Traditional, healthy ingredients recipe for success

Red and green beans have long been used as the preferred ingredients for snack fillings in East Asia.

Now, a company in Shandong province has found a way to use these as essential ingredients for Chinese-style plant-based ready-to-drink beverages.

Keyang Beverage Co, a leading fillings provider for many food brands in Asia, has seen its revenue skyrocket by 150 percent annually since 2020, driven by strong demand for zero-sugar, zero-fat and zero-calorie beverages from health-conscious Chinese consumers.

In 2020, amid stagnant export growth, Keyang's founder and CEO, Wang Zhonghe, decided to develop the company's own brand. Wang and his team introduced beverages such as red bean water, job's tears water and green bean water.

The company launched the first bottle of red bean and barley water in China, claiming to retain the original flavor of the ingredients without any additives.

"We were among the first to bring this traditional wellness culture to modern, convenient formats," Wang said at a food and beverage innovation forum in Shanghai last month. "We removed the starch and protein of the beans from the water, making the drinks zero-sugar, zero-fat and zero-calorie, while maintaining the original taste and color of the ingredients."

The product has a gemstone-like color and is rich in polyphenols, potassium, iron and other trace elements, said Wang.

The market for grain-flavor drinks is heating up, with many companies entering this sector.

A strong supply chain is one of Keyang's advantages, said Wang. As a leading company in domestic filling production, Keyang has been deeply involved in the baking industry for 30 years. The company extracts raw red beans and mung beans without any additives for the beverages, and utilizes the remaining in their filling products.

Jason Yu, general manager of Kantar Worldpanel China, said, "Categories with strong health attributes, such as ready-to-drink juices, ready-to-drink teas, and sports and energy drinks, have seen growth both at home and abroad.

"The consumption of traditional Asian beverages like herbal tea, barley water, and corn silk tea has also seen a notable resurgence in domestic consumption scenarios."

Yu said the growth rate of the packaged beverages sector is significantly higher than other leading fast-moving consumer goods sectors.

According to Kantar Worldpanel China, the overall growth of packaged beverages in 2023 was 10 percent. Although the growth in the first quarter of 2024 was slower, it still achieved an 8 percent increase.

Chinese wellness water, an instant plant-based beverage, aligns with the Chinese concept of "wellness." Common ingredients include red beans, barley, goji berries, red dates, mung beans, chrysanthemum and barley — ingredients perceived as healthy and having both medicinal and dietary uses.

The latest report released by the Qianzhan Industry Research Institute showed that the market size for Chinese wellness water in China reached 450 million yuan ($61.9 million) in 2023, with year-on-year growth exceeding 350 percent.

More brands have entered a market whose compound annual growth rate is expected to exceed 88 percent over the next five years. The market size is projected to surpass 10 billion yuan by 2028.

According to NielsenIQ, the domestic sugar-free beverage industry generated 24.1 billion yuan in revenue in 2023, a year-on-year increase of 26 percent.

The "2023 China Sugar-Free Tea Industry White Paper" revealed that online sales of sugar-free tea on Tmall and Taobao increased from 46.8 million yuan in 2018 to 447.3 million yuan in 2022, achieving nearly 10-fold growth over five years.