---
title: "As an FMCG Professional, I Just Want a Stable 2017: A Review of 2016 and Forecast for 2017"
description: "Reviewing the FMCG industry in 2016, we saw the departure of Mengniu's Sun Yiping, the bitter cold tea price war with JDB at 20 yuan per case, and the news of Red Bull changing its 'war horse' just as we celebrated Yili's entry into the world's top eight dairy companies and the 600 billion club. For 2017, we dare not expect surprises; as marketers, we just want to get through the year steadily. Let's take stock of 2016 and look ahead to 2017, perhaps gaining some insights."
author: "李红权"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-01-23"
language: "en"
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# As an FMCG Professional, I Just Want a Stable 2017: A Review of 2016 and Forecast for 2017

> Reviewing the FMCG industry in 2016, we saw the departure of Mengniu's Sun Yiping, the bitter cold tea price war with JDB at 20 yuan per case, and the news of Red Bull changing its 'war horse' just as we celebrated Yili's entry into the world's top eight dairy companies and the 600 billion club. For 2017, we dare not expect surprises; as marketers, we just want to get through the year steadily. Let's take stock of 2016 and look ahead to 2017, perhaps gaining some insights.

Reviewing the FMCG industry in 2016, the departure of Mengniu's Sun Yiping and the shouts of JDB's special price of 20 yuan per case in the cold tea war still echo in our ears. Just as we celebrated the state-owned enterprise Yili's entry into the world's top eight dairy companies and the 600 billion club, we heard that Red Bull was about to change its 'war horse.' For 2017, we dare not hope for surprises; as marketers, we really just want to get through this year steadily.
So, let's take stock of the 2016 we've experienced and the upcoming 2017, perhaps we can learn some lessons and walk more firmly on the road ahead!
The holy monkey is no more, and the Great Sage is helpless too.
**2016 Keywords: Decline, B2B, Price Hikes**
1. Who can decline less?
At the beginning of 2006, after experiencing the sales slowdown in 2015, experts and scholars from various fields optimistically predicted that the economy would bottom out in the second half of 2016 in major newspapers and forums. Manufacturers actively prepared to fight hard in 2016 to regain the market share lost in 2015. However, with the release of data from major manufacturers in May and June, everyone was shocked. As a veteran FMCG player, Wahaha suffered a severe decline, and despite later denials, the downward trend in product sales was hard to hide. Master Kong and Uni-President followed closely on the decline track, with only functional drinks Red Bull and Mizone managing slight growth, but they also showed signs of fatigue. For a time, manufacturers were comparing who declined less, to the extent that the industry considered a 50% decline normal, a 20% decline meant an excellent company, and no decline or a decline within 10% definitely meant a top-quality company.
Only fermented yogurt managed to save some face, but by the end of 2016, major supermarkets saw crazy promotions like 'second item half price' or '20 yuan off,' clearly indicating huge inventory pressure.
2. Who can run faster?
In March, McDonald's first announced it would introduce mainland investors, and by the end of the year, news spread that it had packaged and sold its mainland franchise stores. Mr. Xu, who brought us into the World Cup, had to give up his Evergrande grain and oil and beverage businesses, selling them to an unrelated automobile company. COFCO may have had enough of Le Conte chocolate and sold it directly to Good Neighbor. In short, major food and beverage companies were in turmoil, actively divesting, a stark contrast to their previous high-profile entries and investments.
3. You don't have B2B yet?
If you met a marketer or distributor in 2016, they were surely busy attending various B2B forums or discussing the future of B2B. If someone hadn't heard of B2B, they'd feel like they wanted to crawl into a hole.
Folks, did you really understand Ma Yun's speech at the Internet Conference? Ma said: Traditional e-commerce is dead, and traditional business models no longer work. Thus, with Alibaba's Taobao New Countryside and JD's New Channel as representatives, various B2B companies emerged, such as Huimin Wang and Zhanghe Tianxia, which flourished for a time. Even major banks launched online-offline interconnected platforms like Yigou Tianjie and financial services. Recently, there was a dispute over E.A. Century; we won't comment on who is right or wrong, but the debate reflects the confusion and current state of many distributors.
4. Paper is rising, iron is rising, logistics is roaring
In 2016, the hardest hit were some small third- and fourth-tier enterprises. The first half was the off-season, and after barely surviving it, they planned to harvest at the end of the year, but unexpectedly couldn't even get packaging materials, let alone produce products, so how could they sell? No wonder it's said: In FMCG, only the top two matter; you can't be third or fourth. Small enterprises survived the off-season but fell in the peak season. Fortunately, we saw Moutai, Wuliangye, and Jiannanchun take the lead in raising prices, finally bringing a ray of sunshine to the dull marketing world. This was also the first large-scale overall price increase in the liquor industry since the 17th Party Congress.
In short, in 2016, the holy monkey was no more, and the Great Sage was helpless too. At the Wan Shang Conference held at the end of 2016, a manufacturer unexpectedly launched silk-stocking milk tea, shocking the industry. Marketing has fallen to such a level; how can we bear it? Has it really come to the point where we must cater to consumers' fetishes to survive? Fortunately, seeing that a neighboring country's president can be controlled by his girlfriend, and big-mouth Trump can stage a comeback, any bizarre marketing move is not surprising.
The golden rooster announces the dawn, but you must endure the silent pre-dawn darkness.
As I write this article, I happen to be listening to Luo Pang's New Year's speech. It wasn't easy to listen to, because I had a sudden low fever, but the keywords I had planned for 2017 were confirmed in the speech, which was some compensation for my fever.
The golden rooster crows, and the world becomes bright, but the darkness before dawn is the most silent. Can we endure this silent dawn? Let me share my bold ideas for 2017.
**My keywords for 2017: Integration, Focus (Vertical), Innovation**
1. Accelerated industry integration, seize the opportunity to claim territory
After the ups and downs of 2016, many small enterprises felt the thrill of a roller coaster, but more felt physically exhausted and wanted to escape the turbulent FMCG world. However, this is a rare opportunity for the leading brands in each category. On one hand, they are already the leaders in their category, and increasing volume or breaking through has become difficult; they need to integrate resources to find new growth points. On the other hand, this is the best time to merge and acquire small enterprises, with the highest cost-effectiveness. Once you acquire them, the dawn will come immediately. Isn't that the best deal?
As Luo Pang said, based on cognitive tax, no one can give a clear answer as to which category or industry will become a hotspot in the future. Well, as long as there's something new, circle it first. On one hand, entrepreneurs feel the capital winter, and on the other hand, they see the anxious capital panic of the big shots. In 2017, capital will no longer panic; what will panic is who is slow to circle and integrate innovation. JD and Alibaba will accelerate their B2B integration! But I think B2B will become clearer in 2017, and perhaps people's enthusiasm will wane.
2. The era of category mega-brands ends, and the era of brand verticalization arrives
The final data for 2016 is not yet out, but from terminal performance, products like Yangyuan's Six Walnuts, Yili's Ambrosial, Uni-President's Laotan Sauerkraut, Nongfu's Mizone, and Jing Brand have performed well, all with standout single products. However, in 2017, the structure of category mega-brands will gradually come to an end. If any distributor has such products, they are extremely lucky, because you may never find them again.
In 2017, categories will become more focused, narrowing to even more specific categories, just to mobilize and satisfy the needs of a portion of consumers. Note that I used 'mobilize and satisfy' here, not just 'satisfy consumer needs.' With the great abundance of materials and products piled up like mountains, consumer needs are confused. At this time, it's not just about simple satisfaction, but about discovering and daring to create, that is, mobilizing consumer needs, and then satisfying their high-quality potential requirements after mobilizing them.
In the era of brand verticalization, we see many companies, after successfully building a brand, continuously force numerous sub-brands onto it, especially in the liquor industry. But this situation will change in 2017. The attachment between brand and category will be higher. For example, in the future, Master Kong will no longer be synonymous with instant noodles, tea, water, or even fast food, but will focus on a specific category, with higher product precision and added value, and higher stickiness with targeted consumers.
3. True innovation is the only way to win
If I'm not mistaken, in 2016 Wahaha will continue its downward trend from 2015. At least from terminal performance and distributor reactions, the decline has not been effectively curbed. Why is that? I just want to say: As a representative of Chinese national brands, Wahaha doesn't have a single product of its own. It only follows others. When others launch 'Six Walnuts,' it launches 'All Walnuts'; when others launch coconut juice drinks, it also 'comes with a squeeze.' From 'Kvass' to 'Qili,' Wahaha has made continuous mistakes. By 2017, following will have no way out.
I sincerely appeal, especially to leading enterprises in some categories, to truly learn from Uni-President, to genuinely research and develop new products that can mobilize and satisfy consumers' high-quality demands, rather than blindly copying. I think Wahaha should learn this lesson, adjust its direction in time, and with its solid and rich distributor network, it can still become the king of FMCG.
The above is just one person's opinion. Criticizing any company is meant to inject vitality and find direction for the sluggish FMCG industry, with no malicious intent. Additionally, I have a guess to leave with you: In 2017, many products may not find a true opponent. In other words, the cold tea, the two colas, and the dairy giants that fought fiercely in 2016—are you really opponents? The answer will be revealed at the end of 2017.
Welcome your brickbats!
Li Hongquan, a veteran who has worked in the FMCG industry for 17 years from frontline to executive, specializing in strategic management positioning, team management, marketing planning, and distributor management.
Source: Jin Xiaoshang (ID: jin-xiao-shang)****
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