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Print Edition> Business
UPDATED: September 19, 2010 NO. 38 SEPTEMBER 23, 2010
China's Red-Canned Beverage

DRINK TO GOOD HEALTH: Wong Lo Kat herbal tea cans line a shelf at a supermarket in Beijing. The herbal tea brand recently won the Global Food Industry Award at the 15th World Congress of Food Science and Technology held in Cape Town, South Africa (CNSPHOTO)

Coca Cola isn't the only company with an iconic red can anymore—Wong Lo Kat herbal tea is gaining recognition worldwide.

At the 15th World Congress of Food Science and Technology held on August 23 in Cape Town, South Africa, the canned Wong Lo Kat herbal tea, produced by The JDB Group, won the Global Food Industry Award. It is the first Chinese beverage brand to win this award.

As the most authoritative conference on food science and technology, the World Congress of Food Science and Technology was held by the International Union of Food Science and Technology.

Competing against 79 other nominees, Wong Lo Kat herbal tea received praise from members of the review committee who thought the production techniques of Wong Lo Kat herbal tea have reached the international advanced level. The tea, they said, also inherits and passes on the traditional culture of health and disseminates Chinese food and drink culture.

A century-old brand

In China, herbal tea is a general term for beverages made of traditional Chinese medicine that can eliminate fevers or internal body heat. Herbal tea can relieve summer heat and treat diseases such as sore throat in winter. Since it represents the traditional Chinese culture of health, herbal tea has been incorporated into the national level intangible cultural heritage list by the State Council.

Historically, the earliest herbal teas were made by Wang Zebang of south China's Guangdong Province in 1828. At Wang's time, malaria was rampant in Guangzhou, Guangdong. Wang found an herbal tea remedy, which could cure villagers infected with the disease, and quench thirst in hot summer. Wang began selling herbal tea medicines in 1840 and established an herbal tea shop in Guangzhou in 1852, selling finished herbal tea under the name Wong Lo Kat.

In 1938, Guangzhou was conquered by the Japanese army and the herbal tea shop of Wong Lo Kat was destroyed. After World War II ended, Wong Lo Kat resumed production in Guangzhou. When the New China was founded in 1949, Wanglaoji United Pharmaceutical Factory was set up in Guangzhou. The company changed its name to Guangzhou Wanglaoji Pharmaceutical Co. Ltd. on March 4, 2004. The brand value of Wong Lo Kat at its highest ranked fifth among the country's top 100 shops, with a value of 2.24 billion yuan ($332.34 million).

New look, new gains

Wong Lo Kat herbal tea has been a local drink in Guangdong for more than a century. Its world expansion started in 1995, when Guangzhou Wanglaoji Pharmaceutical Co. Ltd. rented the use right of the herbal tea to beverage company the JDB Group of Hong Kong.

The use right is being rented from 1995 to 2020. And since the 1990s, the JDB Group has repackaged the image of Wong Lo Kat herbal tea, setting up a production base in Dongguan, Guangdong in 1995 and producing the first red-canned Wong Lo Kat herbal tea soon thereafter. Before that, Guangzhou Wanglaoji Pharmaceutical Co. Ltd. had produced Wong Lo Kat herbal tea in green paper packages.

To fully tap the Chinese market, the JDB Group then established production bases in Beijing, Zhejiang Province, Fujian Province and Guangzhou. By 2008, the sales value of red canned Wong Lo Kat herbal tea had surpassed 10 billion yuan ($1.48 billion), ranking first in China's beverage market in front of Coca Cola and Pepsi. According to figures released by the National Bureau of Statistics in March 2010, Wong Lo Kat herbal tea has been first in China's beverage market in terms of sales value for three consecutive years since 2007. In the first half of 2010, the sales volume of canned Wong Lo Kat herbal tea increased more than 20 percent compared with the same period last year.

At present, the sales networks of Wong Lo Kat herbal tea have spread to all provinces, municipalities and autonomous regions on the Chinese mainland and more than 50 countries and regions in Southeast Asia, Europe and America.

Hu Shuhua, Secretary of the Board of Guangzhou Wanglaoji Pharmaceutical Co. Ltd., said the success of Wong Lo Kat comes not only from innovation and good quality, but also traditional Chinese culture. With a history of more than 180 years, Wong Lo Kat has made handsome gains as a brand embracing the "traditional Chinese culture of health." Stimulating commercial innovation by passing on culture is the secret to Wong Lo Kat's success, Hu said.

Herbal demand

According to figures from the China Beverage Industry Association (CBIA), in 2009, the output of China's beverage industry surpassed 77 million tons, a year-on-year increase of 28 percent, showing the huge potential of the country's beverage market. Herbal tea, an independent category from water, carbonated drinks, milk and juice, is one of the fastest growing categories on the Chinese market.

CBIA figures also show that in 2009, herbal tea on China's beverage market grew at more than 30 percent, with a total sales value of 17 billion-18 billion yuan ($2.52 billion-2.63 billion). In the first half of 2010, herbal tea growth remained high, ranking first with its 20-percent increase. Now, there are more than 10 herbal tea brands in China.

As for the popularity of herbal tea, Ocn.com.cn released a report on investment analysis and predictions of the Chinese functional beverages market in 2010-15. The report says more attention to health by consumers is the main cause for the herbal tea's popularity.

The report says with worldwide declining environmental quality and increasing life pressures, more people are in a sub-health state. As a result, people have begun to care more about their own health and are choosing to consume healthy food and beverages. And Wong Lo Kat meets consumers' demand for healthy living and a return to the traditional culture of health, making it a drink of growing popularity among Chinese and global consumers.

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