U-PRESID CHINA's Beverage Business Slips 0.3% in H1, Propped Up Only by Milk Tea

U-PRESID CHINA's growth continues to slow.

On August 5, U-PRESID CHINA disclosed its interim results for 2026. In the first half of the year, the company's revenue increased by 1.4% to RMB 17.321 billion, and net profit rose by 9%. Gross margin improved by 0.7 percentage points to 35%, primarily driven by optimization of the product mix.

This revenue growth rate was significantly lower than the 10.6% recorded in the same period last year, continuing the weak performance seen since the second half of last year.

By business segment, food revenue grew by 4.7%, while beverage revenue declined by 0.3%. Among beverages, tea beverages and juice fell by 3.5% and 5.5%, respectively, whereas milk tea grew by 7.3%, emerging as the relatively standout category among major beverage segments.

U-PRESID continues to manage traditional flagship products such as Green Tea and Ice Red Tea, while supplementing its sugar-free tea portfolio through independent operations of the "Chunfu" brand and strengthening the "Tea Life King" brand.

The juice business is adjusting its products around sugar reduction, low-sugar options, and functional enhancements, including the launch of Xian Cheng Duo Jasmine Orange and upgrading the isotonic formula of Hai Zhi Yan.

These adjustments highlight current weaknesses in U-PRESID's product structure: demand for traditional sugary teas and juices is under pressure, while growth sectors such as sugar-free teas and functional drinks have already established strong first-mover brand advantages.

With increased investment from giants like Luckin Coffee, Dongpeng Special Drink, and Nongfu Spring, the popularity of ready-to-drink (RTD) coffee has risen this summer.

In its financial report, U-PRESID stated that freshly brewed coffee is still growing rapidly, while competition in the existing RTD coffee market is intensifying.

Its Ahaha Coffee brand is currently focusing on advantageous regions such as East China, where its local growth rate outperforms the industry average. However, the company did not disclose specific revenue figures for its coffee business.

On the channel front, U-PRESID is shifting from traditional distribution and supermarket shelf placement to more segmented scenario-based operations.

This year, the beverage business is prioritizing expansion into six key scenarios: catering and banquets, gift boxes, sports, leisure and entertainment, industrial parks, and education and training. It is also increasing investment in terminal sales points and freezers.

A promotional campaign for U-PRESID Green Tea covered 50,000 offline convenience stores, while new Xian Cheng Duo products are 重点 entering schools and instant retail channels.

Membership stores and snack discount chains have also become important channels for new products and customized businesses.

In addition to co-created products with Sam's Club under the Man Han Da Can brand, U-PRESID customizes NFC juices, composite fruit and vegetable juices, and instant noodles for membership stores and snack discount chains, adjusting flavors, specifications, and ingredient packs according to customer needs.

Channel expansion has also driven up costs. In the first half of the year, U-PRESID's selling and marketing expenses increased by RMB 166 million to RMB 3.939 billion, mainly used for channel promotions, terminal assets, and transportation.

From a revenue structure perspective, U-PRESID has yet to find large-scale incremental growth capable of fully replacing traditional beverages. Whether the beverage business, which accounts for more than 60% of revenue, can return to growth will continue to determine U-PRESID CHINA's overall performance in the near future.

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