With the trademark expiration between Reignwood Group and Thai Red Bull, the renewal situation is uncertain, prompting a new wave of functional drinks aiming to replace China Red Bull. The question remains: which brand will come out on top?

After the national football team's 1:0 victory over South Korea, Lao Na saw a bandwagon advertisement. Seeing the long-lost Qili was like seeing the long-lost national team victory, reminding me that the national team is still playing, and Qili... well, Qili is still alive.

At the end of 2016, the trademark between Reignwood Group and Thai Red Bull expired. China Red Bull held its first distributor conference, but the much-concerned trademark issue remained unresolved.

Although the well-known public account "Food Board" speculated that the renewal was successful based on a message from someone saying "Red Bull is not laying off employees," the truth is not that simple. The trademark issue remains unresolved. Rumors suggest that the renewal may not succeed, but the original agreement between Reignwood and Thai Red Bull includes a supplementary clause providing a two-year buffer period, so China Red Bull and Thai Red Bull won't immediately turn against each other like JDB and Wanglaoji.

Currently, China Red Bull has resumed production after a two-month halt, but capacity is still tightly controlled. This news has made major brands smell a huge business opportunity, ready to roll up their sleeves and go all out. So which challenger can truly threaten Red Bull?

Dongpeng Special Drink

Among all challengers, Lao Na has always favored Dongpeng Special Drink the most. Although this company started with a deep "copycat" flavor, its later market operations were commendable. Especially its choice of differentiated product—bottled—combined with Red Bull's slogan "Tired and sleepy? Drink Dongpeng Special Drink," made many consumers mistakenly think it was a sub-brand of Red Bull.

Some say Dongpeng's advertising is a bit shameless. But that's wrong; compared to other companies' strategies, Dongpeng's advertising is undoubtedly the most correct. As a small unknown factory entering the functional drink market, you either pass by quietly or directly tie yourself to the industry leader. Dongpeng chose the latter, using any means to bind itself with Red Bull.

Just as JD.com ties itself to Jack Ma, constantly attacking Tmall to attract consumers' attention. In this regard, JD.com is successful, and so is Dongpeng.

Through such bundling, Dongpeng gradually rose to become the second brand in China's functional drink market. Later, it changed its slogan to "Young people should stay awake and fight," and through various TV program placements, it gradually took on the appearance of the second-in-command.

Before this year's Spring Sugar Fair, Dongpeng created a little suspense. In some supermarkets, it bought floor displays and shelf space, advertising that the position was already reserved. Through word of mouth, it created some influence. However, the secrecy was only on paper, as later soft articles leaked the news. This was not as effective as Black Sesame's ad in Nandu Daily.

At the subsequent Spring Sugar Fair, Dongpeng's new product was unveiled.

Surprised? Exciting? Dongpeng is just so unpredictable. When you think it's about to confront Red Bull head-on, it shows you its strong copycat flavor. Who can tell me what this slogan is? Did the designers from Red Bull and JDB jump ship to Dongpeng? Is it that direct to splice two ads together and make it your own? What do the eagerly waiting distributors think? What do the chickens, ducks, geese, and dogs in the village think?

Of course, at the meeting, Dongpeng also brought out Jack Ma's system, renaming distributor partners as "partners." Oh heavens, oh earth, when I think your future is bright, you hurt me deeply. Is this how you understand internet thinking? Can we be serious?

Currently, Chinese consumers perceive canned functional drinks as Red Bull. Even if you release a canned version, it doesn't mean consumers will accept it. It's better to firmly position yourself as the number one brand in bottled functional drinks. Haven't you seen Heqizheng, which, after failing in canned herbal tea, carved out its own sky in the bottled market?

Now, canned functional drinks are an opportunity, but also a pitfall. Enter with caution.

Lehu

Lehu is another pioneering category for Dali Group. When JDB and Wanglaoji were at war, herbal tea swept the market. Dali Group successfully avoided this trend and chose to enter the functional drink market, launching Lehu.

While Wahaha's Qili was retreating, Lehu unexpectedly stood its ground. With a strong distributor team and powerful control over township markets, Lehu became another dark horse in functional drinks. "Drink Lehu, refresh and fight fatigue, stimulate positive energy!" Combined with CBA event attention, Lehu advanced year by year, with sales rising from 200 million to over 2 billion. It truly deserves the title of "King of Suburban Markets" for Dali Group.

Unlike Dongpeng, which is the bottled leader, Lehu truly "pulls teeth from a tiger's mouth," with canned products contributing significantly to sales.

However, this year Dali Group will focus on its new product, Doudou Benben Milk, a soy milk tailored for Chinese breakfasts, targeting those with lactose intolerance. They hired the famous actress Sun Li as spokesperson and formed a new sales team to manage this new product.

Lehu is very similar to Heqizheng. During the herbal tea war, Heqizheng disappeared; now during the functional drink war, Lehu is in jeopardy. Will Lehu become the next Heqizheng?

Heika 6 Hours

Heika 6 Hours was a brand that even Lao Na was once attracted to. With strong special channels, high store coverage, high cold-chain availability, high profits, and better taste than Red Bull, Heika 6 Hours had a halo from the start. I once thought it would become the next Six Walnuts. At least it would open its own sky in the functional drink market.

However, with various copycats like Gold Card 8 Hours, and Heika's insufficient brand protection and promotion, Heika has been stagnant for the past six years. It could even be said that its glory was the beginning of its decline.

Heika's mistakes, besides failing to crack down on counterfeits, mainly included over-reliance on distributors and not building a good self-sales team. Many distributors, after obtaining Heika's agency, felt it was too easy to make money, so they imitated Heika drinks, similar to the Six Walnuts and Liuren Walnuts situation. This gradually eroded Heika's market from within.

Heika 6 Hours' official website is pitifully simple, and its Baidu Baike product introduction is sparse. It's a pity for such a product.

Qili

"In the south, there's Zhang Mowen; in the north, there's Ye Maozhong." These days, any planner needs Ye Maozhong as a background. Just as Zhang Mowen wears a hat like Ye Maozhong's wherever he goes, similarity never means equality. So no matter how hard Qili tries, it won't become Red Bull; Wahaha's Kvass won't become Qiulin Kvass; Evergrande Spring Water won't become Baishishan. No problem, old friend.

I don't know who benefited whom between Zhang Mowen and Wahaha. Most of the master's cases are Wahaha's planning, but apart from Nutrition Express and Shuangwaiwai, there are few successful cases (well, Nutrition Express is also dead). As for Evergrande Spring Water, its style is also erratic, ending in selling itself. Under such efforts, Qili naturally didn't achieve much. Like a gust of wind, it came and went quickly. When it appeared, it was like a tornado, with Manchester United and stars, and with Wahaha's strong joint sales system, in an instant, the streets were filled with Qili's sky blue.

However, modern consumers are no longer the consumers of N years ago. It's not that I need to pay attention to your product; now enterprises need to pay attention to consumers. Clearly, Qili, without interaction, put all its strength into "pushing" but none into "pulling." As a result, it went silent after six months. Later, the "golden can" Qili made a brief appearance.

Wahaha Qili's mistake was confronting Red Bull head-on but using a non-mainstream blue tone, perhaps because Wahaha couldn't lower itself to copycat tactics, or simply misunderstood differentiation as color difference.

Now, Qili only makes a presence by riding on the national team's momentum, with no other voice. Qili's only contribution is making Wahaha spend less on advertising for new products, turning Wahaha from an advertising maniac into a casual investor.

Tizhi Nengliang

Zhongwo is a local enterprise in Jiyuan, Henan, known for producing corn juice and yam juice. Influenced by the Qili trend, it launched Zhongwo Tizhi Nengliang, with planning by Henan's famous marketing expert Wang Guanqun. With Tong Dawei and CBA stars as spokespersons, and a bottle shape similar to Heika 6 Hours, it quickly opened the market and is now one of the main forces in Henan's township markets.

Warhorse Arrives

In 2017, Reignwood Group is going all out to promote Warhorse, transferring most of the Red Bull business team to work on it. With VOSS water and Vitacoco performing poorly after entering the Chinese market, Warhorse can be said to be Reignwood's last hope.

Lao Na once wrote that the Chinese trademark "Red Bull" belongs to Reignwood Group. I must apologize here: Reignwood did apply for the Chinese trademark "Red Bull," but the State Trademark Office did not approve it. The Chinese trademark rights belong to Thai Tiansi Pharmaceutical, the parent company of Thai Red Bull.

From the current distribution rate of Warhorse, it's roughly on par with Monster. Warhorse uses a different taste from Red Bull, being a carbonated functional drink. Within the Red Bull internal team, there is also resistance to Warhorse. Many think that being assigned to Warhorse is a disguised layoff.

As the number one canned functional drink, Red Bull is also following the old path of herbal tea. Although canned is now the national leader, the trademark issue restricts products in various regions, and the bottled market has been neglected, making Warhorse's acceptance currently lower than Dongpeng's. Most importantly, both the Red Bull team and its distributors still harbor illusions that Reignwood will continue to operate Red Bull, not realizing the danger Red Bull is in.

Lao Na suggests producing bottled and canned Warhorse with a formula similar to Red Bull, with a slogan like "Red Bull launches new product, Warhorse is stronger," to increase Warhorse's influence during the two-year transition period, rather than the current small-scale efforts. Currently, Reignwood is using covert tactics for "Warhorse"; now it's time to consider overt tactics and fight with their backs to the wall. Otherwise, they'll be led by the nose by Thai Red Bull.

(Warhorse campus activity)

Austrian Red Bull

Austrian Red Bull has been in China for some time, but due to its carbonation and high price (twice that of China Red Bull), it basically doesn't sell.

Due to China Red Bull's production limits, many customers want to import from Vietnam.

Vietnamese Red Bull is similar in packaging to China Red Bull, both non-carbonated, with a slightly sour taste, priced at 2.3 RMB, but smuggling is illegal.

It's basically impossible for Austrian Red Bull to replace Reignwood's Red Bull in China, unless it adopts the entire Reignwood Red Bull approach: gold cans, non-carbonated Red Bull, because Chinese consumers have spent 20 years getting used to Reignwood Red Bull.

Monster

Monster, as the most likely functional drink to challenge Red Bull's position in the world, faced trademark issues before entering China because "Monster" was already registered, so it had to be renamed "Mo Zhua" (Monster Claw). Unlike Coca-Cola's usual swiftness, Monster's entry into mainland China has been slow. Its distribution rate is higher in special channels like gas stations and internet cafes, while in traditional retail it's on par with Warhorse. Monster's retail price is 6-7 RMB, making it a rare high-profit product in the Coca-Cola system.

With the strong operational capability of the Coca-Cola team and Monster's global brand recognition, Monster is the most likely product to defeat Red Bull.

Monster's strength over domestic brands lies in its background: the Coca-Cola team's operations, financial strength, and global influence. Since entering China, Monster has adopted a low-key strategy, with only online promotion and no traditional media advertising, perhaps due to its low distribution rate.

Especially after Coca-Cola outsourced its bottling business to Swire Coca-Cola and COFCO Coca-Cola last year, causing widespread strikes, this has negatively impacted Coca-Cola's brand image and raised doubts about whether Monster's operations will continue Coca-Cola's usual aggressiveness. Will it become the next Minute Maid Pulpy or the next Qoo? It all depends on future performance.

(Lao Na is quite disappointed with Monster's distribution progress)

Dalishen

Before this year's Spring Sugar Fair, Baixiang Group launched its own functional drink, Dalishen. The name reminds Lao Na of the "Yilishen" endorsed by Zhao Dashu and Fan Wei.

Since Baixiang's IPO failure and return from Beijing to Henan, it has been working on beverages. However, its drinks are nothing more than black tea, green tea, etc., products barely visible in the market. Even its distribution rate is lower than Zhongwo's Tizhi Nengliang.

As Baixiang's main business, instant noodles' market share is declining. The Big Bone Soup Cup Noodles, positioned under Trout's theory, hasn't impressed consumers. But it must be admitted that Baixiang's Big Bone Soup Cup Noodles are really delicious, just too small in quantity and too expensive, affecting consumer choice.

Baixiang would be better off focusing on its flour and instant noodle markets rather than launching functional drinks. Although the beverage market is large, it's also more mature. Baixiang has no effective experience in beverage operations over the past two years, so the forced launch of Dalishen is unlikely to yield good results.

Mr. Dragon

In 2016, former JDB team executives founded Zhejiang Yesheng Beverage Co., Ltd., naming their functional drink "Mr. Dragon." This makes China's beverage lineup essentially "Red Bull raises its hoof, Warhorse raises its whip, Lehu descends the mountain, and the divine dragon emerges from the sea."

From Mr. Dragon's packaging, we can see it's a product with Chinese style. The Chinese dragon resembles the martial arts master Bruce Lee, who is arguably the only person to embody the spirit, charm, and image of the dragon.

The main person in charge of Zhejiang Yesheng, a former JDB executive, is familiar to Lao Na. They are skilled in product, brand, and market development. Although everything is still in planning, we can look forward to them creating something new and achieving another glory.

Additionally, if you know, please leave a comment: Is Monster being operated by Swire and COFCO Coca-Cola, or have they formed a separate team? Thank you.

Source: FMCG Disciples (nalanzt)

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