China Food

Lipton sells 2 billion cups of tea every year in China! It’s still growing at a high speed


In China, Lipton’s tea business is becoming bigger and bigger.

 

As a recent example, snack agents have noticed that Lipton, famous for its tea bags, has recently launched a new series of canned loose tea, which is the latest supplement to the existing tea category of Biden. “So far this year, we have launched nearly 20 new products.” Lipton China today told the snack generation in a reply.

 

In fact, with the continuous updating and expansion of its product portfolio in recent years, the most well-known and classic product of Lipton, “yellow brand black tea bag”, has no longer occupied the “big head” of the company’s sales volume and revenue. In the first nine months of this year, yellow brand selected black tea accounted for less than 1 / 5 of Lipton’s sales in China, according to Lipton today.


Snack agents learned that up to now, Lipton operates more than 200 products in the Chinese market, covering tea bags, tea powder, canned loose tea and other categories, and sells about 2 billion cups of tea every year. In the past few years, it is the continuous iterative and diversified business that has supported the tea giant to achieve “double-digit compound annual growth rate”.


 

Now, let’s take a look at the latest trends and future plans of Lipton in China under the background of its parent company Unilever promoting the independence of most of its tea businesses.

 

New products account for 20% of the revenue

 

Let’s take a look at the newly launched “tea language warming” series of canned loose tea.

 

Recently, the snack agent saw on the official flagship store of tmall that there are four kinds of seasoned tea products in this series. It’s not hard to see that, whether it’s the unconventional combination of “coffee and tea” or the product name creativity of “grape you’re happy”, this series of canned loose tea obviously caters to the preferences of young consumers.


In Lipton’s product price belt, it also belongs to high-end positioning. According to the tmall page, the price of the series is 89 yuan per pot of 70g, which is significantly higher than the price of about 30 yuan for 100g yellow brand black tea bags.


 

Today, Lipton told the snack generation that it launched this series of new products because it saw “huge business opportunities” in the category of loose tea. According to the data of the National Bureau of statistics and the tmall Strategy Center, the online tea market scale in 2019 will be 23.5 billion yuan, of which 80% are loose tea.

 

“At the same time, we can see that, driven by the new tea, more and more young consumers in the first and second tier cities express their pursuit of exquisite life by drinking tea. Therefore, in combination with the current popular flavor of street drinks, we launched a new type of loose tea flavored tea in October this year, which is not only suitable for gift giving, but also suitable for adding a sense of ceremony to our life Mr Lipton said.

 


According to Lipton, since this year, it has launched nearly 20 new products, including canned loose tea, herbal tea and fruit tea powder.


“It took only two months for our fruit tea powder from the start of the project to the launch of the market. After being put on the shelves in the flagship store in July this year, we quickly sold more than 10000 pieces a month.” Lipton gave an example to the snack man.


 

A more impressive figure is that in the first three quarters of 2020, Lipton China’s new products in recent years accounted for a fifth of its revenue, according to the company’s disclosure to snack agencies. In the first three quarters of 2020, Lipton’s iconic “yellow card selected black tea” accounted for less than 1 / 5 of its sales.

This means that, unlike the general impression of the outside world, Lipton’s sales are no longer dependent on a single “big single product”, and the successful product innovation in recent years is continuously promoting its growth transformation.


As introduced by the snack agent, Lipton, which has entered the Chinese market for many years, has developed many products of different categories. In addition to Lipton yellow card, Lipton Chinese tea and Lipton chezai tea, Lipton products in China include seasoned tea, fruit tea and herbal tea, as well as a series of solid beverage products, such as Lipton milk tea.


“We are not limited to tea bags. The direction of our product innovation is always to go where the market is. ” According to the company, in recent years, the number and frequency of Lipton’s product innovation has been accelerating, “and the proportion of new products (in revenue) is also increasing year by year.”.

 

Tea bag innovation

 

While expanding other tea business, Lipton is still innovating in the core tea bag business to meet the current tea demand, especially the preference of young people.

 

The snack generation noticed that in October this year, Lipton daily raised herbal tea launched a new tea bag “spirit tea” (ginseng, wolfberry and oolong tea). “After the outbreak, we saw a surge in consumer demand for a strong body and enhanced immunity, so we launched this health tea.” Said Lipton.

 

This one-day herbal tea series is also Lipton catering to the trend of “health preservation”. Last year, the herbal tea bag was launched in China. According to the data of tmall’s Strategy Center, Huacao tea is a new favorite in the local tea market, with a market growth rate of 89%.

 

“But we see that the current market of herbal tea is still dominated by Chinese traditional flowers and plants such as chrysanthemum and honeysuckle, so we want to launch some fashionable and healthy tea bags that young people love.” The company told the food agency. In addition to the newly launched “spirit tea”, Lipton’s daily herb series currently has a total of 6 tea bag products.


 

Interestingly, different from the outstanding varieties of tea, this daily growing herbal tea series emphasizes the segmentation of different consumption scenarios and the needs of people to divide different product positioning. For example, lotus leaf helps to reduce swelling and slim body. Lipton’s “Xianyang tea” uses lotus leaf white tea, which is mainly aimed at people who want to eat and drink freely but are afraid of edema and greasy.

 

This may be a rather clever approach. Because more and more young consumers are paying more attention to “utility” when drinking tea than by subdividing the origin and taste of different tea varieties. “From energy boosting to anti-inflammatory to weight loss and relaxation, tea consumers continue to show interest in products that address specific health problems and offer multiple functions.” Yingmin is hereby analyzed.

 

This strategy seems to work. “Since the launch of the series, the sales of daily growing herbs have grown rapidly. The sales volume from January to July this year is nearly three times that of the whole year last year.” Lipton revealed to the snack agent that the “Xianyang tea” of the Nikko series, which was launched in April this year, has become one of the “trump SKUs” in the sales volume of tmall flagship stores only a few months ago.


 

According to the analysis of snacks generation, from the new products launched this year, the tea giant can mainly summarize three strategies in product innovation.


First of all, it is to identify the high growth or huge opportunities of subdivision categories, layout. Secondly, from taste, packaging to name, we should make products fashionable and younger. Finally, the applicability of products in different consumption scenarios and for different target consumers is highlighted.

 

Food and beverage “hot money”

 

Compared with retail business, Lipton’s catering business is less well known to consumers.

 

“Both businesses are important to us.” According to Lipton, Lipton China sells about 2 billion cups of tea every year, and the catering industry also contributes a lot. According to reports, Lipton currently serves a number of well-known chain restaurants, including foreign and local brands, and has covered tens of thousands of catering stores nationwide.

 

For the tea business of catering channel, Lipton has set up a special R & D team. “We know the pain points of catering customers.” Lipton told the snack agent that the core needs of catering customers for tea products include providing fashionable tea drinks for consumers. At the same time, the production method should not be too complicated, the cost of raw materials is too high, and the materials should be easy to purchase.


 

“We have a team led by tea chef to capture the beverage trend of the season, turning the popular new tea into an efficient drink in the restaurant, and helping customers create popular products.” According to Lipton, taking an international well-known chain restaurant as an example, the annual sales volume of Lipton’s popular milk tea is “close to 100 million cups”.

 

This year, the catering industry has been hit by the epidemic. When asked about the impact on the business of Biden, the company told xiaoshidai that although its catering business was affected to a certain extent under the epidemic situation, Lipton quickly adjusted its strategy, “it has resumed double-digit growth in the second half of the year, and continues to rise throughout the year.”

 

Lipton said that this year’s marketing investment has not been reduced due to the impact of the epidemic, and has increased compared with the same period last year. This year, Lipton sponsored the sixth season of the popular variety show, please the refrigerator, and launched the same “ice worship” gift box in Viva’s studio. During the “618” period, the challenge was also launched in the “tiktok” challenge, and more than 60 thousand users were involved in the interaction.


In addition, Lipton milk tea tiktok A dream this year, IP cooperation, launched the new joint packaging, and duo A dream blind box doll, and at the sound, micro-blog, B station and so on launched the tea drinking tea called duo A dream dream activities. It was revealed that in October this year, Lipton x Doraemon gift box was the highest selling SKU in the official flagship store of Lipton tmall.


 

With the continuous increase of product innovation in retail and catering end, Lipton’s R & D expenses in China market are also increasing year by year. “Lipton attaches great importance to localization, and most of its products in the Chinese market are launched by Lipton China’s tea R & D team. Take milk tea as an example, even in the same Chinese market, different formulas will be introduced according to market conditions and consumer taste habits. ” The company told the food agency.

 

Double digit growth

 

In the future, tea business including Lipton China may operate independently.

 

In July this year, Unilever announced that it would begin to implement independent procedures for most of its tea business, and only “retain the tea business in India and Indonesia, as well as the cooperative rights and interests in the joint venture of instant tea”. It is revealed that the tea business, which will be independent, will generate 2 billion euros (about 15.45 billion yuan) in 2019.

 

This means that Unilever’s tea business in the Chinese market is also within the independent scope, including the Lipton brand; however, the Lipton instant tea cooperation between Unilever and Pepsi will not be affected, and its products are currently sold in Rosen convenience stores and other channels.

 

As a global tea leader, why does Unilever want to separate most of its tea business? In February this year, Unilever pointed out that although the tea business achieved price driven growth, sales volume declined because of the decline in demand for black tea from consumers in developed markets.

 

However, Lipton’s tea business in China is still growing rapidly.

 

“In the past few years, Lipton’s compound annual growth rate has been double-digit.” Lipton revealed today that it has maintained double-digit growth in recent years. The company said it was optimistic about the Chinese market and “gave higher growth expectations” for the future.


 

At present in China, Lipton tea bag always occupies the first place in the market share. According to Nielsen data, in 2019, Lipton has more than 70% of the tea bag Market of offline non herbal tea. In addition, Kantar data shows that Lipton ranks first in the industry in terms of brand strength for many consecutive years, and more than 90% of consumers know Lipton brand.

 

“Driven by the new tea drinks, we also see more and more new tea brands enter the tea bag market, such as Xicha and Naixue tea, and work with Lipton to promote the steady growth of China’s tea bag market. Lipton will also play its own brand awareness, channel distribution and scale advantages, together with many new tea brands, to make more Chinese young people fall in love with tea. ” Mr Lipton said.

 

Talking about the impact of the independence of the tea business, Unilever China stressed to the snack food agency at that time: “this will not affect the sustainable development of the brand.”. “In the future, the brand will continue to provide consumers with high-quality products and services.” The independent process for the global tea business is expected to be completed by the end of 2021, the company said.

 

As for the progress of this matter, Lipton said in reply to the snack food agency today that there is no specific plan and will actively embrace “multiple possibilities and opportunities” in the future. “After independence, we believe that we can further speed up the market response and provide more localized products and services to Chinese consumers.” Mr Lipton said.


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