Asian tastes and tea trends: “Chinese consumers are looking for premiumization,” says FrieslandCampina Kievit

24 Apr 2019 --- Serving a market the size of China with one type of milk tea is not viable as consumer preferences vary per region, according to recent FrieslandCampina Kievit research. Consumers are showing preferences for intense milk tastes and the dairy ingredients supplier has published the results of a study analyzing the “perfect milk tea,” as well as current offerings in the milk tea segment across Greater China. A key takeaway is that Chinese consumers are currently looking for premiumization, Yvonne Kaupmann from FrieslandCampina Kievit, tells FoodIngredientsFirst.

The study, part of an effort to provide customers with sensory data on the Chinese beverage market, examined milk tea offerings and identified individual elements that make up the perfect, consumer-preferred milk tea in different regions. With these findings, FrieslandCampina Kievit is offering customers access to data which describes which key elements to combine – at the appropriate intensities – to create the “perfect milk tea” for their consumers.

China drives the growth of hot drinks worldwide, simply by virtue of being the largest market for tea, among other goods, according to Kaupmann. “Asia is leading the way when it comes to tea trends,” she claims. Over the coming few years, the projected Chinese market size is estimated at around US$10 million, says Kaupmann.

“The Chinese market is the largest in the world for tea and drives trends and developments globally. Though traditionally being a milk tea country, it becomes increasingly clear that coffee is currently booming in China. This was also seen at the recent Hotelex in Shanghai, where coffee was everywhere even in combination with tea. Nevertheless, coffee consumption is still significantly behind that of tea,” she explains. “We also see that Taiwan is a front runner when it comes to trends in milk tea.”

Yvonne Kaupmann from FrieslandCampina KievitKaupmann highlights many surprising insights. “Milk level preferences in, for example, Chengdu do not match what is currently on offer in that market. Consumers like intense milkiness, but most brands offer a medium milk taste. This means that optimization is possible so that manufacturers actually address consumers’ needs,” she notes.

In blind tastings, Kaupmann also says that FrieslandCampina Kievit discovered that fresh milk is seen as too thin and not ideal for the perfect milk tea in China, except for Taiwan. “This was a surprising finding since fresh milk is seen as the benchmark for milk tea,” she continues. “We’ve now found out that this is not based on the taste profile of the milk.”

Thirdly, FrieslandCampina Kievit found out that using tea types like green tea, the preference for which has been growing over the last years in China, is very divisive for consumers. “Some people love it, but others do not like their milk tea at all with green tea,” states Kaupmann. 

The original milk tea has a long history in Taiwan. The base for the classic milk tea is Assam tea, creamer, sugar and pearls. In traditional Chinese culture, the image of tea used to be really antiquated and it was difficult to link tea with fashion. Because pure tea was quite intense, it was difficult for the younger generation to accept, says Kaupmann. 

“Thanks to some market pioneers in Greater China, a newer milk tea arrived, which innovatively combined creamer with new tea type like oolong tea. The unique tea taste with its creamy and smooth milkiness brought a new sensory experience to consumers, especially for young people.”

As such, tea culture is now booming in China and the tea market is also growing globally, she adds.

This sales growth is driven by rising demand from China, India, Thailand, Pakistan and Indonesia, primarily driven by rising disposable incomes, Kaupmann notes. “Tea growth, in general, is also fueling the growth of milk teas worldwide. Though there are markets that traditionally do not combine milk and tea, we see a globalization trend where consumers try flavors from different countries and mix them with their own eating and drinking habits.”

Chinese consumers are looking for premiumization, according to Kaupmann, who says this development has been manifesting in the Chinese tea market for a decade. “In the foodservice space, we also see that eating experiences are becoming more and more important. Consumers like a sensory experience from the product that is multisensory, so to the eye, but also the ear, nose and touch play a role when consuming food and drinks,” she explains. 

“They also like to have an experience, such as topping off their drinks according to their personal preferences and lifestyles. Eating and drinking is becoming more and more of an expression of who you are and what you stand for. As such, it is part of your lifestyle. The way experiences and lifestyles are shared on the internet is increasing with frequency and food and drinks need to be ‘Instagrammable’ these days.”

Specifically, the foodservice channel is the front runner within the hot beverage category, according to Kaupmann. “Many innovations stem from the foodservice channel and are replicated in-home. Consumers want the experience that chains like Starbucks, Daka, Yidiandian, Coco or Happy Lemon are offering them, also at home,” she says. 

They demand a good product quality, a variety of flavors to discover, and versatility of coffee or tea. The latter, so that they can personalize their drinks to their own taste preferences and lifestyles and have a wide sensory experience – which they can then share on social media. 

Kaupmann also notes that trends which are now on the rise include tea with a milk cap, which tastes deliciously and can be topped off with consumer’s favorite toppings. “Furthermore, matcha varieties are booming, not just in tea, but also in coffee, and even as an ingredient for Japanese green sponge cakes. Lastly, the tea coffee combination is also on the rise.”

In the ready-to-drink (RTD) market, Kaupmann sees premiumization in the form of clean label demands, such as, for example, RTD bottles that use dairy and can claim formulated milk powder on the label.  

As a global company with a foot on the ground in many different regions (the Netherlands, Indonesia, Philippines, China and Germany), FrieslandCampina Kievit is well-equipped to pick up these trends quickly and translate them into relevant concepts for other countries. “A clear advantage for our customers who can bring innovations to the market fast and stay ahead of the competition,” Kaupmann adds. 

“This year, we will continue that trend of announcing news related to the beverage market.”

In Asia, FrieslandCampina Kievit owns an innovation kitchen, built in Manila. Asia is an important beverages market, including countries such as Indonesia and the Philippines, where the company has a large presence in the form of plants and their innovation kitchen. 

But other markets like Thailand and Myanmar are also important, stresses Kaupmann. “In our innovation kitchen, we work together with beverage manufacturers in the region to innovate and create value. In this inspiring space, Kievit’s R&D and technical support join forces with Kievit’s customers to develop fresh ideas together. These can range from marketing strategy and better taste and sensory experiences to whole new products and innovations.”

“Coupled with the unique findings from our own studies, we are sure that we will help create successful products that will once again meet market needs in 2019,” she concludes. 

By Elizabeth Green