In 2022, the sales volume of green tea in mainland China will reach 1.311 million tons, a year-on-year increase of 0.14%, and a slight decline in 2023 to 1.289 million tons, but from the long-term market perspective, with people's increasing attention to health, consumers' demand for natural, healthy and low-calorie products has increased, providing a driving force for the continuous growth of the green tea industry.
1. Definitions and Classification
Green tea is an unfermented tea (oxidation degree <10%), and its dry tea is green, tea soup green, and leaf bottom green, with the characteristics of "clear soup green leaves, strong taste astringency", hence the name. According to the Industrial Classification of the National Economy (GB/T4754-2017), black tea belongs to the "C1530 refined tea processing" in the "C15 wine, beverage and refined tea manufacturing industry". Green tea can be divided into roasted green tea (such as eyebrow tea, bead tea, delicate fried green, etc.), roasted green tea (such as ordinary roasted green, delicate roasted green, etc.), sun-dried green tea (such as Yunnan green, Sichuan green, etc.), steamed green tea (such as sencha, Yulu, etc.) and other types, West Lake Longjing, Xinyang Maojian, Lu'an Gua Pian, Mengding Mountain Tea, Huangshan Maofeng, Duyun Maojian, Enshi Yulu, etc. all belong to green tea.
Second, the business model
1. Procurement mode
The raw materials purchased by green tea enterprises mainly include tea raw materials and packaging auxiliary materials, and the company has established a procurement system composed of raw material procurement management committee, supply chain management department, procurement department of each business unit and other relevant departments, among which the raw material procurement management committee is the decision-making body of procurement management; The supply chain management department is the co-ordination, coordination, planning and supervision agency of China's tea procurement management; The procurement department of each business unit is the specific executive department of procurement; The quality and safety management department, warehousing department and financial department of each business unit are the assistance and monitoring departments of raw material procurement, which participate in the implementation of procurement business in accordance with their respective functions and strictly control all kinds of risks that may occur in raw material procurement.
2. Production mode
Green tea enterprises generally adopt the production mode of "sales to production", and adopt the production mode of independent production as the main and entrusted processing as the supplement. Independent production is responsible for the tea processing factories under the green tea enterprise, and each production unit formulates an annual production plan according to the annual sales plan, and decomposes it into each month, formulates a monthly production plan, and issues a product blending list and production notice by the technical department, and each factory schedules and implements it. In addition, in order to make up for the temporary shortage of production capacity of some products, green tea enterprises have the situation of production through commissioned processing (OEM), green tea enterprises have formulated a sound OEM management system, and established the evaluation standards for OEM entrusting units and OEM factory access assessment. At the same time, the company has established a daily supervision and inspection mechanism and an access re-evaluation mechanism to ensure OEM factory management compliance, product quality and safety, and product quality compliance.
3. Sales model
Green tea enterprises to adopt the "distribution-based, direct sales supplemented" sales model, green tea enterprise sales system by the headquarters sales management department, the business unit sales system, etc., the enterprise sales system adhere to the unified planning, division of labor hierarchical implementation of the management principle, among them, the headquarters sales management department is the overall sales management of the specific implementation of the department, the overall operation of the enterprise sales system for overall coordination; Each business unit shall refer to the sales management content of the headquarters and set up corresponding departments or positions to form a sales management system with division of labor and stratification.
4. R&D mode
Through independent research and development and industry-university-research cooperation with domestic universities and scientific research institutions, green tea enterprises continuously improve production and processing technology, improve product quality and production efficiency, and continue to develop new products with more core competitiveness. The R&D department of green tea enterprises is responsible for the development of new products, continuously optimizing and innovating tea-making techniques, and incorporating food safety and quality control technologies and fully automatic packaging technologies into the production process to further ensure product quality and food safety. In addition, guided by market demand, the company determines the new product development plan and improves the formula design through the analysis of consumer preferences, and finally provides consumers with superior quality and exquisite packaging products.
3. Industry policy
1. Industry authorities, regulatory systems and self-regulatory organizations
The authorities in charge of the green tea industry include the Ministry of Commerce, the State Administration for Market Regulation, the National Health Commission, the Ministry of Agriculture and Rural Affairs, the State Forestry Administration, and the Ministry of Industry and Information Technology. Industry self-regulatory organizations include the China Tea Circulation Association, the National Tea Standardization Technical Committee, and the China Food Industry Association.
2. Industry-related policies
In recent years, in order to expand and strengthen the characteristic agriculture and forestry industries such as tea, relevant departments in mainland China have issued a series of policies to support, encourage and standardize the development of the industry, such as: In April 2023, the Ministry of Agriculture and Rural Affairs issued the "Implementation Plan for Supporting Poverty Alleviation Areas to Build Regional Public Brands (2023-2025)", pointing out: do a good job in "native products" articles, lay a solid brand foundation, strengthen the main body of the brand, promote channel docking, strengthen marketing and promotion, and drive the quality and efficiency of industries in poverty alleviation areas and increase farmers' income. Effectively enhance the endogenous development momentum of poverty alleviation areas and people, and provide strong support for comprehensively promoting rural revitalization and accelerating agricultural and rural modernization.
In response to the call of the state, various provinces and cities actively promote the development of the tea industry, including green tea, such as: In August 2023, the Pingnan County Agriculture and Rural Bureau and the Pingnan County Finance Bureau issued the "Several Opinions on Supporting the Development of the Tea Industry in Pingnan County (2023-2025)", pointing out that the improvement of tea varieties and the transformation of low-yield and low-quality tea gardens will be supported by more than 2,000 mu per year. By 2030, the total area of tea gardens in the county will be stable at 30,000 mu, of which 20,000 mu will be ecological tea gardens. In May 2024, the Xinjiang Uygur Autonomous Region issued the "New Requirements for the Packaging of Mooncakes, Zongzi and Tea", pointing out that the number of packaging layers for mooncakes, zongzi and tea will be reduced from no more than four layers to no more than three, so as to provide the market with more high-quality, green, low-carbon and environmentally friendly products, and continue to improve the development level of the industry.
Fourth, the development process
The development process of the mainland green tea industry can be traced back to thousands of years ago, tea was first used for medicinal purposes, and then gradually evolved into drinking, becoming an indispensable drink in the daily life of the people, after thousands of years of development, the mainland green tea occupies an important position in the global tea industry, and tea culture has become one of the important parts of the traditional culture of the mainland.
Fifth, industry barriers
1. Brand barriers
With the continuous improvement of residents' income level, the trend of residents' consumption upgrading is obvious, consumers have put forward higher requirements for the quality and health of green tea products, people pay more and more attention to the choice of branded goods, consumers tend to choose green tea products with higher brand awareness, and their trust and dependence on the brand are getting higher and higher. Good brand awareness and product reputation have become the core competitiveness of enterprises, which helps enterprises to improve the added value of products and expand market share. Brand is the embodiment of the comprehensive strength of the enterprise, and is the result of the continuous efforts and continuous improvement of the enterprise in the research and development of new tea products, quality control, food safety and marketing, etc., which requires long-term investment and accumulation. Therefore, it is difficult for new entrants in the green tea industry to accumulate consumer reputation or quickly establish their own well-known brands in the short term.
2. Barriers to large-scale operation
With the continuous development of the tea industry, the concentration of the industry will gradually increase, some small and medium-sized enterprises are facing the possibility of being eliminated, and the competitive advantage of enterprises with large-scale production capacity is highlighted. Large-scale green tea enterprises need to invest heavily in tea garden bases, plant construction, production equipment purchase, product research and development, personnel training and marketing to form a relatively complete industrial chain in order to have strong competitiveness. However, new entrants in the industry cannot form large-scale operations in the short term and are in a disadvantaged position in the fierce market competition.
3. Food quality and safety barriers
Food safety is directly related to the health of consumers, causing great concern from the government and the public, with the improvement of laws and regulations, regulatory policies and food safety standard system, the quality standards of green tea products will be further improved. At the same time, as consumers pay more and more attention to food safety, their tolerance for food hygiene problems is decreasing. These factors have put forward higher requirements for the quality standards of green tea enterprises, and higher product quality standards require enterprises to accumulate experience for a long time and establish a strict quality control system, so they form a high barrier to new entrants.
4. Sales channel barriers
Large-scale green tea production enterprises need to establish perfect sales channels to expand the downstream market, enhance brand awareness and expand market share, whether the sales channels are perfect, directly affect the sales speed and sales scale of green tea products. After continuous business expansion, large-scale green tea enterprises have formed relatively mature product sales channels in the region, with long-term cooperative customers and relatively stable consumer groups. The establishment of a sound sales channel requires the construction of a sales network and the cultivation of consumer groups, and the need for continuous promotion investment, effective management system and long-term time accumulation, which constitutes a certain barrier to new entrants in the industry.
5. Technical barriers
Green tea production enterprises need to continuously improve the mechanization and standardization level of tea processing, improve production efficiency, ensure product quality, and continue to carry out technical research and development of new products and new processes, and develop products that meet customer needs in a timely manner. For new entrants in the industry, it takes a long period to accumulate rich technology and R&D advantages, which constitutes a certain barrier to new entrants in the industry.
Sixth, the industrial chain
1. Analysis of the industry chain
The upstream of the green tea industry mainly includes tea planting, processing equipment, packaging materials and other industries, among which, the development status of the tea planting industry directly determines the supply quantity, quality and purchase price of green tea raw materials, and plays an important role in the output, quality, cost and profitability of green tea products. The downstream is the sales channel and the end consumer. Sales channels include franchised stores, counters, supermarkets, wholesale markets and e-commerce, etc., and the demand of end consumers is mainly affected by factors such as income level, change of consumption concept, and penetration of marketing channels. With the significant growth of Chinese consumers' income level and spending power, green tea, as one of the safe and healthy beverages, is in line with the consumption concept of consumers in the new era, consumer demand will continue to grow, and the industry will usher in a broad space for development.
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