"Boiling" sparkling water: Giants compete for Generation Z, 0 sugar 0 calories can "make rich"?

Genki Forest Sparkling Water Drink Infographic/IC

"Don't let the young people run away", the sugar-free market opens the hunt.

"The 0 Sugar Bubble Track has another strong player." In mid-March, Zhu Danpeng recorded industry changes in the circle of friends. As a food industry analyst, it is obviously not new for players to get into the market.

This "strong player" is the beverage giant Danone, who holds the "pulse" of the big single product. Since the beginning of this year, the sparkling water industry has remained "lively". The new brand Oriental Honghu won tens of millions of dollars in series A financing, "Water Moutai" Nongfu Mountain Spring plus non-traditional carbonic acid track launched new products, the net red enterprise Yuanqi Forest continued to expand production capacity, and the 6th self-built factory will land in Taicang, Jiangsu Province... The Beijing News Shell Financial Reporter learned that almost all the beverage brands that are familiar to the public at present have sparkling water business, and even Haidilao has also launched sparkling water, which is speculated by the market that this is to do the "Yuanqi Forest of the Hot Pot Industry".

In fact, whether it is the price increase of erythritol, the large amount of "money" of investment institutions, or the active layout or cross-border of many enterprises, it confirms one thing on the side that sparkling water has become one of the star tracks of the beverage market in recent years.

At present, the domestic sparkling water industry is still in its infancy, and when it is carried out in a race, with the emergence of innovative products in the industry, the rapid promotion of new products is also driving the continuous expansion of the market. "If more companies enter the sparkling water market, it may eat away at some of the traditional carbonated beverage share, or squeeze the market share of other categories such as fruit juice." Industry insiders said.

Compete for Gen Z taste buds

Generation Z young people have become the absolute main force of sparkling water.

"Why do you like to drink sparkling water?" Shell financial reporters randomly interviewed several sparkling water enthusiasts, all with their own reasons.

"My weight loss holy water. Every time you want to eat sweets or drink milk tea soft drinks, you feel as if you are satisfied when you take a sip of water. An act of compensatory. ”

"Because I love beans to endorse it."

"The bottle looks good. There are too many flavors to try frequently, and I just like to pursue freshness. ”

The so-called "non-traditional carbonated drinks" are the types of beverages represented by sparkling water and new carbonated drinks in addition to Coke, Sprite, Fanta, etc. In recent years, new beverages based on sparkling water have led to the widespread rise of more "non-traditional carbonated drinks".

Among them, Yuanqi Forest opened a wave of 0 sugar and 0 calories in the flavor sparkling water industry.

Shell financial reporter learned from Yuanqi Forest that in the early stage of the establishment of the brand, it first set up a research and development center, with 0 sugar, 0 fat and 0 calories as a stepping stone, and circled consumers who pursue health.

The track has been opened, and the capital has moved by the wind, but the posture is cautious, and they have chosen to enter the game by investing in shares first. And Yuanqi Forest has become a "fragrant feast" in the eyes of investors, angel round, A round, B round, multi-round war investment... The latest reports show that the Yuanqi Forest, which has not yet been established for 6 years, has been valued at more than 10 billion US dollars.

In January this year, Yuanqi Forest released the "2021 Yuanqi Forest Sparkling Water Consumption Insight Report", showing that "half of the sparkling water is almost drunk by the post-95s." ”

Grasping the stomach of young people and becoming a gold sucking tool, the old beverage companies naturally enter the new track.

In 2019, Wahaha launched sparkling water - "Bubble Hi Boo", which is mainly aimed at consumer groups of students aged 16 to 25, declaring that "no sucrose is added, and there is no burden to drink". In 2020, KellyOne launched the "Angry" sparkling water on the market; in 2021, Wang Yibo served as the spokesperson of the full series of "Angry"

In addition to the label of "0 sugar 0 fat 0 calorie", Nongfu Mountain Spring Sparkling Water also focuses on "0 potassium sorbate". It is understood that in 2011, Nongfu Spring introduced and built the earliest log6 aseptic cold filling production line in China with higher microbial control difficulty than carbonated beverages, which is used for the production of oriental leaves, tea π, NFC juice, soda sparkling water and other beverages. Up to now, Nongfu Spring has dozens of sterile production lines.

"In recent years, as the consumption of bubble products has gradually heated up, new flavors based on various fruity flavors have emerged, bringing fresh taste to consumers." Dongpeng Beverage mentioned in its 2021 annual report that "CBNData consumption big data shows that sparkling water has won the first place in the post-90s beverage preference list with high preference." A variety of innovative sparkling water categories have been launched, such as sparkling juice, sparkling milk, bubble tea, etc., rich taste superimposed, loved by young consumers, the rapid growth of market sales. ”

In March this year, Danone official, who holds a large pulsating single product, announced that he had entered the field of sparkling water and launched a new product "Lingqi", declaring "0 sugar and 0 potassium sorbate, superimposed with three vitamins".

Danone's entry, although there are many voices of doubt that the shot is too late, it is believed that it is difficult to occupy the minds of consumers. But more interpretations say that the players are piling up, which also proves that the bubble water has not yet reached the era of stock competition, there is still a large incremental space, and Danone's entry may indicate that the competition in the bubble water industry will become more and more fierce.

When the race is carried out, R&D is racing and capacity expansion

Hot money poured in, and more and more entrants came in.

According to the enterprise investigation data, there are 2,040 sparkling water-related enterprises in the mainland, and the annual number of new registrations in recent years has remained at hundreds: 303 new in 2017, 315 in 2018, 501 in 2019, 516 in 2020, and 201 in 2021.

Shenzhen Siqisheng Company CEO Wu Daiqi told Shell Financial Reporter that although the growth of carbonated beverages has slowed down in previous years, Yuanqi Forest subdivides sparkling water from carbonated drinks, focusing on "sugar-free" and "healthy", when Yuanqi Forest challenges traditional carbonated drinks, and attracts consumers with the concept of "0 sugar and 0 fat", as well as small clear style, establishing brand positioning. This subdivision is undoubtedly more popular with young people, and has grown rapidly, promoting the development of the carbonated beverage industry. So there will be other brands following the entry.

"If there are more companies in the sparkling water market, adding new concepts and new marketing cultivation, it may be a sense to make the cake bigger, and sparkling water may eat away at some of the traditional carbonated beverage share, or also squeeze out other categories, such as the market share of fruit juice." Wu Daiqi said.

It is not only the old giants that want to stand on the limelight, but also new brands such as Nesher and Xicha.

"At present, domestic sparkling water consumption is still in its infancy, but innovative products in the industry are emerging in an endless stream, and the rapid push of new driving market continues to expand." The relevant person in charge of Nai Xue told reporters.

The more entrants, the fiercer the competition, and it is also forcing the entire industry to upgrade rapidly.

Shell financial reporter learned that in the sparkling water market rapid foothold of the Yuanqi Forest, although it has a certain first-mover advantage, but with the upgrading of competition, enterprises are currently facing two major challenges, one is the production capacity, the other is the quality of the upgrade again.

At the end of February, Shell financial reporter learned from Yuanqi Forest that the company's sixth self-built factory will land in Taicang, Jiangsu Province, focusing on the layout of the Yangtze River Delta region. Yuanqi Forest told reporters: "Jiangsu Taicang factory covers an area of 120 acres, is expected to plan 6 production lines, after the commissioning is expected to reach an annual production capacity of up to 1 billion bottles." ”

The relevant person in charge of Yuanqi Forest said that for the research and development threshold of the beverage industry, it varies according to the industry, the level of enterprise development, and the stage. The key to this problem is whether to truly achieve user first. For the research and development of Yuanqi Forest, the real barrier lies in digging deep into user needs.

In Nai Xue's view, the main reason why its own products can be loved by consumers is "successful innovation in taste".

"When we are deeply engaged in the sparkling water business, the most important thing and the most time and energy is the polishing of the product, and we will worry about the consumer experience is not good, such as whether the bubbles are dense enough, whether the bottle body will be deformed after transportation, and how to balance the bubbles and fruity taste." In this regard, the R & D team after many experiments, the bubble water carbon dioxide gas capacity of the gradient study (from 3.0-4.0 times), and in the post-90s users many times to carry out taste tests, and finally screened out the most palatable gas content formula. The relevant person in charge of NaiXue told reporters.

The rise of domestic flavor sparkling water has become a representative of healthy, weak flavor and heavy touch of new drinks.

CICC analysts believe that sparkling water positioning across packaged water and carbonated beverages, 2025 sales scale is expected to exceed 30 billion yuan. In addition, the 2021 Nielsen brand and consumer U&A survey report shows that the sales scale of carbonated beverages in China will reach 58 billion yuan in 2021, with a growth rate of 11%. Among them, non-traditional carbonic acid categories accounted for 18%, still lower than 31% in Western Europe, 50% in the United States, and 42% in Japan. In other words, China's non-traditional carbonated beverages still have a lot of room for growth.

Zhu Danpeng believes that when the 0 sugar bubble track competes into the deep water area, who can gain insight into the needs of young people and who is most likely to break through the future healthy beverage market. The protagonist of the beverage market is always young people, and trying new is the characteristic of every young person. It must be delicious and useful, but also good-looking and fun, which is undoubtedly a major challenge to brand strength.

Under the "rich tide": Internet celebrities cultivate to save the B side, 0 sugar 0 card is a health card?

A small bottle of sparkling water, not only a few brands, but also a track with fire, the industry "to create a rich tide", benefiting the entire industrial chain.

As early as the popularity of Yuanqi Forest, A-share "Yuanqi Forest Concept Stock" took a roller coaster, including Bowling Bao, Fengyuan Pharmaceutical, O.R.G., Zhuhai Zhongfu and so on.

"The trend of reducing sugar is the trend, and the Yuanqi forest holds red erythritol." Analysts at Tianfeng Securities said.

Bowling treasure is the leading in the functional sugar industry, according to the company's observation, at present in the application of erythritol terminal products, Yuanqi Forest and other cutting-edge beverage brands under the 0 sugar, low sugar drinks have taken the lead in being vigorously promoted and favored by the majority of health-oriented consumers, 0 sugar, low sugar beverage market cultivation and consumer education has achieved initial results, bringing a huge demonstration effect to the same industry. Traditional beverage brands such as Coca-Cola, PepsiCo, Nongfu Spring, Wahaha, Danone, Dali, Dongpeng Special Drink, etc. are also rapidly laying out the 0-sugar and low-sugar beverage markets, which has played a leading role in the use of erythritol for chain brands such as Xicha and Naixue that have entered the 0-sugar and low-sugar beverage market, prompting the outbreak of China's erythritol market.

On March 16, Bowling Bao said that consumers' awareness of sugar control has increased, and sucrose consumption has slowed down in the past 5 years, with an average annual compound growth rate of less than 1%, and the average compound growth rate of low-sugar or sugar-free products is more than 20%. The growth rate of global sucrose consumption has slowed down, and sweetener substitution of sucrose is generally in a rapid deepening stage.

Shell financial reporter noted that as early as February, Sanyuan Bio officially landed on the ChiNext board of the Shenzhen Stock Exchange, with a closing price of 128.01 yuan / share on the day of listing, with a total market value of more than 17 billion yuan.

Sanyuan Bio is the earliest manufacturer in China to start industrial production of erythritol, customers include Nongfu Spring, Yuanqi Forest, Coca-Cola, Xicha, Immaculate and so on.

From 2018 to 2020 and from January to June 2021, the average unit price of erythritol of ternary organisms was 14946.66 yuan / ton, 14989.64 yuan / ton, 14897.44 yuan / ton, and 18659.39 yuan / ton, respectively.

From 2018 to 2020, the gross profit margin of ternary bio erythritol was 36.86%, 43.63%, and 42.16%, respectively.

The B side of the sparkling water industry's continuous release of dividends is the public's question of whether the claim that zero sugar, sugar-free or sugar substitute drinks are really healthier.

Wang Yao, a member of the Chinese Nutrition Association and a nutritionist, told Shell Financial Reporter that the sugar-free drinks currently on the market do not necessarily achieve 100% sugar-free. According to gb28050-2011 national food safety standard "General Rules for Nutrition Labeling of Prepackaged Foods", every 100 grams or 100 ml of sugar content in solid or liquid food is not higher than 0.5 grams, which can be labeled sugar-free. In other words, if a 500 ml bottle of drink contains less than 2.5 grams of sugar, the merchant can advertise it as a sugar-free beverage.

"Therefore, sugar-free drinks should not be drunk more, drink too much, and the sugar intake is still excessive." As for whether sugar-free drinks are harmful to health, Wang Said said that there are currently a considerable number of sugar-free drinks that use sugar substitutes. According to research data, excessive sugar substitute intake can have a negative impact on the human body. For example, a weakened sensitivity to sweetness leads to more sugar intake and gastrointestinal reactions in some people.

"Of course, drinking sugar-substituted beverages in moderation is not harmful to the human body, but can help some people gradually quit sugar." Wang Said.

Chen Wei, chief physician of the Department of Clinical Nutrition of Peking Union Medical College Hospital, said that a foreign study found through long-term follow-up that more people who also drank carbonated drinks, drank sugar-free fat, and more people had diabetes.

"It's a psychology, that is, I think I drink sugar-free, I drink a few more bottles, then, drink more of these sugar-free, even if your sugar is less than the intake of sugary drinks, but some of the ingredients that stimulate appetite in it will still cause you to want to eat other things." That is, if you just replace the drink without fundamentally changing your lifestyle, the risk of obesity is high. Chen Wei analyzed.

Chen Wei said: "We are now judging that 0 calorie 0 sugar drinks are healthier and safer than drinks with calories and sugar, but it is still unhealthy compared to our natural water. ”

In addition, when sparkling water players are fighting, there are also word games in technical terms.

In July last year, the Shanghai Municipal Consumer Protection Commission named "angry bubbles", pointing out that the "2.5 times bubble" in its main slogan was actually "using a technical term to fool consumers". The so-called 2.5 times bubble, in fact, is a professional term, according to the "carbonated beverage (soda)" national standard, this is only the volume multiple of carbon dioxide gas capacity.

The Shanghai Municipal Consumer Protection Commission said: "Regarding whether the 2.5 times bubble is strong or not, experts say that for example, soda will be injected with carbon dioxide when it is produced from the factory, because during the storage and sealing period, the gas volume is also lost." But on the last day of the shelf life, a qualified soda should also contain 1.5 times the gas volume. Experts also said that cola's gas content is also nearly 4 times. Therefore, 2.5 times the gas content is not unusual. ”

Beijing News shell financial reporter Yan Xia Editor Wang Jinyu Proofreader Yang Xuli