Take the initiative to shorten the shelf life, what is the intention of Nongfu Spring? On January 16, Nongfu Spring confirmed to the Beijing Business Daily reporter that from 2020, Nongfu Spring will shorten the shelf life labeling of many of its different brands and different specifications of products, and revise the promotional content of its related product labels according to the new version of the label regulations, but no changes have been made to the product formula and process. According to industry analysts, the purpose of shortening the shelf life of Nongfu Spring is to promote the turnover of commodities and manage inventory, and accelerate the rotation of cash flow. At the same time, benchmarking large beverage companies on the shelf life standard can lay a good foundation for the listing valuation of Nongfu Spring, thereby obtaining a higher premium.
Shorten shelf life
Recently, Nongfu Spring is shortening the shelf life of its products. It involves different specifications of nongfu spring's multiple brands, including natural water 550ml, mother and baby water, tea π, vitamin water, scream, water soluble C, farmer orchard 50% mixed fruits and vegetables (1.25L), anthrax and oriental leaves. Among them, most of the products have shortened the current shelf life of 12 months to 9 months, while the oriental leaves have shortened the shelf life from the original 12 months to 6 months.
Beijing Business Daily reporter visited major supermarkets and found that among the coffee drinks, tea drinks, soy milk and carbonated drinks and other products that can be stored at room temperature on the market, the shelf life on the label mostly ranges from 8 months to 12 months, of which the shelf life of 9 months is also quite a few. Taking bottled water as an example, at present, the shelf life of mainstream bottled water on the market is 12 months, such as Master Kong, Wahaha, Yibao, Baishishan, etc., so Nongfu Spring has adjusted the shelf life of bottled water from 24 months to 12 months and has not been highly marked by peers.
Regarding the reasons for shortening the shelf life, the relevant person in charge of Nongfu Spring said that for a long time, Nongfu Spring has strict age requirements for factories and dealers, and shortening the shelf life labeling of related products is conducive to the turnover of terminal products, maintaining a fresher age, and further optimizing the consumer experience.
Industry insiders believe that the shortening of the shelf life of Nongfu Spring is to increase the rotation of terminal products and increase the speed of cash flow. The short shelf life also forces end customers to work harder to sell Nongfu Spring's products. The deeper role is to force dealers to speed up the processing of product inventory, so that dealers can pay for the promotion of Nongfu Spring products.
According to the data, the traditional products of Nongfu Spring are mainly bottled mineral water; in 2003, mixed fruit juice drinks with "Farmer Orchard" as the brand were launched; other products also include "Scream", "Farmer Tea", "Farmer Soda", "Water Soluble C100" and other beverages.
No recipe changes
It is worth noting that Nongfu Spring told the Beijing Business Daily reporter that the products after the updated shelf life label have been listed one after another, but the formula and process of its related products have not been changed.
Taking Nongfu Spring's 100% NFC juice as an example, it is reported that Nongfu Spring will delete the word "0 added" in the new label. In this regard, Nongfu Spring said that the content adjustment of the NFC juice label is a label revision carried out by the company in accordance with the relevant new versions of regulations and interpretations, and has not changed the product formula and process.
"Nongfu Spring's initiative to shorten the shelf life is easy for consumers to misunderstand that short-term products are healthier." Economist Song Qinghui pointed out.
Among the consumers randomly interviewed by the Beijing Business Daily reporter, when it comes to the first feeling of shortening the shelf life of Nongfu Spring, many consumers said that the additives or preservatives of short-term products should be relatively small, and the shortened shelf life of Nongfu Spring should be an improvement in technology, and the products will be safer and healthier.
However, in the eyes of industry insiders, "the length of the shelf life is not necessarily related to the number of preservatives added, but more depends on the product itself and its production process." ”
It is reported that the shelf life refers to the period of time for prepackaged food to maintain quality under the storage conditions specified in the label. During this period, products are allowed to be sold and are able to maintain the unique qualities on the label that do not have to be stated or have been stated. The shelf life of food is affected by a variety of factors, such as the freshness of the product, the specific ingredients and storage conditions, especially the amount of moisture content in the product.
According to the 2017 "Research Review of Beverage Shelf Life Test Methods" in the "Beverage Industry", in 2006, the National Light Industry Standardization Department made clear provisions on the shelf life of 9 types of food, including fruit juice soda, fruity soda, cola glass bottle for 3 months, canned for 6 months. However, this provision is no longer suitable for the current development of the beverage industry, and the shelf life is no longer specified in the latest (food safety) standards. The reason for this is that beverage production and packaging technology is constantly improving, and the shelf life of beverages is also increasing.
However, the review also pointed out: "At present, the determination of the shelf life of beverages mostly relies on experience or simple testing, and lacks scientific and standardized methods." ”
For a high valuation?
According to industry analysts, the farmer shortened the shelf life this time, in addition to forcing dealers to accelerate the sale of products to promote the rotation of cash flow, but also benchmarked large beverage companies on the shelf life standard, which will lay a good foundation for the valuation of Nongfu Spring' listing.
In fact, there is a precedent for actively shortening the shelf life in the beverage industry, especially for large-scale beverage companies. It is understood that Coca-Cola is one of the companies that began to change the shelf life of products from 24 months and 12 months to 9 months in the beverage industry earlier. Currently, most of Coca-Cola's products have a shelf life of 9 months. In addition, PepsiCo has also increased the shelf life of most of its products from 12 months to 9 months.
"In addition to benchmarking large beverage companies such as Coca-Cola in terms of shortening the shelf life, Nongfu Spring's diversification strategy of frequently promoting new products is also imitating The development strategy of Coca-Cola's full category." Song Qinghui said. It is reported that in 2019, in less than a year, Nongfu Spring has launched nearly 10 new products in a row.
At the beginning of 2019, Nongfu Spring exploded sports drinks and launched two screaming new products; then added plant protein categories and launched soybean fermented plant yogurt; after the birch sap mask, sprays and body lotions were launched; following the launch of the ready-to-drink carbonated coffee drink anthrax, and then quietly laid out the freshly ground coffee machine. Since the second half of the year, Nongfu Spring has launched a new product of low-temperature NFC juice to further improve the NFC juice product line; launched lithium-containing natural mineral water to fill the gap in lithium-containing water categories and middle-aged and elderly market segments; recently, Nongfu Spring has launched a new product of soda mineral water based on natural mineral water.
In the near future, the news that Nongfu Spring will be listed in Hong Kong has not gone away. In Zhu Danpeng's view, whether it is shortening the shelf life or pushing new products, it is Nongfu Spring that is preparing for the listing. "Before going public, Nongfu Spring needs to adjust its product structure and operating model to form sustained profitability so that it is more suitable for the operation of future listed companies and can achieve a high premium."
According to the data, the income of Nongfu Spring reached 20.9 billion yuan in 2018, compared with 10.5 billion yuan in 2015, and the scale of revenue doubled in three years. According to Kantar Consumer Index data, as of October 2019, Nongfu Spring, as one of the 22 FMCG companies that have entered China's hundreds of millions of households, has a penetration rate of 71.8%. Beijing Business Daily reporter Qian Yu Wang Xiao/Wen He