Tea and functional drinks are on the rise.

The global beverage industry is witnessing a strong shift towards health-promoting products such as mineral water and herbal teas, forcing businesses to accelerate product innovation.

Consumers tend to prefer tea products and functional beverages. Photo: Phuong Lam.

Speaking at the "Beverage Industry Development" seminar on April 26th, Jason Peng, senior advisor and food and beverage expert at Black Titan Beer, stated that the global beverage industry landscape last year witnessed a strong shift towards health-supporting products.

In China, total beverage production in 2024 reached 188 million tons, an increase of nearly 8% year-on-year. Notably, product groups such as mineral water, bio-enriched teas, and specialized nutritional beverages are accounting for an increasingly large share.

Among them, tea – known for its antioxidant, immune-boosting, and metabolic-supporting properties – saw growth of nearly 11%. Functional drinks for sports , intellectual work, and physical performance surged by 18%.

Bottled water accounts for nearly 49% of the market share, reflecting the growing demand for clean, safe water in the context of rapidly changing living environments and dietary habits.

However, the Chinese beverage industry also faces numerous challenges, such as a debt-to-asset ratio of 52%, inventory increases exceeding 4%, and nearly 22% of businesses reporting losses. These pressures further compel businesses to increase investment in healthy product segments and sustainable production to maintain consumer confidence.

In Japan, the trend of "health-focused" beverage production has been taking shape for many years.

In 2023, total industry revenue reached 4,450 billion yen (nearly). $31 billion ), up 7%. Products such as herbal tea (accounting for 24% of the market share), natural mineral water (21%), and sports drinks (11%) are all popular with consumers due to their outstanding health benefits.

In particular, the functional beverage segment has boomed with a production growth rate of up to 110%, recording more than 1,300 new products in just one year. These products directly target needs such as weight management, blood pressure stabilization, blood sugar regulation, digestive support, and immune system enhancement.

Major players like Coca-Cola Japan, Suntory, and Asahi have also quickly caught up with the trend, continuously launching lines of sugar-free herbal teas or using Erythritol – a safe sweetener – to replace refined sugar, meeting the need for blood sugar control and prevention of chronic diseases.

Besides products, many businesses are also promoting initiatives to minimize environmental impact. Among these, easily recyclable PET bottles account for 79% of the market share, demonstrating the alignment between the goal of protecting public health and a commitment to minimizing their ecological footprint.

According to Mr. Nguyen Van Viet, Chairman of the Vietnam Beer, Wine and Beverage Association (VBA), consumers are becoming increasingly demanding, the market is constantly fluctuating, and the need for sustainable development is becoming urgent, forcing businesses in the industry to accelerate transformation to adapt.

To meet new demands, many businesses have actively sought innovative technological solutions, optimized production processes, and improved packaging in an environmentally friendly manner. This is not only a trend but also a mandatory requirement if they want to maintain competitiveness in the current period.

The VBA chairman stated that in the new context, optimizing production costs, boldly improving processes, investing in advanced technology systems, applying solar power and renewable energy, recycling by-products, and using alternative materials are becoming vital strategies for survival.

Businesses should not only aim for environmentally friendly products but also ensure energy-efficient operating processes that minimize negative impacts on the ecosystem.

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