Summary of Key Points
The competition in the milk tea industry is currently fierce, but bottled beverages (especially sugary carbonated drinks) are facing issues such as accumulating inventory and declining sales due to the trend of sugar control and the impact of milk tea. In simple terms, milk tea has stolen the business from bottled beverages, as people are becoming less fond of sweet sodas.
Why Has Milk Tea Been Able to Steal the Business from Bottled Beverages?
The popularity of milk tea is not without reason; it has precisely targeted the weaknesses of bottled beverages:
1. Freshness and Personalization: Bottled beverages are produced in advance and have a fixed taste, while milk tea is made to order, allowing customers to choose the amount of sugar (full/semi-sugar/sugar-free), the level of ice (less ice/room temperature), and additional toppings like pearls, coconut, or taro paste, giving each person the ability to customize their taste. This makes milk tea much more flexible than bottled beverages.
2. Strong Social Appeal: Holding a beautifully packaged cup of milk tea and posting it on social media is a common activity for many young people; in contrast, bottled beverages like cola are too ordinary and lack something interesting to share. Milk tea has become a form of social currency, making it more popular.
3. More Flexible Usage Scenarios: Milk tea shops are located in shopping malls, offices, and near schools, making it easily accessible. Although bottled beverages are also available in convenience stores, the immediacy of enjoying milk tea—hot in winter and cold in summer—provides a more substantial experience.
Why Are Sugary Carbonated Drinks Losing Popularity? Sugar Control Is the Key Factor
The main reason for the decline in sales of carbonated drinks is people's increasing awareness of the health risks associated with excessive sugar consumption:
1. Health Consciousness: People now understand that too much sugar can lead to weight gain and an increased risk of diabetes. A regular bottle of cola contains about the equivalent of half a meal's worth of sugar, so who would want to drink it casually?
2. Abundance of Alternatives: For those who prefer something sweet, there are sugar-free milk teas or low-sugar tea drinks; for those who want bubbles, there are sugar-free sodas (such as Yuanqi Forest); for healthier options, there are pure juices or electrolyte drinks. The uniqueness of carbonated drinks has diminished.
3. Seasonal Impact: Although it was once said that carbonated drink sales were as high in summer as in winter, the current decline indicates a true decrease in demand. In the past, people relied on cold cola to beat the heat in summer, but now they prefer milk tea or sugar-free beverages.
What Problems Will Beverage Companies Face with Excess Inventory?
Accumulated inventory is a significant burden for companies:
1. Money Locked Up in Goods: Producing a bottle of beverage incurs costs for ingredients, packaging, and transportation. If the product doesn't sell, the company loses this investment, leading to tight cash flow and limiting its ability to invest in new products or expand into new markets.
2. Forced Price Cuts and Promotions: To clear inventory, companies may offer discounts, buy-one-get-one-free deals, or sell at reduced prices to wholesalers, resulting in significant profit losses.
3. Impact on Production: Excessive inventory discourages companies from producing large quantities, potentially leading to reduced production or even shutdowns, while still incurring costs for wages and equipment maintenance.
4. Damaged Brand Image: If consumers see a product frequently on sale, they may assume it's not popular and are less likely to buy it, creating a negative cycle.
How Can the Beverage Industry Survive?
Companies will not sit idly by and are likely to take the following actions:
1. Focus on Low-Sugar/Sugar-Free Products: Brands like Coca-Cola and Pepsi have introduced zero-degree cola and sugar-free versions, respectively, and many tea brands have also launched sugar-free options. By adapting their formulas to meet consumer demands, they hope to retain market share.
2. Enter the Ready-Made Beverage Market: Traditional beverage companies are opening milk tea shops or collaborating with milk tea brands to enter this market.
3. Innovate Product Formats: They may develop smaller bottle sizes to reduce sugar intake, create functional beverages (e.g., adding vitamins or dietary fiber), or combine carbonated drinks with fruits (e.g., peach-flavored sodas) to appeal to younger consumers.
4. Integrate Online and Offline Strategies: They can use live streaming, social media promotions, and trial events in convenience stores to revive interest in bottled beverages.
In summary, the trends of milk tea and sugar control are forcing the bottled beverage industry to transform. Either they must adapt to consumers' health needs or learn from the flexibility of milk tea, otherwise, inventory will continue to pile up.
What Can Ordinary People Learn from This?
This reflects a shift in consumer behavior, where people are no longer solely focused on taste but also on health and experience. For us, it's important to read ingredient labels when buying beverages and choose those that suit our health preferences. For companies, staying ahead of consumer demands is essential to avoid being eliminated by the market. The "war" between milk tea and bottled beverages is essentially a clash between "new" and "old" consumption patterns.