China Food

Is there a bubble in the sugar free gas water circuit?

Taking the time line longer, with the development of health and slimming economy, an obvious trend is that deglycosylation is likely to become the consumption core of China’s beverage market.

People may not like Coke any more


Carbonated drinks may be becoming the tears of the times.


Since 2005, the sales volume of carbonated beverage market in the United States has fallen for 11 consecutive years. According to the US “beverage digest” report, in 2015, the global per capita consumption of carbonated drinks has dropped to the bottom, the lowest level in 30 years.

The crimson liquid that once made people all over the world crazy about it also lost its attraction.


Official data show that in the North American market, both Coca Cola and Pepsi have seen almost single digit growth in sales over the past few years. In 2018, the organic growth rate of Coca Cola’s overall sales in North America was almost zero.


Clearly, the position of the traditional beverage giant is being shaken.


There is no doubt that the change of health awareness of end consumers is the bottom cause of the cold of carbonated beverage market. In addition to the cold sales, carbonated drinks containing excessive sugar generally face the pressure of sugar tax after lobbying by health organizations.


As early as July last year, the World Health Organization announced that the standard daily sugar intake for adults is 25 grams. Under the policy background, some countries put forward new requirements on the standards and measures of reducing sugar in food and drinks, and the “sugar tax” comes from this.


In 2014, Mexico became the first country to impose a sugar tax on carbonated beverages at a rate of one Peso per liter. Since then, a number of countries, including Chile, Portugal, Britain, France and Ireland, began to enter the army of sugar taxes.


The US media quartz reported that this directly led to the cost pressure of carbonated drinks and deepened consumers’ concerns about sugary drinks in the form of a statutory tax.


On the one hand, consumers are moving towards healthy, sugar free drinks. Beverage Marketing Corp. tracks the sales data of many parties and believes that as early as 2017, the share of health drinks in the United States has occupied 41% of the total beverage market. Ibwa International Bottled Water Association statistics also pointed out that among all non-alcoholic drinks, 72% of consumers preferred bottled water with and without bubbles.


On the other hand, beverage giants are trying to make a comeback by acquiring mature and cutting-edge health beverage brands or launching self-developed product lines to supplement their product matrix and try to create a more healthy beverage image. Take Coca Cola as an example, Zico coconut water and cold-rolled juice brand Suja life were taken under the company before and after, and health tea brands such as honey tea were supplemented.


It’s clear that health and sugar free will be the theme of the next decade.

Bubble water is booming in China


Similar to the consumption trend in North America, the consumption market of carbonated drinks in China is also facing a gradual decline in recent years.


According to Euromonitor and CAITONG securities data, the growth rate of China’s carbonated beverage market has continued to decline since 2012, and tends to stagnate. In 2017, the market share of carbonated drinks was only about 17%, of which Pepsi and Coca Cola accounted for more than 90% of the dishes.


In contrast, it is the booming growth of bubble water in the Chinese market.


More than a decade ago, when high-end bubble water, such as Saint Pellew, landed in China with the identity of Paris, the class attribute was as clear as Starbucks. But now, the industry has developed to the point where everyone can get the price.


This kind of “everyone can get” parity has directly widened the bubble water market by more than a little bit.


According to the forward-looking data, the overall market scale of domestic bubble water will be about 15 billion in 2019, and it is expected to reach 32 billion yuan by 2025. According to other data, the sales volume of bubble water in China increased by 43.9% year-on-year in 2018, far higher than the 5% sales growth rate of ordinary mineral water.


Among them, the healthy carbonated water substitutes for flavored bubble water drinks have become more and more popular in recent years. According to Nielsen’s Omni channel sales data, as of August 2019, the annual retail sales volume of flavored bubble water was $2.45 billion. Although its proportion in carbonated drinks is not high, it has increased significantly.


Of course, bubble water is hot for a reason. In terms of taste, when the bubbles in the liquid burst at the tip of the tongue, carbon dioxide will cause a tingling sensation to the mouth, which is the same as Sichuan and Chongqing’s Hemp and Hunan’s love of Pepper’s spicy.


Most of the bubble water on the market also follows the health rules of this era. “0 sugar, 0 card, 0 fat” has almost become the standard configuration of the brand. Consumers can not only enjoy the delicious food, but also drink freely without any burden. Whether it is the dining room at night or the Seaview restaurant, the sugar free water is irresistible.


Different from the bubble water market in the United States reported in the beverage industry, there are fewer consumers of tasteless natural gas bubble water in China, and people prefer fruit flavored water or bubble water.


Both Coca Cola and Pepsi launched their own fruit drink series and bubble water products.


In February 2018, PepsiCo launched a sugar free bubble water called bubbly, which contains eight flavors such as mango and strawberry. The brand attaches great importance to Bubby because PepsiCo has bought two TV ads for it, which are called “the most entrenched” new product release.


Coca Cola is not to be outdone. In March, it launched aha, a low-cost bubble water brand. Chief Executive James Quincey said in a fireside chat at the beverage digest conference that Coca Cola should have moved earlier on bubble water.


In fact, not only the giants, but also the beverage players in the local market are aiming at the huge business opportunities of bubble water.


Frankly speaking, the entire plate of the beverage industry is more than trillion yuan, but each segment of the track has been at peace for many years. Pepsi and Coca Cola can’t keep up with their competitors in the field of cola. Packaged drinking water is dominated by Master Kang, Nongfu, Yibao and Wahaha. There are four major juice drinks, including Master Kang, Tongyi, Huiyuan and Coca Cola. Among functional drinks, red bull and pulsation are the most important ones. In the tea market, there are also their own leaders.


But in recent years, in the new tea racing track, during the big fight between milk tea and coffee, almost all players were astonished to find that the era of their own king had passed, and each family had quietly invaded the backyard of other families.


Take bubble water as an example. Not only are new brands such as Yuanqi forest, bestinme and Xicha, but also old brands such as Hankou No.2 factory and Jianlibao, as well as Nongfu Shanquan, a newly listed packaging and drinking water giant, and even Yili, a dairy giant, as well as a coffee teacher, Fu Nestle, all want to have a piece of the cake.

It is worth mentioning that when the whole consumer market is on the eve of the explosion, whether it is sales channels, or connecting consumers, or logistics and other infrastructure, the industry as a whole has ushered in an iterative upgrade.


For example, sucralose, one of the sweetness substitutes used in some sugar free bubble water, upstream supply chain manufacturers such as Jinhe industry have achieved month on month improvement in their performance, not only increasing the proportion of fine chemical business, but also trying to become the leader of sugar free zero card industry through 2C product construction.


This proves from one side that the new product launch cycle of sugar free drinks is about to be shortened, and the speed of product iteration is about to become faster, which is a huge acceleration engine for new entrants specializing in the sugar free field.

Channel penetration is also the scene revolution

Frankly speaking, industry analysts have always been amazed by the speed of the distribution of Yuanqi forest.


From online tmall to appearing in Li Jiaqi’s live studio, this rookie has occupied the eyes of the younger generation with a high frequency of almost anywhere.


Consumers’ attention is limited. When the appearance passes, it will appear in their field of vision frequently, which will certainly deepen the brand impression and cognition.

The beverage industry is different from other industries. Although Yuanqi forest is willing to spend money on marketing, the strong channel is always the guarantee of sales. This also explains why, in the 1990s, domestic soda had a thriving market separated by geographical location.


The Arctic Ocean has firmly occupied the Northeast market. Jianlibao is in the Yangtze River Delta. The ice peak in Shaanxi is well-known. The black pine Shashi in Taipei is sour to think of.


This is also a common way for foreign brands to acquire domestic soda brands and quickly win the channel. As mentioned above, Pepsi and Coca Cola almost occupy more than 90% of the soda market.


However, the market opportunity lies in that when the wave of consumption upgrading begins to sweep, and even the subdivision categories like milk tea have run out of the new and cutting-edge brands like Xicha, this means that the market share of most categories begins to cross and the consumer turnover rate rises rapidly.


This also implies that the position of the old industry giants has begun to loosen, the industry concentration has decreased, and the margin of channel dividend has appeared.


In this contest, the first mover’s energy forest is moving like a rabbit, while the industry’s latecomers can only run faster.


When old players push the new line, the accumulation of channels under the line will be more awesome. For example, as soon as arctic bear Fu, a brand of Zero sugar soda bubble water, was born, it appeared on the shelves of Centennial Yili, Wumart, multipoint convenience, Jingdong supermarket and HEMA Xiansheng. But the flagship store of Arctic food on Taobao has not yet opened for sale.


In contrast, the new brand’s way of operation is much more flexible.


Taking xixiaocha as an example, the brand advantage of xixiaocha is brought by its name. When landing offline, it is not the core business circle to choose the scenes such as the street and campus of low-level cities. The method of channel penetration has been relatively clear, and the site selection will be quick.


Similarly, even with the outbreak of black swan, the pace of new beverage brand bestinme in May October was not affected.


New brands are familiar with online operation. They have already been sold in tmall flagship stores, while offline convenience stores, new retail, auto vending, campus convenience, gym and other scenes have been spread out, which can be seen frequently in HEMA and convenience bee. These are the direct tentacles of brand and consumer.


Here’s an interesting point.


It’s not surprising that new brands can penetrate into supermarkets such as HEMA, Yonghui and convenience bee, but it’s very interesting to attack vending machines such as Youbao, as well as the campus and gymnasium spots densely populated by precise users.


After a tour of the gym in Shanghai, I found that Welsh and a trillion Wade could buy this brand. A sweaty gym is just what you need for a sugar free drink.


Sports Xiaobai, who just wants to lose weight, has always preferred sugar free drinks. When he is thirsty, it’s natural to consume the target brand in the place where he can see it. Professional high-level fitness players will also cooperate with nutritional supplements and alternate with sugar free drinks. For example, bestinme’s light 0 coconut electrolyte flavored water can replenish a lot of electrolytes after exercise.


As for the campus where young people gather, channel penetration is equivalent to overtaking on a curve. The new generation of consumers is the main consumer group of beverage products. The earlier the target brand enters the field of consumer cognition, the earlier it occupies the consumer’s mind.


According to solution consulting, the main consumer group of online carbonated drinks is 18-24 years old, and the main consumer group of bottled water is 25-29 years old, which is just a clever overlap with the age span of campus students.


In the campus, whether it is canteen or classroom, library or stadium, the multi-point shop is bound to meet the needs of different scenes of young groups.


Wu Sheng mentioned in scene era that the scene is not fixed, but also superimposed. For example, a relatively fixed campus space can also generate countless offline scenes, and redesigning the scene solutions required for “sugar free era” and “psychological immunity” may bring huge market for some sub categories. This is the opportunity for sugar free water and energy water.


It is conceivable that this is an accelerated channel penetration and an upcoming scene revolution.


No one can take the top spot


Even if Coca Cola’s high-profile exit and its vitality forest fire, they all need an opponent.


In the fierce market competition, no brand can take the first place. According to the data of tmall, among the beverage products sales list of 618 this year, the sales volume of Yuanqi forest surpassed that of Coca Cola, ranking first. Before that, Pepsi, which has been fighting with Coca Cola for many years, has never won this list.


As a result, the world’s giants, which have dominated the world for nearly a decade, will reassess their differences in the defeat of China’s first sugar free bubble water competition.


The difference is that everyone is sugar free, who drinks better and who is healthier. Domestic new brands are mainly erythritol, which is more than 10 times more expensive than aspartame used by Coca Cola.


It is persistent in these details that domestic brands are competing for the position.


According to a Mintel survey, 40% of Chinese soft drink consumers prefer to try new flavors. Black pine Shashi and Laoshan Cola also have a large number of loyal fans, which is enough to illustrate the problem.


The local brands that know Chinese people clearly have more advantages than foreign brands in taste selection.


At present, the taste of the Chinese market should first follow the sound and look of refreshing and healthy feeling. For example, lemon and citrus are sour and crisp, and the taste is more popular. Green fruits and vegetables such as cucumbers and green fruits and vegetables are auxiliary methods to increase the sense of coolness, while coconut, aloe and other plants have their own refreshing icon.


Taking bestinme’s light automobile series as an example, five flavors, including mojito, fresh white peach, green sea salt, strong ice orange, white strawberry and lactic acid bacteria, can basically meet the needs of consumers for fresh feeling and explore new tastes.


In addition to the supplement of water and electrolyte, the supplement of dietary fiber such as polyglucose and fructooligosaccharide can also improve the intestinal function.


At the moment of Guochao’s revival, some brands have also ushered in new opportunities with local culture as the incision.


Kelly one, which has a deep relationship with Wahaha, has launched a green plum bubble water. The bottle tells a story of a thousand years ago. During the Tang Dynasty, the plum was sent to Japan by sea by the envoys sent to Tang Dynasty. Huge green plum blossoms and boats are floating on the waves. The creative pictures let young consumers better understand the connotation of traditional Chinese culture.


The rising trend of new brands can not be underestimated. Based on the mature production chain, sales channels and logistics infrastructure, they may be more likely to be close to young consumers in terms of appearance packaging, creative design and taste selection.


When the “worker” is popular, the bubble water brand Bestinme will also laugh at the official account of WeChat. “It’s hard to work hard, and it needs urgent light gas to get rid of gas”. The bubble water brand chill, which originated from the panda’s brewing, also thought of the reason for the “working people” to quit the class. “This morning, I’m feeling a little bit out of the way, so I have to ask for leave.” To some extent, new brands have learned to talk to the younger generation for a long time.


Taking the time line longer, with the development of health and slimming economy, an obvious trend is that deglycosylation is likely to become the consumption core of China’s beverage market.


But when the old brand leader can control it more freely offline, and the new online brand will tear off the online red label, the competition in the sugar free beverage market in China, whether it is bubble water or sugar free tea, is just beginning.

Source: Wu Juei (ID: esnql520), reprint has been authorized.
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