China Food

How long can we fight the battle of sugar free drinks?

“  
giants follow up and launch sugar free drinks, which is not only a pain point to solve the problem of happiness and health, but also actively create the market.
 ”
Human beings are naturally fond of sweets.
 
Some scholars speculate that the love of sweets stems from the way of survival engraved into human DNA. In ancient times, humans did not have enough food and were vulnerable to attacks from large animals when looking for food outside, so they must eat quickly after finding food. Foods with high sugar and high calories can best meet the survival needs of their ancestors.
 
There are also some views that nature provides humans with a lot of sweet food, so sweet things are not poisonous in people’s memory.
 
With the development of modern society, the memory of sweets in DNA has been left, while exercise is no longer to live, but has become an option, and sweets have become a burden on human health.
 
When you are not full, you need to run with all your life. When you are full, you can’t step away. Health is so anti human.
 
Low oil, low fat, low sugar and low salt are recognized as the direction of healthy diet. In view of the change in the demand for sugar, the source of heat and happiness, a low / sugar free consumption boom in the food and beverage industry has been formed. Industry giants have adjusted their product formulas and market strategies, and the sugar free war has entered a white hot stage.
where does the wind come from?
 
In 1952, in order to taste sweetness for diabetics and cardiovascular patients, Hyman Hershey, vice president of a sanatorium in New York, used family business to produce caloric free drinks: ginger drink and black cherry drink.
 
The first generation sweetener saccharin has the taste of some metal substances. In the process of research and development, they explored a variety of sweeteners and finally made sugar free drinks with calcium containing cyclamate.
 
Sugar free drinks made for patients are very popular in the market.
 
The sugar free Wright Cola in Chicago became the fourth best-selling cola beverage in the U.S. market more than a year after its launch. In the 1960s, major beverage brands joined in one after another, and Pepsi launched the sugar free version of diet coke. In 1982, the sugar free version of Coca Cola, diet coke, was also launched.
 
Salt, sugar and fat: how food giants manipulate us tells us: “Whether it’s low tar cigarettes, low calorie beer or low-fat potato chips, these healthier products do not pose a threat to the main products. If these new products are properly developed, they can attract new customers to understand the overall brand, so as to improve the sales of the company’s traditional high calorie and high-fat products.”.
 
The giants follow up and launch sugar free drinks, which is not only a pain point to solve the problem of happiness and health, but also take the initiative to create the market.
 
In 1997, Japanese Suntory oolong tea entered the Chinese market with low consumer acceptance. In 2002, it uniformly followed up and launched the “king of tea”, emphasizing low-temperature extraction and pure tea taste. The market performance was also average, and finally withdrew.
 
The trend of sugar free in China began in 2016.
 
In May of that year, the dietary guidelines for Chinese residents (2016) issued by the national health and Family Planning Commission stressed that everyone should control the intake of added sugar: “the daily intake of sugar should not exceed 50g, preferably less than 25g”.
 
Many countries follow up the Levy of sugar tax and promote beverage enterprises to adjust their products to low sugar and non sugar. For example, in 2016, the UK announced the tax on sugar in 2018. In 2015, Coca Cola began to increase the campaign promotion of sugar free / low sugar products.
 
Yuanqi forest, which became popular in the war of sugar free drinks, was also established in this year. Four years later, Yuanqi forest promoted the popularity of sugar free drinks in China with the concept of “0 sugar, 0 calorie and 0 fat”.
 
There are three reasons for the blowout of sugar free drinks:
 
First, after a long period of market cultivation, the concept of health has been deeply rooted in the hearts of the people. Who believes that excessive consumption of sugar is one of the reasons for the prevalence of lifestyle diseases such as obesity and diabetes. According to the standard published by who in July 2019, the daily standard sugar intake for adults is 25 grams.
 
Second, people’s pockets are bulging. According to Nielsen’s survey data in 2019, 82% of Chinese consumers are willing to spend more on health drinks, which is higher than the global level of 68%.
 
Third, the new sugar substitute tastes better.
 
Saccharin has the taste of metal substances, the safety of sodium cyclamate is frequently questioned, and the formula of sugar free drinks is also repeated.
 
The development of sugar substitutes has gone through six generations. Saccharin and cyclamate, which have been used for more than 70 years, are the first and second generation sweeteners. Aspartame, the third generation sweetener, is the most widely used. Acesulfame and sucralose are the fourth and fifth generation sweeteners. At present, they are growing fastest and are gradually replacing the first three generations of sweeteners. Neotame is the sixth generation sweetener, but it is difficult to control the sweetness Not widely used.
 
The sugar substitute erythritol used by Yuanqi forest has low sweetness. It is more close to the taste of sugar after mixing with other sugar substitutes such as sucralose.
 
This kind of explosion is due to the favorable conditions of time and place. It can’t be ten years earlier or ten years later.
 
Ten years ago, in 2011, sugar free tea Oriental leaves appeared on the market. Nongnongshanquan used his housekeeping skills to carry out a comprehensive marketing plan for it from packaging, concept to advertising. As a result, the sales volume was flat. In terms of word-of-mouth, he was shortlisted as the top 5 “the most difficult drink in history”. Later, consumers changed their outlook by modifying the market positioning and improving the taste.
giants will join
The best footnote is how hot the sugar free beverage track is. The four-year-old Yuanqi forest is valued at nearly 40 billion yuan.
 
On April 9, 2021, Yuanqi forest announced that a new round of financing had been completed, with a post investment valuation of US $6 billion and a valuation of RMB 39 billion at an exchange rate of 6.5.
 
There is no data on net profit, and its valuation is simply evaluated according to income. According to the income of 2.7 billion yuan of Yuanqi forest last year, the corresponding market sales rate of 39 billion yuan is 14.44. According to the data of yiniu.com, since its listing, Yangyuan beverage has the highest market sales rate of 8.3, and Chengde Lulu has the highest market sales rate of 7.16 in recent 10 years. Only Dongpeng beverage, which has been on the market for a short time, can compete with one, 15.19.
 
There is almost no arbitrage space between the primary and secondary markets, reflecting the crazy pursuit of vitality forest by the capital of the primary market.
 
Everyone wants such a blessing.
 
In addition to the well-known Yuanqi forest, many new consumer brands have completed the development from 0 to 1 by relying on the main sugar free concept, such as Le tikong, Qingquan Chushan, bestinme, Xi tea, Hankou No. 2 factory, etc.
 
Among them, Qingquan emerged quickly without losing the vitality forest. It was established less than three years and completed four rounds of financing. Its product Qingting has a similar appearance to the vitality forest. The formula has been adjusted to reduce costs. By focusing on sinking the market and avoiding the positive competition with the vitality forest, it has set a sales target of 1.5 billion yuan in 2021. Music and sports control focuses on high dietary fiber; Hankou No. 2 factory has become a net red beverage brand through nostalgic Marketing
 
For market pioneers, the market they have cultivated hard for decades must not become the blue ocean of others. Coca Cola launched a variety of sugar free products, including Coca Cola sugar free, Sprite sugar free, fiber + series, etc; In March this year, uni president once again entered the sugar free track and launched high-end sugar free tea, tea bully tea; The Oriental leaves of nongnongshan spring ushered in spring and launched the competitive soda bubble water of Yuanqi forest.
 
For first-line brands, they have strong brand power and channels, and will not let go of this outlet. Yili listed Yiran milk mine bubble water; Jianlibao took micro bubble water as its first new product in 20 years, and Wahaha launched “angry Bobo” soda water; In addition, Yinlu, Master Kang and other beverage enterprises have also launched new sugar free products.
 
On the air outlet of sugar free drinks, first-line brands attack the whole army. The contest between old players and new forces has also become an interesting point in this war.
 
According to the industry media “FMCG”, Nongfu mountain spring asked dealers in some areas to display their own soda bubble water in the freezer of Yuanqi forest, and gave a reward of “each bottle of Nongfu mountain spring bubble water displayed, a bottle of long snow at the price of 3 yuan at the farmer terminal and 48 bottles at the top”.
 
In this activity called “God of wealth”, dealers hardly need to pay, but they can get the sales profit and rebate of promotional products. The beginning of this activity stems from the offence to Nongfu mountain spring when Yuanqi forest arranged offline channels to grab freezers.
 
The competition between the first two is a real sword and a real gun. The story between liangle and Yuanqi forest is much milder.
 
According to 36 krypton’s report, every important meeting between Coca Cola and Pepsi this year, Yuanqi forest will be named. The topic is often about “why Yuanqi forest is successful”.
 
In the past six years, the growth rate of the track for sugar free drinks they compete for far exceeds the overall growth rate of the beverage industry. According to Zhiyan consulting report, the market scale of sugar free beverages increased from RMB 1.66 billion in 2014 to RMB 11.78 billion in 2020, with an annual growth rate of 38.69%. It is estimated that by 2027, the domestic sugar free beverage market will reach 27.66 billion yuan, with high growth rate and large space.
 
In the era of occupying the market, the common method of all products is to spend money on marketing. In the words of Tang Binsen, founder of Yuanqi forest, dare to use 1.8 billion for advertising when the income is 2 billion.
 
The revenue of Yuanqi forest with high cost and high pricing will increase three times in 2020. It has set a sales target of 7.5 billion yuan in 2021, with rapid growth. Qingting, a flat replacement product, also has a market.
 
This is the characteristic of the blue ocean period. With the end of giants, competition is bound to intensify. After all, the growth of this track cannot be endless.
Tang Binsen’s anxiety
Drinking water is the eternal demand of human beings. The just need for water determines that water is the most long-term business, not drinks.
 
As early as Roman times, people used bowls and pots to carry water. From the birth of the first commercial bottled water in the 17th century to the modern bottled water in the 21st century, in 400 years, the water container has experienced the upgrading from pottery can to metal can to glass bottle and then to pet. The product attribute of water has not undergone subversive changes, and the use value is still thirst quenching.
 
As people’s income increases, they have higher requirements for the quality of life. Water for catering industry and household kitchen are still incremental places that can be developed.
 
The beverage meets the different taste needs of consumers. In addition to making it more convenient for consumers to buy, it can not open the incremental market.
 
Compared with packaged drinking water, the beverage industry is more similar to cosmetics, snacks and other FMCG categories. Due to the rapid change of consumer demand, the product life cycle is shorter. From the Arctic Ocean to Jianlibao, red bull to pulsation, and from iced black tea to sugar free tea, there are always new products standing in the forefront.
 
The 2021 water drink innovation trend report jointly released by 21st century industry research institute and JD big data research institute shows that the life cycle of flavored beverage products, including fruit juice, tea and milk drinks, is relatively short, and the life cycle is generally completed in 2-3 years.
 
Nutritional express, iced black tea, Meiliyuan and other products, relying on strong brand power and channels, can maintain a certain retail volume, but the decline has appeared, and the decline is inevitable.
 
Overall, the compound annual growth rate of concentrated drinks, milk drinks, fruit juice and tea drinks decreased by 8.6%, 5.8%, 2.5% and 1.6% respectively in the past five years.
 
Japan, which has basically experienced the development cycle of all sub industries of soft drinks, is the same. The sales of carbonated drinks, fruit juice and instant coffee began to touch the ceiling around 1970, 1980 and 1990 respectively.
 
The product cycle is short, and the ability of enterprises to push through the old and bring forth the new on the beverage track becomes important, especially small and medium-sized enterprises that rely on a product to write a position in the beverage Jianghu.
 
We have all heard an old truth. The gap between 0.99 and 1.01 is very small, but their 365 sides are different. Tang Binsen believes in such a power exponent law. He believes that the party with a large base can win the final victory.
 
In other words, products should be diversified. First, it has strong anti risk ability, and second, it should deal with the category cycle.
 
In order to expand the base, Yuanqi forest has made frequent sales, and its products have covered bubble water, tea drinks, dairy drinks, fruit juice drinks and other categories. In August this year, it was revealed that Yuanqi forest was developing and selling snail powder, hot and sour powder and other fast food.
It can be seen how anxious Tang Binsen is.
 
The success of Yuanqi forest certainly has its advantages in marketing, product taste and packaging. Coca Cola, nongnongshan spring and other companies have long cultivated this land into a soil suitable for sugar free gas soaking in water, which is also a background that can not be ignored.
 
In the accumulation of building the previous explosive product, few customers are loyal to the product, channels are loyal to the profit, and consumers are loyal to the brand. The shade of the trees planted by the explosive products in the preceding paragraph is too small to let the later products enjoy the cool.
 
In the beverage track, there is no compound interest effect of snowball. Every product entering the market is a new war.
reference:
[1] Only sweet, no sugar, sugar free beverage history
[2] The water drinking track is running towards 700 billion: just need is the king, and the categories are differentiated; 21st Century Business Herald
[3] In depth analysis | trillions of domestic soft drink tracks: strength competition, natural course
[4] Domestic sugar free drinks have entered the outbreak period, and the upstream business has also been brought on fire; Tencent News
[5] Bottled water braving the wind and waves; Guoyuan securities
[6] Food and beverage: “sugar free” series report (II): the rise of sugar substitutes
[7]   Sniping at the vitality forest, nongnongshan spring is the only wolf enterprise of FMCG; Fast elimination
作者:何玥阳;编辑:嘉辛;来源:市值榜(ID:shizhibang2021),转载已获得授权。
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