Why are there fewer and fewer drinks under 5 yuan?
A reporter's investigation found that the structure of beverage products has changed, and the prices of sugar and bottles are increasing.
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In many stores and convenience stores, the proportion of beverages priced at RMB 5 and above has exceeded that of beverages priced at RMB 5 and below. Among them, about 65% of the items sold at a community convenience store in Chengdu are priced at more than 5 yuan; nearly 60% of the items sold at a Hongqi Supermarket store are priced at 5 yuan or more; 77% and 79% of the items sold at 5 yuan or more at FamilyMart convenience stores and Lawson convenience stores respectively %
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Industry insiders pointed out that the rising prices of beverage raw materials such as sugar, juice, and tea have forced beverage manufacturers to adjust product prices to maintain profits. At the same time, increases in labor costs, logistics costs and other aspects have also pushed up the prices of beverage products.
There are fewer and fewer drinks under 5 yuan on the market.
On April 7, Red Star Capital Bureau visited a number of small supermarkets and convenience stores and found that drinks priced at RMB 5 and above now account for more than half of the shelves. In some chain convenience stores, nearly 80% of drinks priced at RMB 5 or above product.
Behind this phenomenon, on the one hand, many brand owners have begun to increase the prices of their products and said that the prices of raw materials have increased; on the other hand, sugar-free and healthy drinks have grown rapidly and occupied the C position on supermarket shelves. The popularity of such products The initial pricing has exceeded 5 yuan.
Drinks priced at 5 yuan or more have become mainstream. Nearly 80% of drinks in convenience stores cost more than 5 yuan.
Standing in front of the shelves of a small supermarket or convenience store, at a glance, there are far more drinks priced at more than 5 yuan (excluding bottled water, the same below) than those priced at less than 5 yuan. Because in many convenience stores and supermarkets, most of the products located in the middle of the freezers and shelves are drinks above 5 yuan and products below 5 yuan. Only cola products can occupy a large area in the middle area. Master Kong and Uni-President tea drinks Occasionally it can occupy a part of the center of the shelves of small shops.
In terms of data, according to incomplete statistics from the Red Star Capital Bureau, the proportion of beverage varieties priced at RMB 5 and above in many stores and convenience stores has exceeded those of beverages priced at RMB 5 and below.
Among them, the mini program of a community convenience store in Chengdu shows that there are 246 types of beverage products, 162 of which are more than 5 yuan, accounting for about 65%; a store of Hongqi Supermarket has 144 kinds of beverage products, and 162 of which are more than 5 yuan. Accounting for nearly 60%; Red Star Capital Bureau checked the mini programs of FamilyMart and Lawson Convenience Stores and found that beverage products in their stores worth more than 5 yuan accounted for nearly 80%, reaching 77% and 79% respectively.
Red Star Capital Bureau noticed that beverage products under 5 yuan are mainly old-brand sodas, juices, and sugary tea products, such as Coca-Cola 500ml, Pepsi 500ml, Sprite 500ml, Mirinda 550ml, Fanta 500ml, and Fruity Sunshine Orange 450ml, Uni-President Orange 450ml, Master Kong Jasmine Honey Tea 500ml.
The prices of new brands of cola (such as Yuanqi Forest), fruit juices (such as Naixue's tea) or traditional brands of sugar-free tea (such as Oriental Leaves) are 5 yuan and above.
Some new products/flavors of traditional categories may also reach the price line of 5 yuan. For example, Coca-Cola strawberry flavor 500ml is priced at 5 yuan in a community convenience store and 5.5 yuan in Hongqi Supermarket.
According to Nielsen IQ's "2024 China Beverage Industry Trends and Outlook", from 2021 to 2023, the sales importance of beverages priced at 3-4 yuan/bottle will continue to decrease, while the sales importance of beverages priced at 5-7 yuan/bottle will continue to increase.
Why are drinks under 5 yuan less and less? Sugar, bottles and other raw materials are rising
Red Star Capital Bureau has noticed that the trend of selling drinks priced at 5 yuan and above has become mainstream, which may be related to the price increases of many popular beverage products in recent years. That is to say, there are fewer and fewer beverage products under 5 yuan.
Recently, affected by the increase in purchase prices, many terminals have raised the price of Master Kong's 1L tea series from 4 yuan to 5 yuan; in April 2023, the retail price of Pocari Sweat 500ml product per bottle increased by 0.5 yuan. Currently, many The terminal prices it at 5.5-6 yuan; in October 2022, the retail price of Suntory oolong tea, Qinshui, and Liqu coffee will increase by 0.5-0.8 yuan. The current retail price of Suntory jasmine oolong tea is 5-5.5 yuan.
Price increases have been an overall trend in the beverage industry in recent years. Starting in 2021, major beverage manufacturers have increased prices of their core products to varying degrees.
After Coca-Cola entered the era of 3.5 yuan from 3 yuan in 2022, its sales exceeded 3.5 yuan on different terminals in 2023. The company also said in July 2023 that it would continue to increase prices.
In 2023 alone, Nongfu Spring (09633.HK) announced adjustments to the price of 19L bottled water in Hangzhou; Juneyao Health (605388.SH) also announced that it would adjust the ex-factory prices of some products under the "Wei Power" brand.
Regarding the reasons for the price increase, Nongfu Spring stated in its 2022 annual report and 2023 interim report that PET procurement costs increased due to changes in crude oil prices during the reporting period. Juneyao Health mentioned in the announcement that the main reason is the continued increase in the cost of the main raw materials, transportation, packaging materials and auxiliary materials of the company's products.
"The rising prices of beverage raw materials such as sugar, juice, and tea have forced beverage manufacturers to adjust product prices to maintain profits. At the same time, increases in labor costs, logistics costs, etc. have also pushed up beverage product prices." Jiang, a senior researcher at Pangu Think Tank Han stated to the Red Star Capital Bureau on April 8.
Chen Xiaolong, an investor in the food and beverage industry, told Red Star Capital Bureau that among the cost components of soft drinks, manufacturing and labor account for 20% of the production cost, and white sugar accounts for about 15%. Compared with the ton price of 5,700 yuan in the second half of 2022, the latest sugar futures price is 6,604 yuan/ton, which remains high.
The beverage product structure has changed, and sugar-free beverages with sky-high prices have become more popular.
Behind the increase in the proportion of products priced at 5 yuan and above, the overall structure of beverage products has changed.
In the past, sugary drinks such as cola and non-100% fruit juice drinks were the kings of the market. However, in recent years, products such as 0-calorie sugar soda and sugar-free tea have become upstarts in the beverage industry.
According to Nielsen IQ, ready-to-drink tea will surpass carbonated drinks to occupy the first place in market sales share in 2023, becoming the category with the largest sales volume in the beverage industry. Beverage categories related to health and functionality, such as juices, functional drinks, and ready-to-drink coffee, are also finding opportunities. The sugar-free beverage market will exceed 20 billion yuan in 2023, while maintaining double-digit rapid growth.
Also in 2023, Nongfu Spring tea beverage revenue increased by 83.3% year-on-year, becoming the company's second category with revenue exceeding 10 billion yuan. Just recently, Nongfu Spring’s official public account announced that the second batch of 50,000 boxes of Oriental Leaf Longjing New Tea was sold out in one hour. The first batch of 50,000 boxes went on sale on April 1 and was sold out in 17 hours. Last year, it took seven days to sell out 50,000 boxes of the product. The popularity of sugar-free tea continues to rise.
Jiang Han said: “Consumers’ demands for health and quality continue to increase, prompting beverage manufacturers to launch higher-priced products to meet market demand.”
As for products such as zero-sugar soda, sugar-free tea, and pure fruit juice drinks, due to the higher cost of raw materials, most of them are priced in the 5 yuan price range, and have become the backbone of the 5 yuan and above price range, such as Yuanqi Forest Sparkling Water, Nongfu Spring Oriental Leaves...
Red Star Capital Bureau also noticed that in addition to categories priced at 5 yuan and above from the beginning, some traditional beverage categories have also launched new products with higher prices, such as Sprite with a price range of 3-4 yuan, and the launch of "Zero Sugar" The "Sprite Fiber+" series has been priced at 5 yuan.
Nielsen IQ believes that under cost pressure, launching new products with higher positioning often becomes one of the ways for manufacturers to increase profits.
Chengdu Commercial Daily-Red Star News reporter Zhang Luxi Yu Yao