Six major development trends of the tea industry in 2021, the battle between original tea companies and new tea companies

Seasons cycle year after year, and life also has seasonal ups and downs

Although China's tea industry will experience slight ups and downs in 2020, from the perspective of the entire industry chain, regardless of planting, processing, branding, consumption trends, and funding, it is accelerating the road to high-quality development.

So in the coming 2021, what kind of development trend may China's tea industry show?

1 The overall supply of tea is still oversupply

1 The overall supply of tea is still oversupply

According to statistics from China Tea Circulation Association, China Customs, Ministry of Agriculture, etc.

, China’s total tea production in 2013 was 1.
924 million tons, domestic sales were 1.
53 million tons, export sales were 325,800 tons, and the production and sales gap reached 68,200 tons.
By 2019, China's total tea production was 2,793,400 tons, domestic sales were 2.
0256 million tons, export sales were 366,500 tons, and the production and sales gap was 401,300 tons.

The data trend from 2013 to 2019 shows that over the years, China's tea production and domestic sales have continued to rise, and export sales have basically maintained a balance, but the gap between tea production and sales has shown a trend of increasing year by year.

Shengshixing Tea, as my country enters a well-off society in an all-round way, my country's tea production and total domestic sales will continue to rise in 2021, but the gap between production and sales that has been enlarged since 2014 may be difficult to change in the short term.

The protection of 2 tea identities was strengthened, leading tea companies to develop their source layout

The protection of 2 tea identities was strengthened, leading tea companies to develop their source layout

The growing gap in tea production and sales has made tea counterfeit and inferior incidents common in the market.

The "tea defense war" in major tea producing areas will be further strengthened.

For example, the public brands of Wuyi tea are'Wuyishan Dahongpao' and'Zhengshan Xiaozhong'.

Starting in 2020, Wuyishan City has fully implemented the "subscription of tea".
Wuyishan tea companies have all posted commodity labels uniformly printed with the geographical indication of Wuyi tea on the outer packaging.
By adopting the dual management method of "tea green card" and "commodity standard", it is ensured that the raw materials of tea are produced in Wuyi Mountain; and the technology of blockchain and Internet of Things is adopted to realize the traceability of the whole process of planting, production and sales.

Fuding also implements the quality "one-month review and annual general review" system for the tea products of 238 Fuding white tea trademark authorized enterprises in the city, vigorously promotes the trading of tea green certificates, and strictly prohibits undocumented, quality and safety guarantees of foreign tea greens from entering the market , To ensure that the source of tea products can be inquired, the quality can be traced, and the responsibility can be held accountable.

On September 14, 2019, China and the European Union formally signed the Agreement on the Protection and Cooperation of Geographical Indications between the Government of the People’s Republic of China and the European Union, which further strengthened the protection of geographical indications for famous teas.

Beautiful tea village

With the acceleration of the digitization of China’s tea industry and the continuous strengthening of the protection of their own geographical indications in famous tea producing areas, it will be a general trend for mid-to-high-end tea to obtain a traceable digital identity, which will inevitably promote the leading tea enterprises to the origin of the famous tea.

The investment layout of the supply chain to obtain high-quality supply of famous tea and strengthen the ability to control the source.

Taking Wuyishan as an example, opening the "Action Plan for the High-Quality Development of Tea Industry in Wuyishan City", it can be seen that only the well-known local tea companies in Wuyishan plan to increase capital by 1.

836 billion yuan in 2020, which has attracted Bama, Huaxiangyuan, and JD.
com.
A number of companies set up factories in Wuyishan to invest.
China Tea and Lancang Ancient Tea, which released their stock prospectuses on the same day, have surprisingly consistent financing investment directions, and they are both preparing to invest hundreds of millions of dollars to increase the production capacity of Pu'er tea.

3 Domestic tea consumption is diversified, and original tea and new tea are integrated and developed

3 Domestic tea consumption is diversified, and original tea and new tea are integrated and developed

Tea production and sales are out of balance.

The problem of development can only be solved by development, activating mass consumption, and building a multi-level tea consumer market, so that both high, middle and low-end tea have a consumer market.

From the perspective of drinking methods, tea consumption in my country is divided into original tea and flavored tea.

After years of rapid development, the consumer group of original tea has shown a gradual solidification trend in recent years, and the growth has been slow.

According to the statistics of the "2019 China Tea Consumer Market Report" released by the China Tea Circulation Association, in 2018, my country's tea consumer group has reached 490 million, and the middle-aged and regionalized characteristics of the consumer group still exist.

According to the "2019 China FMCG Online Strategy Crowd Report" jointly released by Bain & Company and Alibaba, the penetration rate of tea among the three potential consumer groups of the backbone, the new power, and the blue ocean population is relatively low.
Among them, with the exception of some brands attracting middle-class groups through "new and refined" products, the industry has shown obvious weakness in expansion among youth groups and small-town populations.

At the same time, thanks to the diversification of domestic tea consumption in recent years, new tea beverages, tea beverages and other market segments are working together.
They are working hand in hand with original tea to build a multi-level tea consumption market and make tea consumption more broad.
Population coverage.

On December 3, 2020, Naixue’s Tea and CBNData jointly released the "2020 New Tea Drinks White Paper", which estimates that the total size of China’s tea drink market in 2020 will be 442 billion yuan, of which the size of the new tea drink market is expected to be by the end of 2020.
Reach 102 billion yuan.
In terms of consumer portraits, the proportion of post-90s and post-00s is 70%, and female consumers account for about 60%.

The tea beverage sector is gradually developing towards a market scale of 100 billion yuan.
According to the statistics of Frost&Sullivan, an international authoritative research organization, the market size of my country's tea beverage industry in 2019 is about 78.
7 billion yuan, and by 2025, the market size of my country's tea beverage industry will be close to 100 billion yuan.

In fact, since Tianfu Mingcha launched its new tea brand "Fang Niu Ban" in 2013, Dayi Tea's "Dayi Tea Court", Bama Tea's tealab, and Chunlun Tea's "Fuyuan" have all appeared one after another.
Traditionally, tea companies that focus on original tea have begun to try new tea drinks.

At the same time, Nay Xue's tea and Hey tea companies are also targeting the original tea market.
The head anchor Wei Ya's data during the double 11 live broadcast in 2020 may be a glimpse of the leopard.
During the period, the 7-flavored Mix of Weekly Good Tea promoted by the Snow Master and the Inspiration Weekly Tea Gift Box promoted by Hey Tea are all original tea and tea bags, and the sales for a single event exceeded one million.
In 2021, traditional tea companies and new tea drinking companies may develop their integration and development at an accelerated pace.

4 Brand tea companies are evolving in the direction of all categories and multiple channels

4 Brand tea companies are evolving in the direction of all categories and multiple channels

The sudden outbreak of the new crown epidemic in 2020 has led to the cancellation of major tea fairs in the first half of the year, and offline stores have also experienced a sharp drop in passenger flow.
Tea industry practitioners have fully felt the current situation of fragile anti-risk capabilities of a single offline channel, and a lot of consumption.
People have developed the habit of buying tea online, which has become a turning point in the layout of the tea industry's multi-channel operation.

According to estimates from multi-party e-commerce platforms, the online tea market in China is expected to reach 26.
5 billion yuan in 2020, an increase of 14.
8% from 23.
5 billion yuan in 2019, and it is expected to grow to 29.
8 billion yuan in 2021.
However, the current e-commerce market share accounts for less than 10% of my country's total tea consumption, and there is still a big gap between my country's online goods and services in the total retail sales of consumer goods (25.
7%).
There is still a lot of room for development in 2021.

At the same time, many companies engaged in tea e-commerce reported that compared with offline channels, the unit price of e-commerce customers is generally lower and the experience is insufficient.
They are already setting up offline locations.
Check the e-commerce platform data.
In 2020, the sales of "tea" on the entire platform will be concentrated in the two price ranges of "44-153 yuan" and "154-340 yuan".
Therefore, from the second half of 2020, many tea companies have begun omni-channel layout, while focusing on online marketing, while continuing to expand offline.
"Tea Ceremony" magazine found through research that many brands, represented by rock tea and white tea in Fuzhou, Xiamen and other places, have stepped up the speed of franchising and offline store expansion.

In addition to the multi-channel layout, in 2021, branded tea companies will move toward a full-category layout to prevent single-category risks and better meet consumer trends.
On November 26, 2020, the black tea company Xiangyi Fucha and the white tea company Liumiao Baicha worked hand in hand to stage the "Black and White Dialogue".

Immediately afterwards, on November 29, Wuyixing, a rock tea company, and Pinpinxiang, a white tea company, also advertised that they had reached a strategic cooperation to jointly create a "heart-to-heart" product.
At the same time, they also reached a cooperation in sales channels, which means that consumers can You can buy Wuyi Rock tea products of Wuyixing at Pinpinxiang stores, and you can also buy Fuding white tea products of Pinpinxiang at Wuyixing stores.
Since 2016, the eight-horse tea industry, which has laid out all categories, has also made gains on Double 11 in 2020.
It has won a white tea with a sales volume of tens of millions, and fifteen single-products (Wuyi rock tea, black tea, Pu'er).

In 2021, cross-category and cross-brand integration has become the general trend of future market development, and it is estimated that cases of cross-industry integrated marketing will continue to emerge.

5Multi-factor game, exports are expected to continue their upward momentum

5Multi-factor game, exports are expected to continue their upward momentum

my country's tea exports show the characteristics of high market concentration.
According to customs statistics, the total export volume and export value of the top 20 major tea markets in my country is 305,700 tons and 1.
8 billion US dollars, accounting for 80.
24% and 82.
78% of the total export volume and total value, respectively.

First, on November 15, 2020, China and the ten ASEAN countries, Japan, South Korea, Australia, and New Zealand signed the Regional Comprehensive Economic Partnership Agreement (RCEP).
Prior to the signing of the agreement, the Belt and Road countries and regions including ASEAN were already huge growth points for China's tea exports.

According to customs statistics, in 2019, my country exported 23,000 tons of tea to ASEAN, an increase of 25.
6%, and the export value was US$400 million, an increase of 55.
7%; it exported 94,000 tons of tea to countries and regions along the “Belt and Road”, an increase of 4 %, the export value was 560 million US dollars, an increase of 30.
7%.
The signing of RCEP brought a monsoon to the sea for Chinese tea exports.

Second, the prevention and control of the new crown epidemic in Europe and the United States will also directly affect my country's tea exports.
According to customs data in the first half of 2020, my country's tea exports to the United States (4976 tons), Germany (3539 tons) and other countries have fallen sharply, down 33.
4% and 33% year-on-year respectively.

Third, tea importing countries including the European Union and Morocco have continuously improved pesticide residue testing standards in recent years, which has also had a relatively large impact on my country’s tea exports and has also forced China’s tea to continuously improve its quality.
Among them, exports to the United States should also pay attention to changes in US trade barriers to China.
From September 1, 2019, the United States has imposed a 15% tariff on Chinese tea (the tariff will be reduced to 7.
5% on February 14, 2020).

Fourth, Chinese culture represented by Chinese games, domestic dramas, novels, e-commerce, and pan-entertainment social products, currently has a certain right to speak overseas, and elements of tea culture often appear in it, which will help Chinese tea influence The increase in power will help tea go out and increase the added value.

The "Min Tea Sea Silk Tour" delegation introduces Min tea to Szűrös Mátyás, the first interim president of the Republic of Hungary

Especially in recent years, Fujian has actively carried out tea culture exchanges and mutual learning with countries along the sea silk.
The "Fujian Tea Sea Silk Tour" campaign initiated by the Fujian Agriculture and Rural Affairs Department and Fujian Daily News Group has entered the countries along the "Belt and Road".
And the region, to promote Chinese tea and Chinese tea culture represented by Fujian tea to go abroad again and into the world.
So far, "Fujian Tea Sea Silk Travel" has successively entered Germany, Poland, Czech Republic, Singapore, Malaysia, Indonesia, Britain, Spain, France, Hungary, Russia, Kazakhstan, India and other countries, and has been in the "Belt and Road" route.
The country and region established 12 "Fujian Tea Culture Promotion Centers", and their overseas influence continued to expand.
Therefore, the export of Fujian tea will have more room for development in 2021.

6Who will become the first A-share listing of tea enterprises?

6Who will become the first A-share listing of tea enterprises?

Whether it is to carry out source layout, to build an online and offline marketing system, or to find new growth points, the help of capital is a rigid demand for tea companies that want to become bigger and stronger.

But at the moment, the overall degree of capitalization of the tea industry is still relatively low.
According to statistics, the number of original leaf tea companies in the A-share market is relatively small.
As of July last year, only Emeishan A (000888.
SZ), Jiajia Food (002650.
SZ), Luxin Ventures (600783.
SH), and VV (600300.
SH), Shenshenbao A (000019.
SZ) and Tasly (600535.
SH).
However, only the Hong Kong-listed Tianfu (Cayman) Holdings Co.
, Ltd.
(Tenfu Mingcha) listed on the Hong Kong stock market and 15 tea companies listed on the New Third Board are the only listed companies with tea as their main business.

Since 2019, tea companies have begun a new round of impact on the capital market.
Since 2019, 7 companies including Xiangyun Feilong, Jianzhijia, Betteni, Xinlian Environmental Protection, Kungong Technology, Colorful Yunnan and Shennong Group have submitted IPO guidance filing materials to the Yunnan Securities Regulatory Bureau through securities firms.

The official website of the China Securities Regulatory Commission also showed that China Tea submitted information on June 18, 2020, and was accepted on June 24, and plans to be listed on the Shanghai Stock Exchange; Lancang Ancient Tea submitted information on June 22 and was accepted on June 28 , Proposed to be listed on the Shenzhen Stock Exchange.
On September 28, CITIC Securities signed a counseling agreement with Ba Ma Tea.
On September 30, CITIC Securities and Ba Ma Tea formally submitted the guidance and filing application materials to the Shenzhen Securities Regulatory Bureau of the China Securities Regulatory Commission and were accepted.
The listing location has not yet been announced.
Who will become the first share of A-share tea companies? It will become the most anticipated event in the tea industry in 2021.

While original tea-based tea companies are struggling to hit the capital market, new tea companies represented by Xicha and Naixue's tea are favored by investors, and their financing capabilities and scale of development are growing rapidly.

In November 2020, the creator of cupped Yangzhi Ganlu 7fentian received 150 million yuan in financing.
Shunwei Capital led the investment, and inward funds followed in the investment.
From the initiation of the financing plan to the formal signing of the agreement and completion of the delivery, Qifentian only took 4 months.
According to incomplete statistics, this is at least the sixth financing in the tea industry in 2020.

For investors, new tea companies are based on a market of hundreds of billions of yuan, and are constantly advancing into the big tea market.
Compared with traditional tea companies, new tea brand companies are generally standardized, have a high degree of chaining, and have strong replication capabilities.
They are easy to go public with the help of capital, thereby bringing high returns to capital.
According to sources from the Financial Associated Press, Chinese milk tea chain companies Xicha and Naixue's tea seek to be listed in Hong Kong before the end of 2021.

As the entire tea industry is accelerating innovation and increasing industry concentration, in 2021, original tea companies and new tea companies will compete for each other in the capital market and enter each other.
This is also a commercial story that must be staged.

Source: Tea Ceremony Media

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