RTD Tea 3.0: What is the next stage of evolution in China’s beverage space?
China’s beverage industry is welcoming the era of ‘RTD Tea 3.0’, revealing a significant new potential market for the wider category.
Ready-to-drink or RTD teas have been at the core of product innovation innovation for many beverage firms in recent years, driven by a dual interest in tea products as well as convenience.
But whilst this is still growing at a rapid rate in most markets, industry experts in China believe that the country is fast approaching what the market deems the era of ‘RTD Tea 3.0’, meaning that consumers will soon have even more demands when making beverage purchases.
China tariff adjustments 2025: Dairy big winner but sugary products take major hit
China is one of the world’s largest consumer markets, and any adjustments to its import and export tariffs can have immense impacts on global trade.
In January, the local State Council Customs Tariff Commission made adjustments to its import-export tariffs for 2025, affecting some 8960 tax items.
“China is making these adjustments in order to improve management of local tariffs and support the development of modern innovation and production so as to accelerate trade and promote national modernisation,” the commission stated via a formal statement.
“Amongst these are various dairy products such as processed cheeses and whey – the former will enjoy a provisional tariff rate of 8% in 2025 (compared to 12% Most Favoured Nation tariff rates for powdered cheeses and 15% rates for blue cheese and other mould-processed premium cheeses) and the latter will enjoy a 2% provisional rate (compared to a 6% Most-Favoured Nation rate).”
Conversely, China will be increasing its tariff rates for certain syrups and premix powders that have a high sugar content.
Reaching China’s Gen Z: Functional, musical and healthier candy innovations
China’s Gen Z is driving candy innovation to blend wellness, tech, and emotion into a new wave of functional, expressive confections.
According to data from market research firm Frost & Sullivan, the market for functional candies has been growing at a 17.3% CAGR in China.
Many functional candies have rapidly appeared on the market, which in turn has seen traditional sweet innovation slowing down somewhat in the country.
An expert said that Gen Z consumers not only want the basic joy and stress relief but also added functionality, which is where candy firms need to look more closely at formulations and tech to provide that value – such as replacing gelatin with collagen to provide natural health properties alongside the chewy texture.
Reinventing classics: Hyperlocal ingredients and strong aromas crucial for food innovation in China
Upcoming food and beverage innovation in China should incorporate hyperlocal elements, strong aromas or radical reinventions of well-known classics to resonate with China’s ‘sensitive’ taste buds.
It is a well-known fact that consumers in China have some of the most exacting taste buds in the world driven by the wide range of cuisines available in the market, and the unusually rapid rate of innovation in the country.
This means that food and beverage first need to go the extra mile to cut through the noise.
“China is a unique market compared to the rest of the world, and this is firstly because we have such a large population leading to increased demands compared to other regions; but more importantly because consumer taste buds here are truly more sensitive,” said Kerry China Marketing Director Helen Tang.
China’s STARFIELD expands plant-based snacks, taps R&D and partnerships for growth
Food tech outfit STARFIELD, which has developed more than 300 plant-based protein foods, is expanding its China market reach through partnerships with major brands, including KFC, Luckin Coffee, and FamilyMart.
To strengthen its market presence, STARFIELD prioritises R&D, operating a few plant-based protein labs and a data centre in China.
Areas of research include the molecular sensory lab, which analyses plant-based raw materials at a molecular level to enhance flavour through optimised processing and storage, while the protein restructuring lab develops techniques to mimic meat’s fibrous texture using extrusion, protein blending, and enzyme crosslinking for improved structure and tenderness.
Production revolution: Food biosynthesis eyed as major solution to meet China’s ‘new demands’
China is looking to develop food biosynthesis as a major solution to meet ‘new food demands’ and supply challenges in the market.
Biosynthesis here refers to the process of using microorganisms as ‘factories’ to produce end products such as nutrients, including proteins, carbohydrates, vitamins and more.
Whilst biosynthesis per se is not a new process, there is a particular drive in China right now to fully develop this as a full-fledged production solution for the food industry, a movement spearheaded by academic and industrial research and supported by the government.
China food industry internationalisation efforts driven by open ‘brand space’, local competition - expert
China food brands’ enthusiastic shift to international expansion has been driven by intense local competition as well as the opportunitiy to fill readily available open ‘brand space’ left by other multinational brands.
China has been gradually opening up its trade market to the world since the 1970s, but in the recent years since the COVID-19 pandemic, progress has been particularly rapid in the food and beverage sector.
This has been clear both in terms of Chinese grocery stores such as MIX and Scarlett as well as foodserice brands like Mixue and Haidilao, all of which have seen nationwide expansion in various South East Asian markets.
According to local industry experts, there are multiple major factors driving this shift, not least a ‘void’ left in various Asian markets after multinational brands such as Carl’s Jr and Tesco either reduced or retired operations in these markets.
Modernising baijiu: World’s bestselling spirit targets China’s Gen Z drinkers
Meta Liquor’s pioneering of sparkling baijiu serves to modernise the traditional spirit, crafting a modern identity to engage Gen Z consumers.
Meta Liquor is an offshoot from the original distillery that refined Maotai baijiu production methods, and current sixth-generation CEO Ares Liao is determined to bring baijiu into the modern age.
“The fact is that baijiu is known for being very strong and high in ABV, but this is not what younger consumers and especially Gen Z’s are interested in,” said Liao.
“Our generation likes soft drinks, we like drinks with sweetness, and we like the additional sensory enjoyment of fizziness in our drinks.”
This concept has formed the basis of Meta Liquor’s unique sparkling baijiu which comes in two flavours: Sea salt Pineapple and Grape Yuzu, both fruity flavours in line with Gen Z flavour trends.
Academics play crucial role in ‘upgrading’ China’s functional food sector, say experts
Food industry academics in China have a major role to play in ‘upgrading’ the local functional foods sector, especially when it comes to discerning TCM herbs for food usage and novel foods development.
A lot of growth in China’s functional food industry has come from research into herbs used in Traditional Chinese Medicine (TCM) and identifying suitable ones that can be integrated into everyday foods and beverages.
However, given the complexity and vastness of herbal and medical knowledge found in TCM compendiums, local food industry academics believe that progress is not as fast as it could be in terms of ‘upgrading’ the functional foods sector.
“The food industry is one of the most important development areas in China, and when it comes to innovation and growth, we must remember that academia is at the core of the R&D and new scientific breakthroughs that make these upgrades possible,” said China Ministry of Education Changjiang Chair Professor Zhengqiang Jiang.
End of nuclear conflict? China may reopen doors to Japanese seafood imports
China is warming to the idea of welcoming Japanese seafood imports back after two years of tension over the nuclear wastewater release saga.
Japan and China have been at odds over the former’s decision to release treated nuclear wastewater into the ocean in 2023.
The wastewater was the result of the 2011 Fukushima nuclear disaster, and led to the Chinese government imposing an outright ban on Japanese seafood imports in addition to a public condemnation of Japan being ‘selfish’ and harming global public health.
Close to two years on, China appears to have softened its stance, evidenced by a joint announcement made by the General Administration of Customs China (GACC) and Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF).
The GACC said that China will carry out sampling and monitoring activities to ensure all safety precautions are met before restoring the import of Japanese fishery products.
