---
title: "300 Prefecture-Level Cities, 3000 Counties, and Countless Local Food Brands That Are Disappearing"
description: "Local food and beverage brands in China are disappearing from shelves as they face competition from national giants and new consumer brands. Despite a nostalgic online trend giving some a temporary boost, these brands struggle with limited reach, lack of innovation, and the challenge of going national in a changed market."
author: "FBIF"
publisher: "New Distribution"
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published: "2021-12-16"
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# 300 Prefecture-Level Cities, 3000 Counties, and Countless Local Food Brands That Are Disappearing

> Local food and beverage brands in China are disappearing from shelves as they face competition from national giants and new consumer brands. Despite a nostalgic online trend giving some a temporary boost, these brands struggle with limited reach, lack of innovation, and the challenge of going national in a changed market.

Source: FBIF Food & Beverage Innovation (ID: FoodInnovation)

One day at noon, I went out to find food. When the dishes arrived, I noticed the restaurant had given us a complimentary peach-flavored drink. At first glance: simple fonts, tacky bright pink, a style that seemed stuck a decade ago... Without even checking the ingredients, I knew it would be "sweet to the heart." After scanning the manufacturer information, I unexpectedly found a highlight and showed it to a colleague: "This is a brand from your hometown, do you recognize it?" She curiously leaned in for a look and told me: this brand, she had been drinking since childhood, and it was a "local renowned brand." But in Shanghai, it was the first time she had seen it.

The sudden appearance of this pink drink gave me a sense of time travel, stirring up some deep memories—when I was a child, whether or not I had pocket money to buy snacks, I would go to the small shop several times a day with friends, staring at the snacks on the shelves with eager eyes.

(Childhood snacks) Image source: E-commerce platform

Candies at one cent for two, spicy strips at five cents a bag, soda at one yuan a bottle... There were many snack and drink brands that accompanied us as we grew up.

Years later, we've grown up, started eating Three Squirrels and Bestore, buying various internet-famous milk teas and sparkling water, and using trendy terms like "recommend," "health," and "low-calorie."

Meanwhile, those "hometown-exclusive" local brands, like this peach juice, have gradually disappeared from the shelves of small shops and supermarkets, forgotten in the distant past.

They seem to be disappearing at an accelerating pace.

**Childhood snacks you can no longer buy**

#### **Local brands that are "disappearing"**

In 2019, singer Liu Sen released a song "County Town" on NetEase Cloud Music. Among over 10,000 comments, the top one was from user "Shaoji Ge_":

"In fact, Beijing, Shanghai, Guangzhou, and Shenzhen only account for about 0.33% of the national area. Even adding the new first-tier cities, it's only 3% of the national area. On the remaining 97% of the land, there are about 300 prefecture-level cities, 3000 counties, 40,000 towns, and 660,000 villages. About 84% of the country's people consume and grow here."

Besides people, the vast majority of local brands also take root and grow on this 97% of the land. Counties lament losing young people, and local brands, besides losing people, are also losing the small counties.

Around 2018, a wave of "nostalgia" suddenly emerged on social media. People looked back and realized: why can't we buy the snacks and drinks we ate as children, those local brands that defined our childhood?

The nostalgia of the post-80s and post-90s generations: "Even with money, you can't buy childhood snacks"
Image source: WeChat

**"Disappearance" didn't just start now; the "bloody battle" offline has never stopped.** Over the past decades, Coca-Cola, Pepsi, Wahaha, Want Want, Jinmailang, and Dali have built a billion-dollar sinking market. Many local brands can't even get into larger supermarkets, only managing to stand in small shops, mom-and-pop stores, and restaurants.

Recently, Wahaha announced the launch of Future Cola's sugar-free series, which indeed sparked another wave of nostalgia. When this "Chinese people's own cola" reappeared in front of the public, it carried a sense of vicissitudes. Breaking through the walls of Coca-Cola and Pepsi is extremely difficult even for a national brand like Wahaha, let alone a host of local brands.

Chongqing Business Daily reported that Tianfu Cola, which had been silent for over 20 years, finally made a comeback after hardships, but in its early years of 2016 and 2017, it suffered losses of 13.87 million yuan and 16.95 million yuan respectively. [1]

There is also a brand that experienced the ups and downs from local to national and back to local.

Huafeng Instant Noodles, "founded in 1986," in the last century, used its Sanxian Yimian (a type of noodle) to expand beyond Guangdong and became popular nationwide. However, with the arrival of Master Kong and Uni-President, Huafeng began to decline around 2000 and gradually retreated to the local Guangdong market. In 2018, rumors that "Huafeng Instant Noodles would exit the market" were rampant, causing many to shed tears.

Now in Guangzhou, the places you can still often encounter it are the lower shelves of local supermarkets and malatang (spicy hot pot) shops.

(Huafeng Sanxian Yimian) Image source: Huafeng official website

Of course, attributing the "disappearance" of local brands solely to competition and monopoly is not comprehensive; there are deeper reasons. Taking instant noodles as an example, data from the World Instant Noodles Association (WINA) shows that from 2013 to 2017, demand for instant noodles in the Chinese market fell from 46.22 billion servings to 38.97 billion servings, a cumulative decline of about 15.7%. [2]

What does this mean? Even if a brand becomes a "local bully" in instant noodles, able to share shelf space equally with Uni-President and Master Kong, it still has to withstand the downturn of the industry environment.

Thinking about soda, spicy strips, juice, melon seeds, candy, etc., these childhood memories of ours are often concentrated in "heavy oil, heavy salt, high sugar," and were listed as "unhealthy foods" by our parents from a young age. Looking at appearance, variety, health, and trendiness, as we stride forward with the "upgraded needs for a better life," perhaps we have long chosen to leave them behind.

**Genki Forest and others "invade" small counties**

Now, besides traditional big brands, local brands are also competing with the "bosses" of the new consumer sector.

Even though we have gone through 12 Double Eleven shopping festivals and are used to concepts like the metaverse and digital humans, **the offline immediacy of FMCG like food and beverages has not disappeared. This is why new consumer brands are continuously increasing their offline presence.**

At the end of last year, Genki Forest raised its 2021 offline sales target from 2.1 billion yuan to 7.5 billion yuan in one go, targeting factories and mom-and-pop stores. [3]

Genki Forest has started deploying offline smart cabinets
Image source: Weibo @Genki Forest

Some episodes may have been heard of. For example, in a mom-and-pop store in Hebei, to win back shelf space, salespeople from Genki Forest and Nongfu Spring had some physical conflicts. Even if local brand salespeople all know "Wing Chun," it's hard to survive in the cracks between giants.

According to LatePost, this year Genki Forest sold 100 million boxes of sugar-free sparkling water, with 80% from offline sales. [4] I believe this, because it has already been placed in supermarkets in my hometown.

Netizens marvel at Genki Forest's channel sinking
Image source: Weibo

Brands under the giants are also exploring their own niches, competing with traditional brands for a foothold.

For example, another sparkling water brand, Qingquan Chushan, is mainly targeting convenience stores, schools, internet cafes, and bath centers in second- and third-tier cities to avoid the giants' edge.

**In addition, the convenience store trend is not friendly to local brands.** The "2021 China Convenience Store Development Report" points out that in 2020, the number of convenience stores in China reached 193,000, of which 144,000 were traditional convenience stores, a year-on-year increase of 9%. [5]

Besides traditional chain convenience stores like FamilyMart, Lawson, 7-Eleven, Meiyijia, and Tianfu, new-style chains like JD and Suning convenience stores, plus various local chains, are replacing more and more mom-and-pop stores and "small circulation" outlets.

On one hand, the main customer base of convenience stores is young people, making them one of the main battlefields for new consumer brands. Taking Lawson as an example, it is reported that since this year, the growth rate of new brand suppliers at Lawson has remained above 30%. [6]

On the other hand, chain convenience stores, unlike mom-and-pop stores, have strict control over SKUs. New brands may need to pay high entry fees, SKU barcode fees, display fees, and sometimes even promotional discounts and restocking management fees borne by the brand. **Compared to small-scale, "rustic" local brands, various big brands and new consumer brands have more traffic and bargaining power.**

Customers under 30 are the main force in convenience stores
Image source: "2021 China Convenience Store Development Report"

**The internet stirs up a "nostalgia" trend,
**Local brands usher in a second spring?**

There is a classic saying: When God closes a door, he opens a window.

**The internet + nostalgia trend may be that window for local brands.**

At some point, nostalgic snack shops became standard in major tourist attractions and commercial streets across the country. In these shops, bright retro signs and small shelves piled high with goods, except for the prices which have multiplied several times, everything else is indeed very childhood-like.

Childhood nostalgic snack shop
Image source: Childhood Nostalgic Xiaopang Theme Store WeChat public account

Post-80s and post-90s netizens have become "self-appointed promoters," posting countless "archaeology posts" for hometown delicacies on platforms like Douyin, Xiaohongshu, and Bilibili. From Jiangsu, Henan, Jiangxi, Northeast, Chengdu, Chaoshan... here you can discover hundreds of snack and drink brands you may never have heard of. Moreover, the more rustic the packaging, the more likely it is to be listed.

Nostalgic snacks are trending on Xiaohongshu
Image source: Xiaohongshu

For spicy strips, a national favorite, do you only know Weilong? Sorry, there are also Gege Spicy Strips, Shoe Sole Spicy Strips, Boxing King Spicy Strips, Weilong Spicy Strips, Mala Prince Spicy Strips... Although the names are strange, each spicy strip is filled with youth.

In the instant noodle world, which is not favored by new consumption, Henan's Beijing Instant Noodles, Yang Zhanggui Instant Noodles, Dayuzhu Instant Noodles, and Lucky Instant Noodles have all experienced the taste of "becoming an internet celebrity without trying."

We randomly selected about 10 local brands and searched on Taobao and Tmall, finding that most products can achieve monthly sales of hundreds to thousands, with a few reaching 20,000 to 30,000 units per month.

Some childhood snack sales on Taobao
Image source: Taobao

Mindshare, emotion, and word-of-mouth are all natural advantages. Compared to new consumer brands that fight desperately to attract young people, the "rebirth online" of rustic local brands seems particularly easy.

However, just as "dividends" are inherently short-lived, **local brands want to deepen their brand identity and ride the wave, but in the long run, it is not easy.**

Looking at the recommendation lists compiled by netizens, a place has at least a dozen, or as many as twenty or thirty brands. The labels on them are extremely uniform: cheap, delicious, childhood snacks, with no brand personality. Like new consumption, when everyone starts doing sugar-free, sugar-free becomes an ordinary label without distinction.

The local and nostalgic attributes also constitute their natural limitations. Imagine a Northeasterner and a Zhejiang person talking about local brands; it's hard to resonate with each other.

The offline channels of local brands are mostly laid out in one or several cities, or within their own province, with relatively limited reach. For example, we all know Yeguo Coconut Juice, but do you know Yeguo brand chrysanthemum tea, winter melon tea, or jelly? I've never seen them in supermarkets, but they are almost household names on Hainan Island.

Yeguo Chrysanthemum Tea
Image source: Yeguo WeChat public account

Even Bingfeng Soda, which has entered the internet celebrity circle and plans to go public, has not yet significantly broken through regional limitations. According to its prospectus disclosed in July 2021, Bingfeng's total revenue in 2020 was 320 million yuan, with over 80% of revenue still coming from Shaanxi Province. [7]

Bingfeng classic orange bottled soda
Image source: Bingfeng Icepeak WeChat public account

In a few more years, the post-90s generation will be approaching their forties. Will these local brands still have a place in the memories of Generation Z?

Compared to the temporary dividend, the crisis they face seems more worrying.

#### **Left to OEM, right to new consumption**

For local brands, does having a real brand matter?

After all, without a brand, it's still possible to survive.

After searching around, we found that brands mainly doing local business often are themselves physical factories. For example, Tianyiyuan, recommended by a Henan netizen, not only produces various snacks but is also one of Bestore's OEM factories. Thus, around 2018 when new consumption started to rise, **local brands further retreated upstream, joining the OEM and ODM wave, which became a good business.**

Netizens summarize OEM factories for various snack brands
Image source: Weibo

Like the OEM factories for snack brands that netizens have dug up, there can be as many as ten or twenty, meaning one brand supports a group of factories. Incidentally, they are also targeted by young people who want delicious and affordable snacks, boosting their own sales.

But the underlying logic of OEM factories being targeted is that Bestore, Muji, etc., are recognized brands that can serve as endorsements. In other words, it's not that they suddenly have brand loyalty themselves.

An industry insider once revealed that some "substandard" products produced by OEM factories do not meet the brand's requirements but are higher than national and industry standards, so some factories sell them as affordable products under their own brands. This difference in quality and mindset also determines that OEM factories building brands is just one of the survival options.

**At the other end of the spectrum from the OEM model is a small group that refuses to give up on branding, striving to get closer to young people.**

For example, "Xian Huoji," a Wuhan local brand like Hankou No.2 Factory, was renamed from "Wugang Ren" in 2003, with the classic product being a salty functional soda. In the past year or two, "Xian Huoji" has continuously launched new products such as 0 sugar 0 calorie sparkling water and "Sarsaparilla," and this year invited women's football player Wang Shuang as brand ambassador.

Xian Huoji product line
Image source: Xian Huoji WeChat public account

What do you think when you see the above series of products? Not to mention replicating the success of Hankou No.2 Factory, just "youthfulness" alone, the current Xian Huoji may still need to work harder.

Another example, Huahuaniu, which Henan students may be familiar with, has its best-selling product as Huahuaniu Probiotic Flavored Fermented Milk, which has been sold in Henan for 16 years.

Huahuaniu classic bestseller: Probiotic Flavored Fermented Milk
Image source: Huahuaniu Tmall flagship store

Now it's more than that. With its own pastures and factories, Huahuaniu has launched multiple new products on the basis of its original Niuhuahua fruit and vegetable milk and Qingjue light yogurt series, including Mini Xiaoxiang vanilla ice cream yogurt, "Changjiduo" herbal lactic acid bacteria, and cheese yogurt. This year, the flagship store also launched children's cheese sticks.

When promoting "Qingjue," Huahuaniu also launched a "Qingjue Relaxing Live Show" on Douyin, setting up a trendy live-streaming room on an outdoor lawn, inviting celebrities and anchors to interact with the audience.

Huahuaniu "Qingjue" light yogurt, cheese yogurt
Image source: Weibo @Huahuaniu

The "lively" Northeast soda circle also has cases. Zhenzhen, which focuses on lychee soda, has a good reputation, making Northeast students remember this brand from Guangdong Foshan since childhood. Even Genki Forest's lychee-flavored sparkling water was inspired by it.

Subsequently, Zhenzhen also launched a sugar-free lychee sparkling water with a refreshed packaging, and collaborated with Dunhuang IP and snack brand Mr. Beaver to launch gift boxes.

Zhenzhen Lychee ranks seventh on Ele.me's Shenyang soda love list
Image source: 2018 Tmall Double Eleven City Soda List

Zhenzhen sugar-free lychee sparkling water
Image source: Zhenzhen Food flagship store

From netizen feedback, the new products of Huahuaniu and Zhenzhen are relatively successful, with monthly sales of several hundred units not a problem. However, **we found that compared to classic products, the sales and popularity of these new products still lag behind.**

Although this proves the vitality of classic products, it is a bit awkward for brands trying to break into new circles. After all, **the empathy brought by "nostalgia" is limited. When they benchmark new products against new consumption, consumers are also making decisions with new eyes.**

Yogurt, sparkling water, snacks... all are arenas where blades clash and sparks fly. Thus, climbing the trend pyramid and standing shoulder to shoulder with new consumption, local brands will find that what lies ahead is not a sunny path but a more severe test.

**Local brands, harder to go national?**

##### **1. The brand evolution path has changed**

**Traditionally, national brands were mostly once local brands.** More precisely, they started as local factories.

Weilong, which recently passed its listing hearing, was founded in 1999, gained fame across Henan Province around 2005, and after 2010 invited multiple celebrities to endorse, tested online, expanded production capacity, and quickly spread across the national market.

ChaCha, which sells melon seeds nationwide, was founded in Hefei in 2001 and quickly expanded nationwide upon launch, but it wasn't until a decade later that it listed on the Shenzhen Stock Exchange.

The traditional path for brand upgrading is relatively fixed: often start locally, deeply cultivate offline channels, and after scale and production capacity expand to a certain stage, expand to other cities and nationwide. Therefore, it generally requires a long period of accumulation and cultivation.

**New consumer brands, on the other hand, are born in front of the stage, with factories of all sizes behind the scenes.** A common path is to first gain attention online, build sales and reputation, attract capital; then improve the team, develop new products, gradually expand channels online and offline, echo each other, and extend to more blank markets.

Online communication is characterized by point-to-surface, and its efficiency and flexibility are very suitable for brand building. According to data from the 2021 Tencent Smart Marketing Summit, among new product launches, 10% are only released offline, and 90% are released through a combination of online and offline. [8]

Think of Luckin, Heytea, and a host of "post-20s" new brands. For new consumption, being established for three to five years already makes you a senior player. Our ability to recognize brands can't keep up with their speed of launching new products.

So, for local brands, the old way of gradually cultivating channels and accumulating capital to become a national brand, while stable, is clearly at a disadvantage under the new rules and competitors.

##### **2. Talent and capital are in first-tier cities**

Have you noticed that the headquarters of many new consumer brands are in first-tier and new first-tier cities like Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou? Why?

**Because these places have people, money, resources, and consumers.**

In October, CBNData's New First-Tier Cities Research Institute, together with the China Chain Store & Franchise Association (CCFA), evaluated 37 cities and released a fashion consumption power index list. Overall, Shanghai, Beijing, Shenzhen, and Guangzhou continue to lead.

Top 10 of the Fashion Consumption Power Index (partial screenshot) Image source: New First-Tier Cities Research Institute

**These prosperous big cities also retain the most consumer-savvy companies and talent.** For example, the P&G alumni network, known as the "Whampoa Military Academy" of FMCG, is jokingly said to support half of the new consumer brands.

Media have publicly reported that founders and executives of brands like Jane's Yogurt, WonderLab, Meixianshuo, Manfen Niuniu, COOOOK Light Cooking, Plant Professor, and Lamian Shuo are all from P&G. The "P&G Alumni Association" even established the Baojiehui Venture Capital Fund to incubate new consumer brands in groups. Including the Alibaba and Tencent alumni networks, which are most familiar with the internet, they are also "supplying" talent to new consumption.

**New consumption is also very "money-burning."** The latest report from CBNData shows that, according to incomplete statistics, in May 2021 alone, the total financing amount in the consumer sector exceeded 10 billion yuan, with 29 brands receiving over 100 million yuan, surpassing the total for the whole of 2020. [9]

This proves that some money really is blown in by the wind. But this wind is not the northwest wind or the southeast wind, but called new consumption.

Distribution of food and beverage financing cases from 2018 to Q3 2021
Image source: Entrepreneur Bang's "2021 New Consumer Food and Beverage Brand Research Report" Data source: Ruishou Analysis

Naturally, we can understand why many new brands choose their first offline store in famous shopping malls in first-tier cities like Beijing and Shanghai. It's not that they have too much money to spend, but that being at the center of traffic makes it easier to be noticed and seen by the capital market.

Specifically for product launches, brand management, and marketing investment, big cities have more supporting resources, higher consumption levels, and gather the most young people, making them clearly more suitable for brand incubation.

In the "2021 New Consumer Brand Unicorn TOP30" and "2021 New Consumer Brand Future Unicorn TOP100" lists released by Lansha Consumption, **in terms of geographical distribution, Shanghai is the veritable capital of new consumer brands,** with 5 unicorn brands on the list, ranking second; and 27 future unicorns, ranking first, including M Stand and Daily Dark Chocolate. [10]

There are exceptions, such as Changsha, known as the "new consumer manufacturing machine." Although it is not a first-tier city, it shares many traits with first-tier cities, such as gathering young people, thriving night economy, and having its own traffic (as a top-tier internet-famous city).

##### **3. Continuous iteration and innovation**

Is the biggest difference between traditional local brands and new consumption a lack of innovation?

In 2015, a product called O, Ye! Coconut Milk appeared on the market. To promote it heavily, they spent a lot of money to invite Huang Xiaoming as spokesperson and invested in publicity on platforms like WeChat public accounts.

O, Ye! Coconut Milk with Huang Xiaoming as spokesperson Image source: Huierkang

According to the introduction at the time, this coconut milk "starts from the domestic health consumption trend, positioned as a high-end nutritional health drink, inspired by the traditional food of Lingnan coconut milk stew, using top coconuts from Sumatra Island and high-quality milk from New Zealand pastures, and uses a full skim technology to remove animal fat from milk that is harmful to the human body."

Doesn't that sound a bit like new consumption?

This product comes from Xiamen Huierkang Food Co., Ltd. Although the name sounds like a shoe brand, they are very professional in beverages. Winter melon tea, chrysanthemum tea, and red apple juice are all classic bestsellers, and they are also a major OEM factory for Wanglaoji. But this coconut milk, which was heavily promoted, not only I, but also Fujian friends familiar with Huierkang, said they had never heard of it.

Huierkang product series Image source: Huierkang Food Tmall flagship store

Now, it's hard to analyze what prevented its success. Was it too few channels, unattractive packaging, or insufficient promotional methods? Since it was a good product that fit the trend, why not continue to improve and iterate?

**The conclusion is that innovation has a cost.** For a brand or enterprise, when the cost of trial and error is too high, it's difficult to maintain high-frequency continuous innovation. This also explains why new consumption always "plays with capital"—**without the ability to continuously iterate and launch new products, it may not survive in this fierce competition.**

**Conclusion**

Stories of local brands making a comeback do exist.

Domestic beer is a highly monopolized and saturated industry. Wusu Beer from the northern foot of the Tianshan Mountains in Xinjiang gained attention for its unique positioning of high alcohol and slow sobering, and was later dubbed "Deadly Big Wusu" by netizens, quickly going viral on Weibo and Bilibili.

Thus, Wusu jumped from an unknown local beer to a new traffic star in the beer industry, paving the way for national expansion.

In hindsight, Wusu's unexpected rise may have involved luck, but its original regional characteristics and rare product positioning were the core of its popularity; capital support and a solid channel base were the strong assists after going viral.

Of course, how far Wusu can go remains to be seen. But it's enough to show that the window of new consumption is not closed to traditional brands. **The key is: are you unique enough? Do you have the ability to be seen? Are you always ready to strike?**

In the matter of building a brand, whether new consumption or traditional local, the essence they face is no different.

The only difference is that the rules of the game have changed. You can adapt, or you can choose to redefine.

An interaction: What classic local brands or products are there in your hometown? Which brands do you think have the potential to break through? Feel free to chat~

References:
[1] "Rejoicing with the People: Tianfu Cola's Mixed Reform Regains Ambition," July 2018, Chongqing Business Daily
[2] "Seeking IPO for the Third Time, Jinmailang Missed the Golden Period and Can't Cook a Good Bowl of Instant Noodles," March 2021, Zinc Finance
[3] "Heavyweight | Offline Channel Target 7.5 Billion, 2021 Will Be Genki Forest's 'Product Year,'" December 2020, Food Board
[4] "Dialogue with Genki Forest's Tang Binsen: Tycoon, Pirate, and Product Manager," November 2021, LatePost
[5] "2021 China Convenience Store Development Report," 2020, China Chain Store & Franchise Association
[6] "How Did Convenience Stores Become a Paradise for New Brands?," November 2021, Alphabet List
[7] "Old Drink Brand Bingfeng IPO: Total Assets 3.2 Billion but Raising 6.7 Billion, Nearly 60% of Funds for Marketing 'Aggressive' Breakthrough," July 2021, Sohu Finance
[8] "New Consumption, What Exactly Is It Changing?," October 2021, Advertise Gate APP
[9] "2021 China New Consumer Brand Growth Power White Paper," 2021, CBNData
[10] "2021 New Consumer Brand Unicorn TOP30" and "2021 New Consumer Brand Future Unicorn TOP100," October 2021, Lansha Consumption

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