Recently, a reporter from Beijing Business Daily visited and found that Coca-Cola's brand Milk Bele launched reconstituted milk. A year ago, Coca-Cola and Mengniu jointly launched the ultra-filtered milk "Fairlife" (Fairlife), which entered the situation of discontinuation and sales, and the company will need to wait for the company to announce when sales will resume. After a year, without waiting for the resale of Fresh Phila, Coca-Cola launched the milk Bele product and continued to develop the track of "high-quality nutritional milk".
In the eyes of industry insiders, Coca-Cola's transformation into a full-category beverage company and targeting the high-end dairy beverage market is an accelerated strategic layout to a full-category beverage company. However, unlike beverages, milk drinks have barriers in terms of milk source, policy, technology, etc., and it will take time to test whether they can be paid for by the market.
A reporter from Beijing Business Daily visited and found that the newly listed milk Bele reconstituted milk is 256ml per bottle, priced at 8 yuan per bottle, divided into banana and chocolate flavors, and is labeled with words such as "high-quality nutritional milk" and "more than 12g protein per bottle" in a conspicuous place on the bottle.
This is not the first time Coca-Cola has put dairy products on the shelves, and the last fresh Fila, which focuses on "high-nutrition milk", has been discontinued. In April 2023, Xian Feile's official WeChat mini program and Jingdong flagship store posted a notice of suspension of product sales services, saying that "the store will be upgraded from April 1, 2023, and the completion time of the store upgrade will be notified separately". Subsequently, some media reported that "Xian Feile" was temporarily suspended, and both online and offline channels have been removed from the shelves and stopped selling, and the company will need to wait for the company to notify when sales will resume.
On April 14, a reporter from Beijing Business Daily still did not search for relevant product information from JD.com, Taobao and other shopping platforms. The Fresh Philip Mini Program still shows "System Update and Maintenance".
Xianfeile's listing in China can be traced back to 2020, when Coca-Cola and Mengniu established a joint venture "Keniu". At that time, the relevant person in charge of Mengniu and Coca-Cola told a reporter from Beijing Business Daily that "Coca-Cola and Mengniu jointly funded the establishment of Keniu Dairy Co., Ltd., which has completed the industrial and commercial registration procedures and obtained a business license." The new joint venture will leverage the advantages of both parties in dairy R&D, dairy processing technology, brand influence and distribution channels to bring a new low-temperature milk brand to Chinese consumers and promote the upgrading of China's dairy consumption."
In 2021, "Ke Niu" announced the launch of Xian Feile, a native high-times nutritional milk brand. Xian Feile is "ultra-filtered milk", which is produced by UF purification ultrafiltration technology, which has the characteristics of high protein, calcium, zero lactose, and relatively long shelf life. This is Coca-Cola China's first foray into the low-temperature milk market, and China is the first overseas market for Coca-Cola to enter outside of North America.
It was discontinued after only one year on the market, and some consumers lamented that Xian Feile was "a pity". However, there are also industry insiders speculating that Milk Bele is a substitute for fresh Feile.
Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, said, "If Milk Bele is similar or identical to Xian Fei Le in terms of product positioning, target market and consumer groups, and provides similar nutritional value, taste or other characteristics to Xian Fei Le, then it is likely to be regarded as a substitute for Xian Fei Le." In addition, Coca-Cola's go-to-market strategy also provides some clues. If the company emphasizes its alternative to Infira when promoting Milk Be-Lux, then this is further proof of Milk Be-Lux's alternative position."
However, according to Zhan Junhao, a strategic positioning expert and founder of Fujian Great Aim Brand Positioning Consulting, although it also focuses on "high-quality nutritional milk", Milk Bed Milk may not be a substitute for Xian Feile, "each brand has its own unique brand positioning and market positioning, and Milk Bed is just a new product launched by Coca-Cola to make up for the gap in the high-end dairy market."
According to the product information, the entrusting party of Milk Bele products is COFCO Coca-Cola Supply Chain (Tianjin) Co., Ltd., and there is no longer Mengniu, which seems to mean that Coca-Cola will be more independent in the layout of the dairy beverage track.
"The launch of 'Fresh Phila' in China is another important step for Coca-Cola China to accelerate its transformation into a 'full-category beverage' company to meet the diverse needs of Chinese consumers. Vamsi Mohan Thati, who was the president of Coca-Cola Greater China and Mongolia at the time, once said.
Behind the successive launches of Xian Fei Le and Milk Bele is the acceleration of Coca-Cola's transformation into a full-category beverage company. As early as 2016, Coca-Cola proposed to be a "full-category beverage company". In 2017, James Quincey, Chairman and CEO of The Coca-Cola Company, officially announced Coca-Cola's "All Categories of Beverages" strategy.
With the implementation of the "all-category beverage" strategy, Coca-Cola has increased its layout to coffee, dairy drinks and alcoholic beverages. In 2017, Coca-Cola announced its entry into the Japanese Chu-Hi sparkling wine market. In August 2018, Coca-Cola acquired COSTA Co., Ltd. for $5.1 billion, gaining access to COSTA Coffee's business platform in Europe, Asia-Pacific, the Middle East and Africa. In January 2020, Coca-Cola announced the acquisition of a 57.5% stake in fairlife, a U.S. dairy brand, from its joint venture partner Select Milk Producers.
In recent years, Coca-Cola's product matrix has also been continuously enriched. In 2022 alone, Coca-Cola China launched more than 20 products, covering multiple categories such as flavored sodas, juices, coffee and tea.
"This shows that Coca-Cola has a strong interest in the premium dairy beverage market. However, whether it can build the next billion-dollar brand also depends on its market strategy, brand positioning, product innovation and other factors. Fairlife has already achieved good results in the U.S. market, which has provided Coca-Cola with valuable experience and resources. However, there are differences in consumer needs, cultural backgrounds, etc., in different markets, so Coca-Cola needs to fully consider these factors and develop strategies and plans that are suitable for the local market."
Coca-Cola has not been able to put up milk drinks, or has seen the potential of this market. According to the "2024-2029 Global and China Dairy Industry In-depth Research Report" released by the China Business Industry Research Institute, from 2017 to 2022, the market size of the mainland dairy beverage industry increased from 92.96 billion yuan to 136.17 billion yuan, with a compound annual growth rate of 7.9%. Analysts at the China Business Industry Research Institute predict that the mainland dairy beverage market will grow to 149.76 billion yuan in 2024.
"However, there are certain barriers to the beverage and dairy industry, the most obvious of which is the source of milk. Dairy enterprises need to have a stable supply of milk, large investment in fixed assets, and a long supply chain system, compared to beverages, which need to bear less risk. Song Liang, an independent dairy analyst, analyzed.
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, believes that with the improvement of people's living standards, consumers' demand for dairy products is also escalating, so the dairy product market still has a lot of room for development. The high-end dairy beverage market has high growth potential, and Coca-Cola has advantages in terms of brand influence and channels. However, challenges should not be overlooked, such as how to deal with competitor competition, how to maintain product quality and taste consistency, and how to effectively promote and sell new products.
Regarding Coca-Cola's future development plan and other issues, a reporter from Beijing Business Daily contacted and interviewed Coca-Cola, but as of press time, the other party did not reply.
Beijing Business Daily reporter |
Edited by Topol