Not only Coca-Cola, these drinks are also rising in price

Zhongxin Jingwei, May 5 (Yan Shuxin and intern Zhao Wei) Recently, the news of Coca-Cola's price increase has attracted attention from the industry, and some netizens called "Fat House Happy Water is unhappy." In fact, not only Coca-Cola, affected by the rising cost of raw materials and other factors, many beverage companies have raised the price of their products since the beginning of this year.

Recently visited offline supermarkets, convenience stores and other retail channels and found that apart from mineral water, there are few drinks below 3 yuan, and products above 5 yuan are occupying more positions in the beverage area.

A supermarket beverage area in Wuhan Photo by Zhongxin Jingwei

Coca-Cola not only increased prices but also ran out of stock?

Recently, Zhongxin Jingwei visited a number of supermarkets, convenience stores and community supermarkets in Beijing and found that the price of Coca-Cola in 500ml bottles of Coca-Cola increased from 3.5 yuan to 3.6 yuan, and a community supermarket sold 3.8 yuan, but some supermarkets and convenience stores still maintained a retail price of 3.5 yuan.

According to public reports, since returning to the Chinese market in 1979, the price of Coca-Cola's products has not increased significantly for more than 40 years. According to a previous report released by Guosheng Securities, from 1990 to 2019, the compound growth rate of Coca-Cola's product unit price was 0.42%.

Coca-Cola's last large-scale price increase in the Chinese market was in November 2021, according to the price adjustment information flowing out at that time, since November 11, 2021, the suggested retail price of 11 ml Coca-Cola in China has increased from 1 yuan to 500.3 yuan, an increase of 3.5 yuan.

In response to the recent price increase, Zhongxin Jingwei contacted the relevant person in charge of Coca-Cola China several times to try to learn more, but did not receive a reply as of press time.

In addition to the price increase, there have been media reports recently that due to the unstable supply of raw materials, Coca-Cola series products in the Beijing market Youbao unmanned retail channel has been out of stock for a period of time. The relevant person in charge of Youbao said that at present, the entire Beijing area is temporarily out of stock, replaced by PepsiCo products, and the recovery time is uncertain.

In this regard, the relevant person in charge of COFCO Coca-Cola Beijing responded to Zhongxin Jingwei on the evening of the 24th, saying, "Our product supply is normal, and there is no shortage of supply." ”

The Coca-Cola manufacturer in Beijing is COFCO Coca-Cola, one of Coca-Cola China's two bottlers in the Chinese market.

But it is undeniable that the problem of raw material supply is indeed a major factor affecting the entire carbonated beverage industry.

According to CCTV Financial reports, the recent armed conflict in Sudan continues, making global carbonated beverage manufacturers feel anxious. Because Sudan's exports of gum arabic are a key ingredient in the production of carbonated beverages, if gum arabic exports are interrupted, the world's major carbonated beverage producers may face the danger of losing supply within a few months.

A number of beverage companies have raised product prices

In fact, since the beginning of this year, many beverage companies have raised the price of their products.

First of all, at the end of January 2023, some dealers released news in the circle of friends, saying that according to the "Notice of China Resources Yibao on the price adjustment of dealer terminals", from March 1, 2023, Yibao pure water will be adjusted by 3 yuan; Immediately afterwards, on February 1, Nongfu Spring's "Notice of 1 Liters of Water Price Adjustment in Hangzhou Region" was circulated in the industry, and from February 2, 1, the retail price of 19L bottled water in Hangzhou Nongfu Spring increased from the previous 2023 yuan / barrel to 2 yuan / barrel, with a price adjustment of 1%.

In early February, the price of Yakult's 2 billion live bacteria original flavor and low-sugar products also began to rise, from 100.11 yuan and 7.12 yuan to 7.12 yuan and 8.13 yuan respectively.

Subsequently, JuneYao Health, known as the "first stock of lactic acid bacteria beverages", also announced on February 2 that it will adjust the ex-factory prices of some products of the "Wei Power" brand, with an increase of about 12% to 3%, and the new price enforcement will be implemented from March 6, 2023.

According to media reports, since April 4, the electrolyte water brand Baomine Water has successively adjusted prices, of which the 1 ml product is the first price increase in nearly 500 years, with an increase of about 23.0 yuan. Zhongxin Jingwei saw that in a chain supermarket in Beijing, the price of 5 ml of Baomine Li Water Special is 500.5 yuan, and convenience stores are relatively expensive, and some stores sell for 5 yuan.

In addition to the price increase of basic products, the price of new products of major beverage companies is generally higher than that of existing products. Taking Nongfu Spring's brand Oriental Leaf recently launched as an example, in a convenience store in Beijing, the product was priced at 5.8 yuan, while the original tea drinks launched earlier such as jasmine tea, green tea, and oolong tea of the same brand and specifications in the store were priced at 5.5 yuan.

In addition, in February this year, Yakult launched a 2 billion live lactic acid bacteria milk drink low-sugar golden packaging "small golden bottle" product, priced at 500.16 yuan, which is also higher than the original 8 billion live bacteria product.

Visit: Drinks above 5 yuan occupy more places

Existing products are rising in price, new products are becoming more expensive, and drinks are becoming more and more expensive, which has become a common feeling of consumers.

"In the past two years, I obviously feel that drinks are becoming more and more expensive, especially new drinks, many of which start at 5 yuan, and I remember that they were generally about 3 yuan before." With the arrival of summer, Mr. Zhao in Beijing wanted to stock up on some drinks in the refrigerator, but the price from 5 yuan made him resolutely give up some new flavors, and finally chose the products he used to buy regularly, but he could clearly feel that the price had risen.

"Like the 300ml bottle Sprite I bought on the e-commerce platform two years ago, 12 bottles cost only 15.9 yuan, and now it has risen to 19.9 yuan." Mr. Zhao said.

On social platforms such as Weibo and Xiaohongshu, many netizens also reflected, "Now all drinks are more than 3.5 yuan."

Recently, Zhongxin Jingwei visited supermarkets and convenience stores in Beijing and found that drinks over 5 yuan are occupying more positions in the beverage area.

In a community supermarket, drinks below 3 yuan are mostly some mineral water and small-sized cola, sprite, soda, etc., standard-sized fruit juice drinks, tea drinks, etc. are generally more than 3 yuan, and sports drinks and sparkling water are more than 5 yuan. In the refrigerated freezer of the supermarket, drinks of about 5 yuan occupy more positions.

Beverage area of a community supermarket in Beijing Photo by Zhongxin Jingwei

In addition, in the online channel of a convenience store, in addition to mineral water, there is only a 3ml carry-on Coca-Cola less than 300 yuan, priced at 2.1 yuan, a total of 3 models priced between 5-37 yuan, and a total of 5 models above 82 yuan, of which the most expensive drink is sold for 27.1 yuan a bottle, which is a whole plant drink of 480ml (No. 2); In another convenience store, there were 5 drinks under 32 yuan, and 5 drinks above 70 yuan.

Not only in Beijing, but also in many supermarkets and convenience stores in Wuhan, most of the beverage products such as milk tea, pure fruit juice, low-sugar tea drinks, and electrolyte water are priced at more than 5 yuan. Among them, in the refrigerated freezer of a convenience store, except for carbonated drinks, the price of other drinks is mostly 4-6 yuan, and the most expensive one is sold for 9 yuan.

Why do drinks get more expensive the more you sell?

In the past two years, an important reason why beverages have become more expensive is the increase in raw material prices.

JuneYao Health mentioned in the announcement that the ex-factory price of some products of the company's "Wei Power" brand was raised, mainly because of the continuous increase in the cost of the main raw materials, transportation, packaging materials and auxiliary materials of the company's products.

At an analyst performance meeting in March 2022, Nongfu Spring executive director Zhou Zhenhua bluntly said that cost pressure has "exceeded the level that enterprises can unilaterally digest", Nongfu Spring's first choice is to digest costs by improving operational efficiency, and due to large changes in the market and cost side, competing products also have price adjustment actions, Nongfu Spring is also continuing to wait and see.

In an interview with the media, Yakult said that the price increase of the company's products is also due to the continuous rise in operating costs such as raw material prices in recent years.

In February, Nestlé Switzerland's CEO Mark Schneider announced that the company's products would have to continue to increase this year in response to rising raw material prices, but did not specify the price increase. Data shows that in 2, the price of Nestlé products has increased by 2022.8%.

As early as November 2021, before Coca-Cola China sales area raised the retail price of products, Coca-Cola CEO James Quincy reminded consumers on April 11 that Coca-Cola would raise beverage prices to cope with the impact of rising commodity costs.

Zhu Danpeng, vice president of the Guangdong Food Safety Promotion Association and food industry analyst, told Zhongxin Jingwei that in the past two years, due to the epidemic and other factors, the raw material costs, logistics costs, and personnel management costs of the food and beverage industry have increased to a certain extent, resulting in the retail end of products having to take measures to increase prices.

Xu Xiongjun, a strategic positioning expert and founder of Jiude Positioning Consulting Company, also mentioned that under the influence of the epidemic and other factors, the comprehensive efficiency of the beverage industry has declined, and the cost of raw materials is rising, so that companies have responded by increasing prices.

According to media reports, data released by the Food and Agriculture Organization of the United Nations on May 2023, 5 showed that the sugar price index averaged 5.4 points in April, up 149.4 points (22.4%) from the previous month, rising for three consecutive months and hitting a new high since October 17.

Domestically, sugar prices are also rising. According to data released by the China Sugar Association, as of the end of April 2023, all sugar beet sugar factories have been shut down, and sugar cane sugar factories have been harvested in other provinces (regions) except for 4 in Yunnan Province. In the 3/2022 sugar production period, the country produced 2023.896 million tons of sugar, a year-on-year decrease of 39,5865 tons. The cumulative average sales price of finished white sugar of national sugar industry enterprises was 129 yuan / ton, up <> yuan / ton year-on-year.

In addition to the rise in sugar prices, the price of PET (a polymer polyester material), the main raw material for beverage packaging bottles, is also rising. Nongfu Spring mentioned in its 2022 annual report that the price of crude oil will rise in 2022, and the price of raw materials such as PET, which is a downstream product of crude oil, has also increased the cost pressure of drinking water and beverage enterprises that use PET and other materials as the main raw materials for product packaging.

The data shows that Nongfu Spring's gross profit margin in 2022 fell to 59.5% from 57.4% in the same period of the previous year, and the reason was the increase in PET procurement costs. Everbright Securities Research Report pointed out that from the cost side, the pressure on the cost side of Nongfu Spring in 2023 may be slightly relieved, and it is necessary to pay close attention to the changes in crude oil prices in the future.

In April this year, Wankai New Materials, a domestic bottle-grade PET manufacturer, said in response to investors' questions that the price center of gravity of bottle-grade PET and main raw materials PTA in the first quarter of this year has risen compared with the beginning of the year, and the price trend in the second quarter needs to be analyzed in terms of upstream prices, downstream demand, supply and demand of the industrial chain.

That is to say, beverage companies may still face greater cost pressure in the future. (Zhongxin Jingwei APP)