It's a well-known fact that the beverage industry is prone to making the rich. If you break it down to energy drinks, it's no exception. A can of Red Bull has made several big rich people.
The Hsu family, the founder of Red Bull, has been ranked among the top three richest people in Thailand for many years; after cooperating with the Hsu family, the Austrian businessman Metschütz, who made Red Bull go to Europe, has become the richest man in Austria; and Yan Bin, a Thai-Chinese businessman who introduced Red Bull to China and sold it to all parts of the country, has a fortune of 100 billion yuan.
In China's energy drink market, Red Bull is groundbreaking and nurturing consumers for the industry.
Since the disagreement between Thai Red Bull and Chinese Red Bull, the lawsuit between the two has been going on for many years and has not yet ended. Just when the "Red Bull Department" was in chaos and fell into a "tug of war", Dongpeng Special Drink from Shenzhen took the opportunity to rise rapidly, and snatched a lot of markets from Red Bull with the cost-effective trend of "larger volume and low price", making domestic brands stand up.
Twenty years ago, Dongpeng Beverage was still a small factory that could not even pay wages, and as of January 25, the total market value exceeded 66 billion yuan. The father and son of Lin Muqin and Lin Yupeng, businessmen from Shanwei, Guangdong, behind it, will be on the 2023 Hurun Report, with a wealth of 43.5 billion yuan.
This story of wealth creation is also related to Red Bull. To a certain extent, it can also be said that Red Bull has created at least four rich people.
Although the voice of China's Red Bull is weakening, Thailand's Red Bull is trying its best to redeploy the Chinese market. The market share of the "Red Bull series" still far exceeds that of Dongpeng Special Drink. Under the competition, Dongpeng Beverage, which relies on Dongpeng Special Drink, began to "spread the net and diversify".
01, 66 billion giants attack everywhere
In mid-January, Dongpeng Beverage launched a VIVI cocktail with an alcohol content of 8 degrees and a taste of citrus, green grapes, and white peach.
This time, Dongpeng Beverage once again reached out to the pre-mixed cocktail track.
The leading enterprise in the pre-mixed cocktail market is Bairun Co., Ltd., whose core business is RIO brand pre-mixed cocktails. By 2023, Bairun Co., Ltd.'s pre-mixed cocktails include slightly drunk series, classic series, refreshing series, strong cool series, light enjoyment series, etc., with different specifications such as 275ml, 330ml, and 500ml.
Like Dongpeng Beverage, the core product of Dongpeng Beverage, VIVI cocktail also takes the cost-effective route.
▲ (Screenshot from the flagship store of Dongpeng Beverage E-commerce Platform)
According to the flagship store of Dongpeng Beverage E-commerce Platform, VIVI cocktails are 500ml per can, buy 4 cans and get 2 cans free, the price is 47.9 yuan, equivalent to about 8 yuan per can, and the price of 15 cans in a box is 129.3 yuan, which is 109.9 yuan after the discount, which is equivalent to 7.3 yuan per can.
In contrast, RIO Qiangshuang, which is also 8 degrees, has the highest sales volume of 330ml products in its flagship store on its e-commerce platform, while the upgraded 500ml cans, a box of 8 cans are 109 yuan, and the discount is 103 yuan, which is equivalent to 12.9 yuan per can, and the retail price of offline supermarkets is 13.5 yuan.
In recent years, every subdivision of the beverage industry has been rolling, and the Matthew effect of the industry has become more and more prominent. Although the VIVI cocktail is more cost-effective than the RIO Qiang, as a new brand, it is not easy for consumers to accept it quickly.
From the announcement of the launch on January 15 to January 23, the sales figures of the VIVI cocktail on Dongpeng Beverage's Tmall flagship store were relatively dismal, with 4 cans showing 12 sold, 15 cans showing 43 sold, and only 1 valid review.
According to the product information of the Tmall flagship store, the manufacturer of VIVI cocktails is Hubei ORG Beverage Industry Co., Ltd. - behind it is the listed company ORG. In addition to supplying packaging, ORG also provides customers with integrated comprehensive services for filling OEM. In other words, ORG is an OEM manufacturer of VIVI cocktails.
The VIVI cocktail is just one step in the diversification of Dongpeng Beverage. Prior to this, Dongpeng Beverage has launched a number of diversified products, which have been described by the outside world as "spreading the net diversification".
At the end of December 2023, Dongpeng Beverage launched a cross-border plant-based protein drink - Island Coconut Coconut Water, with an original price of 52.9 yuan for 24 boxes of x250ml FCL and 44.97 yuan after discount, and 72.9 yuan for 24 bottles of x330ml FCL for 61.9 yuan after discount.
The leader of this subdivision track is the coconut palm brand coconut water. In contrast, the island coconut water also takes the cost-effective route.
Earlier, Dongpeng Beverage also launched electrolyte drinks to replenish water, coffee drinks, Dongpeng coffee, tea drinks, tangerine peel special drinks, oolong tea, lemon tea, freshly squeezed juice drinks, raw pressed orange juice, bottled water, Dongpeng natural water, etc.
The diversified layout can't be stopped, and Dongpeng Beverage is trying to quickly create a second curve.
At the company's summary and commendation meeting held in March 2023, Lin Muqin, chairman and president of Dongpeng Beverage, gave a speech on the topic of "Forge ahead and fight for the future". "In the next three years, we must nurture and develop a second growth curve," he said. We can't have a flat mentality. If you don't learn, your own ability can't keep up with the company's development speed, and you will be eliminated. ”
02, Red Bull is trapped, Dongpeng runs
Why are you in a hurry to develop the second curve? This has to start with the story of the beginning of Dongpeng Beverage.
The predecessor of Dongpeng Beverage was Dongpeng Industry. In 2003, this Shenzhen state-owned enterprise, which was on the verge of bankruptcy, was transferred 100% of the property rights by 20 employees with Lin Muqin as the core for 2.5366 million yuan. After the completion of the restructuring, through several equity transfers and capital increases, Lin Muqin became the actual controller of Dongpeng Beverage.
Lin Muqin was born in 1964 and is a native of Shanwei, Guangdong. Before joining Dongpeng Industrial in 1997, he worked for a beverage company in Shenzhen for many years. According to the Financial National Weekly, the Shanwei brothers, Lin Muqin and his younger brother Lin Mugang (now the director and executive president of Dongpeng Beverage), were the workshop leaders of the China Red Bull foundry and have accumulated rich experience.
In 1995, Reignwood Group, a Thai-Chinese businessman, introduced Red Bull, a tonic drink from Thailand Tencel Group, to exclusively operate Red Bull in the Chinese market, opening the story of Red Bull in China. In the Spring Festival Gala of 1996, Yan Bin invested hundreds of millions of yuan to advertise: "Red Bull came to China", so that all Chinese knew about Red Bull.
"Drink Red Bull when you are thirsty, and drink Red Bull even more when you are sleepy and tired. "For a long time, Red Bull was synonymous with energy drinks in the Chinese market.
The best-selling popularity of Red Bull has made many companies see opportunities, including Dongpeng Industrial and Lin Muqin. At the end of 2009, when China Red Bull was moving towards sales of 10 billion yuan, Dongpeng Special Drink in PET bottles was born. At that time, Red Bull already accounted for 90% of China's energy drink market.
▲ (China Red Bull.) Photo source/city boundary)
Dongpeng Special Drink can only carry out differentiated competition, from packaging to price, it has avoided the edge of Red Bull.
In terms of packaging, Dongpeng special drinks are bottled in PET bottles, while energy drinks represented by Red Bull are almost all in metal cans. In contrast, PET bottles are more portable and dust-resistant. In terms of price, Red Bull's large single product is 250ml, 6 yuan/can, and 250ml Dongpeng special drink, only 2~3 yuan/bottle.
Although their own efforts are important, the strong rival Red Bull has also given Dongpeng Special Drink a good opportunity for development.
In 2013, Red Bull abandoned the classic advertising slogan - "Drink Red Bull when you are sleepy and tired" and replaced it with "Your energy is beyond your imagination". Dongpeng Beverage picked it up, invited Nicholas Tse to endorse it, and launched a new advertising slogan - "Tired and sleepy, Dongpeng Special Drink", bombarding everywhere. This kind of "problem-solving marketing" has a very obvious effect.
What's more, since 2016, the cooperation agreement between Thai Tencel and Reignwood Group has been divided, and the two sides have endlessly resorted to law over the issue of authorization and trademark, and have fallen into a tug-of-war. Dongpeng Beverage seized the opportunity to launch a 500ml Dongpeng special drink packaged in PET bottle + dustproof cap in 2017, with a terminal price of 5 yuan per bottle, with a large quantity and low price, seizing the market.
In addition to marketing, price and packaging to capture the psychology of consumer groups, Dongpeng Special Drink also has an ingenious feature, that is, the cup-shaped transparent dust cover designed on its packaging can also be used as an ashtray for drivers and masters of the core consumer group.
Although the development of Dongpeng Beverage, accompanied by "imitation" and "plagiarism" and other questions. However, under the strong encirclement of the giant Red Bull, Dongpeng Beverage still achieved a breakthrough. The bottled 500ml Dongpeng special drink has become the core item of Dongpeng beverage.
▲（东鹏特饮与红牛。 图源/市界）
In May 2021, Dongpeng Beverage was listed on the Shanghai Stock Exchange. On the night of the listing, at the Shangri-La Hotel in Shenzhen, Dongpeng Beverage held a listing appreciation dinner.
At the dinner, Lin Muqin also thanked Yan Bin of Reignwood Group for introducing Red Bull to China, cultivating the first generation of consumers' awareness of functional drinks and promoting the development of the entire category.
In a sense, Red Bull has not only played a pioneering and leading role, but also educated the Chinese market, and today, energy drink brands large and small are more or less beneficiaries. This is especially true of Dongpeng Special Drink.
Dongpeng Beverage can grow rapidly and go on the market, and even the total market value once exceeded 100 billion, relying on a single category and large single product with high cost performance. However, with the changes in the market in recent years, Dongpeng Beverage is working hard to break the circle on the one hand, such as sponsoring the CCTV broadcast of the Qatar World Cup, and on the other hand, it is still trying to diversify and find the second curve.
03, the "Red Bull Department" exerted its strength, and the hidden worries gradually appeared
Dongpeng Beverage divides its products into two camps: Dongpeng Special Drink and other beverages. Dongpeng Special Drink series has a variety of packaging specifications: 500ml Golden Bottle Special Drink, 250ml Golden Bottle Special Drink, 250ml Golden Jar Special Drink, 335ml Golden Jar Special Drink, 250ml Golden Brick Special Drink, 250ml Golden Diamond Special Drink.
From the category point of view, Dongpeng Special Drink is the absolute core of the company, and in Dongpeng Special Drink, 500ml is the most core item. In other words, Dongpeng Beverage relies on the core category Dongpeng Special Drink, and also relies on the core large single product.
Under the vigorous diversification of Dongpeng Beverage, the proportion of Dongpeng Special Beverage's main business income has decreased slightly, but it is still very high.
In the first three quarters of 2023, Dongpeng Beverage achieved operating income of 8.641 billion yuan and net profit attributable to the parent company of 1.656 billion yuan. Among them, Dongpeng Special Drink contributed nearly 8 billion yuan in revenue, accounting for 92.6% of the main business income, compared with 94.7% in 2021.
Moreover, in terms of revenue and profit, the 500ml Golden Bottle Special Drink is the most important contributor.
In 2021, the 500ml Golden Bottle Special Drink accounted for more than 76.2% of the revenue of Dongpeng Special Drink products, and the gross profit margin was also significantly higher than that of other packaging. Taking 2020 as an example, the gross profit margin of 500ml gold bottles was 52.3%, which was higher than the company's overall sales gross margin, while 44.1% for 250ml gold bottles and 40.1% for 250ml gold bottles.
However, after the "Red Bull Department" eased up, the space of Dongpeng Beverage began to become cramped again.
After China Red Bull was sued by Thailand's Tencel, China Red Bull has encountered resistance in terms of advertising and market share. However, at the same time, Tencel Group has launched a strong offensive and is making efforts to re-deploy the Chinese market.
▲ (A Yonghui supermarket in Beijing shelf display.) Photo source/city boundary)
Through multi-channel research, "City Boundary" found that there are currently a variety of Red Bull products in the Chinese market: the first is Red Bull Vitamin Functional Drink (i.e. China Red Bull, produced by Red Bull Vitamin Beverage Co., Ltd. and operated by Reignwood), the second is Red Bull Vitamin Flavor Drink (from Hainan Red Bull Company, controlled by the Hsu family in Thailand), the third is Red Bull Vitamin Taurine Drink (jointly launched by Tencel and Guangzhou Yao Energy), the fourth is RedBull imported from Austria, and Red Bull imported from Thailand......
With the deepening of the contradiction between Tencel Group and Reignwood Group, Tencel Group has spread Red Bull products other than China Red Bull to the Chinese market through various ways, forming a siege on China Red Bull.
Among them, the second and third types, which have been vigorously promoted in recent years, are the first type of frontal sniping. In August 2022, Tencel Group also announced that Wu Jing became the spokesperson of Red Bull Vitamin Flavored Drink.
"City Boundary" found that in Beijing, big supermarkets now mainly promote the second and third types, for example, the second type is mainly displayed in Yonghui supermarkets. In Jingdong and Tmall, the second and third types are also mainly promoted, and the self-operated stores of the first type have long been closed. Whether it is online or offline, many mainstream platforms and channels, the first one is relatively rare.
Dongpeng Special Drink once launched canned products with the same capacity and price as Red Bull, but the market was difficult to open, so it had to adjust its strategy and the price dropped to about 3.5 yuan per can. In March 2022, Dongpeng Special Drink upgraded its canned products and launched a 250ml "China Gold Can", priced at about 5 yuan, which is benchmarked against the "Red Bull series".
In terms of channel promotion, Dongpeng Special Drink is also making efforts. However, a distributor of Dongpeng Beverage in Beijing told the "City Boundary" that the current main promotion is still 500ml, and if the supermarket buys it, a box of 24 bottles, the invoice is 95 yuan, a box with two bottles, and a retail bottle of five or six yuan. "If you do the display, you will get one box of hydrating electrolyte water for six boxes, and two boxes for the refrigerator display. ”
According to China Post Securities, Dongpeng Beverage's market share has risen to 14% in 2022, while China Red Bull's market share has fallen to 55.2% due to endless lawsuits.
Although the market share of China's Red Bull is declining, through the layout of Tencel Group, the entire "Red Bull series" still firmly dominates the Chinese energy drink market.
For Dongpeng Beverage, it is not only facing a strong group opponent such as "Red Bull", but also a number of opponents behind it, such as Lehu, Devil's Claw, Physical Energy, Force Health, and War Horse.
Dongpeng Beverage had to think of a second curve.
Lin Muqin once put forward the development strategy of "national comprehensive development and cultivation of the second curve": while building the "Dongpeng Energy +" product matrix, he poured resources into cultivating the second curve products, vigorously supported the development of new categories, and cultivated new growth points for the healthy and sustainable development of the enterprise in the future.
However, judging from the diversified new products launched by Dongpeng Beverage, each track faces strong competitors, and the competition is even more fierce than the energy drink track.
For example, the pre-mixed cocktail track has Bairun shares, the coconut water track has coconut trees, the coffee drink track has Nestle, not to mention the bottled water and tea track, Nongfu Spring and Master Kong are even more giants. These giants have been deeply cultivated for many years, and there is almost no roll in the track.
Lin Muqin once said that the beverage industry is a fully competitive industry, and it is not enough to stand in place and guard the existing market, "we must move forward."
Author | Lei Yanpeng
Edit | Chen Fang
Operations | Liu Shan