lower rate as manufacturing scales up.

It’s all about convenience

Hot tea remains the most preferred choice in Asia. Still, GlobalData expect to see consumption trends in both Asia and in western markets moving toward RTD beverages like cold brew tea and brown sugar milk tea.

Where and why people choose certain beverages will play into the retail uptake of a product like cold brew tea. Coffee remains the first choice for drinks outside the home, as GlobalData points out. At the same time, the Chinese market in particular is increasingly demanding both healthier products, and products that suit a busy lifestyle.

A healthy beverage that could be consumed on the move looks likely to be well received in Chinese markets, and indeed across much of Asia. Almost half of Chinese consumers are already familiar with or frequent consumers of RTD drinks.

All that remains now is to tap into a burgeoning market for cold brew tea, a product that could come to be seen as a moniker for quality in a conveniently drinkable guise.

Frances Ball