Lifu noticed that beverage brands are doing something clever: changing packaging. For example, Hawangshui quietly launched a small 125ml hawthorn drink for office snacking, and Lemon Republic introduced small Tetra Pak juices under the brand Guoxi. Apple's philosophy is 'bigger than bigger,' but why are hawthorn and lemon going smaller? Packaging changes are just the surface; brands are finding a golden ratio between face and substance. On one side is brand tone (value and experience), on the other is cost-effectiveness and profit margin. By using attractive small packaging, they maintain value perception, satisfy consumer and brand face, while lowering production costs and prices, benefiting both sides. In the current consumption environment, this trend will grow. Soft drink packaging, like 'affordable housing' in beverages, is becoming more practical and mutually beneficial.

Retro Soft Packaging: A 'Beautiful Lie' First, let's talk about brand face. Where does the dignity of packaged beverages come from? First, high price: regardless of taste, it must have a price worthy of Hermès VIP water. Second, premium packaging: like San Pellegrino's glass bottles, giving a tactile feel; the weight conveys quality. Third, storytelling: attaching beautiful tales of origin and hometown to basic natural ingredients or lightly processed drinks, making you feel you're drinking culture, not just water. So, if the goal is to cut costs, preserve substance without losing face, and maintain brand premium, what to do? Soft packaging, like Tetra Pak, is clearly a smart choice. Tetra Pak, a great invention collected by MoMA, offers lower production and transport costs and longer shelf life, making it the world's largest packaging company with nearly 80% market share. Our generation—80s and 90s kids who grew up on Mengniu, Yili, and Want Want—are loyal Tetra Pak fans. This creates an interesting phenomenon: when 80s and 90s kids grow up, seeing Tetra Pak juice drinks again evokes a 'strange familiarity.' Though it's old bottles with new wine, Tetra Pak costs less than most glass or plastic bottles, and consumers don't find it cheap; instead, it has a retro, fashionable vibe. So high-end brands using Tetra Pak or similar soft packaging to lower price points is logical, maintaining brand tone.

Mengniu Pure Milk Image: Mengniu Official Weibo

A More Sophisticated Price Increase: Looking Cheaper What is brand substance? The most important is the cost red line: expand scale with profit, and increase profit while maintaining scale. High-priced or new beverage brands commonly face: either new channels can't expand, or old customer groups aren't buying. How to solve this? Two methods: cut costs to increase profit, or launch new products to reach new groups. Smart brands combine both. The more advanced hunter often appears as prey. Launching low-priced new products looks like 'playing the pig to eat the tiger'—the price seems lower, but the formula is unchanged, and the unit price hasn't dropped; it may even have quietly risen. For example, an orange juice brand: originally 500ml for 15 yuan (0.03 yuan/ml), now 125ml for 4 yuan (0.032 yuan/ml), actually 0.002 yuan more per ml. You think it's a price cut, but it's a disguised increase. While both unit price and size drop, it gives consumers a cheap illusion and boosts brand profit margins. So, consumption downgrading doesn't mean selling off assets or discounting; instead, you can subtly raise prices in a consumer-pleasing way, achieving a win-win. Learn from HARMAY, which rose by selling beauty samples. Beverage brands that master 'samples' can also thrive in the price-war era.

Beverages Switch to XS: Who Are They Courting? Looking back, this 'affordable housing' move has three keys: First, new packaging lowers overall costs; second, costs drop but consumer experience stays, earning goodwill and recognition; third, consumers genuinely feel the value. This isn't just in China. In Japan and Korea, beverages have long adopted XS packaging. I'm in Korea now and see convenience store drinks shrinking. The most typical is banana milk: after the popular 238ml, they've even launched a 120ml mini version.

Mini milk at a Korean convenience store Image: Hua Lifu

Everyone is going smaller, not only due to economic factors lowering consumption expectations, but also changing consumer demographics. Who buys beverages? That's key. In Japan and Korea, single-person or small-family households are the main consumption units. Women often buy beverages for the family, and they prefer small-packaged sweet drinks. Think about it: isn't it your wife or mom who buys drinks at home? In their minds, sweet drinks are just for occasional cravings; a small can feels guilt-free. Ultimately, launching new products and changing packaging is just a tactic; the strategy is to understand dynamic consumer needs.

After all, new needs are an eternal variable; meeting them is a brand's constant pursuit.

PS: From March 14-16, 2024, the 9th China FMCG Innovation Conference, the 2nd China FMCG Hard Discount Conference, and the 2nd China FMCG Distributor Conference will be grandly held in Chengdu! This conference will focus on 'Supply Chain Revolution' with 3 days, 1 main forum, over a dozen sub-forums and closed-door exchanges, gathering thousands of FMCG brand owners, distributors, retail innovators, and industry service providers nationwide in Chengdu to discuss challenges, opportunities, changes, and solutions in the supply chain revolution era.

In this era of supply chain revolution, a new business era will emerge. We hope every participant will have a place in this wave; we believe it will be a worthwhile meeting!

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