Products like Yuanqi Forest Sugar-free Sparkling Water have almost no threshold, and after the emergence of new variables, the bubble of the new consumption track can easily burst.
Wen 丨 BT Finance Aoyama Egret
There are all indications that the Yuanqi Forest is experiencing a major crisis.
Since the end of March, there have been frequent news of Yuanqi Forest laying off employees on the Internet, and a number of Yuanqi Forest employees have exposed on social media that they have been forced to leave their jobs due to organizational restructuring. Although in the "wave of layoffs" of a number of Internet manufacturers, the scale of layoffs in Yuanqi Forest may not be large, but Yuanqi Forest has not only ordinary employees who have left, but also executives from the core management.
On March 31, there have been a number of media reports that Liu Zhen, one of the executives of Yuanqi Forest, has left his job, and it is reported that Liu Zhen is responsible for the overseas business of Yuanqi Forest, and it has only been one year since he joined Yuanqi Forest. Moreover, the "Finance and Economics" report pointed out that Liu Zhen's departure was very hasty, and even no internal letter was sent, and the position after Liu Zhen left is currently vacant.
The combing found that Liu Zhen is already the third executive of Yuanqi Forest to leave in the past six months, and the other two executives are Zong Hao at the vice president level, who is responsible for brand operations; and another ran Hao, who is also at the vice president level, who is responsible for human resources.
In fact, the internal adjustment of Yuanqi Forest has long been a sign, and there have been departments that have been abolished or adjusted before, such as the Merger business department under the business center was merged, and its information flow delivery and live broadcast business functions were adjusted to the digital marketing department; the innovation incubation center was abolished, and the WOW business department was transferred to the core business segment.
Some media pointed out that Internet entrepreneurs with strong operating genes have poured into the new consumption track on a large scale, and products such as sugar-free sparkling water have almost no threshold, and after the emergence of new variables, the bubble of the new consumption track has begun to burst one by one.
Is this really the case?
Overseas plans were frustrated
What made Liu Zhen, who had only been employed for one year and three months, shake off the YuanQi Forest, it is no longer known.
Looking back at December 2020, Liu Zhen confidently joined Yuanqi Forest, responsible for the business of going to sea, combing Liu Zhen's resume will find that she can definitely take on this heavy responsibility, Liu Zhen is the niece of Liu Chuanzhi, the founder of Lenovo Group, and the sister of Liu Qing, president of Didi Chuxing Group.
Born in 1982, liu zhen has been studying in the United States since middle school, and later completed his undergraduate degree at the Law School of Chinese Min University, and then went to Berkeley Law School in California to continue his legal studies, and after graduation, he worked in a law firm in Silicon Valley.
Liu Zhen began the transformation in 2015, served as the head of strategy at Uber China, and also experienced the "burning money war" of the travel platform at that time, and then joined ByteDance as a senior vice president in 2017, liu Zhen left From ByteDance in May 2020 and joined Yuanqi Forest in December.
After Liu Zhen joined ByteDance, it was considered by the outside world to be a landmark event for ByteDance to prepare to enter the overseas market, and similarly, Liu Zhen was also regarded by the outside world after joining Yuanqi Forest, that is, when Liu Zhen joined, Yuanqi Forest set up an overseas business department.
According to reports, at that time, in order to form an overseas business department, Yuanqi Forest specially drew elite soldiers from traditional FMCG, Internet, investment and other fields, and also developed new localized products for different overseas markets, with a total of more than 20 kinds of products listed in overseas markets, and BT Finance found that Yuanqi Forest also established a DTC website in the United States, and its official Instagram account basically maintained a "daily change" state.
Although Liu Zhen has not worked in Yuanqi Forest for a long time, Yuanqi Forest has a very high evaluation of it, and the official has said that Liu Zhen "led the team to open up overseas markets and achieved unexpected results." ”
This is exactly the case, according to the data, in May 2021, Yuanqi Forest began to lay out the US market, and in December of that year, Yuanqi Forest ranked among the top ten of Amazon's best-selling sparkling water beverage brands (but according to BT Financial Inquiry, this list is updated in real time every hour, and the query day does not contain Yuanqi Forest Sparkling Water in the TOP10).
Liu Zhen's departure, there is speculation from the outside world or related to the internal adjustment of Yuanqi Forest, there are people close to Liu Zhen revealed to the media that the overseas business of new consumption of FMCG is not the same as the platform business of other enterprises, liu Zhen is better at the platform model.
According to the analysis of industry researcher Wu Feng, from the perspective of channels, yuanqi forest's overseas strategy is also an online to offline promotion strategy, but for China's new consumer beverage brands, it is too difficult to occupy the overseas market, because the overseas beverage market giant pattern has been formed, and it is difficult for new consumer brands to compete with opponents such as Coca-Cola and PepsiCo.
Wu Feng also pointed out that although zero sugar sparkling water has only caught fire in China in recent years, but in foreign Coca-Cola and other giants have long been laid out in this track, such as Coca-Cola, which launched zero sugar a long time ago, Yuanqi Forest does not have a first-mover advantage, and in the context of the epidemic, sea freight rates have soared, cabins are tight, and logistics ports are blocked... Because the beverage is lower in value and heavier than 3C, clothing and other products, the difficulties encountered by the Yuanqi Forest to go to sea are only a lot more.
Some media believe that in the past two years, many new consumer brands have taken "going to sea" as the inflection point and second growth curve of brand development, at present, Yuanqi Forest is far from reaching the stage of outbreak overseas, no matter what reason Liu Zhen left, it means that Yuanqi Forest's overseas expansion plan may have been blocked.
Caught in internal and external difficulties
Since its inception in 2016, Yuanqi Forest has been running wildly, and the revenue growth rate of Yuanqi Forest has stunned the market, and the revenue of Yuanqi Forest from 2018 to 2021 is 200 million yuan, 660 million yuan, 2.7 billion yuan and 7.5 billion yuan, and the sales growth rate is 300%, 200% and 309% respectively.
What shocked the market the most was that in the "Double Eleven" promotion from 2019 to 2021, the sales volume of Yuanqi Forest exceeded that of the two major international beverage giants, Coca-Cola and Pepsi Cola.
At the end of 2021, Guo Hai, general manager of the digital business department of Yuanqi Forest Group, also released a bold statement that the annual sales of Yuanqi Forest will exceed 10 billion yuan by the end of 2021, but Yuanqi Forest officials then changed their mouths to say that this statement was unconfirmed.
In 2021, Yuanqi Forest finally ended this rapid growth. There is a view that the rapid growth of the Yuanqi Forest is due to the capital heating track, and there is a new consumption gap in the new consumer market, but with the emergence of new sparkling water brands that dilute the market share of the Yuanqi Forest, in addition, the Yuanqi Forest will also exhaust the traffic heat, and it is inevitable to end the high-speed growth.
As a "popular Internet celebrity brand", Yuanqi Forest has heated up the entire sparkling water track, and also heated up the entire "zero sugar drink" track, which has led to new and old players such as Nongfu Spring and Coca-Cola entering the game, just like staging a scene of "Three Kingdoms Killing".
According to the US "Newsweek" pointed out that the international beverage giants Coca-Cola and Pepsi Cola even expect to join hands to "encircle" the Yuanqi Forest, Coca-Cola, Pepsi Cola are expected to launch new products of sparkling water on the market in 2022, and the report quoted the source as saying: "In 2022, there will be no more Yuanqi Forest in the market." ”
Although from the actual situation, Yuanqi Forest is still far from being the opponent of Coca-Cola and Pepsi Cola in terms of volume, but these two brands entering the sparkling water track is obviously not good news for Yuanqi Forest.
In addition, the domestic beverage giant Nongfu Shanquan has also begun to target the Yuanqi Forest. There are reports that a number of regional distributors of Nongfu Spring have received orders from the headquarters not to represent yuanqi forest products, and nongfu springs will also enter the bureau to launch sparkling water drinks. In addition, the foundry of Yuanqi Forest Milk Tea has also received a notice to stop the oem of Yuanqi Forest's products, which is even worse for Yuanqi Forest, which has a tight supply chain.
The old enterprises are accelerating the layout, and the sparkling water track, which has no threshold, has also ushered in a new "predator" - the Oriental Bird.
The establishment time of oriental birds is shorter than that of Yuanqi Forest, and it was only established in 2018 and began to lay out new consumption areas in 2020. Compared with the rise of the Yuanqi Forest, the Oriental Honghu is a "monster-level" opponent, and it took only 10 months to investigate the market and develop products, and launched the Nezha sparkling water of the "national tide wind", and the rapid joint herbal tea head enterprise Wang Laoji launched the "sugar-free black herbal tea", which directly buckled the two major life doors of the Yuanqi Forest - sparkling water and sugar-free.
What's more frightening is that Oriental Hung Hoon has also received angel investment from giant ByteDance and Series A financing from source code capital. Backed by capital, and also online marketing of the FMCG model, it is no wonder that Morgan Business Research Institute called "the next yuanqi forest".
Compared with the setback of going to sea, competitors from China are the big trouble of Yuanqi Forest.
Sugar-free pulled off the altar?
Yuanqi Forest's always advertised sugar-free drink is being pulled off the altar.
In the December 2021 "Dialogue Challenger" program, Tang Binsen took the stage to "blind taste" 5 kinds of drinks, when he vowed that one of the samples was Yuanqi Forest, but was denied by the host, the result was that these 5 samples were not Yuanqi Forest, and the scene of the program was once very embarrassing.
According to Tang Fei, an analyst in the retail industry, this also shows from the side that there is no research and development threshold for sugar-free sparkling water, and the taste is similar and does not have too obvious recognition.
Previously, the Yuanqi Forest, which has been advertised as "0 sugar 0 calorie 0 fat" and is popular throughout the Network, has caused many doubts, until the media exposed that its "0 sugar" sparkling water is not really sugar-free, and this marketing method of stealing the concept has made the image of yuanqi forest once plummet.
Despite the media exposure, the attention to sugar-free drinks has also begun to increase. Until more authoritative scientific data show that sugar-free beverages are not really sugar-free, sugar-free drinks will still appear sucralose, erythritol and other sugar sweeteners, but these two additives will outline the risk of metabolic syndrome and type 2 diabetes, especially for obese people.
On November 14, 2021, the United Nations Diabetes Day, CCTV also interviewed experts, experts said in the program that there is no essential difference between sweetener-containing beverages and sugar-sweetened drinks in terms of the risk of causing diabetes and cardiovascular disease, and long-term consumption of sugar-free beverages will reduce the taste sensitivity to sweetness, which will affect the central nervous system of brain feeding, resulting in a higher demand for sugar intake.
The focus on sugar-free drinks is the first to point to the Yuanqi Forest, which has eaten the dividends of sugar-free drinks. For a long time, Yuanqi Forest has taken 0 sugar / low sugar, 0 fat / low fat, health, etc. as the main product selling point, sugar-free drinks have also become hot due to Yuanqi Forest, and now the concept of sugar-free has also become one of the constraints on the development of Yuanqi Forest.
According to the data, the sparkling water of the Yuanqi Forest will be the high price of erythritol as the product selling point, with the exposure of CCTV programs, the myth of natural sugar substitutes such as erythritol has also been broken, yuanqi forest had to start developing new products, looking forward to finding the next explosive model, but after the sparkling water, the yuanqi forest, whether it is micro-sparkling juice or coffee, it is difficult to recreate a myth.
In addition, Yuanqi Forest has invested in alcohol, snacks, and meal replacements, and has the tendency to launch sub-brands, but when developing new products and new business lines, Yuanqi Forest has to consider the "healthy human design" that it has always advertised, that is, the product needs to maintain low sugar and low calorie, natural health, and innovation in line with new consumption FMCG, which is undoubtedly more difficult.
This is not the biggest problem, the biggest problem still comes from the soft underbelly of the Yuanqi Forest - the supply chain. When the entire sparkling water track was on fire, it also made the core raw material for the production of sparkling water sugar in short supply.
In the face of huge market demand, Yuanqi Forest's main erythritol suppliers Ternary Biologics and Bowling Bao production capacity began to be unable to meet production demand, at the end of 2021, even erythritol was out of stock, which also triggered a sharp increase in the price of erythritol, according to incomplete statistics, as of June 2021, Yuanqi Forest's sales loss caused by the supply of sugar substitute raw materials has exceeded 1 billion yuan.
This made the Yuanqi Forest, which already had a low gross profit, even more helpless. Previously, a number of media reports pointed out that the gross profit of Yuanqi Forest was only about 28%, compared with the gross profit margin of 60% of Coca-Cola and 55% of nongfu Spring, and the gross profit of Yuanqi Forest was indeed too low.
The new consumer myth shattered?
In the eyes of many market participants, Yuanqi Forest is only a new consumer brand that has been established for less than 5 years, especially in the supply chain, channel operation, products and other aspects of almost no "moat".
Industry Research Institute Wu Feng pointed out that the new consumer industry has undergone tremendous changes in recent years, especially the Internet model has begun to penetrate into the new consumer industry, bringing e-commerce channels and emerging content platforms, such as Tang Binsen, the founder of Yuanqi Forest, who was born in games before, and the maturity and overcapacity of the supply chain make "asset-light" entrepreneurship possible, so it is not a difficult thing for entrepreneurs in the new consumption field to receive a "good card" just after entering.
Wu Feng also pointed out that these new consumer brands are all ripened by capital, and they are not new products derived from the market law of the beverage category, but are driven out by capital students with money, so the foundation is extremely unstable, and it is easy to be eliminated by the market if the heat is passed.
Tang Fei, an analyst in the retail industry, believes that in recent years, among the more popular FMCG brands, yuanqi forest and other enterprises are actually still using Internet thinking, that is to say, through new retail channels, from online to the market, through burning money marketing to quickly launch products and social media with goods, to put it bluntly, it is still a traffic business.
Tang Fei also pointed out that although this model can quickly occupy the market, compared with traditional consumer brands, its supply chain and offline channels are not stable, such as the long-term supply chain problem in Yuanqi Forest, and it has to spend huge investment to build its own supply chain. In addition, although online is the main consumption scene of new retail, it is still the main consumption scene for beverage products offline, such as Yuanqi Forest has a revenue of 7.5 billion yuan in 2021, and more than 80% of it still comes from offline sales, so in the competition with Nongfu Spring and Coca-Cola, they are pressed by channels such as supermarkets and supermarkets.
In addition, Tang Fei believes that the "geopolitical arbitrage" strategy recognized by founder Tang Binsen has made Yuanqi Forest successful in China, but once it encounters going to sea, it may not work, and the information it has is poor or due to market changes, so the Yuanqi Forest sea plan is not smooth.
In addition, although the sparkling water track is known as "no need for research and development" and "no moat", from the perspective of the development trajectory of the Oriental Bird, research and development is still the only magic weapon to widen the gap between the opponent and the opponent. Compared with Yuanqi Forest, Oriental Honghu is more like an Internet technology enterprise with heavy technology research and development, and it is reported that more than 50% of the employees of Oriental Honghu are Internet technology research and development personnel.
In addition, Yuanqi Forest expected to create the second growth curve after the sparkling water encountered "giant encirclement", breaking through in the fields of juice, coffee, wine, snacks, meal replacements, etc., but at present, the business has not been able to form a scale.
For Yuanqi Forest, what may need to be learned is Luckin Coffee, which needs to be adjusted back to the market law itself in time to study what products consumers really need, rather than relying on a large number of advertising to drive consumer cognition, thus generating consumption, that consumption is just rootless water.
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