Nayuki Bets $152 Million on Bottled Tea

Chinese bubble tea chain Nayuki is in urgent need of acquiring a ready-to-drink (RTD) production line due to the recent sharp increase in sales of ready-to-drink products, Sina Finance reported on Tuesday. The company is supposedly looking to invest between 500 million to 1 billion yuan ($76 million – $152 million) in the production.

According to an internal picture of a financing consultant acquired by Sina Finance, the specific requirements of the “listed company” for its RTD production line are: the production capacity reaches 70-80 million boxes/year; 8-12 production lines; aseptic cold filling, high automation level and a team with more than 10 years of factory management experience. That “listed company” is the Nayuki Holdings Limited.

A few weeks ago, Nayuki set up its own investment company. According to Tianyancha, Shenzhen Meihao Own Power Investment Co., Ltd. was established on March 28th. According to shareholder information, the company is wholly-owned by Shenzhen Pindao Catering Management Co., Ltd., an affiliated company of Nayuki. The registered capital is 10 million yuan.

Regarding the planned acquisition of a RTD production line, Nayuki’s spokesperson responded to Sina Finance, saying that the company is indeed vigorously developing its bottled beverage business. In 2021, the Nayuki Beverage tech firm was established and seven bottled tea products were launched to market. But the person clarified that it would not be easy to confirm the investment matters rumored on the Internet yet.

According to data collected by Forward (Qianzhan) Intelligence Co., Ltd., China’s soft drink market has become one of the largest soft drink markets in the world with a market size of about 600 billion yuan. The largest segment of China’s soft drink industry in 2020 was in fact packaged drinking water, accounting for 37.64% of the market share, while ready-to-drink bottled tea was close behind, accounting for 19.64%. The soft drink industry as a whole is valued at around 100 billion yuan and holds promising market returns. Compared with freshly made tea, bottled beverages have higher gross profits, wider consumption and better market coverage.

SEE ALSO: Nayuki’s 2021 Adjusted Net Loss Between $672M to $678M

In order to find new growth markets going forward, top-tier Chinese milk-tea brands such as HeyTea, Nayuki and LELECHA have begun making inroads to the bottled tea business. Some insiders are saying that bottled drinks could become the next source of profits for milk-tea brands.