"The new product was developed and produced by ourselves, not just a brand endorsement." By-Health, which was rumored to be entering the functional beverage market, finally confirmed this to Nandu reporters yesterday afternoon. As one of the largest health product companies in China, By-Health had just announced last month its high-profile acquisition of Australian probiotic leader Life-Space for 3.5 billion yuan. This move into functional beverages, however, has been relatively low-key.
In fact, By-Health is not the first pharmaceutical or health company to enter the functional beverage market in recent years. Previously, Jiangzhong Group, Xiangxue Manufacturing, and Yiling Pharmaceutical had already made moves, but most of their products have performed mediocrely in the market.
Experts said yesterday that although the functional beverage market has huge potential, the lack of industry standards still needs to be addressed.
By-Health follows the trend
After Jiangzhong Pharmaceutical launched its "digestion and stomach-nourishing" Hericium mushroom drink and the "eye-protecting" Langu drink, By-Health, which is credited with first introducing the concept of dietary supplements to China, is also quietly testing the waters.
According to a person in charge at By-Health's headquarters, the company's new functional beverage F6, which focuses on "energy," was developed by By-Health's subsidiary Liujiaoshou Beverage Co., Ltd., which was officially established last year and claims to integrate R&D and sales.
It is reported that the product has already been listed on WeChat stores, and from the end of April, it will gradually be available in convenience stores such as Watsons and FamilyMart, as well as at major gas stations.
This approach is similar to the channel strategy announced by Xiangxue Pharmaceutical for its new functional beverage Asian Hero, which also initially planned to include gas stations as a channel.
Of course, so far, there are not many successful examples of pharmaceutical and health companies entering the functional beverage market. Take Yiling Pharmaceutical, which began its foray in 2013: its two products, Yimeng and Jinliwang, have seen lackluster sales. On Tmall, the Yiling Food flagship store sells Yimeng in 350ml12 bottle packs, with only 12 monthly sales. In the Yiling Pharmacy flagship store, Jinliwang in 350ml12 bottle packs has monthly sales of only 5, while the same product in the Yiling Food flagship store has even fewer, just 2 monthly sales.
More cross-industry newcomers are coming
"Many companies are entering because they see the huge potential of the functional beverage market," said Zhang Yong, secretary-general of the Guangdong Nutrition and Health Industry Association, analyzing why so many pharmaceutical and health companies are entering the functional beverage market.
It is understood that during the just-concluded Spring Sugar and Wine Fair, the "Second China Functional Beverage Trend Summit" released the "2017-2018 China Functional Beverage Category Trend Development Report," which predicts that by 2020, China's functional beverage retail sales will reach 163.528 billion yuan, indicating huge market potential.
It is precisely because of such expectations that celebrities and influencers are also making high-profile moves. In addition to Wang Sicong of Wanda Group launching his energy drink Ailo EROS at the Spring Sugar and Wine Fair, on March 26, it was reported that Bayern Munich midfielder James Rodriguez and "Functional Foods" company jointly launched a mineral water and functional drink called "10Gold."
Experts point out that functional beverage regulations are yet to come
In Zhang Yong's view, whether it is pharmaceutical and health companies or celebrities, another reason for their entry into functional beverages is that both drugs and health foods are subject to dosage form and approval restrictions, and the approval cycle can be very long. Additionally, functional beverages are FMCG products, making it relatively easier to achieve scale sales.
However, he also believes that the influx of capital from all sides into the functional beverage market will test the market. It is understood that the functional beverage industry currently lacks standards, and some domestic associations want to intervene but lack funding and other support.
In fact, this month, there were reports in the UK that some supermarkets have proactively banned the sale of functional drinks to children. Zhang Hongyu, a pediatric expert at Sun Yat-sen University, also told Nandu reporters yesterday that because some ingredients in functional drinks can easily stimulate the body, affect sleep, and pediatricians generally do not recommend children drink functional drinks, sales should also be subject to relevant controls.
Source: Southern Metropolis Daily -END-