When the tea and coffee rolled up to 9 yuan 9 everywhere, the price of bottled drinks quietly increased. According to incomplete statistics from the **chain paradigm, in 2023, many industry giants in the field of soft drinks such as China Resources C'estbon, Nongfu Spring, Yakult, Wahaha, Pocari Electrolyte Water, Coca-Cola, and Master Kong have announced price increases.
Among them, the suggested retail price of Master Kong's medium-packaged tea and juice ranges from 3 yuan bottle** to 3 yuan5 yuan bottles, one-liter bottles from 4 yuan bottles** to 5 yuan bottles, the price increase is about 17% to 25%. The unit price increase of other brands has also been between 0Between 5 yuan and 1 yuan, it is generally goodbye to the 3 yuan era.
Looking at the cross-border brands, their life does not seem to be easy. For example, not long ago, Mixue Bingcheng announced that it had withdrawn from the bottled water business.
It is reported that the bottled water business of Mixue Bingcheng began in December 2022, starting with the brand "Snow King Loves Water", and after that, it launched the bottled sparkling water "Snow King Domineering" and expanded to the sparkling water business. But at present, these two products have been rolled off the official Tmall of Mixue Bingcheng.
Mixue Bingcheng, which has always relied on the ** chain to play the tea business, why did it make a mistake in the bottled water business?
*Chain paradigm combing found that the reason is that the homogenization of bottled water and beverage products is obvious, and the industry competition is fierce, even if Mixue Bingcheng will hit ** to 15 yuan bottle, still can't open sales, let alone compete with Nongfu Spring, Cestbon and other giants. This withdrawal is a wise move, and it also shows that Mixue Bingcheng's "low-priced" play method of ** chain roll cannot be effective in the bottled water track.
Generally speaking, soft drink brands are the only way to find a new growth curve due to the characteristics of standardized production lines, long shelf life, large market, high profits, and high repurchase rates, but the wave of price increases in recent years seems to imply that the industry is generally facing the same problems.
How does the domestic beverage industry compress the ** chain to the extreme? What is the root cause behind the collective price increase? What are the laws of competition in the soft drinks industry?
The beverage ** chain has been compressed to the extreme
Behind two or three bottled drinks, there is a trillion-level market. According to iiMedia Consulting data, the size of China's soft drink market will reach 12,478 in 202200000000000000000000000000000000000000000000000000000000000 The gross profit margin is also very high, most companies are between 30% and 60%, for example, Coca-Cola's gross profit margin in the past ten years is about 60%, and Nongfu Spring is about 55-59%. In other words, a 3 yuan cup of Coca-Cola, if you don't count labor expenses, costs about 11 yuan, of which, the cost of raw materials is 02 yuan, bottle 06 yuan, warehousing and logistics costs 0$3.
Behind the shocking figures, in fact, it is due to the extreme compression of the ** chain by beverage companies over the years.
According to the first chain paradigm, the domestic soft drink market started in the 70s of the last century, after a complete growth stage, and now has a mature mechanism on the first chain system.
At present, the production of soft drinks is inseparable from three links, namely the upstream, midstream and downstream of the industrial chain.
The upstream mainly includes raw materials and packaging, involving drinking water, fruits, vegetables, vegetable oil extraction, food additives and packaging materials.
According to the calculation data of Haitong ** Research Institute, the cost of the soft drink industry accounts for % of the cost of manufacturing and labor, PET, cartons, white sugar, fruit juice and other raw materials respectively.
Therefore, for enterprises, the stability of raw materials is very important, taking Nongfu Spring, the "porter of nature" as an example, it has maintained the first market share in the field of bottled water for many years, which is inseparable from its construction on the first chain.
It is understood that as early as 1996, in order to ensure the supply of water sources, Nongfu Spring began to look for water in the enclosure of the country, and has formed ten major supply bases including Qiandao Lake, Danjiangkou, Emei Mountain, Tianshan Mountain, Wuling Mountain, Changbai Mountain, Wanlv Lake, Taibai Mountain, etc.
Another major brand, Coca-Cola, in addition to using cheap corn syrup to replace cane syrup to reduce costs, also uses an exclusive formula to concoct a concentrate, which has become a major advantage of its ** chain. Because Coca-Cola's concentrate is so thick and requires less space to transport, it can save a lot of money on transportation.
In the middle of the industrial chain, the manufacturing of soft drinks is mainly used, and the cost behind it is composed of labor, packaging materials, transportation, etc.
For example, Yuanqi Forest, which has 5 manufacturing plants across the country, has upgraded the first-chain factories into forest factories by using intelligent manufacturing, which has formed its own competitiveness while saving costs.
In Hubei, for example, there are 5 beverage production lines and 12 yogurt production lines, each of which requires less than 10 workers to produce 800,000 bottles of beverages per day. At the cap factory in Xianning, a fully automatic high-speed compression molding cap making line is utilized, and every 02-0.In about 4 seconds, about 10 caps can be produced.
Yuanqi Forest Hubei Plant).
After the beverage is manufactured, it will flow into the downstream of the industrial chain, that is, the circulation link, in addition to the cost of distribution channels, the cost of the final link mainly comes from transportation costs.
According to a set of data estimated by the Zero Two One Research Institute, from the source to the end, every ton of bottled water transported will be converted into 05 yuan bottle cost. Therefore, for bottled water with a low unit price, every penny of transportation costs saved will have an important impact on the profitability of the business.
Master Kong has been committed to the management of the logistics chain, from the early self-built logistics to achieve the direct terminal of the enterprise, to now plans to optimize the path of the national warehousing network, with the help of scientific and digital tools, to achieve the full-link digital management from raw material procurement, production and manufacturing to warehousing, logistics and transportation. It is understood that after the upgrade of digital management, Master Kong will achieve a significant reduction in the cost of the end-to-end chain, and is expected to reduce the logistics and transportation costs of tens of millions of yuan for Master Kong's beverage division.
It is precisely because of the continuous upgrading and optimization of the ** chain by various brands over the years that the soft drink industry that can generate high gross profits with only a bottle of 3 yuan has been created.
Still can't bear the dilemma of raw material costs?
As we mentioned above, the ultimate chain management makes drinks everywhere for 3 yuan, but no matter how the company optimizes the chain, it is difficult to resist the dilemma of raw material costs.
In recent years, due to the external environment, the gross profit margin of many beverage companies has been declining.
Master Kong's 2022 financial report shows that the company's gross profit margin decreased by 130% to 2909%, a five-year low, and the first time it fell below 30% in five years. Master Kong explained that due to the change of raw materials and combinations, the gross profit margin of products declined, which in turn led to a decline in net profit for the whole year.
On the other hand, Nongfu Spring, which occupies the top 1 in the market all year round, has a better performance in 2022, but its gross profit margin also decreased by 2% year-on-year1 percentage point. And Coca-Cola, which has not increased its price, has also raised its price for the second time since 2021 due to cost issues.
The reason for this lies in the rise of white sugar and PET (plastic bottle material).
It is reported that since 2023, affected by factors such as the international geopolitical situation and extreme weather, domestic white sugar** has risen rapidly. According to the data of the commodity analysis system of the business community, the average price of first-grade white sugar at the beginning of 2023 will be 5,786 yuan tons, and the average price at the end of the year will be 6,704 yuan tons, with an annual price of 1587%。During the year, the highest level of white sugar was 7,538 yuan ton, and the lowest price was 5,754 yuan ton.
In terms of packaging, since the main material of PET plastic bottles is petroleum, since 2020, the ** of PET has soared from more than 5,000 yuan per ton to more than 9,000 yuan. In addition to PET plastics, packaging paper, packaging plastic film, etc. have risen to varying degrees, and some plastic companies have even increased by more than 8,000 yuan tons.
For soft drink companies, these two costs account for the majority of the product, Dongpeng Special Drink's financial report shows that the core raw materials of the product, PET and sugar, account for more than 60% of the company's cost.
It can be seen that in the water and beverage market, even if the cost is continuously optimized through excellent chain management to achieve a stable state, it is difficult to solve the dilemma of raw materials.
However, no matter how the external environment changes, the ** chain is still an important issue. Bai Wenxi, chief economist of IPG China, once said that under the current macroeconomic situation, the food and beverage industry is indeed facing challenges such as raw material costs and chain bottlenecks. For enterprises, it is necessary to strengthen the management of the first chain and deal with these challenges by optimizing the production process and reducing logistics costs.
The chain paradigm believes that Coca-Cola's strong chain advantage built over the years is proving this for us, even if it is **again**, 3Coca-Cola, which is priced at 8 yuan a bottle, still has the best advantage in the general 4 yuan and 5 yuan markets.
Channels are king
Although the soft drink market has a low barrier to entry, it is not easy for anyone to enter.
Ray, a partner of Ruifeng Capital, revealed to **Chain Paradigm that brands such as Wahaha and Nongfu Spring have gained advantages with the ability to occupy offline retail channels, so it is difficult for cutting-edge brands to run out in this place, because the distribution volume is not large enough, the cost is not low enough, and there is no competitive advantage compared with old brands.
According to iiMedia Research, among the channels for Chinese netizens to buy soft drinks in 2021, 865% of consumers buy soft drinks through offline channels. It can be seen that for the beverage industry, which has survived for nearly half a century, the channel is its main battlefield.
For example, Yuanqi Forest, which entered the beverage industry with the "decentralization" of the Internet, has taught a vivid lesson in the matter of channels.
In 2021, in order to expand the channel path, Yuanqisen will launch intelligent networked freezers across the country, squeezing the living space of soft drink giants such as Coca-Cola and Nongfu Spring.
* Chain Paradigm has been featured in "Coca-Cola, which earns $43 billion a year, where is the resilience?" In order to deal with the menacing competition, Nongfu Spring launched an activity for Yuanqi Forest, saying that if the owner displays a bottle of Nongfu Spring's sparkling water in the freezer of Yuanqi Forest, he can get a bottle of Nongfu Changbaixue mineral water with a retail price of 3 yuan for free. In some places, Nongfu Spring directly bought out Yuanqi forest products, making it lose its offline living space.
Immediately afterwards, Yuanqi Forest faced the problem of the first chain, due to the "supply cut" of erythritol, which led to a loss of nearly 1 billion yuan in Yuanqi Forest, which inevitably had the operation of Coca-Cola.
Under the siege of giants, in the second half of 2021, the market share of Yuanqi Forest Sparkling Water fell to about 50%, and its revenue also slowed down significantly in 2022.
The founder Tang Binsen couldn't help but sigh at a dealer conference: "In the long run, relying on dealers to develop our sales network is the right way." The so-called decentralization, this kind of internet thinking is poison and does not understand enough sales. ”
It can be seen that the soft drink market has already formed an inherent way of playing, that is, whoever occupies the channel will have the space to survive. Therefore, Mixue Bingcheng, which started with joining, expanding, and selling ** chains, cannot find room for growth in this track.
Channels also affect pricing power, which is another reason why beverage brands have increased prices in recent years.
When the channel network such as supermarkets and convenience stores is monopolized by giants, other small and medium-sized brands want to enter, and they can only motivate channel providers to promote products by giving dealers more profits.
At present, in the entire soft drink market, the Matthew effect of "the strong will always be strong, and the weak will become weaker" is intensifying, and only by occupying the channel can we win in this battle. [*Chain Paradigm].
Yuanqi Forest official website, Coca-Cola official WeChat, Nongfu Spring official WeChatReferences:1. "Honey Snow Bingcheng Quietly Removed Bottled Water from the Shelves", Jiemian News 2, "Research Report on the Development of Soft Drink Industry", Qianji Investment Bank 3, "Reporter Investigation |".A large wave of drinks is rising in price, and the "3 yuan era" will end? Market Participants: It's All Caused by Sugar", Financial Investment News 4, "The "Money Printing Machine" in the Beverage Industry - Coca-Cola" 5, "Covid and Die with Distributors, How Do Nongfu Spring, Yuanqi Forest, and Master Kong Do Things?" ", Fat Whale Headlines 6, "10 people, 800,000 bottles of drinks per day!" How to do this "forest factory", CCTV Finance and Economics 7, "Zero Two One Research Report Bottled Water Industry", "Zero Two One Research Institute" 8, "19.8 million tons! Exceed expectations! Raw materials soared by nearly 400! The project is expected to rise sharply! PET rose 295 yuan, PC PA66 was red again....9, "2021 Beverage Wars: Giants Encircle and Suppress Yuanqi Forest Deep Krypton, 36 Krypton 10, "Yuanqi Forest Tang Binsen's Channel War", slow motion.