Reese Viewpoint
In the spring of March, sugar and wine are busy. As the vane of the food and beverage industry, the sugar and wine fair is no exception to the emergence of new products this year, and the competition in various industries can be glimpsed.
In this spring sugar beverage theme exhibition, we can see that major brands are speeding up the layout of products in the direction of beverage health, among which sugar-free tea and functional drinks are particularly eye-catching. After 30 or 40 years of development, China's modern beverage industry is the only way to benchmark the high-end markets of Japan and South Korea, and to transform to "health". It's not hard to understand why many brands are consistently flocking to the sugar-free tea and functional beverage tracks to compete.
Everyone has seen the trend of health, traditional giants are also accelerating their transformation, and new consumer brands are trying to fight product concepts to kill the bloody road. However, judging from the current game situation, there are many misunderstandings in the practices of the original Liangle, Kangtong beverage giants, and new consumer brands, which are not enough to establish competitive barriers. Behind the lack of surprise is the lack of product innovation based on consumer needs, and blindly falling into the self-congratulatory nature of product creativity. Creativity and innovation, although the difference between the word, but the direction is completely different......
Can sugar-free tea still be rolled?
Reese's Perspective: The industry is seeing the light of day, new and old players are at war, but we don't see real category innovation. Under the tuyere of sugar-free tea, with the current rolling method of these new players, they can't eat meat, and at most drink soup.
When it comes to the hottest drink at the Spring Sugar Fair, sugar-free tea is the first to bear the brunt. The rapid outbreak of sugar-free tea and the anti-sky growth rate of oriental leaves have attracted large and small enterprises to flock to the layout, intending to grab a bite of meat in this boiling pot. In order to create brand differentiation, sugar-free tea has also fallen into different ways of rolling, volume cost performance (larger capacity), roll tea (various regional subdivision of tea species), roll origin (high mountain tea plantation, core production area...... ), roll brewing method (freeze-dried tea powder + bottled water)...
Unfortunately, in this "Thousand Tea War", despite their own strange tricks, it is still a solid "Oriental Leaves, Suntory, Other" competitive pattern, the core of the melee is that the lack of product innovation based on consumer needs is that we generally fall into three major innovation misunderstandings:
Myth 1: Homogeneous development, "better" can not impress consumers
Looking at the spring sugar sugar-free tea brand, everyone slowly fell into the quagmire of "doing more and more alike", the products imitate each other, spread and learn from each other, from the original "green tea, black tea, oolong tea..." to "Phoenix Single Cong, Zhengshan Small Species, Yanbo Longjing...", the brand hopes to establish a better and more textured cognition for consumers through the subdivision of tea species. But in fact, unlike the old tea customers, the young people of the target group of sugar-free tea only stop at the general category of tea, and they will say "I want to drink Zhengshan small seeds"? They will only become numb in the face of the same product gimmick. It can be seen that a better concept can only briefly stir the nerves of consumers, and only the innovation that really jumps out of the homogenization situation can be precipitated into long-selling products.
Image source network
Myth 2: Pseudo-category trap, pseudo-category will only go further and further
The binary pattern of Oriental Leaves and Suntory tends to be stable, and there are many brands in the market that hope to rely on "category innovation" to lead sugar-free tea into a new era, but is that a real category innovation?
Starting from Yili's Yike Huoquan freshly brewed tea, the concept of screw-top freshly brewed tea was pushed to the public, and many small brands followed suit, all of which were intended to educate the market to "twist and shake to restore the original taste of freshly brewed tea". However, the instant way of tea powder can not surpass the experience of ready-to-drink sugar-free tea in taste, and it is also more than one in the way of drinking, so such a product can only be a pseudo category.
China's heavy tea culture gene determines that a good pot of tea is inseparable from the right water temperature utensils, and it takes patience to brew in order to taste the tea aroma, and there is a huge gap between sugar-free tea drinks and freshly brewed tea.
Myth 3: Pseudo-positioning is not what consumers really need
In addition to more types of tea and more brewing forms, a variety of communication concepts also appeared at the Spring Sugar Fair, with "Tea Village Level", "Exquisite Tea", "Master Tea" and "Oriental Tea" plastered all over the beverage exhibition site. At first glance, I thought I had strayed into the tea expo site.
It is necessary for brands to ask themselves: "Is our selling point really what consumers need?Does it solve the pain points of consumers?Is it able to bring unique value to consumers?"As soon as the three questions come out, you can see how ridiculous the pseudo-positioning of new concepts such as master tea, oriental tea, and tea village level in the competition of ready-to-drink sugar-free tea.
Image source: Photo by the Rees Project
How can chaotic warfare break out of the encirclement? There are three major directions worth grasping
Rees believes that sugar-free tea has huge room for development to expand to 100 billion yuan in the future, and will be able to become the third largest soft drink category in China, alongside bottled water and carbonated drinks.
For such a huge track, there will definitely be no more Oriental leaves and Suntory. Based on Reese's observation of the spring sugar beverage sector and his research on the sugar-free tea category, we believe that there are three potential ways for new players to break the game if they want to advance to the finals:
Potential Opportunity One
The popularization path of sugar-free tea has shifted from "tea health" to "bottled water substitution", so there are major development opportunities for creating sugar-free tea in the 3 yuan price band.
Sugar-free tea has ushered in an outbreak in China after ten years of dormancy, taking advantage of the tuyere of sugar reduction and sugar-free, it has completed a large number of transformations from sugar-free drinks to sugar-free tea, and has accumulated a group of fans based on the "sugar-free" characteristics. With the gradual awakening of consumers' health awareness at different market levels, coupled with the high-density layout of beverage giants, the development speed of sugar-free tea has far exceeded expectations, consumers have begun to develop stable consumption habits, and the consumption demand for sugar-free tea has also begun to move from "healthier beverages" to "flavored water".
As the substitution effect of bottled water increases, the change of substitution will bring about a downward shift in the price scale. It can also be seen from the high-end market in Japan that the price difference between sugar-free tea and bottled water is an important factor in determining whether the substitution is valid, so 3 yuan will become an important price segment. In addition, in order to successfully transform the bottled water market, "delicious" will become the category advantage of sugar-free tea, and in terms of delicious attributes, the direction of compounding is worth exploring and researching, such as the compound of flowers and fruits, the compound of tea and so on.
Rees believes that whoever can take the lead in creating delicious sugar-free tea based on the 3 yuan price band is expected to give birth to a new game-breaking brand and promote the development of sugar-free tea into the next fast lane.
Potential Opportunity Two
The taste pattern of sugar-free tea is undecided, based on a single tea species, with technological breakthroughs and innovations to achieve a stunning taste, and has the development opportunity to build a strong single tea expert brand.
"This tea is particularly delicious, not astringent at all", "Our product is very strong, the same as your hot water brewing", "Although it looks similar, we have been on the market for more than a year, and there are more than 100 million, mainly because consumers recognize our taste, especially this one has a floral fragrance"......
Sugar-free tea has entered the fast lane, and various brands have also changed from emphasizing "sugar-free" to emphasizing "delicious", which seems to be the core weapon for brands to compete for consumers' minds: whether it is the ripe fruit "not bitter, not astringent, and sweet", or the tea Xiaokai's "bean fragrant, fresh and mellow and refreshing", or the "high mountain good tea to drink and let tea" of tea, in fact, they are all making a fuss about the taste, emphasizing the origin of tea, emphasizing the fragrance, and emphasizing the compound are all means to achieve good taste. However, the highly homogeneous publicity and the taste with few differences did not make any brand really enter the minds of consumers, but the product was too much like consumers to choose, and finally still chose the preferred brand of the category.
In fact, tea is the first criterion for the differentiation of sugar-free tea categories. Domestic sugar-free tea has swarmed many flavors and dug up all the domestic tea varieties, but only oolong tea has escaped. Therefore, although there are many flavors on the market, there is no stable taste pattern in the mind.
From the perspective of consumption and national acceptance, green tea, black tea, and Pu'er all have a chance to run out, and the mature market of Japan is the competition between various tea expert brands. However, to achieve a breakthrough based on the tea species, it is not enough to rely on the tea seed itself, how to achieve a breakthrough in technology, so that the tea itself brings amazing and unique flavor characteristics, is the way to win. Taking Japanese green tea as an example, turning sugar-free green tea into a national beverage is inseparable from the continuous technological breakthroughs of Japanese companies: Itoen starts from the three dimensions of original leaf innovation, tea canning and product preservation, in order to retain the original aroma, color and flavor of green tea; Kirin raw tea innovates in raw materials and processes to highlight the umami and sweetness of green tea in order to solve the bitter taste pain points of green tea in the market; Asahi will launch "Sa" in 2023 with "fragrance" as the positioning based on consumers' expectations for the fragrance of sugar-free tea Green tea, in the first week of its release, won 23.5 million bottles in one fell swoop...... Under China's dualistic pattern, who can take the lead?
Potential Opportunity Three
Dig deep into the efficacy and role of tea, break through the boundary of sugar-free tea "water replacement", create strong functional attributes, and cater to the more extreme health trend.
Sugar-free tea starts from health, and it is bound to move towards health in the future, but the essence of health has changed, and strong functional attributes are a weapon to truly break through the boundary of "water replacement" of sugar-free tea. Sugar-free tea in the Japanese market is overwhelmingly emphasizing the functional attributes of tea, such as "reducing visceral fat", "lowering cholesterol" and so on; although from the perspective of regulations, there are great differences between China and Japan in terms of declaration threshold and review cycle, but the mental education of public relations and grass can be used as an effective means of communication, such as Pu'er tea has the effect of scraping oil and reducing fat, green tea has the effect of reducing visceral fat, and oolong tea has the benefit of reducing blood lipids... Based on the tea itself, the functional attributes are strengthened, and the addition of relevant functional ingredients will also make the brand cater to a more extreme health trend.
When will the outlet for functional drinks come?
Reese's view: Only by starting from the consumer's mental cognition can we avoid becoming an "IQ tax". But we must not blindly find subdivisions, the real big strategic opportunity is to seize the main channel in the mind, grasp the high-frequency rigid demand in order to create a big brand.
Drinking a bottle of drink to achieve functional replenishment, where is it going?
In the functional beverage track, in addition to the large category of energy drinks, the concept of light function and light health care has gradually lingered in the ears of the public, from the "whitening drink", "glow drink" and "sleep aid drink" that were popular in the past few years relying on the addition of ingredients gradually retreated from the stage, to a number of natural ingredients "blueberry drink", "carrot juice", "red bean water", "wolfberry water" The call has risen, all of which see the great enthusiasm of beverage brands under the trend of great health. However, the brand that focuses on "light health", based on the demand insight of the Z era and excellent product innovation ability, both are indispensable.
2023 Spring Sugar Fair products
2024 Spring Sugar Fair products
"The way to maintain health is to maintain health. "The word health has been rooted in the genes of Chinese consumers since ancient times, and the demand certainly exists, but whether the health demand needs to resort to beverages to achieve it is a question worth exploring. It can be seen from the two types of products at the Spring Sugar Fair that both fruit and vegetable juice products with functional attributes and seemingly healthy-sounding herbal water are facing category development bottlenecks in China.
Healthy juice is facing a wall: in China, delicious juice has been facing the criticism of high sugar content, which will become a constraint on the development of the category under the whole health trend; although 100% juice is healthy, it has not ushered in the category development explosion due to high price, taste, and high availability of fruits; But health is health, and the healthy atmosphere from ingredients to finished products is difficult to cover up the taste concerns of pure juice, which is why there are not many Internet celebrity products in recent years, but there are not many precipitated categories. In order to achieve a balance between health and taste, Japanese companies often innovate products through the compound blending of fruits, vegetables and nutrients, which may provide a good reference for China.
The homology of medicine and food is tepid: the homology of medicine and food is a treasure mine for mining functional drinks, but health drinks are not a category in consumer cognition, and the truly valuable category must be a subdivision track with high frequency, rigid demand, visible effect, and in line with consumption habits, which is the opportunity to create an outlet.
- The category opportunity of medicine and food homologous needs to be compatible with the consumption habits of bottled cold drinks
The same is true of herbal tea, the mainland has a diet since ancient times, through the intake of medicinal and edible ingredients to maintain the body and mind, but the ingredients close to the herb are often associated with bitterness, Chinese medicine taste, therefore, the concept of "ginseng water", "red bean water", "barley water" can only become "another choice of healthy drinks" in the minds of consumers. Moreover, although ready-to-drink is an inevitable trend of beverages, health tea is a hot brew habit in China, and whether consumers can still accept it from pot to bottle is also a question that needs to be considered.
- For the category opportunities of medicine and food, we must find a big track in our minds in order to raise big fish
From the perspective of the participating brands of the Spring Sugar Fair, a misunderstanding that brands are prone to fall into is to blindly tap the subdivided categories in the homology of medicine and food, and these small categories in the mind are easy to be classified as niche and cannot carry the growth needs of the brand. For example, the kidney bean, poria and sour papaya drinks launched by Chang'an Beverage Co., Ltd. originally hoped to provide solutions for consumers' personalized health needs. But in fact, every step from educating consumers about the efficacy of these categories to cultivating regular drinking habits will be very difficult and the cost of education will be extremely high. These so-called personality drinks will eventually be short-lived. Only a big track can grow a big brand, and the brand must only be based on the minds of consumers and find the real high-frequency rigid demand, in order to truly create the development of light health drinks.
Image source: Internet
What does it take to move from "placebo" to "genuine" brands?
Starting from the underlying logic of the establishment of the category, if a beverage with functional attributes wants to break through, it needs to meet the following three conditions:
First, category functions are high-frequency rigid needs that consumers can define. Wang Laoji has become a tens of billions of single products by relieving greasyness, and ginseng water, which focuses on the relatively virtual function of replenishing qi and blood, is bound to be short-lived.
Second, the category function has a short-term noticeable effect. Prune drinks sell well because prunes can make people achieve a smooth effect in a short period of time, while blueberry drinks and dampness drinks are drinks that need to be observed for a long time, which can only have the effect of placebo in the short term, and are easy to be labeled as an IQ tax.
Third, category functions need to have strong mental resources. For example, consumers know that fat sea is good for their throats, but they don't know that lotus leaf tea can help defecation and reduce swelling.
brief summary
A single flower is not spring, a hundred flowers bloom in spring. It is the original intention of all beverage brands to get a piece of the pie and leverage more market share in the vast beverage track, but behind the "volume", it is not the piling up of bells and whistles product concepts, not a simple struggle with a few more zeros, but a real based on consumer needs to create a category that the market and consumers really need, so as to make the brand more vigorous.
From product innovation to product innovation to category innovation, brands need to be down-to-earth and calm down to figure out what consumers really need, but from product innovation to product creativity, it is just a thought.
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