China’s Milk Tea Industry Gets a Health Check

A new grading system currently being tested in Shanghai aims to give consumers a clearer picture of the sugary drinks’ nutritional value — or lack thereof.

By Li Xin and Ding Xiaoyan

SHANGHAI — Waiting in line at her favorite milk tea shop, Zhang Xin inspects the menu closely. The object of her curiosity isn’t the store’s long list of toppings or flavors, but something new: a color-coded grid of nutrition ratings attached to each drink.

Zhang, a 30-year-old accountant, says she likes to treat herself to a sugary, caffeinated milk tea whenever work gets too stressful. She’s not alone: Mid- and high-end milk tea chains have exploded on the Chinese mainland in recent years as office workers looked for an afternoon pick-me-up.

Now there are signs of a sugar crash. Obesity rates are climbing, worrying regulators, and health-conscious young Chinese are flocking to healthier, if not always tastier, options like so-called yangsheng, or “body-healing,” beverages, which promise the energy boost without the calories.

The health label that caught Zhang’s eye is in part a response to this trend: This March, the Shanghai Center for Disease Control and Prevention launched a one-year pilot program to test the feasibility of adding nutrition labels to fresh beverages.

The system, which grades drinks on a scale from A to D, with D indicating the highest levels of sugar and saturated fat, is mandatory for beverage packaging, in-store menus, and online ordering systems.

Unlike other nutrition evaluation systems, which seek to offer a comprehensive look at a drink’s contents, the system currently being tested in Shanghai evaluates drinks based on four criteria: non-dairy sugar, saturated fats, trans fats, and non-sugar sweeteners. It then appends a final grade based on the lowest rating earned in any of the four categories. This means that as long as one of the four is a D, the drink will receive a D rating, even if the other ratings are all As.

At Chagee, a trendy newcomer to the market and Zhang’s tea chain of choice, the online menu updates grades in real time, depending on her chosen add-ons. Her order starts at a B, but if she chooses to add sugar, the grade falls to a C. “I usually prefer the taste of sweeter drinks,” Zhang says. “But with the nutrition labels, I guess I’m thinking twice.”

There are signs that the system is already changing customers’ buying habits. A spokesperson for Nayuki, another popular tea chain, told local media that sales of products with A and B ratings increased 23% in the first few weeks after the launch.

A Chagee store in downtown Shanghai, July 1, 2024. Li Xin/Sixth Tone

Other brands, including Chagee, have gone further, integrating nutrition calculators into their online ordering systems. The feature displays the sugar, carbohydrate, fat, and protein content of each drink — information that was previously unavailable for freshly made beverages.

Chang Yue, a 24-year-old Type 1 diabetic, appreciates the new functions. “The nutrient data helps me to decide how much insulin to take,” she says.

Excessive sugar intake has been linked to increased risk for obesity, cardiovascular diseases, diabetes, and other metabolic diseases. According to China’s official dietary guidelines, adults should consume no more than 50 grams of added sugar per day. Recommended sugar intake was cut from 30 grams to 25 grams in 2019.

Problems associated with sugar consumption have continued to rise, however, driven in part by the popularity of milk tea among young Chinese. One study found that deaths linked to sugary beverage consumption reached 46,600 in 2019, up 95% since 1990.

Another study of the body mass index (BMI) of 15.8 million Chinese adults found that 34.8% met the criteria to be classified as “overweight”; 14.1% were obese.

According to the Shanghai CDC, nearly half of milk teas tested would receive a C grade, even if consumers select the second-lowest sugar option.

Zhang Yi, chief analyst at the consulting firm iiMedia, expects the new system will create a “watershed” for beverage brands looking to brand themselves as health conscious by allowing them to emphasize factors other than taste.

“The pilot program can be seen as a reflection of consumer demand,” he says. “It will drive brands to develop more healthy products.”

(Header image: SamsonFM/VectorStock/VCG, re-edit by Sixth Tone)

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