Reporter | Zhao Xiaojuan
Edit | Ya Han Xiang
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After 19 years of launching Pulse, Danone China has finally launched a new beverage product.
On March 17, Danone announced the launch of "Lingqi" sparkling water drink through its beverage brand Pulse, which is also the first sparkling water product of Danone Beverage. At present, in Jingdong and Tmall, they have begun to shop on the shelves, and a bottle of 480 ml is priced at about 6.6 yuan, which is comparable to the mainstream sparkling water price in the market.
According to danone's promotional materials, this new product covers two flavors, lemon lime flavor and orange blood orange flavor, in addition to the zero sugar formula, it also adds vitamin C, vitamin B6 and niacinamide and other nutrients.
But right now, the sparkling water track is already quite crowded, and almost all the head giants have completed this move by 2021.
China's sparkling water drinks were stirred by Yuanqi Forest 4 years ago, triggering major brands to follow up and reach a climax in 2020-2021. Interface News has reported that on the shelves of supermarkets and convenience stores, mainstream beverage brands such as Yuanqi Forest, Coca-Cola, and Nongfu Spring have long been "fighting openly and secretly" on the shelves, and occupy different market customers by seizing the freezers of small shops and stacking heads in hypermarkets.
Looking at the context of Danone's beverage layout in China, it is found that in addition to the big single product of Pulse, Danone's actions in the Chinese beverage market do not have too many bright spots, and the previously acquired Loeb and Yili have been sold by Danone again.
As a nutraceutical and food giant, Danone entered the Chinese packaged beverage market through the acquisition of Robex Curve. Founded in 1989 by He Boquan and five other people, the latter includes Loeb's milk drinks, mineral water, tea drinks and other products, which is a brand with the same name as Wahaha in the 1990s. In 2000, Danone acquired 92% of the shares of Robex, but a year after the acquisition, due to differences in Business Philosophy between China and foreign countries, the founding team led by He Boquan was completely out.
In 2003, Danone launched sports drink Pulse, which had sales of 800 million yuan that year, but the popularity of Pulse failed to save Robex's decline, and Robex began to lose money since 2005, until 2013 Danone announced that Robex only retained the drinking water business.
At this time, Pulse is still the largest single product of Danone Beverage, and public information shows that Pulse's terminal retail sales in 2013-2015 were 6.7 billion yuan, 8.6 billion yuan and 9.8 billion yuan, respectively, and sold the entire Loeb in 2016, only retaining Pulse.
There are public reports that pulse sales have shown an inflection point after 2016, and since then, pulse has sought more changes in new tastes and new spokespersons, and has not made a breakthrough in the beverage category.
For example, in March 2017, Pulse launched the "Pulse Blazing Energy Series" for sports and sweating people, and in April 2020, Pulse upgraded the brand, involving brand positioning, packaging design, product formulation, taste combination, and said that this was the biggest change in Pulse.
Beijing Hema Supermarket, Pulse is competing with many sparkling water drinks. (Photo: Zhao Xiaojuan)
In the large category of beverages and packaged water, Danone's products in China mainly include three products: Pulse, Evian and Ferrarelle, the latter two of which are bottled water products, and the proportion of sales is not high.
Pulse's sales were not separately disclosed in Danone's historical financial reports, but were covered in the beverage and packaged water categories. However, the fluctuations in the sales volume of Pulse in China are still transmitted to the entire category. For example, in 2020, due to the impact of the epidemic on Chinese consumers going out, the sales revenue of drinking water and beverage business decreased by 16.8% year-on-year last year.
In 2021, the impact of the epidemic slowed down, and Danone's drinking water and beverage business generated sales revenue of 4 billion euros (contracted 28.1 billion yuan) in 2021, an increase of 7.2% year-on-year. In China, Pulse's sales revenue returned to positive growth and its market share remained stable.
According to the data that Danone chose to launch sparkling water products at this time, the "2021 China Sugar-free Beverage Market Trend Insight Report" released by the Chinese Academy of Sciences predicts that the size of the sugar-free beverage market will increase to 22.74 billion yuan in 2025, and the market will continue to climb to 27.6 billion yuan in 2027.
The new product can attract more young consumers with the help of pulse's existing brand advantages, but it is still doubtful how many matching customer groups can be brought to Lingqi sparkling water by relying only on the existing channels and brand recognition of Pulse.