In depth report of China’s soft drink industry in 2021 From Huachuang securities

The following is the In depth report of China’s soft drink industry in 2021 From Huachuang securities recommended by recordtrend.com. And this article belongs to the classification: Securities report, Life data.

China’s soft drink industry in-depth report – contest Road, big player. The market may have a certain stereotype of the soft drink industry, that is, the entry threshold is low, the product life cycle is short, and there is a great uncertainty in the amount of popular products, which may not be a good business. But at the same time, the current retail scale of the beverage industry is more than 700 billion. The former head of Wahaha has been listed as China’s richest man for several times. Later, Nongfu Shanquan has been listed and obtained a hundred times valuation. The valuation of Yuanqi forest, which was founded only four years ago, has reached 6 billion US dollars. The industry has a broad space and there are many bright spots for enterprises. In this report, we analyze the competitive strategy and investment value of beverage enterprises on the basis of in-depth analysis of industry essence, business model and industry trend.

Category characteristics: channel is the foundation of traditional soft drinks, and the innate endowment of subdivision track should be function / light addiction > packaged water > taste. The consumption demands of traditional soft drinks are gradually accumulated along the “convenience → taste → function”, that is, convenience is the basic demand of all categories. Therefore, in general, compared with milk, beer and other popular drinks, beverage enterprises have higher proportion of circulation channels, more terminal outlets, and pay more attention to the layout of retail equipment such as vending machines, which also gives the channel more profits to enhance channel thrust and seize shelf share. From the perspective of characteristics, the demand for packaged water and functional / light addictive drinks (energy drinks / coffee / carbonated drinks, etc.) is relatively stable and the product life cycle is longer, and the functional / light addictive drinks have higher consumption frequency and stronger brand stickiness, which are also easier to breed large single products; Flavor drinks (juice / instant tea / milk drinks, etc.) have the widest space. However, due to the changeable taste demands, short product life cycle and the most fierce open-loop competition, enterprises with perfect product matrix perform more steadily.

Category trend: process oriented, from carbonic acid oriented to multi parallel, demand led category internal non saccharification innovation. Carbonated beverage has become the pioneer category of soft drink industry development all over the world because of its unique taste and convenient for industrial production. With the progress of production technology and the improvement of consumers’ health demands, beverage categories are gradually enriched, and the proportion of sugar free formula is gradually increasing. At present, China’s beverage industry is in the accelerated evolution stage of functionalization and non saccharification trend. If we look at the product layout of beverage enterprises from the perspective of category life cycle, enterprises with mature categories (carbonated drinks / fruit juice / milk drinks / sugary tea, etc.) should focus on new product cultivation, and enterprises with growing categories (packaged water / energy drinks / coffee, etc.) should focus on share concentration, Import categories (bubble water / NFC juice, etc.) or need to pay more attention to the competitive pressure of multi-party entry.

The road to advancement: from vertical and horizontal channels to innovation driven. Before 2013, the industry was still in the stage of volume growth, which was also the stage of enterprise nationwide expansion. Through deep sinking, Wahaha, Master Kong, Dali, Wangwang and other enterprises ushered in brilliant development. In 2014 and beyond, the laying of the “happy horse enclosure” channel is coming to an end, the industry’s volume growth is peaking, the demand for quality is improving, and the characteristics of new consumer groups seeking innovation and difference are highlighted. In this context, the marginal utility of the original core competitive advantage of channel enterprises is diminishing, and they are faced with the difficult transformation of seeking new growth driven, while innovation driven enterprises such as Nongfu and Tongyi have ushered in a larger stage. At present, the requirements for product innovation and iteration speed are higher. Internet thinking enterprises represented by Yuanqi forest have entered the market, and become innovators in the industry by virtue of the efficient innovation mode of rapid testing and rapid iteration, and the marketing mode with distinctive features.

Strategy analysis and Prospect: enterprise competition from the product itself to the brand concept to seek differentiation, enhance the intrinsic value of products is the new business opportunities in the future. At present, the homogenization of beverage products is still obvious. In the era of information flow fragmentation, consumers need more and more “reasons” to choose, and brand highlights are more and more important, which is the core of the current competitive strategy. For the new entrants, they have the opportunity to quickly expand their capacity by binding the emerging new channels, subdividing the differentiated brand positioning, and seeking differentiation under large categories. In the context of product homogeneity, the traditional enterprise competition points turn to brand differentiation competition. Brand represents not only the product itself, but also the concept and lifestyle it contains. Nongfu Shanquan adheres to “natural and healthy” and Red Bull “your energy is beyond your imagination”, which can become the reason for consumers to choose. Of course, in the cost structure of most beverage enterprises, the proportion of product intrinsic value is not high. In the future, if we can reduce the proportion of packaging cost, channel profit and marketing expenses, and improve the intrinsic value of the product itself, and seek differentiation by product quality, it will also breed new business opportunities in the future.

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