Source of this article: Times Finance Author: Xing Wenwen
Another childhood drink will return to the market.
Image source: Photo by Times Finance
"Everyone's fruit is coming!" On the evening of May 16, the official account of Robust's Xiaohongshu posted a note, previewing "Please lock in next week's grain fruit activity", and replied to fans that the product is planned to be launched in June.
Image source: Robust's Xiaohongshu account
"AD Calcium Milk" is a milk yogurt product with popping beads launched by Robust in 2000. This is another resumption of production after Robust's launched two classic AD calcium milks at the end of last year, green bottle and red bottle.
"When I was a child, the conditions were not good, and I couldn't drink it often, so I passed by the door of the store and saw that there was Robust's AD calcium milk in it, so I yelled at my grandfather to buy it. Unforgettable memories. A fan recalled.
Following the same formula and classic shape, at the end of 2023, Robust will return to play the sentimental card and take the lead from online channels. With the arrival of summer and the gradual entry of beverage consumption into the peak season, Robust began to expand offline channels while continuing to resume the production of the original classic products.
Robust continues to make new moves, and can this beverage brand in the childhood memories of the post-80s and 90s generations return to its glory, and what is the progress of its expansion in offline channels?
Robust's AD calcium milk line has not yet been rolled out nationwide
In March this year, Robust's resumed production and launched strawberry-flavored AD calcium milk, and plans to launch "Grain Fruit" in June, and its official Xiaohongshu operator also revealed in a reply to fans' comments that the company is developing new products.
In terms of channels, e-commerce is the direction that Robust has focused on before. Times Finance noticed that Robust's AD calcium milk is sold on e-commerce platforms such as Tmall, Jingdong, and Pinduoduo, among which one of its products has sold more than 20,000 pieces in the past year in Tmall store.
However, many consumers reported that they still can't buy Robust's AD calcium milk offline.
On May 17, Times Finance visited a number of supermarkets and convenience stores in Tianhe District, Guangzhou, but there was no trace of Robust's AD calcium milk. The owner of a convenience store told Times Finance that it was sold many years ago, but it has not been sold for a long time, and he did not know that Robust's AD calcium milk was re-listed.
As an old brand focusing on lactic acid bacteria drinks, Robust was once a rival to the beverage giant Wahaha. In 1989, Robust was founded in Zhongshan, Guangdong, and in 1997, it successively launched a variety of flavors of AD calcium milk. At that time, Robust spared no expense to build its brand image, and invited Hong Kong star Liming to perform a pure water commercial that was broadcast on CCTV during prime time, and became popular all over the country in the 90s.
In 2000, Robust was sold to the foreign giant Danone, and the yoghurt business was gradually marginalized until it disappeared from the market, leaving only the drinking water business. Robust (Guangdong) Food & Beverage Co., Ltd. also changed its name to Robust (Guangdong) Drinking Water Co., Ltd., with six of its factories acquired by investment-focused Profit Investment Holdings Limited in 2016.
Over the years, the dairy market and competitors have not been the same. How can Robust's, which is "re-emerging from the rivers and lakes", seize offline channels and roll them out across the country?
According to Times Finance, in terms of drinking water business, Robust has opened up many chain hotel channels, and since 2022, it has successively cooperated with mid-to-high-end express hotels such as Lavande, Hanting, and Qitian. As for the newly resumed production of AD calcium milk, Robust chose to cooperate with 7-Eleven convenience stores. According to the information of Robust's official account, Robust's AD calcium milk has been put on the shelves of more than 600 stores in the Beijing-Tianjin-Hebei region from 7 to 11, and more urban outlets are being unlocked one after another. On the Meituan platform, it can be seen that some 7-11 stores in Beijing have Robust's AD calcium milk for sale.
Establishing cooperation with new retail formats such as mass snack brands and community group buying platforms is also a trend that Robust needs to catch up. At present, the decline in the passenger flow of large KAs, mainly supermarkets and hypermarkets, has been irretrievable, while the share of small near-field channels continues to grow. According to the National Bureau of Statistics, from 2021 to 2023, the retail sales of convenience stores increased by 16.9%, 3.7% and 7.5% respectively over the previous year, while the year-on-year growth of supermarket retail sales in the same period was only 6.0%, 3.0% and -0.4%.
GF Securities data also pointed out that in the first three quarters of 2023, the sales of liquid milk in large supermarkets and stores fell by 7.50% and 14.50% year-on-year, respectively. In the first three quarters of 2023, the sales of liquid milk in small supermarkets, wholesale markets, grocery stores, and convenience stores increased by 13.60%, 13.10%, 3.80%, and 1.40% year-on-year, respectively.
On May 17, an operation manager of Guangzhou Yangjinzi Trading Co., Ltd., a distributor of Robust, revealed to Times Finance that Robust has reached a cooperation with the mass-selling snack brand Haoxiang, and will put AD calcium milk on the shelves in more than 3,000 stores across the country in the future.
I think it's Wanchen Group (300972. SZ) is a chain snack brand established by merging its four snack brands in October 2023. In the first quarter of 2023 and 2024, the total revenue of Wanchen Group's wholesale snack business will be 8.759 billion yuan and 4.695 billion yuan respectively, and the net profit will be 33 million yuan and 120 million yuan respectively. By the end of 2023, Haoxianglai has 4,726 stores in multiple regions across the country. The first store in Beijing opened in December last year.
At the end of 2023, I really want to come to the offline store situation. Data source: Wanchen Group's 2023 annual report
In recent years, the mass merchandising snack track has sprung up, including snacks are very busy (after merging with Zhao Yiming snacks) and Wanchen Group are impacting the scale of 10,000 stores. The huge channel coverage also continues to attract traditional snack brands into this channel to obtain continuous sales growth.
Start with the northern market?
As a southern brand established in South China, Robust's current offline expansion has given priority to the northern market.
The above-mentioned operation manager also told Times Finance that Robust's current offline sales are more concentrated in the northern market.
Song Liang, an independent dairy analyst, told Times Finance that there are many new tea brand stores in the southern market, and they are very substitutable to the lactic acid bacteria drinks to which AD calcium milk belongs, "while there are fewer tea shops and cold drink shops in the north, and consumers are more concentrated in room temperature drinks, so it is right to shop the northern market first." ”
The above-mentioned operation manager also told Times Finance that they are responsible for negotiating with fresh e-commerce platforms such as Benlai Life and Pupu, and will launch Robust's products on relevant community group buying platforms in the future; On the other hand, Robust is also relying on the private domain traffic of distribution companies, such as China Southern Power Grid and other companies.
Song Liang believes that China's dairy beverage market has not reached a monopoly level, does not have an absolute brand effect, as long as the product is good and the innovation speed is fast enough, the packaging is novel, and the cost performance is high, there will still be a certain volume of niche differentiation route.
"At present, there is a serious surplus in the market, and it is very difficult to make the brand bigger, but if Robust does not have a large volume target requirements, it is no problem to take the cost-effective route and survive." Song Liang said that in third- and fourth-tier cities, cold drink shops and convenience stores around places with high traffic such as amusement parks and tourist attractions are very important retail formats.
However, Song Liang also pointed out that Robust's supply chain costs will be higher, which is not difficult to see from the price of the product. Taking the Tmall flagship store as an example, a 24-bottle (206g/bottle) of Robust's AD calcium milk costs 59.9 yuan, about 2.5 yuan/bottle, while 20 bottles (220g/bottle) of Wahaha original AD calcium milk costs 35.8 yuan, about 1.8 yuan/bottle. Based on this calculation, Robust's AD calcium milk is about 1 yuan per bottle more expensive than Wahaha. According to the Meituan platform, the price of Robust's AD calcium milk 206g sold in a 711 convenience store in Beijing is 4 yuan per bottle, and the price of Wahaha AD calcium milk 220g in the same store is 3 yuan per bottle.
In the AD calcium milk market, Wahaha's decades of precipitation in brand and product strength are something that Robust cannot catch up with in the short term. In February 2024, driven by the feelings of paying tribute to the founder, Wahaha AD calcium milk ushered in a surge in online and offline sales. Times Finance visited a number of convenience stores in Tianhe, Guangzhou, and found that Wahaha AD calcium milk was out of stock. The manager of a 7-11 convenience store told Times Finance that the sales of Wahaha AD calcium milk have increased significantly recently, and the factory does not supply much and is often out of stock.
To this day, AD calcium milk is still one of Wahaha's most popular items. On May 16, Wahaha also tweeted on its official public account about its AD calcium milk and nutrition express advertising competition. With the help of paying tribute to the founder's feelings, Wahaha has also embarked on its own path of rejuvenation.
Robust's brand marketing also played the label of "national tide", saying that it has nothing to do with Danone and is "a proper domestic product". However, when the feelings of consumers and the national tide dividend are over, will Robust's return to its former glory in the beverage market? What kind of test will the comeback of the Robust AD concept go through?