Old players are stationed in the new players to enter the game one after another
What are the odds of Nai Xue's tea investing 1 billion in bottled beverages?
Advantage
Analysts believe that new tea brands also have advantages in competition with traditional beverage giants, because this category is popular with consumers and is itself a big IP.
However, the large number of fans accumulated by the brand has brought advantages to the early development. Whether it will continue to dominate in the follow-up still needs to wait for the market to test.
disadvantage
From the perspective of size and qualifications, Nai Xue and other new tea brands are probably difficult to compete with the old players on the field.
The brand influence of new tea beverages in the bottled beverage market needs to be improved. In addition, new tea beverage brands are still weaker than traditional and established beverage companies in offline retail channels
"The first share of new tea drinks" Nai Xue's tea has recently been rumored to invest 500 million to 1 billion yuan to bet on the bottled beverage track.
At the end of April, Nai Xue’s tea responded to the Red Star Capital Bureau that the company is indeed vigorously developing the bottled beverage business, but it is not convenient to disclose the investment matters.
In the bottled beverage market, Nai Xue faces a lot of challenges.
The reporter noticed that the competition in the bottled beverage market is very fierce and has a tendency to intensify.
Old-fashioned beverage giants such as Nongfu Spring, Yibao, Uni-President, and Wahaha are still stationed ahead, and new-style tea companies such as Heytea, Lele Tea, and Michelle Bingcheng have also begun to deploy in the past two years.
Judging from the best-selling list of goods at the 2021 China Convenience Store Conference, the new tea brand has not yet shaken the status of the old traditional beverage brand, and the online sales data of Naixue bottled beverages are not as high as HEYTEA.
While new-style tea companies are deploying bottled beverages, traditional beverage companies such as Wahaha and Wanglaoji are also exploring the current tea market in reverse.
Enter
Net loss of hundreds of millions in 2021
Nai Xue continues to look for new growth points
Nai Xue’s tea has recently been rumored to invest 500 million to 1 billion yuan to bet on the bottled beverage track.
In this regard, Nai Xue's tea has not disclosed specific information yet, but Nai Xue introduced to the Red Star Capital Bureau that it is indeed vigorously developing the bottled beverage business. In 2021, Nai Xue Beverage Technology Company has been established, and 7 bottled tea products have been launched.
Earlier in October 2020, Nai Xue cut into the field of bottled beverages with the bottled sparkling water series and sold them in the Tmall flagship store.
In the 2021 semi-annual report, Naixue said: "We expect to start launching retail products to offline chain shopping malls and other channels in the second half of this year. In the future, we expect retail business to gradually become an important part of the Group's revenue. ." At present, Nai Xue has distributed bottled beverages to convenience stores such as Family Mart, 711, and supermarket channels.
Regarding Nai Xue's development of the bottled beverage business, Chinese food industry analyst Zhu Danpeng analyzed to the Red Star Capital Bureau: "In the past, Nai Xue may have been more of an OEM, but now it may become Nai Xue's own operation and production." The reporter noticed that in addition to betting on the bottled beverage market, Nai Xue also tried to find new growth points in the mid-end market by creating sub-brands, reducing prices, and opening PRO stores.
Behind this is the fact that the new-style tea industry is gradually calming down, and the growth rate of new-style tea brands is slowing down.
Taking Nai Xue as an example, from 2018 to 2021, its income will be 1.087 billion yuan, 2.502 billion yuan (an increase of 130.17%), 3.057 billion yuan (an increase of 22.18%), and 4.297 billion yuan (an increase of 40.56%).
In 2021, Nai Xue's adjusted net loss will be 145 million yuan.
contest
"Battlefield" smokes everywhere
Nai Xue's challenge to make bottled beverages is not small
The "battlefield" of bottled beverages has long been smoked. From the perspective of size and qualifications, Nai Xue and other new tea brands are probably difficult to compete with the old players on the field.
In 2021, Nongfu Spring's total revenue will reach 29.696 billion yuan, and Wahaha's total revenue is expected to be about 50 billion yuan; while Naixue's tea revenue in 2021 will be 4.297 billion yuan, only about 1/7 of Nongfu Spring's, or even less than 2/3 of the emerging brand Yuanqi Forest.
According to the performance data disclosed by Li Guoxun, vice president of Yuanqi Forest, the revenue of Yuanqi Forest in 2021 is 2.6 times that of 2020 (2.7 billion yuan). Based on this calculation, the revenue of Yuanqi Forest in 2021 is about 7 billion yuan.
It is reported that Naixue will invest 500 million to 1 billion yuan in the bottled beverage business, and the total cost of Nongfu Spring in 2021 will be 10 billion yuan, of which 125 million will be invested in research and development.
An industry insider said bluntly to the Red Star Capital Bureau: "What is this 1 billion enough for? It may be a fraction of the industry's leading companies such as Coca-Cola and Nongfu Spring."
According to the data on the best-selling commodity list released by the China Chain Store & Franchise Association at the 2021 China Convenience Store Conference in May last year, there is no new tea brand bottled beverage on the list.
On the one hand, it shows that the brand influence of new tea beverages in the bottled beverage market needs to be improved.
In addition to competing with bottled water/beverage giants, Nayuki also needs to meet challenges from new tea drink rivals.
The reporter learned that HEYTEA began to lay out the bottled beverage track in 2019, and launched the "Xixiaocha Bottled Factory" in June 2020.
The parent company of Lele Tea, Shanghai Chatian Catering Management Co., Ltd., also applied for the relevant trademarks of "Happy Tea" and "Bottle Tea" at the end of 2020; Michelle Bingcheng will obtain the appearance of "Bottle (Snow King loves to drink water)" in 2021 Patent authorization, and in March 2022, the "Bottle Sticker (Baqi Series)" appearance patent was authorized.
Comparing the current sales data of bottled beverages of Naixue and Heytea in Tmall flagship store, the monthly sales of 15 bottles of Heytea juice tea is 4000+, and the monthly sales of Naixue juice tea is only 600+, which shows that the challenges that Naixue faces are not small. .
Tentative
old-fashioned beverage company
Reverse entry into the ready-made tea market
The reporter found that while new-style tea drinks are betting on bottled drinks, traditional beverage companies are also exploring the market for ready-made tea drinks.
In December 2017, Wanglaoji stepped on the outlet of freshly made tea and opened the first store of "1828 Wanglaoji Freshly Brewed Herbal Tea" in Guangzhou, and publicly stated that it would strive to achieve the operation scale of 3,000 stores nationwide by 2021.
The official website of Wahaha Milk Tea shows that since the end of 2019, Wahaha has launched the offline tea shop brand project.
In July 2020, the first Wahaha milk tea store opened in Guangzhou.
But two years later, Wahaha Milk Tea’s first store in Beijing closed.
On April 28, a contact of Wahaha milk tea franchise business told the Red Star Capital Bureau that the rent in Beijing was relatively high, and the salary of the staff was not profitable, so the store was closed.
The above-mentioned contact person said that at present, Wahaha Milk Tea is a relatively well-made store with a net profit margin of 40%-50%.
According to the data from the narrow door dining eye, Wahaha Milk Tea currently has 312 stores, 258 stores currently in operation, 54 stores are temporarily closed, and only 1 new store will be added in 2022.
According to Sino-Singapore Jingwei reports, for future store planning, Wahaha said in the brand manual that it will open 10,000 Wahaha milk tea stores in 10 years.
At present, this goal may be difficult to achieve.
Wanglaoji's goal of "3,000 stores" also seems like a castle in the air.
According to the data from Zhaimen Restaurant, there are currently 76 "1828 Wanglaoji" stores, of which 59 are currently open and 17 are temporarily closed.
In terms of brand influence, which is extremely important to new-style tea, although Wanglaoji and Wahaha can be called "national brands", their predicament can be seen from the number of fans on social media.
As of press time, "Wahaha Milk Tea" has 67,000 Weibo followers, "1828 Wanglaoji" has only 7,051 Weibo followers, while Nai Xue's tea has 1.326 million followers and Hey Tea has 1.212 million followers.
summary
The ready-to-drink market has a certain room for growth
Nai Xue's bet on bottled tea market strategy is right
If Nai Xue's tea invests hundreds of millions of yuan in the unfamiliar and highly competitive business of bottled beverages, Zhu Danpeng believes that this may erode Nai Xue's profits - the management system will become more difficult and management costs will increase accordingly.
Whether the taste of bottled beverages will have a negative impact on the entire brand is also one of the risks Naixue faces.
However, Zhu Danpeng believes that the entire ready-to-drink market has a certain room for growth, and Naixue's strategic direction of choosing to bet on the bottled tea market is not wrong.
"The key points of competition for new tea brands to make bottled beverages are brand appeal, number of fans, brand tonality, etc. General giants can do it, but other small brands cannot. In the melee of giants with brand influence, only real Only companies with a complete industrial chain and supply chain can succeed.”
Chengdu Business Daily-Red Star News reporter Yuan Ye intern reporter Zhang Luxi