Chinese RTD iced tea giants like Master Kong (above) are experiencing fierce competition from market newcomers focusing on healthier, reduced sugar options.
China is the largest consumer of iced tea in the Asia Pacific. Following its early start, rapid expansion, and the emergence of new trends, the Chinese iced tea industry is now entering a phase of health upgrades, with sugar-free and reduced-sugar products dominating the market.
According to the “2025 China Bottled Iced Black Tea Beverage Industry White Paper,” 71% of consumers pay close attention to reduced sugar/sugar-free labels when purchasing iced tea, and 82.9% prefer reduced-sugar formulas. Taste and flavor (83%), value for money (61%), and nutrition and health (53%) are the top three factors influencing purchasing decisions. Customers demonstrate strict preferences for sweetness (75%), tea flavor (56%), and tea aroma (53%), preferring tea that is not too sweet and has authentic ingredients.
Individuals who purchase iced tea three to five times a month account for 41% of the market; 63% of consumers spend between 3 and 5 CNY ($0.42-0.70) on a single bottle. The 500 ml size is the preferred size for 64% of iced tea users due to its convenient capacity and single-serving function. Among larger sizes, 1-liter sharing bottles are particularly popular.
Data shows that young consumers aged 18-25 place particular emphasis on a rich and balanced taste when choosing iced tea, demonstrating higher taste loyalty and repeat purchase rates.
In terms of market demographics, consumers are concentrated in first-tier cities (30.5%), new first-tier cities (22.5%), and third-tier and below cities (29.7%). With the multidimensional upgrade of bottled iced black tea products, the core occupational audience has transitioned from manual laborers to white-collar employees, including a notable presence of full-time workers, such as teachers, doctors, and lawyers.
The Rise of Yuanqi Forest Iced Tea
For the market, Master Kong maintains a leading position with a 68.6% sales share, followed by Unif Ice Tea (10.8%) and Vita Lemon Tea (5.5%). Major iced tea brands have actively responded to the "sugar reduction" policy call, innovating and upgrading their healthier products to capture the iced tea market.
Master Kong's new iced black tea has reduced sugar by 50% and increased dietary fiber (≥15g/bottle). Nongfu Spring launched its carbonated "Iced Tea," featuring zero potassium sorbate, zero tea powder, and a cold-filled packaging process, while also reinforcing its reduced-sugar labeling.
Among emerging players, Yuanqi Forest Iced Tea has rapidly risen through its differentiated strategies, achieving a 2.7% sales share. Yuanqi Forest, with its "sugar reduction >25%,” was the first to break through the fierce market competition and become a pioneer in the "new health track.”
Yuanqi Forest has restructured its formula, using Sri Lankan black tea and whole lemons, with the slogan "reduced sugar without sacrificing flavor.” Notably, in collaboration with suppliers, the Yuanqi Forest Research Institute upgraded its iced tea production process to a lemon-freezing method using liquid nitrogen at -196°C, introducing this technology into a domestic beverage production line for the first time. The technology better restores and highlights the lemon aroma of iced tea, pushing iced tea preservation technology to a new level.
In terms of repurchase frequency, Yuanqi Forest ranked second with 63% after Master Kong Iced Tea (69.6%) in 2025. The following performers were Nongfu Spring Tea (40.6%) and Unif Ice Tea (29%). Yuanqi Forest achieved a 460% growth rate in sales for lower-tier markets in 2024.
When discussing iced tea as a "milestone product" for Yuanqi Forest, the head of the iced tea business specifically mentioned that the group now has six factories of its own and a relatively complete supply chain system. These are the necessary prerequisites for iced tea to achieve high cost-effectiveness and compete with traditional market giants.