---
title: "2015 Beverage Market Sluggish: Is It Really the 'Cool Summer' to Blame?"
description: "A recent article in Sugar, Tobacco, and Wine Weekly attributed the 2015 beverage market downturn to a 'cool summer,' but the author argues this is not the main cause. Instead, the decline is driven by category shifts, price band upgrades, channel saturation, and ineffective promotions."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2015-08-28"
language: "en"
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# 2015 Beverage Market Sluggish: Is It Really the 'Cool Summer' to Blame?

> A recent article in Sugar, Tobacco, and Wine Weekly attributed the 2015 beverage market downturn to a 'cool summer,' but the author argues this is not the main cause. Instead, the decline is driven by category shifts, price band upgrades, channel saturation, and ineffective promotions.

Sugar, Tobacco, and Wine Weekly's food edition published an article yesterday, using 5,000 words to explain the impact of the 'cool summer' on this year's beverage market and the reasons for the downturn. Personally, I think the cool summer issue does exist, but it is definitely not the main cause of the 2015 beverage market sales decline. From the argument's perspective, there is no actual data on temperatures and rainfall across the country, nor a comparison with the past 10 years. It's just a judgment based on a baseless 'feeling' data, which seems purely to excuse companies with poor performance. I casually searched for weather data online, and even experts say this year is a hot summer. How do you explain that? Which year doesn't have rain in summer? Why must we avoid the essence of the problem? If you're interested in the original article, you can click 'Read Original' at the bottom of this article.

I think the main reasons for the 2015 beverage decline should be analyzed from the following four levels:

**From the category level:**
Looking at the overall industry data, the main decline is in carbonated drinks and tea drinks. In the past two years, emerging light beverages, functional drinks, lactic acid bacteria drinks, and coconut juice drinks have grown rapidly. For example, Uni-President's Hai Zhi Yan / Xiao Ming Tong Xue, Special Forces / Huan Le Jia's coconut juice, Mengniu and Hao Cai Tou's You Yi C Xiao Yang, which one isn't growing fast enough?

**Conclusion:** Consumer health awareness has increased. The core issue for the decline of carbonated drinks and tea drinks is that the market is basically saturated and products are severely aging. Coca-Cola's Zhong Lu and Pepsi's Jia Ge came too slowly and too late. New category cultivation still needs time, and the growth space is far from compensating for the base volume lost in carbonated drinks. Marketing innovation cannot solve the problem of increased consumer choices and consumption upgrade. The overall industry trend is transitioning to high value-added and diversified categories. If companies remain conservative, they will find it hard to escape the decline.

**From the price band level:**
Mid-to-high priced products are growing rapidly, and new/high-end products are selling well: A notable feature of this year's new beverages is that the price band is no longer concentrated around 3 yuan, but almost all are competing in the 4/5/6 yuan range. Tea and carbonated drinks concentrated at 2.5-3 yuan are firmly pinned to that price band, and their low-end image has no chance of recovery.

From the competition of new products: Functional drinks generally compete in the 4 yuan price band, coconut juice in the 5 yuan band, and lactic acid bacteria drinks around 6 yuan. Major manufacturers have almost all abandoned new products in the 3 yuan band. Uni-President's entire new product line is above 4 yuan, only Master Kong launched a Sea Salt Lemon still selling at 3 yuan.

**Conclusion:** Consumption upgrade, consumption generally transitions from low to high. Companies with severe sales declines all face an awkward problem: insufficient innovation capability, and basically no chance to raise prices for old products.

**From the channel level:**
Consumer coverage of first- and second-tier brand products in first-, second-, and third-tier cities is basically saturated. Fourth- and fifth-tier markets have severe empty-nest issues due to urbanization, leaving little room for growth. Third- and fourth-tier products are constrained by high channel operation costs, making it difficult to rapidly expand markets through large-scale channel operations to generate incremental sales. Additionally, due to excessive performance pressure, companies blindly push inventory at all costs, causing price chaos and serious cross-regional selling. Although this may boost sales in the short term, the lack of driving force in the interest chain leads to loss of control in the entire channel chain, which is a severe challenge for declining companies this year.

**Conclusion:** Demographic and channel dividends have disappeared. If mainstream brands want to rely on existing brands to extract incremental growth from channels, it's almost impossible. Channel promotions cannot fill the gap left by sales decline. Moreover, China's economic growth has entered the new normal, saying goodbye to high-speed growth, and urbanization is slowing down. First-line brands' existing products have no opportunity to mine channels.

**From the promotion level:**
In terms of promotion, Coca-Cola's lyric bottles can no longer move consumers, and Master Kong's low prices cannot retain young people who are not price-sensitive. Almost all companies are doing 'buy one get one free' promotions. Evergrande's QR code scanning only has influence within the industry, and channels are flooded with old-date products from Taobao, resulting in insufficient penetration to users.

**Conclusion:** Users' taste for novelty changes too quickly. Promotional methods lack innovation and highlights. Internet cross-border new plays still need further exploration.

Summary: China's beverage golden decade is over. The next three to five years will be a battle for existing market share. Third-tier beverage brands that follow and imitate will be the first to exit if they don't make it to the top three in the industry. In the future, category innovation is the mainstream, and internet plays are the main marketing tools. Consumption upgrade has reached a critical period. The trend is set. If companies don't adjust their product positioning and sort out their channel chains, no matter how hot the weather is, it won't matter to them.

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Click 'Read Original' below to read the original article:
## "2015 Another Cool Summer, How Much Damage to the Beverage Industry? See the 5,000-Word Channel Survey!"


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