The sparkling water "cold" Yuanqi Forest is trying to "revivenation" its own performance through new strategic moves.
As an Internet celebrity hit in the past few years, Yuanqi Forest quickly climbed to the peak as soon as it entered the beverage market.
In 2018, Yuanqi Forest's "0 sugar, 0 fat and 0 calories" sparkling water sold well as soon as it was listed, driving the company's annual revenue to exceed 200 million yuan. Between 2018 and 2020, the growth rate of Genki Forest reached 300%, 200% and 309%, respectively. The continuous rapid growth has created a "myth" in the domestic beverage market, which can be called a dark horse. However, after 2021, the sales of sparkling water have cooled, and the sales growth rate has fallen by nearly 40%, and then the sales head of the southwest region has been detained for major corruption, and the problem of internal management chaos has been exposed to the sun.
From 2021 to 2022, it can be described as the "two silent years" of Yuanqi Forest, and from time to time on the Internet, "Yuanqi Forest can't be sold?" "The Genki Forest is gone?" and other topics. In 2024, the first new product launched by Yuanqi Forest, Alien WAVE, will be priced at only 3 yuan, which will cause an uproar again.
Can the current Yuanqi Forest still be "full of vitality"?
Yuanqi Forest out of the "fast running period"
In 2022, the news of Yuanqi Forest's pressure on goods in national sales channels and mutual channeling between distributors will be circulated in the beverage industry. The so-called channeling of goods means that the pressure of goods in one area is too great to sell, and the dealer will sell the goods to another region, so the market price of the product will change.
A beverage practitioner once said: "The market maintenance can't keep up, and now basically the goods are poured out, and customers who specialize in dumping have vitality products every day." "In 2022, some terminal supermarkets will start to sell Yuanqi Forest sparkling water at a reduced price to 3 yuan per bottle. However, Yuanqi Forest has increased the price of its sparkling water series, and the price of each product has increased by 4 yuan, threatening the direct interests of dealers. In 2022, Yuanqi Forest's revenue growth rate in the first quarter will only be 50%, which is very different from the previous doubling.
Not only that, since 2021, there has been a large loss of personnel in Yuanqi Forest. "The basic salary has been reduced from five or six thousand to two or three thousand, and social security has also been paid at the lowest level, resulting in a high turnover rate of employees, and the sales rewards of front-line salesmen are declining, and the year-end bonus has also decreased a lot compared with previous years." It has been revealed by relevant personnel.
At the same time of "internal worries", Coca-Cola's continuous "encirclement and suppression" has become an "external trouble". In the summer of 2021, ternary biology, a erythritol production company, suddenly cut off the supply of Yuanqi Forest, resulting in the latter stopping production and unable to supply during the peak sales season, with a loss of nearly one billion yuan. There have been media reports that Coca-Cola and Pepsi have made internal statements to eliminate the Yuanqi Forest. Coca-Cola industry officials have said, "We will continue to cut off the supply of caps and raw materials to Yuanqi Forest." To this end, Tang Binsen, the founder of Yuanqi Forest, revealed in public reports that in response to the problem that the bottle cap is difficult to unscrew under aseptic technology production, the company has introduced a process from Germany, and it has cost more than 20 million yuan to improve the production line.
According to relevant media reports, driven by the popularity of sparkling water, more than 30 brands in China's beverage market have successively launched sparkling water products. Before 2019, the market share of Yuanqi Forest in the sparkling water category was as high as 85%, and by the second half of 2021, the market share of Yuanqi Forest dropped to 50%, and the market share of Coca-Cola's small universe AAHA and Nongfu Spring sparkling water was about 25% and 18% respectively, and the sparkling water category has been reshuffled.
In 2021, the growth rate of Yuanqi Forest's sales revenue will decline by nearly 40%, and the sales momentum of sparkling water will decline; In 2022, this year is regarded as a "period of sluggish economic growth since the establishment and development of Yuanqi Forest". Until 2023, some media reported that erythritol, which was once contested by various brands because of the sparkling water boom, began to appear in an "oversupply" situation. Erythritol supplier Bowling Bao suffered a significant decline in performance in 2023, which can be attributed to the oversupply in the Chinese market, increasing competition, and declining prices.
It is not difficult to see that the high growth trend of sparkling water has become "outdated", and as a synonym for sparkling water, Yuanqi Forest has also broken away from the original image of "popular idol" with "full of vitality" and entered a new period of brand development.
The second growth curve, and try and do
When the market heat fades, there is a rather severe market competition environment in front of Yuanqi Forest, especially in the encounter with giants in many popular tracks.
Although Yuanqi Forest has a layout in areas such as sparkling water, electrolyte water, sugar-free tea and plant-based beverages, a broader market means stronger competition, and these fields have also attracted strong entry from giants such as PepsiCo, Coca-Cola, Nongfu Spring, and even dairy companies such as Yili have also crossed borders. In the offline market, where traditional beverage giants have been operating for many years, the "latecomer" Yuanqi Forest wants to "share food" and reshape the minds of consumers, which is difficult to imagine. Whether it's a business, it's in product, marketing development, or channels, it needs to invest more and more. However, the ability of Genki Forest to raise funds is also declining. According to the Tianyancha App, Yuanqi Forest's last round of financing stopped in 2021, and no financing information has been released since then.
In addition to the sparkling water, Yuanqi Forest urgently needs to explore its own second growth curve. However, the current beverage market is highly competitive, and it is difficult to recreate the glory of "sparkling water".
Genki Forest tried to enter the bottled water market, but ultimately failed. In July 2021, Yuanqi Forest launched its first bottled water product "Youmine", but in the end, it failed to get rid of the fate of being quietly removed from the shelves. At the same time, Yuanqi Forest has also made efforts in the "sugar" market, and has successively launched sugary products such as electrolyte water "Alien PRO", "Iced Tea", "Chaoke" lemon tea and lemon sparkling water "Lang".
Yuanqi Forest wants to explore the second growth engine, whether it is the mineral water market or sugary drinks, it has become its unavoidable Red Sea track. But in these tracks, there are brands that have entered the minds of consumers first. In these product areas, Yuanqi Forest will no longer have the flow advantage of sparkling water in the past, and it must compete with a large number of domestic and foreign beverage giants.
What's more worth mentioning is that, according to media reports, in the next few years, domestic and foreign beverage giants, including Coca-Cola, Pepsi Cola, and Nongfu Spring, have plans to launch blockbuster new products and accelerate the layout of popular tracks including sugar-free tea, healthy plant-based drinks, alcoholic beverages, coffee drinks and functional drinks. Although the sales of electrolyte drinks "Alien" and "Milk Tea" have exceeded 1 billion, the rest of the new products have not yet improved, and they have not cultivated large items like sparkling water, carrying the banner of "second growth curve".
The comprehensive competitiveness of Yuanqi Forest in the beverage market is still slightly weak after all.
Break through the battle and reshape the brand image
2023 is the "year of restart" of Yuanqi Forest. According to reports, Yuanqi Forest has greatly adjusted its products, brands, marketing, and channels to make strategic adjustments in multiple key dimensions, and even greatly changed its organizational structure to cope with the cold of the market.
The first is to try to adjust the product pricing strategy, launch a more people-friendly product line, and break through the sinking market.
In 2024, Genki Forest announced a new "Alien WAVE Flavored Water Drink". It is understood that the product is a flavored water drink containing electrolytes with a light lemon taste. At the same time, in terms of price, the 600ml specification of this product is priced at about 3 yuan, which is undoubtedly eye-catching. Compared with other mainstream products in the brand that cost 5 to 6 yuan, as well as electrolyte water drinks and coconut water on the market, which also focus on "hydration", the price of Alien WAVE is more affordable.
Compared with other mainstream products in the brand that cost 5 to 6 yuan, as well as electrolyte water drinks and coconut water on the market, which also focus on "hydration", the price of Alien WAVE is more affordable. Focusing on "cost-effective", it meets the needs of consumers in the sinking market for electrolyte water drinks, and has also become its best replacement.
In addition to the new products launched, the price of Yuanqi Forest's "old products" is also further explored. Previously, the terminal retail price of Yuanqi Forest milk tea was about 10 yuan, but in 2023, Yuanqi Forest will adjust the packaging, taste, and price of the milk tea series, and the price of the new product will be about 6 yuan, and it will only take 3 months to achieve a performance of more than 100 million yuan. At the same time, the price of the 900ml specification of Yuanqi Forest Iced Tea Series is only 5 yuan, which is consistent with the retail price of Master Kong Iced Tea 1L.
Secondly, in addition to working price, Yuanqi Forest is also constantly narrowing the distance between itself and consumers through new flavors, new endorsements, and new tracks.
On March 16 this year, Yuanqi Forest invited the top artist Xiao Zhan to become its spokesperson. As the top stream in the entertainment industry, Xiao Zhan's appeal and influence in the consumer market have been greatly improved, and after the official announcement of the brand, it has #肖战元气森林气泡水品牌代言人#的话题阅读超过了13 900 million and the number of discussions has exceeded 28.177 million.
At the same time, Genki Forest Sparkling Water has also launched new flavors such as vitamin C orange flavor and vitamin C lemon flavor, and launched a limited green bamboo grapefruit flavor to meet the needs of different consumers.
"Alien" electrolyte water will also attack strongly in 2024 with a new slogan "Tired Charging", through advertising in first-tier tourist city landmarks, cooperation with traffic IP, and planning a series of event marketing, not only to enhance consumers' desire to buy, but also to successfully integrate products into the sports scene, to achieve the brand's national coverage.
In addition, at the beginning of this year, Yuanqi Forest fully opened the national sales channels of alien vitamin C water, with white-collar workers with strong health awareness as the primary target group, and with its strong health functional attributes, the product achieved a repurchase rate of more than 40% in the first month. In the sugar-free tea market, Yuanqi Forest takes burning tea as the main force, confronts competitors head-on, seizes market share, and cleverly launches a large amount of affordable tea series to achieve a market breakthrough.
At the 2024 Yuanqi Forest Dealer Conference, Uki, the head of the Yuanqi Forest market brand, said that Fa Tea will also become an important fulcrum for Yuanqi Forest to break through the sugar-free tea track in 2024. With the popularity of water substitute drinks in daily life, consumers' requirements for the cost performance of such drinks are also increasing. To this end, the "Fa Cha" series has undergone an important upgrade, expanding the capacity from the original 550ml to 650ml, and the retail price is still 5 yuan. With the characteristics of large quantity and affordability, "Fa Tea" meets the "daily water replacement" needs of consumers.
Yuanqi Forest's series of actions at the product and market level are helping it to continuously shorten the distance with consumers and consolidate the brand foundation. This is inseparable from the strong support of its supply chain.
The industry generally believes that under the foundry model, the supply capacity of the enterprise depends on the production capacity of the foundry, and it is easy to have capacity bottlenecks. Aware of this, Genki Forest has been building its own factory at a rate of six months since 2019. It has built 6 factories in Chuzhou, Anhui, Zhaoqing, Guangdong, Xiqing, Tianjin, Xianning, Hubei, Dujiangyan, Sichuan and Taicang, Jiangsu. The total investment reached 6.7 billion yuan, and the total production capacity reached 6.2 billion bottles.
On April 15, Yuanqi Forest's Jiangsu Taicang factory completed the trial production of the new beverage project production line, which will be officially put into operation at the end of April. The construction of the Taicang factory in Jiangsu Province started in July 2022, producing a series of products such as sparkling water, burning tea, and milk tea, with an annual output value of 2.4 billion yuan after it is put into operation.
With the gradual improvement of the layout of self-built factories in North China, East China, South China, Central China, and Southwest China, the supply chain of Yuanqi Forest has been able to cover 700 million people in five major urban clusters, and Yuanqi Forest, which has made up for the shortcomings of the supply chain, is constantly increasing product transformation and innovation driven by the trend of healthy consumption.
epilogue
Overall, after a short period of prosperity, emerging consumer brands are entering the "deep water area" and have begun a long-term game between the old and new forces.
In 2024, the performance of new products and price reduction on the market side shows that brand competition will intensify. On the other hand, consumers pay more attention to personality expression and emotional experience, and their demand for customization and scenario-based products and services is increasing, requiring brands to provide more "added value". As a representative of emerging consumer brands, can Yuanqi Forest complete "self-redemption", successfully transform, restore the momentum of "full of vitality", and open a new starting point of 10 billion yuan? It's worth the wait.
Author: Lin Xiaobai
Editor: Zhang Ting
Producer: Fan Yi