Follow and star ↑↑「New Distribution」 See how many friends are following industry trends with you In the FMCG "red ocean," the beverage industry's competition and pace of change are second only to the internet. In the first eight months of 2019, news such as Huiyuan Juice selling to Tiandi No.1, Luckin Coffee's rapid IPO, Robust restarting its bottled water business, and the China-Thailand Red Bull dispute dominated headlines. In short, the beverage world is never short of conflict. It's said that the world of martial arts is not about fighting but about human relationships; young people who charge ahead blindly find it hard to succeed in the beverage industry. In 1982, when 26-year-old Steve Jobs persuaded John Sculley, then president of Pepsi-Cola, to join Apple, he famously said: "Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?" But what happened? A few years later, Jobs was outmaneuvered by Sculley. China's beverage market has similar situations. Although many companies and brands have come and gone over the decades, it's the "old guys" who endure, especially the toughest of them. Drinking beverages is something our ancestors mastered long ago. In the painting "Along the River During the Qingming Festival," there is a stall with a banner reading "Fragrant Drink," offering beverages for people to cool off in summer. According to "Dreams of the Eastern Capital," during summer, stalls selling "ice-cold water" and "lychee paste" were popular at intersections in Bianliang. From the Ming and Qing dynasties onward, the water quality in Beijing was poor, mostly from bitter wells. The royal family had water transported from Yuquan Mountain in the west, entering the city through Xizhimen, which is why water wave patterns are carved on the city gate. Abroad, the same was true: once conditions allowed, nobles demanded higher quality water. In 1826, the Duke of Savoy in France sold the world's first bottled mineral water, named after its source, Evian, officially starting the bottled beverage era. Mainland China only introduced bottled beverages in the 1920s when Coca-Cola entered the Shanghai concessions. The initial translation, "Kedou Kenla" (tadpole chewing wax), was inelegant and reminiscent of Chinese herbal medicine, so it sold poorly. To change this awkward situation, Coca-Cola publicly offered a £350 prize for a new translation. Ultimately, Chiang Yee, a Shanghai professor living in Britain, won the prize with "Coca-Cola," which was both phonetic and had a good meaning. · 1930s, old Shanghai Coca-Cola bottling line Getting such a great brand name for £350 was a bargain. Moreover, due to their emphasis on intellectual property, Coca-Cola even profited from many of their advertising designs later. When Gao Xiaosong was filming the movie "The Grandmaster," he wanted to paste old Coca-Cola ads on street trams to create a period feel. He hoped to get sponsorship from Coca-Cola, but instead received legal requirements to pay usage fees, have the trademark reviewed, and reshoot if it didn't match the era's trademark, causing extra trouble. Driven by Coca-Cola, many local Chinese beverage brands began to emerge rapidly. In 1932, China's first bottled beverage factory, Qingdao Laoshan Mineral Water Factory, was established. However, due to years of war, production remained limited, and until 1980, it was still the only mineral water factory in the country. Like Laoshan, other domestic beverage brands that rose with Coca-Cola were mostly local, with limited influence beyond their regions. Examples include Beijing's Beibingyang soda, Tianjin's Shanhaiguan soda, Shenyang's Bawangsi soda, Wuhan's Erchang soda, Sichuan's Tianfu Cola, and Guangzhou's Asia Soda. These old brands from the Republican era mostly imitated Coca-Cola in bottle shape and taste, and even today, they are familiar to locals but unknown to outsiders. Beyond marketing strategies, the rise and fall of many local soda brands were closely tied to the entry and competition of foreign capital (mainly Coca-Cola and Pepsi). Beibingyang soda is a typical example. In 1936, Wang Yusheng, nephew of former Hubei military governor Wang Zhanyuan, opened the Beiping Ice Factory. After liberation in 1949, it was taken over and renamed Beijing New Ice Factory. In 1951, it began producing Beibingyang soda, with the snow mountain white bear trademark still in use today. In 1985, Beibingyang Food Company was formally established and soon exceeded 100 million yuan in output value. To accelerate international integration, in 1988, Beibingyang signed a cooperation agreement with Pepsi-Cola, but due to inexperience, it nearly lost half its life. Beibingyang believed the cooperation was limited to its factory producing Pepsi, Mirinda, and 7UP, but Pepsi had other ideas. In the agreement, the US side invested $8.4 million compared to China's $3.7 million, giving the US side a majority, allowing them to focus only on their own interests and ignore Beibingyang's development, leading to production cuts and halts. As Beibingyang's deputy general manager Xing Huiming put it: "Americans are very shrewd; their goal is never to help Beibingyang grow. They want not only Beibingyang's sales channels but also our beverage market." It wasn't until 2007 that China regained Beibingyang's operating rights in negotiations with Pepsi, on the condition that "China would not produce any carbonated beverages under the Beibingyang brand for four years." In 2008, Beijing Yili Food Company took over the Beibingyang brand and gradually revived it by improving formulas and sponsoring Beijing-style TV dramas. In the early days of reform and opening up, Chinese beverage "veterans" lacking capital experience made similar mistakes to Beibingyang. At that time, due to policy restrictions, international beverage giants like Coca-Cola and Pepsi could not enter the Chinese market on a large scale, so they often cooperated with local beverage brands, investing in shares to enter, and eventually using capital to seize market channels and suppress local brands, reaping all the benefits. In 1902, British merchant Messers invested in Tianjin to establish the Shanhaiguan Soda Factory, whose development was strikingly similar to Beibingyang. After the founding of New China, British capital withdrew, and the Tianjin government took over. In 1986, seeking further development, Shanhaiguan introduced Coca-Cola capital to form Tianjin Jinmei Beverage Co., Ltd. Subsequent facts proved that Coca-Cola only cared about Shanhaiguan's sales channels, not its survival, and even took a "kick them when they're down" attitude. At that time, the Tianjin government allowed township enterprises to produce Shanhaiguan soda to boost GDP, but Jinmei, led by Coca-Cola, refused to supply production materials to these enterprises, leading to a flood of low-quality Shanhaiguan soda that damaged the brand's reputation. By around 2000, it disappeared from the market. It wasn't until 2008, after Coca-Cola withdrew, that Shanhaiguan Beverage Co., Ltd. was established, and Shanhaiguan soda reappeared. It was no coincidence that Beibingyang and Shanhaiguan both returned to Chinese hands in 2008; that year, the central government implemented the Anti-Monopoly Law, affecting many domestic beverage companies, not just these two. In 1920, Zhu Shouchen, owner of Beijing Shuanghesheng Brewery, built the first factory of Bawangsi Soda Factory at "Bawangsi Well" in Fengtian. After expansions in 1925 and 1928, it became a famous soda brand in China and remained one of the three largest soda factories until the early reform era. In 1993, Coca-Cola's capital also entered Bawangsi Soda Factory, quickly seizing its trademark and sales channels, and it disappeared from the market in 1995. In 2003, after a three-year international lawsuit by Shenyang lawyers, the Bawangsi brand was recovered. Sichuan's Tianfu Cola and Guangzhou's Asia Soda suffered similar fates, and since the process was too similar, I won't elaborate here. They all became victims of the two international giants' entry into the Chinese market. Even if their products still appear today, there's little hope of restoring their former glory. "Past experience, if not forgotten, is a guide for the future." The veterans' failures opened market opportunities for newcomers, but also made post-reform beverage brands wary of foreign capital, making the game more exciting. Some used foreign capital to grow rapidly, some missed opportunities, some forcefully expelled foreign capital, and some defended against foreign capital but died from political-business relationships. The first domestic beverage giant to rise after reform and opening up was undoubtedly Jianlibao, founded by Li Jingwei in 1984. Li Jingwei, who grew up in an orphanage, had just turned around the Sanshui County Distillery as deputy director. He was shrewd at business and relationships. Before becoming deputy director, he was the deputy director of the county sports committee, a position he "begged" for after building a good relationship with the county armed forces leader on the basketball court. But who would have thought that Li Jingwei would ultimately "die" from a broken relationship with leaders? On a business trip to Guangzhou, Li Jingwei drank canned Coca-Cola and loved it. Calculating that producing such beverages was more profitable than making liquor, he decided to enter the beverage business and began searching for a suitable formula. In 1984, after buying a "tonic" formula developed by the Guangdong Sports Science Research Institute that supposedly helped athletes recover quickly, the 45-year-old Li Jingwei restructured the state-owned county distillery into a Jianlibao production enterprise. Subsequently, Li Jingwei not only personally designed the sporty Jianlibao logo but also bet all his assets on sports marketing, sponsoring the Chinese delegation to the Los Angeles Olympics for 280,000 yuan, which made the brand an instant success, achieving 200 million yuan in annual sales within two years. This sponsorship also forged a bond between Li Jingwei and Li Ning, who was 24 years younger. The boss (as Li Ning always called Li Jingwei) not only sponsored Li Ning's retirement ceremony at Shenzhen Gymnasium in 1988 but also funded the establishment of the "Li Ning" brand. When funding Li Ning's personal brand, Li Jingwei had already foreseen the constraints of Jianlibao's unclear property rights. After Jianlibao topped the beverage industry in sales, taxes, and profits for six consecutive years from 1991 to 1996, Li Jingwei faced his "endless war" with the Sanshui government in 1997. In 1997, Li Jingwei insisted on moving Jianlibao's headquarters, with annual sales exceeding 6 billion yuan, to Guangzhou and building a 38-story Jianlibao Tower. To prevent Li Jingwei from leaving, Sanshui officials tightened control over Jianlibao's personnel and finances, playing against him. In 1998, the 59-year-old Li Jingwei faced retirement issues for state-owned enterprise managers, and only one of the main Sanshui leaders supported his retention, creating a situation of pressure. The following year, the Sanshui government underwent elections, and old leaders with ties to Li Jingwei left, making the situation even more uncontrollable. Under such circumstances, Li Jingwei harbored hopes of an MBO (management buyout) of Jianlibao, but it was vetoed by the new Sanshui mayor, Li Yiwei, the day before signing, and instead sold to Zhang Hai, who had made his fortune from "special abilities" since childhood. At the signing ceremony where Zhang Hai won control of Jianlibao, Li Jingwei, left aside, looked up with tears in his eyes. Nine days later, he suffered a cerebral hemorrhage at home and was hospitalized. This was not the end for Li Jingwei. In 2002, Li Jingwei was reported for corruption and placed under surveillance in the hospital, with all expenses covered by Li Ning. The case dragged on, and in 2009, a bedridden Li Jingwei forced himself to appear in court. In 2011, he was sentenced to 15 years in prison by the Foshan Intermediate Court (Sanshui had become Sanshui District of Foshan in 2003) and had 150,000 yuan of personal property confiscated. He died in 2013 with regret. · Li Jingwei's funeral After Zhang Hai and subsequent managers' mismanagement, Jianlibao had long lost its "Oriental Magic Water" brand influence. When Jianlibao was thriving in the 1980s, outperforming Coca-Cola and Pepsi, it inspired many to see the market potential in China's beverage industry and enter the field. In 1989, Longhuan Company (predecessor of C'estbon) launched the first bottle of purified water in China, priced at 2 yuan per bottle, a price that remains stable to this day. Also in 1989, He Boquan founded Robust Health Products Co., Ltd. in a small office of less than 10 square meters in Zhongshan City with 950,000 yuan funded by the town government. He quickly launched a yogurt drink marketed as "a new generation of high-grade natural health beverage," which became a favorite among children. Around 2000, Robust fully entered the drinking water market. In 1989, Zong Qinghou, who had sold popsicles and managed a school-run enterprise distribution department, also targeted the children's health products market and founded Wahaha. After making his first fortune with Wahaha Children's Nutritional Liquid, Zong saw the chaos in the health products industry and quickly exited, launching Wahaha Purified Water in 1996 and Future Cola in 1998. In 1991, Zhuhai Jialinshan Mineral Water Company launched China's first barreled water, with a capacity of 5 gallons, but at a high price of 120 yuan per barrel, the consumer base was very small. In 1992, Zhu Xinli, a frontrunner for deputy county magistrate, decided to start his own business. Two years later, he founded Huiyuan in Beijing, focusing on the juice market. In 1993, Zhong Shanshan, who had been a journalist and agent for Wahaha products, founded Yangshengtang in Hangzhou to make health products, and in 1996, he incubated Nongfu Spring. Wahaha, Huiyuan, and Nongfu Spring needed time to grow into industry giants. Coca-Cola and Pepsi had just been allowed into China in 1993 and hadn't yet dominated the mainstream market. The industry star of those years was Hebei Xurisheng, which launched a tea drink series. Despite a wide product line, Xurisheng Iced Black Tea was undoubtedly the most famous product of Xuri Group. Chinese people have a special attachment to tea, and the concept of "iced tea" wasn't new; as early as the Ming Dynasty, Chinese people had the habit of drinking iced tea, even though the role of flavorings in tea drinks far outweighs the tea elements. Jianlibao originated from the Samsui County Distillery, while Xuri Group was a more thorough state-owned enterprise, transformed from the Jixian Supply and Marketing Cooperative in Hengshui. Its development relied entirely on the push of Duan Hengzhong, the cooperative's party secretary and director. Hengshui has rich experience in nurturing beverage companies. Besides the ancient Hengshui Laobaigan liquor, after Xurisheng, there was Hebei Yangyuan, famous nationwide for "Six Walnuts." Duan Hengzhong was 39 when he took over the Jixian Supply and Marketing Cooperative in 1990. He spent three years reforming the cooperative's chaotic personnel and inefficient operations, and in 1993, he formally established Hebei Xuri Group, with Duan as chairman. A year later, Xuri Group claimed to have spent 30 million yuan developing Xurisheng Iced Tea, a combination of tea and carbonated beverage. Because Xurisheng Iced Black Tea spent lavishly on advertising blitzes in Beijing, Tianjin, and Hebei, sales reached over 50 million yuan within a year. Using this money, Duan Hengzhong acquired multiple beverage production lines and, through leasing factories or contract manufacturing, quickly opened 23 branch companies nationwide. With increased capacity, Xurisheng Iced Tea sales climbed year by year, exceeding 500 million yuan in 1996 and reaching a new high of 3 billion yuan in 1998, a miracle in the industry. In 1999, to ensure stable development, Xuri Group imitated Coca-Cola by registering the "iced tea" concept as a proprietary trademark. The result was clearly not protected; today, the most famous producers of bottled iced tea are Taiwan's Master Kong and Uni-President. Xuri Group's downfall was not due to following Jianlibao's path but to internal financial mismanagement and external market competition. In 1999, as Xuri Group reached its peak, the inherent flaws of the supply and marketing cooperative system resurfaced due to lax management. The nationwide sales system was almost entirely controlled by locals from Jixian in key positions, and the group only used payment collection as the primary performance metric. This led to rampant kickbacks between distributors and sales managers, and to earn more commissions and bonuses, salespeople encouraged distributors to hoard stock, causing overstocking and unsold goods in the same region, leading to a vicious cycle. In contrast, Wahaha's major reform of its distribution system after its big development was very wise. Initially, Wahaha expanded nationwide through state-owned sugar, wine, non-staple food, and pharmaceutical wholesale companies and their sub-stations. In the mid-1990s, Zong Qinghou felt this channel strategy would hinder future development, so he overruled objections and implemented a "deposit system" for distributors: distributors had to pay a deposit to Wahaha each year and settle transactions one by one. In return, Wahaha offered more favorable policies and interest on deposits higher than bank rates. Later, Zong Qinghou implemented this distribution system as a joint sales model, achieving leapfrog development for Wahaha. The recent reforms due to e-commerce channel impact are a later story. Facing Xuri Group's problems, Duan Hengzhong also made bold reforms, splitting the group into five business divisions and hiring outside managers, but it was too late because two stronger external competitors had already risen. While Xuri Group was mired in trouble, Uni-President launched green tea in 1998, and Master Kong quickly introduced a series of tea drinks in 2000. Combined with Coca-Cola and Wahaha's frequent attempts in this field, Xuri Group was caught in a pincer attack. Bill Gates said it well: a company is always only 18 months from bankruptcy. By 2001, Xuri Group's market share had fallen from a peak of 70% to 30%, and it continued to decline year after year. Xuri became the setting sun. People didn't hear about Xuri Group again until 2011, when Huiyuan Group acquired all 164 trademarks, including "Xurisheng," for 12.01 million yuan. Huiyuan briefly resumed production of Xurisheng beverages but gave up completely three years later, as even Huiyuan itself was in dire straits. Huiyuan Juice is also a large beverage enterprise that emerged from a state-owned enterprise. Huiyuan's soul figure, Zhu Xinli, born in 1952 in Yiyuan County, Shandong Province, maintained a simple farmer's appearance and accent even after becoming a billionaire, easily giving an amiable impression. Of course, countless entrepreneur stories tell us that judging by appearance is the least reliable. Poverty in his childhood left a deep mark on Zhu Xinli. With little education, he seized every opportunity to improve his economic situation. He made his fortune in transportation in his youth and excelled in both business and politics, being elected village committee director and leading villagers to common prosperity. From the start, Zhu Xinli recognized the advantages of the mountainous area, leading villagers to abandon corn and plant grapes with higher market value. Within a few years, Dongli East Village became a famous "10,000-yuan household village." Due to his outstanding achievements, Zhu Xinli became a key county reserve cadre. At 37, he was sent to study at the Shandong Economic Management Institute. After returning, he was appointed deputy director of the county foreign economic relations and trade commission, and in 1992, he was a hot candidate for deputy county magistrate. Clearly, Zhu Xinli did not become deputy county magistrate but resigned to start his own business, becoming one of the "92 generation." Initially, Zhu Xinli took over a county-run cannery that had been shut down for three years and was in debt of 10 million yuan, renaming it Shandong Zibo Huiyuan Food Co., Ltd. Over the next year, by introducing German fruit processing equipment and participating in German food exhibitions, he won the factory's first big order, reviving it. With this confidence, in 1994, Zhu Xinli led a team of over 30 people to Beijing Shunyi and founded the fully private Beijing Huiyuan Food and Beverage Co., Ltd., which is today's Huiyuan. In the following years, through advertising methods like sponsoring the News Broadcast time signal and Spring Festival Gala, Huiyuan grew rapidly, reaching 1.2 billion yuan in annual sales and a 23% share of the national juice market by 2000. Also in 2000, seeking ample funds for further market expansion, Zhu Xinli, who had studied at the Economic Management Institute, began the capital games that would later bring him both joy and sorrow. Zhu Xinli first approached the "D'Long system" led by Tang Wanxin. At that time, D'Long, known as "China's No. 1 village," was in its heyday. Tang Wanxin, who loved drinking and hunting, had grown D'Long from a small enterprise in the northwest border into a financial empire controlling assets over 120 billion yuan, dreaming of "big industry integration," and the only thing he lacked was not money. · Tang Wanxin In March 2001, Huiyuan and D'Long jointly established "Beijing Huiyuan," with D'Long investing 510 million yuan in cash for 51% and Huiyuan contributing equipment and technology for 49%. Zhu Xinli used these funds to add over 20 large production bases nationwide. Of the 14 PET production lines in the country, Huiyuan had 11, making it extremely prominent. However, as D'Long, keen on capital games, fell into trouble due to the Shanghai index crash in 2001 (from 2000 points to 1300 points), Zhu Xinli began to taste the backlash of capital. To support the market, D'Long started borrowing from Huiyuan, robbing Peter to pay Paul, taking 380 million yuan from Huiyuan in one year. This made Zhu Xinli feel that continuing cooperation with D'Long was not a good deal. D'Long had originally promised 510 million yuan in equity investment but only 300 million actually arrived, and now they had borrowed 380 million. Over time, Huiyuan would be dragged down. So he proposed to D'Long: within one week, whoever could come up with 800 million yuan first could buy the other's shares. The day after the agreement, Zhu Xinli raised 200 million yuan through cooperation with the Shunyi County Party Committee, successfully parting ways with the D'Long system. There was no shortage of criticism that Zhu Xinli was short-sighted, but in 2003, when the D'Long system collapsed under macro-control and Tang Wanxin was imprisoned, such voices quickly disappeared. After parting with D'Long, Zhu Xinli proposed the theory of "cooperation before listing, industrial investors before financial investors," continuing to attract funds. In 2005, Huiyuan split its juice business into "China Huiyuan Juice Holdings," and Uni-President Group invested 250 million yuan for a 5% stake. In 2006, Zhu Xinli again brought in $220 million in financing from France's Danone, US Warburg Pincus, the Netherlands Development Bank, and Hong Kong's Value Partners, paving the way for listing. On February 23, 2007, Huiyuan Juice successfully listed on the Hong Kong Stock Exchange, rising 66% on IPO day with a market value of HK$2.4 billion, the largest IPO in Hong Kong that year. With the successful hosting of the 2008 Beijing Olympics and rising national sentiment, Huiyuan, which had long promoted itself as a "national brand," also benefited greatly, reaching its peak. Zhu Xinli, who received the "CCTV China Economic Person of the Year" award in 2008, may have forgotten the old saying from before 2000: "What you gain from, you lose from." Shortly after receiving the CCTV award, media reported that Huiyuan's sales were declining, and acquisitions and investments in new factories led to high debt ratios, with depreciation and land use rights amortization eating into profits. Feeling pressured, Zhu Xinli proposed divesting the juice production and sales business to focus on the upstream juice industry as a pure juice raw material supplier. But this transformation plan failed at its first step—Huiyuan Juice's "sale" to Coca-Cola was unsuccessful. On September 3, 2008, Coca-Cola announced it would acquire all of Huiyuan Juice at HK$12.20 per share, totaling HK$17.92 billion. Zhu Xinli, holding 41.53%, would have cashed out HK$7.4 billion. This was Coca-Cola's largest acquisition outside the US at the time. The news caused an uproar, especially against the backdrop of Beibingyang and Shanhaiguan sodas just breaking free from foreign brands. Voices saying "don't sell the national brand Huiyuan to foreign companies" poured in. After several twists, on March 18, 2009, the Ministry of Commerce ruled under the Anti-Monopoly Law that the acquisition would have adverse effects on competition and prohibited it. This made Huiyuan the first company to fail an acquisition review since the Anti-Monopoly Law was implemented in 2008. Missing this opportunity, Huiyuan's performance stagnated thereafter. In an era when internet companies frequently accept cross-border financing, the failure of an acquisition due to national sentiment seems ridiculous, but it happened just 10 years ago. Compared to the failed Coca-Cola acquisition of Huiyuan in 2008, it's easier to understand why in 2007, Wahaha chairman Zong Qinghou used a "mass movement" to stir public opinion and drive France's Danone out of the board. As a global food giant, Danone is now best known in China for Evian and Mizone. In 1996, when Danone was eyeing the Chinese market, it saw Wahaha's potential and invested $45 million plus 50 million yuan in trademark transfer fees to form a joint venture with Wahaha, with Danone holding 51% and Wahaha 49%. This investment was lucrative for Danone, which received over 3 billion yuan in profits from the joint venture over the next 10 years. In 2006, Danone's new chairman of the joint venture, Fan Yimou, discovered that Zong Qinghou had established a series of non-joint-venture companies owned by state-owned enterprises and employees outside the joint venture, with profits not attributed to the joint venture but only to Wahaha's books. Believing this seriously harmed Danone's interests, he proposed that Danone acquire 51% of Wahaha's non-joint-venture companies at a net asset price of 4 billion yuan (a very low price for Wahaha). The proposal was naturally rejected outright by Zong Qinghou. To gain support, Zong, far more adept at fighting than Danone, used nationalism and patriotism to stir public opinion. The two sides fought 29 international commercial disputes, even involving the heads of state of China and France in mediation. Finally, on September 30, 2009, Wahaha paid 3 billion yuan to get Danone to withdraw from the joint venture. The "Danone-Wahaha dispute" was called by many media "the most influential international commercial war in the 30 years of reform and opening up." The direct effect was that Zong Qinghou's family topped the Hurun China Rich List twice, in 2010 and 2012. To avoid being on the "kill list," Zong told reporters in 2013 that his family had all renounced their US green cards, had no foreign nationality, and had no immigration plans. After the breakdown of the relationship between Wahaha and Danone, financial writer Wu Xiaobo wrote a column titled "'Victim' Zong Qinghou" criticizing him, arguing:
The beverage industry has long been a fully competitive field; national policy has no need for protection. In such a field, calling for protection in the name of "national righteousness" is a bit laughable, as if the world is empty. After the column was published, Wu Xiaobo and Zong Qinghou, both from Hangzhou, ended their friendship. They lost the intimacy they had when writing "Very Marketing" and had no contact for years. It wasn't until later, when Wu Xiaobo started his own media and attended various summits, that they shared a stage, along with Lenovo's Yang Yuanqing. The three chatted awkwardly for over ten minutes before leaving. China, with 20% of the world's population, is a huge market, and it's natural for multinational beverage giants to want a piece. Failure is common, and Danone is a typical example of not understanding the Chinese market. To capture the Chinese market, Danone, besides investing in Wahaha, also acquired 92% of Robust's equity in 2000. This time, it wasn't expelled, but Robust didn't achieve Wahaha-style success either. In 2016, Danone sold all its Robust assets to Yingtou Holdings, completely divesting. After the failed partnership with Coca-Cola in 2008, Huiyuan Juice continued to be listed in Hong Kong, and Zhu Xinli continued his strategy of upstream industry layout. In the 2011 TV drama "Country Love Symphony" ("Country Love 4"), Zhu Xinli personally attended the ceremony for acquiring Xie Yongqiang's orchard in Xiangyao Village, making him the most high-profile cameo. · Zhu Xinli at the "Country Love 4" press conference Layout requires burning money. To seek funds, in 2017, Huiyuan fell into trouble again due to Zhu Xinli's capital games. Zhu Xinli had always held the title of senior economist at Huiyuan Group, but at this time, he was doing things completely contrary to that title. From August 15, 2017, to March 29, 2018, at Zhu Xinli's direction, Huiyuan Juice provided 4.282 billion yuan in short-term loans to Beijing Huiyuan Beverage (a company in which Zhu Xinli held most shares, not part of the listed entity) to meet temporary working capital needs and repay debts. It's worth noting that Huiyuan Juice's market value at that time was only HK$5.397 billion. Zhu Xinli moved 4.282 billion yuan, essentially emptying the company. Because this operation was not approved by the board, no agreement was signed, and it was not disclosed, seriously violating Hong Kong Stock Exchange rules, Huiyuan Juice has been suspended since April 3, 2018. Before the formal suspension, one of Huiyuan's major shareholders, Temasek Holdings, which knew about this, had already broken with Zhu Xinli. At the end of March, it sold all its 8.23% stake in Huiyuan Juice at once, causing a sharp drop and fully exposing the facts that Huiyuan Juice had been loss-making for six consecutive years, was burdened with over 10 billion yuan in debt, was robbing Peter to pay Paul, practiced nepotism (many key positions held by Zhu's relatives), and relied mainly on government subsidies as income, leading to widespread market skepticism. From January to February 2019, Huiyuan, with sharply declining shipments during the Spring Festival, faced another debt crisis, with six executives leaving within 22 days. The Hong Kong Stock Exchange set conditions for Huiyuan Juice to resume trading; if it failed to meet them by January 31, 2020, its listing status would be cancelled. After basic needs were met by giants, many newcomers in China's beverage industry began to occupy the market with various functional gimmicks, such as natural water from "nature's porter," herbal tea for reducing heat, walnut milk for brain health, almond dew for beauty, functional drinks for anti-fatigue, and trendy tea shops for social media check-ins. But none were as creative as Coconut Palm's coconut juice, which claimed to enhance breasts. Due to years of soft-porn advertising, in 2019, Coconut Palm made headlines several times for its latest slogan "Drink it from childhood to adulthood." Many people didn't expect this Hainan-based company to have such tropical flair, almost ready to compete with various breast-enhancement products and micro-businesses. After the incident escalated, the Haikou Industry and Commerce Bureau intervened, but as you know, as a local pillar enterprise, such investigations often fizzle out. The biggest significance of this incident is that it made more people aware of the past of Wang Guangxing, the leader of Coconut Palm Group. This "neighbor Wang" is not just concerned about young women's chests. Now 78, Wang Guangxing is a typical self-made man from humble beginnings. He lost his father in childhood, and his mother raised three children by selling old clothes. After junior high school, Wang Guangxing became a temporary worker at the Haikou Canned Food Factory, the predecessor of Coconut Palm Group. His intelligence and diligence caught the leader's attention, and he was promoted to office clerk, rising rapidly. Not only could he please leaders, but Wang was also good at management. Wherever he became a workshop director, the workshop would quickly improve, making him a well-known talent in the local beverage industry. In 1983, Wang Guangxing was transferred to the troubled Haikou Beverage Factory as a reform director, turning losses into profits within a year. In 1985, he was again transferred to the Haikou Electronics Industry Corporation, which was on the verge of bankruptcy, and again achieved the miracle of turning losses into profits within a year, gaining fame. Because of these achievements, Wang Guangxing was transferred back to the Haikou Canned Food Factory in 1986 as a "firefighter" to lead reform, as the previous four directors in five years had failed to revive it and had made things worse. Wang Guangxing once again demonstrated his exceptional business acumen. By splitting the factory into nine units responsible for their own profits and losses, breaking the "iron rice bowl" and switching to piece-rate wages, he quickly turned the situation around. Soon, seeing the low profit margins of canned products, Wang Guangxing set his sights on the coconut juice market. He offered a 5% product profit reward to R&D personnel, quickly overcoming the oil separation technology that plagued the entire coconut juice industry, and firmly adopted the quality control standard still used today: "Fresh coconut meat squeezed, no coconut pulp added, no flavorings added." In advertising and marketing, Wang Guangxing was equally adept. Besides making Coconut Palm coconut juice a beverage for the Diaoyutai State Guesthouse, he began using soft-porn slogans like "white and tender" to bombard streets and alleys nationwide. In the 1999 Spring Festival Gala ad, a model in scant clothing held Coconut Palm coconut juice and told the nation about the benefits of "one cup a day, white and tender." It's unclear how it passed review back then. Due to the special era's imprint, many older Chinese entrepreneurs show a longing for "Mao-style management philosophy," with Zong Qinghou and Wang Guangxing being prime examples. They are absolute in their companies, and they play "idol worship" quite well, always showing off their vigor by swimming across the Yangtze at 70 or diving into the sea at 80. It's not hard for one person to want to be a leader; the hard part is how to balance when a group wants to be leaders. From near bankruptcy to dominating a single category nationwide, Wang Guangxing had help from capable people, one of whom was Ke Lanting, responsible for packaging design. Ke Lanting was a somewhat famous painter in Haikou. After being invited repeatedly by Wang Guangxing, he agreed to design the packaging for Coconut Palm. Later, Ke Lanting and Wang Guangxing jointly became inventors of over 10 Coconut Palm coconut juice appearance design patents. As Coconut Palm coconut juice succeeded nationwide, Ke Lanting, as the packaging patent owner, naturally benefited greatly. But in 1998, Ke suddenly discovered that the hundreds of millions of trademark papers consumed annually from 1994 to 1998 were supplied by a small enterprise without even printing qualifications, at prices clearly higher than market average. Coconut Palm Group had spent an extra 72.468 million yuan on this alone. Due to Ke Lanting's insistence, this gradually developed into the sensational "Coconut Palm Group 70 Million State Assets Case." The Haikou Discipline Inspection Commission and Supervision Bureau investigated for over two months but concluded with "lack of factual basis, difficult to determine." More suspiciously, on the afternoon of March 4, 1999, when Ke Lanting went to Coconut Palm Group to report the situation, he was slashed 12 times at the company gate, requiring over 100 stitches to save his life. The case remains unsolved. Who ordered the attacker is only speculation, but for nearly 20 years after being slashed until his death, Ke Lanting did only one thing besides painting: he fought lawsuits against Wang Guangxing and Coconut Palm Group, though his appeals never succeeded. The only certainty is that the truth is far more complex than we imagine. In several confrontations between the two parties, Coconut Palm Group revealed that Ke Lanting had repeatedly blackmailed them before exposing the "70 million state assets case," demanding cars, houses, and shares. Ke Lanting himself admitted in interviews that without personal interests, he wouldn't have persisted in appealing. Now that Ke Lanting has passed away, Wang Guangxing has one less worry, but the bigger worry of equity has never allowed him peace, even once threatening his position. In fact, Wang Guangxing was one of the earliest state-owned enterprise leaders to advocate property rights reform. As early as 1989, shortly after turning the Haikou Canned Food Factory around, he experimented with an internal shareholding cooperative system. In 1994, Coconut Palm Group was listed by the State Council as one of the 100 pilot units for establishing a modern enterprise system in Hainan Province. If Coconut Palm Group had been in another province, it might have completed property rights reform long ago. Unfortunately, in Hainan Province, which follows the strategy of "marrying off ugly daughters first," poorly performing state-owned enterprises were quickly cast aside, while Coconut Palm, as the only standout, was cherished by leaders who didn't want to let go. Coupled with the impact of Lang Xianping's 2003 debate on state-owned enterprise reform, Wang Guangxing's MBO plan was urgently halted, dragging on for several more years. It wasn't until 2006 that the Haikou Municipal Government approved the "Coconut Palm Group Co., Ltd. Restructuring Implementation Plan," selling all state-owned assets to the Coconut Palm employee shareholding association, completing the transformation. But this left Wang Guangxing with a Coconut Palm Group with dispersed equity. He tried various ways to increase his stake and control decision-making but failed, and due to intense internal competition, he faced accusations of "forcing and luring employees to sign, expressing support for the founder to hold more shares." However, in Coconut Palm Group's official announcements, it was a different scene: at a backbone meeting, Wang Guangxing, who resigned in tears, was strongly retained by the backbone members and had to continue... Whether Wang Guangxing is a drama queen or not, he did complete the restructuring and kept his leadership. In this regard, Coconut Palm coconut juice is much luckier than Wang Laoji herbal tea. After the disastrous defeat in the "red-green dispute," Chen Hongdao, chairman of Hongdao Group, had a fire that no amount of herbal tea could quench. Wang Laoji herbal tea, which has existed since the Daoguang period of the Qing Dynasty, is highly popular in Guangdong. Chen Hongdao, born in Dongguan, naturally loved it since childhood. The herbal tea formula, invented by Wang Zebang (nicknamed Wang Aji), was the greatest legacy he left to his descendants. The Wang family opened the first herbal tea shop in 1885. After the founding of New China, through various transformations, the property rights were taken over by the Guangzhou Pharmaceutical Corporation (formally transformed into Guangzhou Pharmaceutical Group in 1996). Many state-owned enterprises have the flaw of having a divine weapon but not using it well, and Guangzhou Pharmaceutical Group was no exception. Its green Tetra Pak Wang Laoji herbal tea failed to open the market for years. So in 1995, it licensed the production of the more familiar red-can Wang Laoji herbal tea to Hongdao Group, run by Chen Hongdao, for an annual fee of 3 million yuan, with a lease term of 15 years. The two packaging types coexisted in the market for a long time, but red-can Wang Laoji far outsold the green. · Chen Hongdao Under Chen Hongdao's leadership, the slogan "Afraid of getting hot? Drink Wang Laoji" successfully captured consumer minds. Combined with marketing tactics like the 100 million yuan donation after the Wenchuan earthquake, red-can Wang Laoji quickly captured the national market, becoming the second local beverage brand after Jianlibao to surpass Coca-Cola in market share in China. As red-can Wang Laoji's annual sales exceeded 10 billion yuan, the problem of "easy to share hardship, hard to share wealth" arose between Guangzhou Pharmaceutical Group and Hongdao Group. Seeing the country covered in red, Guangzhou Pharmaceutical Group, which held the green boxed Wang Laoji but saw no improvement and only collected 3 million yuan in brand fees annually, naturally had thoughts. This contradiction fully erupted after Hongdao Group's license expired in 2010. In November 2010, at a press conference, Guangzhou Pharmaceutical Group announced that the Wang Laoji brand value had exceeded 108 billion yuan and that it was seeking new partners globally, which was tantamount to publicly revealing its conflict with Hongdao Group. Hongdao Group insisted that in its cooperation agreement with Guangzhou Pharmaceutical Group, it had successfully extended the Wang Laoji trademark lease to 2020. The two sides argued in court, and in May 2012, the China International Economic and Trade Arbitration Commission ruled that Hongdao Group must stop using the Wang Laoji trademark. The subsequent facts are well known: the red-green dispute between Guangzhou Pharmaceutical and Hongdao became a red-gold dispute. Hongdao Group continued to expand the market with gold-can JDB, and during ground promotion, there were multiple "physical altercations" with Wang Laoji. Hongdao Group's claim that the Wang Laoji trademark lease had been extended to 2020 was not unfounded. As early as 2002, Chen Hongdao had noticed this issue and, in 2002 and 2003, bribed Li Yimin, former general manager of Guangzhou Pharmaceutical Group, with over HK$3 million to secure Li's promise to extend the license to 2020. But in 2005, the case was exposed. Li Yimin was sentenced to life imprisonment, and Chen Hongdao was arrested but released on bail and fled to Hong Kong, preventing the renewal. In 2019, the two sides continued to have various lawsuits. Another beverage brand that faced a trademark dispute like Wang Laoji is Red Bull. Red Bull, which originated in Thailand but is headquartered in Austria, belongs to Thailand's TCP Group. When it first entered the Chinese market in 1995, it chose to cooperate with Huabin Group to establish Red Bull Vitamin Beverage Co., Ltd. Initially based in Shenzhen, it was re-registered in Beijing on September 30, 1998. The company's establishment date was also the effective date of the Red Bull brand license, with a term of 20 years. Because Red Bull China developed very well (one Beijing production base alone produced over 10 billion cans), when the brand license expired on September 29, 2018, the two sides began to argue. TCP said it would not renew the license, while Huabin Group insisted it had a legal document committing to 50 years of cooperation. At the height of the conflict, Yan Bin, the head of Red Bull China, angrily accused the Xu family of Thailand of coming to China to "pick peaches." The Xu family retorted that Yan Bin was stealing profits from the joint venture and had no business ethics. The Xu family, which owns the Red Bull formula, was once named the richest family in Thailand by Thai media. The family's rise began with Xu Shubiao, born in 1923 in Wenchang, Hainan. He moved to Thailand with his parents at age 2. After saving money through odd jobs, he founded TCP Pharmaceutical & Health Products Co., Ltd. in 1956, specializing in European drug processing. In the 1970s, while developing a new health product for night-shift workers like truck drivers, he accidentally invented Red Bull. · Xu Shubiao So for a long time, Red Bull was treated as a health product rather than a beverage. It was for this reason that when Xu Shubiao returned to invest in his hometown in 1993, he suffered from the crackdown after China's health product craze. Unable to obtain a health food approval certificate, he eventually chose to cooperate with Yan Bin's Huabin Group. At that time, the equity structure of the joint venture "China Red Bull" was as follows: Yan Bin and the Xu family jointly funded "Thai Red Bull," which then held 88% of China Red Bull. The remaining shares were held by Inter-Biotech (Xu family) at 7%, Global Market (Yan Bin) at 4%, and the township enterprise corporation of Huairou County, Beijing, the main production site, at 1%. Initially, both sides cooperated happily, but after Xu Shubiao's death in 2012 and the transfer of family power to the second generation, Xu Xiongxin, the situation took a sharp turn for the worse. The conflicts erupted on two levels: 1. The shareholding ratio in Thai Red Bull: Yan Bin claimed he held 50%, while the Xu family only recognized 32%; 2. Dividend distribution in China Red Bull: Xu Shubiao had agreed to Yan Bin's proposal to use profits for capital increase rather than distributing dividends to shareholders, but Xu Xiongxin, after taking over, calculated that if so much profit wasn't distributed, Yan Bin would swallow it all. The two conflicts finally became public at the China Red Bull board meeting in September 2015. Yan Bin said he had paid dividends, but the Xu family said the money was received through Yan Bin's Hong Kong Huabin Group account, confirming their suspicions. Yan Bin was furious and immediately changed his stance, saying that without resolving the Thai Red Bull share issue, he wouldn't discuss dividends. After a standoff of over a month, both sides made concessions: the Xu family recognized Yan Bin's 49% stake in Thai Red Bull, and Yan Bin agreed to start calculating dividends. But when it came to auditing accounts, the two sides became tense again and couldn't proceed. In 2016, the Xu family kicked Yan Bin off the Thai Red Bull board. As they engaged in a tug-of-war of lawsuits, the Xu family sought new partners in China, while Yan Bin created War Horse, a drink almost identical to Red Bull. Because of this heated business dispute, the previously low-key Xu family and Yan Bin came into the spotlight, and many aspects of their lives were reported by the media. For example, Yan Bin loves building and investing in luxury golf estates and wineries: he has a golf club covering over a thousand acres around Beijing, a golf course in Hawaii, a wine estate in Bordeaux, France, and luxury properties in London worth over £400 million. · Yan Bin As for the Xu family, which has been wealthy for two generations, the third generation began to show signs of being spoiled. Six months after Xu Shubiao's death, 27-year-old Worayuth, a third-generation member, was driving a Ferrari at 170 mph in downtown Bangkok when he hit and killed a police officer, causing an uproar. After the police filed a case, Worayuth, with the help of lawyers, refused to appear for questioning on various pretexts and continued to travel by private jet. When the police issued an arrest warrant under public pressure, Worayuth mysteriously disappeared. Once the statute of limitations expired (6 years), he was back in the limelight. There are also many stories of wealthy outsiders entering the beverage industry, the most famous being Evergrande Spring Water. The big boss Xu Jiayin not only loves Hermès and Fan Bingbing but is also a restless person. Whenever the real estate main business enters a new round of regulatory cycles, Xu enters a new industry and tells a new story to boost market value. In 2019, it was car manufacturing; in 2013, it was mineral water and grain and oil. Billionaires who casually treat 100 million as a small goal don't bother with small accounts. At that time, Xu Jiayin set an annual sales target of 10 billion yuan for Evergrande Spring Water. But by the end of 2015, Evergrande Spring Water had only achieved 1.09 billion yuan in sales and recorded a loss of 2.37 billion yuan. After being slapped in the face, in 2016, Evergrande sold all its interests in the mineral water and grain and oil businesses. If even Boss Xu couldn't do it, few others could. It seems the world is yours, and the world is ours, but in the end, the beverage industry belongs to those "old guys." References: "China Soda Geography: Every City Has a Signature Drink You've Grown Up With," National Humanities History; "Burdened with 10 Billion in Debt and Facing Delisting, How Was Huiyuan Juice 'Squeezed Dry'?" Huxiu; "Huiyuan's Defeat: How Did Such a Strong Brand and Big Boss Fail?" Houde Innovation Valley; "'Victim' Zong Qinghou," Wu Xiaobo; "From Mountains to Seas: This Business History Is More Magnificent Than 'The River," Meng Ge; "Advertising, Bloodshed, and Strife: 31 Years of Coconut Palm's Troubles," China Business Journal; "Barbaric Red Bull: A Story Interwoven with Money and Lies," Lens Deep Web Source: Seventy Biographies (ID: qishiliezhuan) Tips will be paid 400-2000 yuan upon adoption