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http://www.xinhuanet.com/fortune/2018-09/12/c_1123415871.htm

CHINA
Beverage market: functional beverages into potential stocks
2018-09-12 Source: Workers Daily
The functional beverage market is becoming a potential stock in the beverage industry. In mid-August, Coca-Cola announced that it has invested in the functional beverage brand BodyArmor, which is a functional beverage brand that Coca-Cola re-harvested after its hydrodynamics. For Coca-Cola, which is declining in sales and constantly seeking to lose weight, its strategic layout for expanding the functional beverage market has become clearer.

In China, functional drinks are also entering a golden age. In recent years, with the increase of national health awareness and the increase in sports consumption expenditure, the functional beverage market has developed rapidly, with more than 40 billion yuan in 2017. The good development of the market has also attracted many manufacturers to enter, and the industry is fiercely competitive.

Carbonated drink

At present, the concept of health is permeating people's lives, and the lifestyle of consumers has changed.

In this situation, the cola with the name "fat house happy water" is getting cold and cold due to high sugar and high calories.

The traditional sugar-sweetened carbonated beverage market is getting worse. According to the financial report, the sales performance of Coca-Cola and Pepsi-Cola declined from 2014 to 2017. In 2017, revenues were 35.41 billion yuan and 63.525 billion yuan respectively. For the 2017 net profit, the former fell 81% to 1.283 billion US dollars, while the latter fell 23% to 4.908 billion US dollars.

More and more healthy, low-calorie, non-artificial beverages have entered the market, and a focus on health and sensory experience has become a trend in the beverage industry.

In the carbonated beverage market, Coca-Cola launched a new product called “Citty Sugar, Zero Calorie”, such as Zero Coke; PepsiCo launched two sugar-free products, Qingyi Coke and Extreme Coke. In June of this year, China's drinking water giant Nongfu Spring launched a new "bubble tea" to reach out to the field of carbonated beverages. "Bubble tea" used tea and juice to remove the high sugar content of cola. Carbonated drinks are the most criticized problem.

The rise of the concept of healthy eating has also accelerated the transformation of the two giants of traditional carbonated beverages, Coca-Cola and Pepsi. In mid-August this year, Coca-Cola formed a strategic alliance with American sports drink BodyArmor to further expand the functional beverage market. Shortly thereafter, Pepsi announced that it would acquire SodaStream, the global leader in soda water, for $3.2 billion, trying to add to the transformation of the healthy beverage market.

Functional drink rise

After more than two hours of training, fitness enthusiast Zhang Yu walked out of the gym. At this time, he was sweaty, tired and thirsty, and he was eager to drink something.

The drinks that can be selected by Zhang Yu are full of mineral water, tea drinks, carbonated drinks, fruit and vegetable juice drinks, and functional drinks such as Red Bull, Pulsating, Gatorade, and Baoli. Finally, Zhang Yu bought a bottle of pulsation. “In the past, I used to drink carbonated drinks such as cola and sprite. Now I know that functional drinks are more conducive to the recovery of the body after exercise.”

Zhang Yu's choice also reflects the changing trend of the beverage market in recent years: functional beverages are rapidly emerging, more and more popular, and bring more and more attractive cakes to the beverage industry.

A functional beverage is a beverage that regulates the function of the human body to a certain extent by adjusting the composition and content ratio of the nutrients in the beverage.

According to relevant information, functional beverages are a healthy drink that has gradually become popular in developed countries such as Europe, America and Japan since 2000. It is mainly divided into nutrient drinks containing dietary fiber, vitamins and minerals, which can adapt to athletes or participate in sports exercises. Sports-physical characteristics, sports drinks for special nutritional needs, and special-purpose beverages such as probiotics, immune-enhancing ingredients, and low-energy drinks suitable for obese people.

According to public data, from 2011 to 2017, the annual compound growth rate of China's functional beverage retail sales reached 17.1%, and the annual compound growth rate of functional beverage retail sales reached 12.35%. By the end of 2017, the retail sales of functional beverages in China has exceeded 40 billion yuan to reach 41.52 billion yuan, and the retail sales have increased to 12.783 billion liters. It is estimated that the retail sales of functional beverages in China will exceed 45 billion yuan in 2018.

From the perspective of the global functional beverage market, the scale shows a rapid growth trend, with an average annual growth rate of more than 10%. Compared with developed countries in the world, the per capita consumption of functional beverages in China is only 0.5 kilograms per year. There is still a large space for the consumption of 7 kilograms per capita in the world. Therefore, China's functional beverage market has great potential.

According to industry experts, from the initial niche market to the scale of 10 billion yuan, the drinking scene of functional beverages is expanding, from supplementing energy to expanding into dining, gathering, work, learning, driving and other scenarios. Functional beverages have become a new growth point in the domestic beverage market.

Incoming people continue to increase

The market with great development potential has attracted many new incomers, and the competition in the functional beverage market is increasingly fierce.

The data shows that at present, domestic functional beverages account for nearly 13% of the total beverage market, and there are more than 150 types of products. Almost all beverage giants have a functional beverage product line. Among the many brands, the status of Red Bull has been unmovable, and the old-fashioned functional beverages such as Pulse, Jiadele and Baolili have remained stable, and brands such as Lehu and Dongpeng have grown rapidly.

According to Nielsen data, Red Bull has fallen into a trademark dispute in the past two years, and its current market share has dropped from 63% to 58%. It is expected to release at least 7 billion yuan of market space. Faced with such a big cake, many beverage companies want to compete for the market when the industry is full of variables, and the market is in a state of flux.

In 2017, the new products were launched in a unified manner; the pulse of Danone Group was launched in addition to the original products, and launched a new product sports beverage “Illuminated Energy”; China Red Bull parent company Huabin Group launched the war horse; Yibao entered the functional beverage and launched "Magic" amino acid sports drink new products; Wahaha after 13 years, and then launched a sports drink brand; Amway, the acquisition of energy drinks XS, launched a new product in the Chinese market in September 2017, just 29 hours, sales reached 1000 Ten thousand cans.

In addition, there are screams from Nongfu Spring, COFCO's bigbang ? rod Mojito sports drinks, functional drinks from Thailand, Karabao and re-energized Jianlibao, etc., new and old functional beverage brands camped on each other. , ? one side.

At the same time, foreign functional beverage brands are also overweight in the field of functional beverages in China. Monster Beverage, which excelled in North America, entered China in 2016, behind which Coca-Cola acquired its 16.7% stake for $2.15 billion. Canada's hundred quenching, directed to the professional sports crowd, in the Chinese market, the main concept of no preservative, no caffeine, no artificial color; American functional beverage flying LIFE will NBA player O'Neill bust as a front of the packaging marketing; the main health function The US beverage brand CELSIUS also announced that it will enter retail terminals across China in the shortest time.

Mr. Li, the owner of the supermarket in Fangzhuang, Beijing, told reporters that it is also selling 10 bottles of beverages. One bottle may be a functional beverage five years ago, and now it can have 3 to 4 bottles. “The retail price of a bottle of ordinary beverage is about 3 yuan, but the price of functional drinks of the same specification is 30% higher and the profit is more than 1 time.”

Based on this, both terminal vendors and manufacturers have a stronger willingness to cultivate and promote the market.

Some industry experts also said that China's functional beverage market has some problems at the same time of rapid development. For example, the lack of innovation in enterprises, the serious follow-up of the market, the convergence of products, and the lack of specific standards for the functional beverage industry in China, the low entry threshold and competition in the industry. Unordered. “Beverage manufacturers should correctly position their products in the market, actively carry out innovations in technology and marketing, and look for differentiated selling points.”

Overall, the functional beverage market is still a blue ocean, and there is huge room for growth in the future. It is foreseeable that as the competition in the next market intensifies, the competition for channels and marketing of functional beverages will become more intense.