Author | Yun Mengze
Editor | Yu Mu
The "sweetness" of milk tea is somewhat saturated, but the "heat" of sparkling water is still rising.
When Heytea meets Yuanqi Forest, the two unicorns as new drinks are facing a head-on confrontation on the mutual invasion track.
In the past month, Yuanqi Forest has launched two pop-up tea shops in Chengdu and Beijing, with pomegranate and red raspberry sparkling water limited to the Southwest region and red crisp pear limited to the North China region. The debut of flavored sparkling water has set off a craze on social platforms such as Sina Weibo and Xiaohongshu. This is Yuanqi Forest’s once again declaration of its ambition to invade the “milk tea” track after deploying bottled “milk tea”.
The domestic sparkling water market is still in the development stage. According to a report from the Qianzhan Industry Research Institute, the overall domestic sparkling water market size is expected to reach 32 billion in 2025. This has also attracted many players to join in, chasing the same piece of cake.
But the new tea drink market is no longer so easy to break through. At present, the competition in the entire new tea market has become fierce. Naixue, with a market value of 24 billion yuan, and Heytea, with a valuation of 60 billion yuan, are competing for land. Many mid-level brands are facing losses, difficulty in financing, and difficulty in expansion.
If Yuanqi Forest wants to break into the new tea industry, it is destined to be a money-burning battle. Currently, Heytea, Naixue's Tea, Lele Tea, etc. occupy the high-end market; Yidiandian, Duke Coco, Happy Lemon, Gongcha, etc. occupy the mid-range market; and in the low-end market, there are brands such as Guming and Mixue Bingcheng. . No matter which area the Yuanqi Forest enters, it will face strong opponents.
The all-out battle between Heytea and Yuanqi Forest is underway, which also indicates that the industry has already developed from single-track competition to multi-track competition, and more brands are eager to try, trying to compete in each other's tracks. A cup of soup.
A "milk tea shop" has opened in Yuanqi Forest.
From July 24th to August 2nd, Yuanqi Forest opened a pop-up store at the entrance of Joy City in Chaoyang, Beijing. The overall store has a theme of vitality, nature and refreshing, aiming to create a pop-up space that simulates natural ecology, which is also consistent with the brand positioning of Yuanqi Forest focusing on health.
In terms of products, Yuanqi Forest launched two smoothies, pear smoothie and grape smoothie, as well as two milk teas, pear milk tea and grape milk tea, and a grape milk tea at the pop-up store in Beijing. Pear Pear Frappuccino. All products are made from Yuanqi Forest Sparkling Water, which still continues the healthy positioning.
In fact, in early July, Yuanqi Forest also opened a pop-up store in Chengdu, Sichuan, and attracted a large number of young people to check in.
This time, Yuanqi Forest opened a pop-up store in Beijing and also launched milk tea products. It is obviously interested in entering the milk tea track.
After this battle, Yuanqi Forest began to make more plans and layouts for the "Milk Tea" track.
According to Tianyancha, Yuanqi Forest (Beijing) Food Technology Group Co., Ltd. has recently added multiple trademark application information, including "Adult's Milk Tea", "Xishi's Freezer", "Bengong Ice" and "Snowman" Nunu", etc., involving international classification of convenience foods, beer and beverages, etc., the trademark status is "Registration pending".
According to the Daily Financial Weekly, Yuanqi Forest’s revenue in 2020 was nearly 2.9 billion, and it will hit 7.5 billion in 2021. At the same time, Tang Binsen, founder of Yuanqi Forest, revealed that 95% of Yuanqi Forest’s products have not yet been launched, and this year will be Yuanqi Forest’s “product year”. If it can maintain rapid growth and further increase its market share, it will consolidate its Its status in the hearts of capital helps it prepare enough food and grass before going public.
At the dealer conference held by Yuanqi Forest in December last year, Tang Binsen also proposed an offline sales target of 7.5 billion yuan. The growth of single categories is very limited, and it is difficult to achieve the current sales target of Yuanqi Forest. , therefore, Yuanqi Forest’s top priority is still to cast a wide net and continuously expand subdivided categories.
On the road to expansion of Yuanqi Forest, targeting the "milk tea" track is also a strategic choice.
In order to match the revenue target of 7.5 billion and the "product year" strategy, Yuanji Forest is building factories "crazily" and is also frequently testing the track in various fields, including the "milk tea" track. Keep exploring.
In just over a year, Yuanqi Forest invested heavily to promote the construction of four self-owned factories. According to rough calculations, its production capacity will exceed 1 billion bottles, and sales of self-produced drinks will exceed 5 billion, which has accumulated strong potential for subsequent product expansion. In terms of channel expansion, Yuanqi Forest also launched 80,000 smart freezers in the first half of the year to ensure the efficiency of the supply chain through digital networking.
The recent pop-up stores launched in first-tier cities such as Chengdu and Beijing are also a test of the milk tea track.
However, although Yuanqi Forest has built a sparkling water empire in just a few years, like all old beverage companies that have impacted the "milk tea" track, Yuanqi Forest also lacks actual combat in offline markets and stores. From experience, what was opened this time was only a pop-up store, not a real store.
If you want to roll out offline stores across the country, it will require a lot of money and manpower. This will be a major decision for Yuanqi Forest. At present, it has not really taken this step.
Unlike Yuanqi Forest, which currently only opens a tea pop-up store to test the water, Heytea is aggressively invading the "sparkling water" track.
As a leading company in the tea beverage industry, Heytea has also launched multiple flavors of sparkling water products since the middle of last year, launching a fierce attack on the Yuanqi Forest track. With Heytea's consistent high standards and high popularity, sparkling water products have achieved good sales through online and offline channels.
Judging from the sales data reported by Tencent News, during the Double Eleven period in 2020, Heytea Sparkling Water sold more than 40,000 boxes and 500,000 bottles, and ranked among Tmall’s health soda water lists and Internet celebrities. Top 5 sales in many lists including sparkling water list, favorite sugar-free sparkling water list, acid-base balanced soda water list, etc.
During the 2021 Spring Festival, the new sea salt grapefruit sugar-free sparkling water drove the entire line of Heytea sparkling water products to sell nearly 65,000 boxes and about 750,000 bottles during the New Year Festival.
The explosive sales of sparkling water may prove that Heytea’s exploration of the bottled beverage market is feasible, but what many people don’t know is that the process of invasion is not easy for Heytea.
As early as 2019, Heytea had already begun preparations for the bottled beverage business to expand its consumption scenarios. The choice was sparkling water, a phenomenal product category in the market segment.
However, after more than a hundred formula iterations and polishing, the two sparkling water products launched in July 2020 did not receive recognition from the market and consumers as imagined. On the contrary, they were also because of their taste. There are slight deficiencies that make some consumers dissatisfied.
After spending a long time and energy, the products produced are not favored by the consumer market. This result is undoubtedly a huge blow to brands that are new to this field. However, Heytea was not discouraged.
After consumer feedback, Heytea took a rather radical approach - taking the initiative to remove the first batch of sparkling water products from the shelves.
Then after two months of "reinvention", the sparkling water formula was optimized, and finally three sparkling water products with new formulas, packaging and flavors were launched in September 2020.
In order to promote sparkling water, Heytea has been sparing no effort in making various efforts.
Relying on the brand effect of Heytea itself, Heytea sparkling water relies on its own store tie-ins to drive overall sales. It also deploys online platforms and offline convenience stores, supermarkets, etc., and has entered almost every possible market. Sales channels.
Heytea’s rapid advancement in the sparkling water market has also led to the rapid expansion of sales channels, which has also had a feedback effect on its own brand. Heytea currently has mainstream e-commerce channels such as Tmall and JD.com, and has more than 30,000 offline sales outlets. In addition to fully covering its own stores, it also includes mainstream convenience stores represented by 711 and FamilyMart, as well as New retail channels represented by Hema, Dingdong, and Daily Fresh.
In terms of price and capacity, the average price of Heytea Sparkling Water is 5.5 yuan per bottle and the capacity is 500 ml, while the average price of Yuanqi Forest Sparkling Water is 5 yuan per bottle and the capacity is 480 ml. It can be said to be a "hand-to-hand fight" with the vitality forest.
Heytea is also working hard to find differences with competing products such as Yuanqi Forest. To that end, it emphasizes that its sparkling water products are fortified with real juice. Take grape-flavored sparkling water, for example, which attempts to amplify the natural fruity flavor in the drink by adding grape juice concentrate and purple carrot juice concentrate.
In addition, the addition of dietary fiber, vitamins and other ingredients is also one of the key points of differentiation of Heytea sparkling water. Even in the lactic acid bacteria sparkling water that many brands on the market have tried to launch, Heytea also adds prebiotics to make a slight taste innovation.
Innovation and differentiation are the keys to whether a brand can break through. Will HeyTea and Yuanqi Forest eventually become threats that cannot be ignored?
The boundaries between the new tea beverage industry and the bottled beverage industry are becoming increasingly blurred. New tea brands such as Heytea and Naixue’s Tea have invaded the bottled beverage track, while bottled beverage brands such as Yuanqi Forest and Wahaha have entered the “milk tea” field.
Each of them has relied on brand hot products to break through, and relies on existing single products to continuously expand the category boundaries, and is trying to challenge the leading players.
However, although the new tea industry has broad prospects, it is already a difficult field to attack.
According to user survey data in the "2020 New Tea Drinks White Paper", post-90s and post-00s consumers have become the mainstream consumer group of new tea drinks, accounting for nearly 70% of the total number of consumers; post-90s and post-00s consumers After that, the proportion of monthly expenditure on tea drinks was more than 400 yuan, accounting for 27%, and the proportion of 200-400 yuan accounted for 31%.
Faced with such a broad market prospect, it is a general trend for both sides to invade each other's tracks, and what is behind this is not just sufficient ammunition.
Nowadays, the tea market has moved from the blue ocean to the red ocean. More than 20,000 new milk tea companies have been registered in a year, and the number of abnormal operating companies has also exceeded 20,000. It has entered the reshuffle stage.
Breaking through is not easy. Leading bottled beverage players such as Yuanqi Forest and Wahaha have launched an attack on the "milk tea" track, with Wahaha taking the lead in entering the offline tea market. Wahaha milk tea stores rely on original brand products, including AD calcium milk series, milk tea series, lactic acid Shuangwaiwai series, fruit tea series, cheese nutrition express series and winter hot drink series, etc., and used "childhood memories" as the promotion point, indeed caused a big splash when they were first launched.
However, in terms of operations, Wahaha enters into new tea drinks through cooperation with other companies and has little relationship with its parent company. Therefore, it is stretched in terms of building tea drink brand power and achieving fan effect. This The First World War did not elicit the expected response.
With Wahaha leading the way, Yuanqi Forest’s milk tea invasion track is more conservative. It first laid the foundation with "milk tea", and now wants to use pop-up stores to test user reactions, instead of directly opening large-scale tea shops.
The barriers for leading players in the new tea field have been initially established.
Leading tea beverage companies such as Heytea and Nayuki’s Tea already have a relatively strong brand potential foundation, which will be helpful for distribution and sales in the early stage, but Yuanqi Forest pales in comparison in this regard; in terms of product In terms of product research and development strength and supply chain advantages of tea beverage companies in the field of ready-made tea beverages, bottled beverage companies are relatively weak; at the same time, tea beverage shops attach great importance to opening offline stores, which require a large amount of financial support. Players have to expand despite losses, which puts more pressure on new players to break through.
The new tea drinking track is difficult to conquer. In the sparkling water track, do Heytea and Nayuki’s teas threaten the Yuanqi Forest?
At present, in the face of the invasion of many brands such as Heytea and Nayuki’s Tea, Yuanqi Forest has temporarily stabilized its position. It is also not that simple to break through the sparkling water empire it established. According to public data, Yuanqi Forest’s sales increased by as much as 2.7 billion yuan in 2020, a year-on-year increase of 309%.
Yuanqi Forest’s sparkling water empire has a stable position. The “market leadership rule” has enabled Yuanqi Forest to capture the consumer mind of “zero sugar sparkling water” from the beginning. Yuanqi Forest sparkling water is essentially out of the circle because of its concept. Although sparkling water is not the first recommendation of Yuanqi Forest, it is Yuanqi Forest's 0-sugar sparkling water that first made it popular in China. This allows Yuanqi Forest to occupy the "first launch advantage" in the sparkling water segment, which is also the core competitive point of the product.
Even if latecomers imitate the appearance and taste, it will be difficult for them to reverse the established market perception of Yuanqi Forest in a short period of time. What Heytea is currently doing is also a micro-innovation in taste. , it is difficult to have disruptive innovation.
The success of Yuanqi Forest Sparkling Water is also inseparable from founder Tang Binsen’s emphasis on brand marketing.
In 2020, Yuanqi Forest’s omni-channel marketing expenses will account for about 1/4 of its revenue. This data is even basically the same as that of Nongfu Spring, the “marketing master” of bottled water.
Marketing investment has provided a strong boost to Yuanqi Forest. In addition, Yuanqi Forest’s rapid rise is partly due to the expansion of convenience stores in first-tier cities.
At present, in order to obtain more users, Heytea and Yuanqi Forest will not stop invading each other’s tracks. The all-out battle has begun. In the future, they may also appear together in beer and coffee. Waiting for more tracks to build a larger business territory.