Can the "bubbles" of the 100 billion yuanqi forest be quickly blown up?

Produced by Radar Finance and | Zhang Kaijing, editor| deep sea

On April 15, Li Guoxun, vice president of Yuanqi Forest, disclosed some of the company's performance data for 2021. It is understood that in 2021, the revenue of Yuanqi Forest increased by 2.6 times year-on-year, but Li Guoxun did not clearly announce the specific figures.

From the data point of view, the growth rate of Yuanqi Forest is gratifying. Under the leadership of Internet veteran Tang Binsen, the sales growth rate of Yuanqi Forest from 2018 to 2020 is 300%, 200% and 309% respectively. In the global unicorn list released by Hurun in December 2021, the valuation of Yuanqi Forest, which was established less than 5 years ago, is as high as 95 billion yuan, and the rocket-like growth rate makes a number of beverage brands unattainable.

It is worth mentioning that the high-growth "fairy tale" of the Yuanqi Forest is ushering in a change. In the first quarter of 2022, the company's revenue growth rate has fallen back to 50%, and it is also reported that the revenue target set by Yuanqi Forest in 2022 is 10 billion yuan, a year-on-year growth rate that has plummeted to 37%.

In addition, Yuanqi Forest is falling into the rumor of "slimming", and the news of layoffs continues. However, the company denied this claim, saying that the personnel changes were normal and are currently "slowing down rhythmically".

Radar Finance noted that behind the overall slowdown of the Yuanqi Forest, the company is also facing the "encirclement and suppression" of giants.

Some industry insiders believe that under the internal and external troubles, the high growth road of the Yuanqi Forest may have to press the pause button.

The performance did not reach the target, and the Yuanqi forest slowed down

As a company that has not publicly disclosed financial data to the market, Yuanqi Forest's performance can only be traced from public reports.

Radar Finance found that for the income data of Yuanqi Forest, there have been many statements circulating in the market.

In February 2021, 36Kr reported that the sales of Yuanqi Forest in 2020 were 2.3 billion yuan to 2.5 billion yuan, of which the sales of sparkling water accounted for more than 70%.

However, a month later, the 2021 China New Consumption New Domestic Brand Top100 List released by the research institute Dolphin News Agency showed that the sales scale of Yuanqi Forest in 2020 reached 2.7 billion yuan, an increase of 309% year-on-year. The same figure also appeared at the event site of the first China Beverage Health Consumption Forum in September 2021, released by a white paper released by a third-party organization. It is worth noting that Tang Binsen also attended the event.

In January 2022, Yuanqi Forest and Quanjude jointly launched the Chinese New Year's Eve lunch gift box, while Blue Whale Finance reported that in 2020, Yuanqi Forest's performance increased by about 270% year-on-year, with annual sales reaching 3 billion yuan and annual sales reaching 7.5 billion yuan in 2021. However, this news was denied by Yuanqi Forest.

According to a later report, the sales collection amount of Yuanqi Forest in 2020 was 2.7 billion yuan, which increased by about 2.7 times in 2021, slightly lower than the previous internal target of 7.5 billion yuan, with a growth rate of about 170%. It should be pointed out that the payment collection involves variables such as discounts, account periods, and agreed payment methods, and is not the sales volume of the current year.

There are also people close to the top level of yuanqi forest, saying that in 2021, the company's entire sparkling water plus aliens plus other side lines sales are a total of more than 5 billion yuan.

On the whole, whether it is 2020 or 2021, it is difficult for the outside world to give an accurate figure for the specific sales performance of Yuanqi Forest. But it is almost certain that while the company has experienced rapid growth in the past two years, its performance in 2021 has not reached the expected target set previously, and the growth rate will continue to decline in 2022.

For example, on April 15, Li Guoxun revealed that the revenue growth rate of Yuanqi Forest in the first quarter of 2022 was only 50%, which was far from the previous doubling situation. Tang Binsen also said in an interview at the end of 2021 that in 2022, Yuanqi Forest will return to a traditional company, "in the next three years to ensure 50%-60% annualized growth can be enough - I do not require two or three times every year." ”

In addition to the reduction in performance expectations, Genki Forest is also trying to save costs.

In March, Liu Zhen, head of Yuanqi Forest's overseas business, was exposed to leave his job due to personal reasons. At the same time, the company also left in the second half of last year, including Zong Hao, vice president in charge of brand operations, and Ran Hao, vice president in charge of human resources.

At the employee level, in mid-March, there were employees who complained that there was no year-end bonus. At the end of the month, a number of former employees said that they were forced to leave their jobs due to the adjustment of the organizational structure of Yuanqi Forest.

Some operation employees said that their colleagues have been changing. "Basically change some people in two months, and the shortest one comes for a week or so and leaves." Another division brand center employee revealed that in May 2021, there were more than 200 people in the department, and after two adjustments, there are now less than 100 people.

This is in stark contrast to the rapid expansion of the scale of Yuanqi Forest's employees before. It is understood that since the second half of 2020, there will be senior executives, middle-level and even grass-roots employees from traditional beverage companies such as Unity, Nongfu Spring, Wahaha, Master Kong, And Coca-Cola to join the Yuanqi Forest in batches. At present, the number of employees has increased from more than 2,000 at the beginning of last year to more than 8,000.

In this regard, Li Guoxun believes that the rumors of layoffs are not accurate, and said that Yuanqi Forest is promoting the construction of central Taiwan and data. "In the past, Yuanqi Forest had its own product development, e-commerce and growth team for each product, and the cross-departmental team of these overlapping construction was not highly efficient, but through the construction of middle-stage, we released a lot of resources and improved the overall capability."

It also said that in 2022, Yuanqi Forest will slow down or even "suspend" organizational expansion, "the focus of this year's work is to improve organizational capabilities, build business and processes more stable, and further improve per capita efficiency and combat effectiveness."

Yuanqi Forest falls into "ten-sided ambush"

In fact, the high growth of Yuanqi Forest may be gone, and the reason is that its market role has changed.

Tang Binsen first founded Yuanqi Forest in 2016, when the domestic sparkling water market was still a blue ocean. In fact, before the Yuanqi Forest came out, there was no sparkling water on the market, but because of the weak taste, it has not been able to gain the favor of consumers.

Some people believe that the sugar-free that consumers want is not without sweetness, and beverage giants such as Coca-Cola and Nongfu Spring have previously launched related products, but with little effect. Its attitude may be as stated in a Gen Z consumer survey released by Aoyama Investment in 2020: "I want health, I want beauty, but it is not delicious."

In this context, Yuanqi Forest took the lead in using sugar substitutes with higher prices, sweet taste but almost negligible content such as calories and fat, which took into account taste and health while also tearing a crack in the original market. In the eyes of industry insiders, this is a strategy that avoids the frontal battlefield and can fully grasp the initiative.

Zhu Danpeng, an analyst in the Chinese food industry, told Radar Finance that the rise of Yuanqi Forest is mainly due to its use of the new consumer Internet thinking to do traditional categories, and fully achieve product differentiation, including channels, positioning, packaging differentiation and so on.

At the channel end, the rise of Yuanqi Forest coincides with the venture capital boom of new convenience stores and the vigorous development of e-commerce.

Taking convenience bee as an example, its founder is Zhuang Chenchao, CEO of Qunar, who opened its first store around the Zhongguancun Business Park in 2017 and became a super convenience store chain group with more than 4,000 stores in only 5 years. Convenience bee stores often accurately cover office buildings, schools and other white-collar workers and young people's gathering places. More importantly, this type of convenience store is different from the game rules of the previous small shops, which usually dynamically adjust the shelf position based on traffic data.

At the same time, in order to cope with the impact of e-commerce platforms, some hypermarkets and supermarkets will also take the initiative to choose products that are closer to young people.

Under the superposition of various factors, the market share of Yuanqi Forest before 2019 is as high as 85%, and the sales of sparkling water in 2020 once accounted for more than 70% of the whole industry.

But when competitors also discovered the "blind spot" of sparkling water and quickly followed up, the situation has changed.

"This differentiation is easy to replicate, and as the giants follow suit, his sparkling water does not have much of an advantage." Zhu Danpeng said.

In 2021, the inner volume of the sparkling water track continues to intensify. Not only did Nongfu Spring launch the main concept of "0 sugar, 0 calorie, 0 fat, 0 potassium sorbate" soda sparkling water, Coca-Cola, Pepsi Cola, Wahaha and other giants also launched "AH! HA! small universe", "bubly smile fun bubble", "small light smoked soda sparkling water", even the new tea drink brand Heytea, Naixue's tea are running in.

At the beginning of 2022, there are also industry insiders close to the middle and high level of Coca-Cola revealed: "Coke said that in 2022, there will be no more sparkling water in the Yuanqi Forest on the market; both sides have held meetings and are determined to destroy the Yuanqi Forest." ”

On this basis, the original production and distribution system of Yuanqi Forest has also begun to withstand impact. In the industrial chain of the beverage industry, as long as the giant orders, almost all related raw materials, packaging, foundries and distributors may blockade the Yuanqi Forest.

For example, Nongfu Spring once asked dealers in some areas to display their own sparkling water in the refrigerated cabinet of Yuanqi Forest, and gave specific rewards. "For each bottle of Nongfu Mountain Spring sparkling water on display, a bottle of long white snow with a price of 3 yuan at the farmer's terminal is sent, and 48 bottles are capped." This promotion is known as the "God of Fortune".

According to Tencent Deep Network, Sanyuan Biologics, a manufacturer that began industrial production of erythritol earlier in China, suddenly cut off supply to Yuanqi Forest in the summer of 2021, resulting in the latter's peak sales season stopping production and supplying, with a loss of less than one billion yuan. In 2020, Yuanqi Forest is also the third largest customer of Sanyuan Bio.

The foundry of Yuanqi Forest also received an "order": "Before 12 o'clock this evening, all factories producing Yuanqi Forest must stop working." ”

A beverage distributor in the Beijing market said in a survey report that 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 Mountain Spring soda sparkling water have risen to about 25% and 18%.

The prospect of power channels and products is still unclear

In order to reverse the passive situation of being subject to people, Yuanqi Forest had to move to the "heavy asset" model.

At the end of March, the fifth self-built factory of Yuanqi Forest ushered in trial production, and soon the sixth factory will also be landed in Taicang, Jiangsu Province.

At the same time, in December 2021, Yuanqi Forest made a large-scale adjustment around the organizational structure. Tang Binsen began to personally go down, focusing on channels, sales management and product research and development. The company has also increased the recruitment of sales positions, and set up a new first-level department "Intelligent Terminal Division" under the middle and back office business sector, which is responsible for the development, operation and maintenance of commercial terminal equipment (such as display cabinets, retail cabinets and other products).

This will bring greater financial pressure to the Yuanqi Forest, which already has high marketing costs.

Yuanqi Forest is still trying to find a second growth curve besides sparkling water, but the current effect is also difficult to be optimistic.

According to the official website, there are currently 9 series of products under Yuanqi Forest, namely sparkling water, milk tea, countermeasure lactic acid bacteria drink, alien electrolyte water, tea drink burning tea, plant tea drink fiber tea, plant milk Ao wood, mineral natural mineral water and Beihai pasture yogurt.

In fact, yuanqi forest has launched far more products than these, but from the sales data, the explosive models that can keep pace with sparkling water have never appeared.

Some people believe that this is related to the higher difficulty of achieving 0 sugar 0 fat 0 calories in other categories. Milk tea has been pointed out to be suspected of false propaganda, confusing the concept between "0 sucrose" and "0 sugar", and its popularity has also been frustrated by the incident, and the once popular micro-sparkling juice has not become popular.

"It's not easy for a company to build a blockbuster. At present, the entire scale of the so-called explosive products, 30-40 billion has reached the ceiling, that is to say, the sparkling water of the Yuanqi Forest has not much incremental space. In the future, with the continuous extension of its other categories, it will further dilute the resources of the original brand channels. Zhu Danpeng said, "It said that it should achieve 7.5 billion and 10 billion, but it is basically achieved by pressing goods and opening new dealers, and the gold content of the entire growth is not high." ”

Yuanqi Forest has also invested in prefabricated dishes, drinks, coffee, light food and other tracks through investment, but so far it has not made much splash.

In the case of a domestic situation, is overseas an alternative? "At present, overseas business will definitely be done, but it will certainly not be the mainstream sales market of the company's products in the short term." Youyuanqi Forest employees explained that in the overseas market, it is necessary to face international big brands such as "Two Music" and also to face local local beverage brands, which is undoubtedly a huge challenge for Yuanqi Forest, which is still in the early stage of development and has not yet built factories overseas.

Analysts pointed out that the current prosperity of the new consumption track is not high. According to the statistics of Tsingshan Capital, in the first quarter of 2022, there were only 170 consumer track investment events, down 56% from the previous quarter. Based on this, the future development of brands is very likely to return to tradition, but whether it is channels or supply chains, the ultimate direction is the product.

Can the Yuanqi Forest create another miracle? Radar Finance will continue to pay attention.

Note: This article is the original of Radar Finance (ID: leidacj). Unauthorized reproduction is prohibited.