Push the new coconut water products, canned yellow peaches are difficult to support alone, and happy homes are looking for new ones

Launched a new brand, officially announced a celebrity spokesperson, and gave coconut water to shareholders...... In two days, a series of operations in Happy Home all showed the importance of "Coconut Shark" coconut water. On April 11, Happy Home's new brand "Coconut Shark" was launched, and basketball star Shaquille O'Neal was officially announced as the new spokesperson. The night before, Happy Home announced that it would hold a shareholder feedback activity and give 1 case of coconut water to eligible shareholders for free. From the "stable variety" canned fruit to the "growing variety" coconut water, after the canned yellow peach craze subsided, Happy Home is aiming at the coconut water market to find new growth points.

On April 11, Happy Home launched a new coconut water product with its new brand "Coconut Shark" and officially announced its cooperation with basketball star O'Neal.

In the view of Li Zihao, vice chairman of Happy Home Food Group Co., Ltd., the cooperation with O'Neill is a major breakthrough in the brand strategy of Happy Home, which can further deepen consumers' awareness of the Happy Home Coconut Shark brand.

Listing new brands, official announcement spokespersons, and giving coconut water to shareholders...... Behind this series of actions is that the happy family that used canned yellow peaches to fight the world in the past is looking for new growth points, and coconut shark coconut water is a new growth variety that it focuses on cultivating.

According to official information, Happy Home was founded in 2001 and has been focusing on canned fruits such as canned yellow peaches and canned oranges since its establishment. Until 2014, Happy Home entered the market of plant-based protein drinks such as coconut water, and in 2023, it will launch a new brand of coconut water, "Coconut Shark". At present, Happy Home has formed a dual-driven development strategy of canned fruit and coconut water.

According to the 2023 financial report data of Happy Home, the operating income of coconut water beverage products was 1 billion yuan, an increase of 24.37% over the same period of the previous year, accounting for 52.02% of the company's operating income, and the operating income of canned fruit products was 709 million yuan, an increase of 17.49% over the same period of the previous year, accounting for 36.86% of the company's operating income.

In recent years, the number of entrants in the coconut water market has increased rapidly, and Tianyancha data shows that as of June 2023, there are more than 6,500 related companies such as "coconut, coconut milk, and coconut milk", and many emerging coconut water brands have also received different rounds of investment. According to data from Huajing Industry Research Institute, the market size of China's coconut liquid beverage industry increased from 10.28 billion yuan to 14.44 billion yuan from 2017 to 2021, with a CAGR of 7% from 2017 to 2021, and the market size is expected to exceed 20 billion yuan in 2026.

According to Zhu Danpeng, an analyst of China's food industry, there are currently four well-known coconut water brands in China, the largest of which is the coconut tree that ranks first in market share, the second is Guangdong Coconut Tai Biotechnology, the third is Happy Home, and the fourth is the special forces, which together account for more than 50% of the market share of the domestic coconut water market. "On the whole, the canned food category has limited and unsustainable development space in the future due to the limited foreign trade and the influence of Chinese consumers' less accepting consumption concept of canned food, so Happy Home will choose to focus on the development of coconut water products. ”

According to the information provided by the representative of Happy Home Securities, Happy Home has positioned the Coconut Shark brand tonally as "young, energetic and sporty", aiming at young people and the sports market, and has been exposed in sports-related events many times.

Happy Home once said in a survey that strategically canned fruit is a stable variety, and coconut water is a growth variety. From the perspective of the industry, the gradual transition from canned fruit to coconut water business is mainly due to the limited future development of the canned fruit category, while the coconut water category is more sustainable.

According to the 2023 financial report, Happy Home achieved annual revenue of 1.923 billion yuan, a year-on-year increase of 20.47%, and attributable net profit of about 278 million yuan, a year-on-year increase of 36.85%. It is worth noting that Happy Home specifically mentioned that due to the impact of the boom in canned yellow peaches from the end of 2022 to the beginning of 2023, the operating income of canned yellow peaches in 2023 will be 297 million yuan, an increase of 50.12% over the same period of the previous year, and the operating income of canned fruits will account for 41.95%.

However, in the eyes of the industry, the consumption boom of canned yellow peaches at that time was only a short-term sales behavior and was not sustainable. Shen Meng, director of Chanson Capital, said that the canned yellow peach boom at the beginning of 2023 is a short-term Internet popularity, and with the rapid rise and fall of topical popularity, it will have a certain positive impact on the performance of canned fruit companies for a period of time, but in the long run, the actual growth will not be very large.

Judging from the overall market situation, the growth space of the canned food industry is narrowing, and the output is gradually decreasing. According to the "Research on the Development Status of China's Canned Fruit Industry and Investment Trend Forecast Report (2024-2031)" released by Guanyan Report Network, by the end of 2021, there were 665 enterprises above designated size in the canned food industry in mainland China, including 475 canned vegetable and fruit production enterprises, accounting for 71.43%. In recent years, the production of canned fruit in the mainland has shrunk. After reaching the peak in 2016, the output of the canned fruit industry has been declining year by year.

In addition, the fluctuation of the canned fruit export market also has a great impact on the output of canned fruit. In recent years, due to the superposition of foreign trade, global supply chain and other factors, the demand of foreign market has changed, and the output of canned fruits in the mainland has declined. According to the data, from 2018 to 2022, the export volume of canned fruits in the mainland decreased from 578,700 tons to 537,300 tons.

Shen Meng said that canned products, as popular consumer goods, have a certain consumer demand base, but for a long time, the solidification of canned food categories has led to a decline in industry yields and squeezed profit margins, so if more R&D innovation is not introduced and new products are developed, the canned food industry may face an overall industry contraction.

This is also considered to be an important reason why Happy Home continues to increase its weight and launch new coconut water products to develop the coconut water track. Happy Home said that with the increasing demand of consumers for healthy drinks, the launch of the new Coconut Shark product will further enhance the competitiveness of Happy Home in the coconut drink market. Li Zihao revealed at the press conference that in the future, Happy Home will continue to participate in more diversified sports events, empower the brand's young and energetic image, enhance brand awareness, and deepen the sports and health impression of coconut shark coconut water.

Beijing Business Daily reporter | Guo Xiujuan Zhang Han

Edited by Topol