Author 丨Rinning Report | Consumer world
Guide:
Once the products of Yuanqi Forest came out, it can be described as smooth sailing in the domestic market, but the recent major actions seem to be revealed, and Yuanqi Forest is experiencing a major crisis.
On April 1, the Yuanqi Forest Sparkling Water Series came out with the news that the price may increase. At present, Yuanqi Forest responds that the price increase is only for the dealer's per-box factory price, and the terminal suggested retail price has not been adjusted. At the same time, the news that "Liu Zhen, an executive of Yuanqi Forest, left his post after 15 months in office" also caused widespread discussion on the Internet. In fact, since the end of March, there have been many news on the Internet that Yuanqi Forest is laying off employees.
It is undeniable that Yuanqi Forest is facing the double test of "products" and "Internet legacy problems".
Since its debut, Yuanqi Forest has always occupied a place in the hearts of domestic consumers. In the eyes of consumers, Yuanqi Forest is a "net red" brand, thanks to the founder Tang Binsen's concept of "using the Spirit of the Internet to make beverage products". Under the guidance of this concept, in terms of products, Yuanqi Forest focuses on 0 sugar, 0 fat and 0 calories, which not only changes the traditional concept of "bubble water is unhealthy" of consumers, but also implants health into the hearts of consumers.
In terms of marketing, Yuanqi Forest is also full of horsepower. Tang Binsen once said in an interview: We dare to spend 1.8 billion yuan to advertise when the revenue is 2 billion. With such boldness, Yuanqi Forest invited stars such as Zhang Yuqi, Yi Yanqianxi, gu Ailing and other stars to do endorsements, and even more on the online title of B station across the Chinese New Year's Eve, in the "Our Band", "Yuanqi Full of Brothers" and other variety shows to do implantation, can be called where the consumer is, the advertisement hits. Therefore, this domestic beverage brand, founded in 2016, debuted with the concept of health and Japanese small and fresh packaging, and quickly captured the hearts of consumers.
Recently, China Youth Online released a list of "Top 10 Brand Influence of Emerging Dairy Brands after "00"", and in the two aspects of product attractiveness and health that young consumers are most concerned about, the Beihai Ranch under Yuanqi Forest ranks first and third respectively.
On December 20, 2021, in the "2021 Global Unicorn List" released by the Hurun Research Institute, Yuanqi Forest, which has been established for only five years, ranked ninth in China's top ten list, with a valuation of 95 billion yuan. In the giant beverage industry, the fledgling Yuanqi Forest has quickly become the hottest Internet celebrity, an achievement that other beverage brands in China are beyond the reach of other beverage brands.
But even with consumer preference, the Yuanqi Forest, which has been singing all the way, seems to have encountered a bottleneck recently. Despite the previous continuous doubling of marketing performance, Tang Binsen was still relieved in the interview at the end of 2021, "The next three years to ensure 50% to 60% annualized growth can be enough - I do not require two or three times every year." From the perspective of Tang Binsen's goal, he also realized that the development of Yuanqi Forest has touched the ceiling of domestic beverages.
The suffering of the Yuanqi Forest is traceable. In fact, although it has never relaxed in marketing, after it has seized the market share of the so-called sugar-free drinks, It is difficult for Yuanqi Forest to maintain its previous growth. Especially after the bubble water of major manufacturers took turns to appear, the sparkling water products were reshuffled.
Before 2019, the market share of Yuanqi Forest was as high as 85%, but after all competitors kept up in 2020, the market share of Yuanqi Forest fell to a maximum of 50% in the second half of 2021. Rising star Coca-Cola's small universe AHHA and Nongfu Spring Soda sparkling water are about 25% and 18% respectively.
In this environment, Yuanqi Forest urgently needs to find the next explosive model other than sparkling water to explore new performance growth points. According to relevant statistics, the two categories of sparkling water and tea burning products of Yuanqi Forest account for nearly 90% of the company's sales, of which sparkling water accounts for more than burning tea, accounting for nearly 90%.
However, although there are many products, there are only a few explosive products that can replace sparkling water. Yuanqi Forest has launched dozens of products, including milk tea, yogurt, electrolyte water, mineral water and other subdivisions, but the results are not satisfactory, not only the explosive products have not appeared for a long time, but because of the loss of research and development expenses, they have to save food and clothing.
Internal research and development was frustrated, and external clamps did not relax at all. Channels have been "pinched" by traditional beverage giants such as Coca-Cola and Nongfu Spring, and the upstream supply chain has also been restricted. The reason why it can play the "0 sugar 0 fat 0 calorie" propaganda is because Yuanqi Forest has found erythritol + sucralose to replace the sweetness of sucrose. However, due to the shortage of supply, the price of erythritol continued to rise, and upstream manufacturers directly stopped the supply of erythritol to Yuanqi Forest.
With no new suppliers found, the shortage of erythritol directly limited production in the Yuanqi Forest, resulting in a loss of nearly 1 billion. Erythritol, which once brought great benefits to the Yuanqi Forest, has now become a constraint.
And the Yuanqi Forest, in the case of not being able to touch the hard, also used the eighteen martial arts to actively "save itself". The first is to build factories upstream. In order to prevent the giant from getting stuck in the neck, Yuanqi Forest has completed the layout of 5 self-built factories, which are located in Tang Binsen's hometown of Chuzhou in Anhui, Xiqing in Tianjin, Zhaoqing in Guangdong, Xianning in Hubei and Dujiangyan in Sichuan. It is reported that these five factories can support a production capacity of 11 billion goods.
The second is to lay offline sales channels downstream. By increasing the investment and expansion of offline salesmen, as well as quickly laying smart freezers, Luck Forest has opened up an exclusive sales line. However, these measures to deal with opponents have made production costs higher and higher. According to the understanding of internal relevant personnel, "cost reduction and efficiency increase" has become the key word of Yuanqi Forest.
For the Yuanqi Forest, which is clamped down by capital and attacked by giants, there are no more than two kinds of development, one is to lay out a multi-product matrix, and the other is to go to sea to seek more growth curves. In 2020, Tang Binsen, founder of Yuanqi Forest, made a bold statement to the outside world that in 2021, Yuanqi Forest set an offline sales target of 7.5 billion yuan. This goal is bound to rely on the help of overseas markets for Yuanqi Forest, whose current market share is not as good as before.
In the domestic market, the menacing Yuanqi Forest has long gained the attention of overseas giants. Coca-Cola's middle and high-level industry insiders once confided to the relevant media: "In 2022, there will be no more sparkling water in the yuanqi forest on the market." Both sides of the 'Two Music' met and made up their minds to take down the Yuanqi Forest. "Going abroad and attacking overseas, it is imperative for the Yuanqi Forest."
Liu Zhen's induction is regarded as an important step in the overseas layout of Yuanqi Forest. According to previous reports, Liu Zhen has helped a number of well-known enterprises to achieve overseas business layout. Since joining Yuanqi Forest for more than a year, Liu Zhen has been responsible for Yuanqi Forest's overseas business. Now that Liu Zhen has left his job 15 months after joining the company, it seems that yuanqi forest's overseas pace is not going well.
Yuanqi Forest International Business Department was established in 2020, and since 2019, Yuanqi Forest has gradually laid out overseas markets, and there are also special responsible persons for different overseas regions. At present, it has entered the mainstream channels of many developed countries, and its products have entered more than 40 overseas markets such as the United States, Canada, the United Kingdom, France, Germany, Australia, New Zealand, Japan, and South Korea.
Under the full preparation, the first step of Yuanqi Forest to attack the overseas market was sonorous and powerful, and two good news came. First, in mid-December last year, the overseas version of the sparkling water of Yuanqi Forest broke into the Top 10 of the Amazon sparkling water best-seller list in the United States, and at the same time won the top 3 of the new product list, becoming the first and only Chinese brand to enter the list.
Another is that in January this year, Tesla CEO Musk's mother took a group photo with friends at home, and there was a canned sparkling water of Yuanqi Forest on the table, not only this group photo itself was widely forwarded on social networking sites, causing a lot of discussion, Yuanqi Forest also gained a new round of heat with the help of celebrity effects. The yuanqi forest bubbled water, and in this way it broke into the life of the Americans with great momentum.
For different overseas markets, Yuanqi Forest continues to launch new localized items, and the packaging looks like sparkling water is replaced by a more compact and delicate mini aluminum can. At the same time, the packaging is also more concise. For example, the original background after the canned sparkling water logo "気" is removed, and the "burning" word of burning tea is replaced by a capital "R", and the milk tea is more thoroughly changed, replacing the cartoon image of the yuanqi forest milk tea sister with black and white stick figures.
In terms of taste, it will not only continue the rich domestic sparkling water flavor variety, but also introduce some unique local flavors, such as the overseas version of "Green Bamboo Aloe Vera" flavor sparkling water that is not available in China. Yuanqi Forest has won the taste buds of Americans with its ingenious taste, and in the eyes of American consumers, Yuanqi Forest Sparkling Water has a unique taste, but it is not like the traditional sparkling water they recognize, more like a fruity sugar-free Coke.
Genki Forest did not limit its focus to the North American market. The Middle East is a market where Yuanqi Forest has high hopes. At expo Dubai, Yuanqi Forest became the senior sponsor of the China Pavilion. On the day of the Enterprise Day of the Expo, Yuanqi Forest announced the three most preferred sparkling water flavors in the UAE, namely white peach, summer black grape and Carman orange flavor.
Going to sea, tang Binsen is familiar with the road, he broke through the developed country market with his self-developed game clash of kings before the establishment of Yuanqi Forest, and won the 6th place in the North American best-seller list. But for the Yuanqi Forest, it was the first time.
From Amazon's point of view, whether it is sales or reviews, there is still a huge gap compared to the sparkling water giants, and the brand recognition is far from it. Moreover, the product pricing of Yuanqi Forest is currently 1.5-2 times that of the competitors, which does not have a significant advantage in pricing. Compared with European and American brands that already have mature sales systems, whether Yuanqi Forest can take root overseas and be recognized by overseas consumers needs time to test.
In recent years, the maturity of cross-border e-commerce and social software has allowed more domestic products to be displayed in front of global consumers, and many Chinese food and beverage brands have chosen to go overseas in the face of increasingly fierce competition in the domestic market. In 2009, the domestic beverage leader Baishishan took the lead in going to sea and became the most successful brand of domestic beverages going to sea.
However, for the Chinese beverage industry, it is not easy to truly occupy overseas markets. It is true that going to sea is an important means to expand brand influence and sales, but it also means that it is necessary to fight with classic brands that have been deeply cultivated abroad for more than ten years or even hundreds of years.
In foreign markets, industry giants such as Coca-Cola, PepsiCo, and Nestlé occupy the leading position in the beverage industry in the world market for many years, control shopping malls, and form an inseparable relationship with various channel providers.
In addition to the giant's supply chain control, the food and beverage industry also has its own peculiarities, that is, it needs to obtain local food safety compliance certificates. Only by completing compliance and obtaining the "access license" of the product can it enter mainstream consumption channels such as local supermarkets and convenience stores.
But the key is that many overseas countries have strict and different requirements for imported products. For example, in North America, the United States and Canada, the requirements are clear and rigorous; in Asia, Indonesia, Thailand, South Korea, and the Philippines have the most granular requirements for compliance and access. Before the product is imported into these four countries, it needs to pass the country's FDA (Food and Drug Administration) inspection, require the product to complete similar standards to the US FDA, and provide a special nutrition facts list before it can be imported, otherwise it cannot complete customs clearance.
Despite this, the overseas market is still quite attractive to domestic brands, and Yuanqi Forest is not the first to develop its own domestic beverage brands with the help of overseas tracks. After Baishishan successfully went abroad in 2009, Wahaha and Nongfu Spring also followed suit and launched the internationalization process.
However, even Baishengshan, which occupies the top spot in China's food export list for many years, is also facing complex challenges in the European and American markets, which shows that without considering the high cost of going to sea, in the face of the traditional brands of the industry, the Yuanqi Forest, which has only four or five years of development, may not be able to take advantage, and its road to opening up overseas markets will be difficult.
Judging from the layout of more than 40 countries and regions and local mainstream consumption channels where Yuanqi Forest goes to sea, Yuanqi Forest's goal of going to sea is not only overseas Chinese business, but also committed to building international brands in domestic beverages. However, the domestic beverage industry is heavily restricted in overseas development, and it lacks experience and rules in overseas products, channels, supply chains and brand building, which requires Yuanqi Forest to bravely advance in overseas rapids and take a new road.
At the same time, under the global epidemic, it is even more difficult for beverage brands to "go to sea". Going to sea itself has increased the cost of logistics, cargo damage and other sales costs, because of the impact of the epidemic, sea freight rates have soared, and the shortage of cabins is also an unfavorable factor that cannot be ignored. As a beverage product, because it is inferior in value and weight compared to other export products, the difficulties encountered in going to sea will only be more.
At this time of difficulty, Yuanqi Forest urgently needs to prove to the market that it still has the ability to maintain "Yuanqi".
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