Tea has always carried more meaning than its ingredient list suggests. In many Asian markets, it is tied to ritual, hospitality, habit, and identity. That is part of what makes the current shift in tea consumption commercially interesting. Tea is still culturally rooted, but in market terms it is no longer only a traditional drink. It has become a format that can absorb new ingredients, new textures, and new consumer expectations without losing its familiarity. That matters because milk is no longer sitting at the edge of the category. In many fast-growing tea formats, it is now central to how value is created.
Euromonitor’s recent work helps explain why this is worth paying attention to. Across Asia Pacific, per capita expenditure on tea is projected to rise by 9% between 2022 and 2027 to USD6.1, while specialist coffee and tea shops in the region recorded 8% value growth between 2017 and 2022, reaching USD26.9 billion. In Southeast Asia alone, Euromonitor says foodservice sales of specialist coffee and tea shops reached USD4.4 billion in 2023 and are forecast to grow at an 8% CAGR through 2028. This is not a niche story anymore. It is a broader foodservice and beverage channel that is still expanding, still fragmenting, and still making room for new forms of premiumisation.
What makes this more than a tea story is the way consumer expectations are changing inside the category. Euromonitor notes that in China, 47% of consumers say they are trying to reduce sugar and 38% are trying to reduce fat, yet 41% say texture matters and 31% say they enjoy trying new tastes and combinations. That combination is important. It suggests that consumers are not simply moving toward “healthier” beverages in a narrow sense. They still want pleasure, sensory reward, and novelty. They just want those things delivered in a more credible or better-balanced way. That is one reason milk continues to matter. It helps brands reduce the harshness of tea, soften sweetness, create texture, and support more premium positioning at the same time.
This helps explain the rise of what China often refers to as “new-style tea drinks.” Euromonitor describes these drinks as being built from high-quality tea leaves mixed with ingredients and toppings such as fruit and whipped cheese, and says they have been driving growth in chained coffee and tea shops in Asia Pacific. It also notes that the share of chained coffee and tea shops within the region’s total cafés and bars rose from 12% in 2015 to 22% in 2020 and was expected to reach 24% by 2024. That may sound like a channel statistic, but it is really a consumer behaviour signal. Tea is being consumed less as a fixed product and more as an adaptable format that can carry freshness, indulgence, functionality, and social experience at the same time.
In China, the category’s development shows how quickly this can move. Euromonitor argues that mainland China’s new-style tea drinks have been driven by the pursuit of health and a more sophisticated taste in bubble tea. Earlier waves of milk tea were often novelty-led and price-led. As incomes rose, consumers traded up. Euromonitor points to brands such as HeyTea and Nayuki as companies that energised demand through cheese tea, fruit tea, reduced-sugar options, and store environments designed as comfortable “third places.” It adds that consumers were willing to pay a premium for these beverages, and that from 2015 to 2019 sales for HeyTea and Nayuki in China grew at CAGRs of 53% and 358% respectively. The broader lesson is that people did not abandon tea culture. They reinterpreted it through quality signals, better ingredients, and a more modern retail experience.
That shift has a direct bearing on dairy. In older milk tea models, milk was often a functional ingredient, and sometimes not milk in any meaningful sense at all. Creamers, powders, syrups, and stabilised blends did much of the work. In more premium formats, the logic is different. The dairy component is now part of the proposition. Nayuki’s own 2024 annual report described its positioning around less sugar and higher-quality ingredients, specifically highlighting fresh fruits, high-quality tea leaves, and fresh milk instead of syrup, tea powder, and creamer. That is a useful brand example because it shows how ingredient choices have become part of consumer-facing positioning, not just back-end formulation.
At the other end of the market, the value segment also shows why this category matters. Mixue reported more than 46,000 stores across China and 11 overseas countries as of the end of 2024, with core products typically priced between RMB2 and RMB8. That scale matters because it shows the category is not confined to premium urban consumers. Milk tea and tea-based drinks now operate across very different price bands, from mass-market frequency purchases to lifestyle-led premium beverages. For suppliers, that means there is no single “tea opportunity.” There are multiple sub-markets, each with different requirements for price, functionality, logistics, and storytelling.
The internationalisation of Chinese tea chains is another important signal. Chagee reported 7,453 teahouses across Greater China and overseas as of the end of 2025, with overseas fourth-quarter GMV up 84.6% year on year. Euromonitor also notes that Southeast Asian consumers are sophisticated, open to trying new flavours, and willing to spend, even though per capita spend in specialist coffee shops remains relatively low at USD7.3 in 2023, roughly half the global average. In other words, the market is still early enough to offer headroom, but developed enough to reward differentiated propositions.
For New Zealand and Australian businesses, this is where the opportunity becomes more practical. Both countries come into the conversation with a strong dairy reputation, and in New Zealand’s case, dairy is still the country’s biggest export earner at about NZ$19 billion a year. New Zealand also now has a tariff advantage in China that matters commercially: MFAT states that all remaining tariffs on New Zealand dairy products were lifted in 2024, and the government estimated the end of safeguard duties on milk powder would deliver around NZ$350 million in additional annual tariff savings. Australia’s opportunity looks somewhat different but still relevant. Austrade says Asia takes around 87% of Australia’s dairy exports, and Southeast Asia is its fastest-growing regional market, importing more than 290,000 tonnes of dairy products worth over A$1.2 billion in FY2023-24.
But the real opportunity is not simply “sell more milk into Asia.” That framing is too broad and increasingly too weak. Euromonitor’s Asia dairy analysis makes a useful point here. It says drinking milk products account for 58% of dairy retail value sales in Asia Pacific in 2024, but per capita consumption is still only 12.8 litres, far below Western Europe’s 42.3 litres and North America’s 36.6 litres. It argues that brands need to introduce products that complement local cuisines and enhance lifestyles. That is exactly the right lens for the tea channel. Tea is not just another route to dairy volume. It is a way of embedding dairy into an already relevant local consumption habit.
That distinction matters because it changes what exporters should pay attention to. The opportunity is strongest where dairy does not feel imported into the category from outside, but where it helps the category become what consumers already want it to be. In premium tea formats, that can mean fresh milk that supports a cleaner label, a more natural image, or a softer and fuller mouthfeel. In scaled franchise formats, it may mean dairy powders or blends that hold up under shaking, sugar loading, temperature shifts, and delivery times. In RTD tea, it can mean stable milk-tea systems that preserve texture without undermining shelf life. Euromonitor’s analysis of Chinese consumers makes this tension quite clear: people want reduced sugar and more natural cues, but they also care about texture and enjoy novelty. The supplier who can solve both sides of that equation is more useful than the supplier who arrives only with origin credentials.
This is also where many businesses misread the category. It is easy to assume that a strong national dairy reputation will do most of the work. In practice, tea brands buy on a more complicated logic. Performance in the cup matters. Does the product split? Does it flatten the tea aroma? Does it hold a foam layer? Can it work in hot and cold applications? Does it create a mouthfeel that feels more premium without pushing cost beyond what the final drink can bear? These are not generic dairy questions. They are beverage-application questions. The category therefore rewards businesses that are willing to think like ingredient partners rather than simply exporters.
There is also a branding implication that should not be overlooked. Euromonitor notes that 40% of Chinese consumers look for all-natural ingredients on food and drink labels. That does not mean every tea chain will place the milk origin front and centre. Many will not. But it does suggest that when a brand wants to signal quality, “fresh milk,” “better ingredients,” and more transparent sourcing have become commercially useful language. Nayuki’s own wording shows that this is already happening at brand level. For New Zealand and Australian suppliers, that opens a second layer of opportunity beyond raw ingredient supply: selective co-branding, menu-level ingredient endorsement, or B2B positioning as a quality-enabling component in premium tea systems.
None of this means the opportunity is easy. The tea channel is fragmented, fashion-sensitive, and highly operational. Premium chains and value chains behave very differently. Delivery platforms influence product design. Store economics are tight. Trends move quickly. A product that works in milk coffee does not automatically work in fruit tea with milk foam. A milk powder designed for bakery or standard beverage use may not perform well in tea. And because the category is still evolving, technical support, local testing, and responsiveness often matter more than exporters expect. That is precisely why the opportunity is real. It is harder to commoditise when application knowledge matters.
The larger conclusion is that tea culture and dairy are no longer separate commercial worlds. Tea has become a consumer platform where texture, visible ingredient quality, health signalling, and social experience all meet. Euromonitor’s research suggests the category still has room to grow, while the development of brands such as Mixue, Nayuki, HeyTea, and Chagee shows how broad the market has become in both price and positioning. For New Zealand and Australian businesses, the opportunity is not simply to be present in the market. It is to become relevant to how the market is changing. That means understanding tea not as a sales channel for milk, but as a fast-evolving beverage culture in which the right dairy ingredient can help define the product itself.