--- title: "Can Tianfu Cola, a Brand Shelved for 20 Years, Make a Comeback?" description: "On January 6, Tianfu Cola, once the highest-market-share cola brand in China, held a comeback ceremony featuring the song 'My Chinese Heart.' The brand lost 20 years due to a joint venture with PepsiCo, but after legal battles, it regained its formula and trademark. With planned investments of 500 million to 1 billion yuan, the company aims to relaunch its products in March, though its future success remains uncertain." author: "程维" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2016-01-07" language: "en" canonical: "https://xinjignxiao.com/en/articles/can-tianfu-cola-a-brand-shelved-for-20-years-make-a-comeback-56b5f06d/" markdown: "https://xinjignxiao.com/en/articles/can-tianfu-cola-a-brand-shelved-for-20-years-make-a-comeback-56b5f06d.md" original_source: "https://mp.weixin.qq.com/s/oGgpFCIA3RLW6byx840oMg" translation: "https://xinjignxiao.com/zh/articles/%E5%93%81%E7%89%8C%E8%A2%AB%E9%9B%AA%E8%97%8F20%E5%B9%B4%E7%9A%84%E5%A4%A9%E5%BA%9C%E5%8F%AF%E4%B9%90%E8%83%BD%E5%90%A6%E4%B8%9C%E5%B1%B1%E5%86%8D%E8%B5%B7-56b5f06d.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/can-tianfu-cola-a-brand-shelved-for-20-years-make-a-comeback-56b5f06d/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Can Tianfu Cola, a Brand Shelved for 20 Years, Make a Comeback? > On January 6, Tianfu Cola, once the highest-market-share cola brand in China, held a comeback ceremony featuring the song 'My Chinese Heart.' The brand lost 20 years due to a joint venture with PepsiCo, but after legal battles, it regained its formula and trademark. With planned investments of 500 million to 1 billion yuan, the company aims to relaunch its products in March, though its future success remains uncertain. On January 6, Tianfu Cola, the cola brand that once held the highest market share in China, played the song "My Chinese Heart" at its comeback ceremony. On both sides of the venue, there were spray-painted boards measuring 20 meters long and 2.5 meters high. The background color was a gray reminiscent of a Holocaust memorial, stained with patches of black. The four red characters "Tianfu Cola" were printed on them, accompanied by 15 red-and-white time markers and milestone events arranged along a red timeline since 1936, as well as over 20 black-and-white photos. This was a rare comeback ceremony with a strong tragic atmosphere. Comeback "Our joint venture with PepsiCo caused the Tianfu Cola brand to be shelved, losing us 20 years," Qian Huang, general manager of Tianfu Cola Group Company, told reporters. Since 2008, the company has reclaimed the formula, production process, and brand of Tianfu Cola and its series of beverages from PepsiCo (China) Investment Co., Ltd. (hereinafter referred to as "PepsiCo") through judicial recovery and other means. Qian Huang is a veteran of Tianfu Cola, having risen from technician to director, deputy general manager, and general manager. He experienced the entire conflict with PepsiCo and was the main person responsible for the company's rights protection against PepsiCo. However, at the comeback press conference, Tianfu Cola did not provide product samples. Company staff said that in March this year, Tianfu Cola's cola and Bailin (lemon-lime) products will be officially launched on the market. In 2017, they will further launch more than 50 other products, including other beverages, juices, chocolate, and plant-based protein drinks. In response to a reporter's question, Qian Huang said that the total planned investment for Tianfu Cola's comeback is 500 million to 1 billion yuan. Currently, modern factories with an annual production capacity of over 200,000 tons have been built in Xi'an and Yunnan, and the Chongqing factory is also in the site selection process. However, Qian Huang and company staff refused to disclose further details behind this investment. Therefore, it remains unclear whether the relationship between Tianfu Cola Group Company and investor Chongqing Guoxiang Beverage Co., Ltd. (hereinafter referred to as "Guoxiang Beverage") is a brand licensing arrangement or an equity cooperation. In addition, there is no public information on how much the major shareholder of Tianfu Cola, Chongqing Mechanical and Electrical Holding Group Company (the renamed company of the former Chongqing Light Industry Bureau), has invested in this comeback. Qian Huang only briefly stated: "Guoxiang Beverage Company is responsible for market operations, and we will have deep cooperation in the future." Guoxiang Beverage, the main financial backer supporting Tianfu Cola's comeback, did not appear at the January 6 press conference. According to public records, Guoxiang Beverage was established on September 15, 2015, with a registered capital of 160 million yuan. It has three shareholders: Chongqing Xinfu Industrial Development (Group) Co., Ltd., Hu Daiying, and Chen Chun. Xinfu Industrial was registered on January 18, 2015, with a registered capital of 1.672 billion yuan, and has only four natural-person shareholders: Zhao Yingguang, Gong Jieyou, Ma Shaojin, and Wang Chuan. Qian Huang confirmed to reporters that behind Guoxiang Beverage, "there are a number of investment companies and fund companies." However, Qian Huang did not disclose further information about the investors. The Root of the Problem: Joint Venture with Pepsi Li Peiquan, one of the founders of Tianfu Cola, said that the product's development originated from a high-ranking central official. The official commented on a report about a shipment of 800 million yuan worth of white peony root (a traditional Chinese medicine) being blocked for export by sea, instructing that research be organized on the application of Chinese medicinal herbs. Subsequently, multiple domestic Chinese medicine research institutes began studying the development and application of white peony root. The relevant person in charge of Tianfu Cola saw Coca-Cola on the Beijing market, returned to Chongqing, and collaborated with the former Sichuan Institute of Chinese Medicine to develop a cola-type beverage using Chinese herbs, which was successful. In 1980, Tianfu Cola began producing a cola formula composed of natural Chinese herbal ingredients. In 1981, the Tianfu Cola brand captured most of the market share in the Sichuan-Chongqing region and became one of the specialties of the two regions. In 1995, Tianfu Cola passed pathological experiments at Tongji Medical University, proving that Tianfu Cola could effectively reduce aflatoxin and had anti-cancer effects. In 1988, the company was renamed China Tianfu Cola Group Company, with 108 bottling plants under it, and achieved a 75% market share in China's cola market. In 1990, Tianfu Cola established a bottling plant in Moscow, and Japan's Kazama Corporation voluntarily acted as an agent, setting up a company in the World Trade Center in the United States to exclusively sell Tianfu Cola in the U.S. market. However, on the eve of China's entry into the WTO (referred to as "ru guan" in Chinese), officials from the former Ministry of Light Industry believed that once the market was opened, foreign cola giants would enter China and the domestic beverage market would collapse. Therefore, they designated the eight major domestic beverage factories to form joint ventures with the two cola giants. But contrary to expectations, after the international beverage giants signed joint venture agreements, the original eight domestic beverage enterprises accelerated their decline. Only Tianfu Cola still had a small amount of products visible on the market, a situation the industry called "water flooding the seven armies." In 1994, Pepsi and Tianfu jointly established a joint venture company, Chongqing Pepsi Tianfu Company. According to data, at that time, Pepsi contributed $10.7 million in cash, while Tianfu Cola contributed land, factories, and production equipment (valued at $7.3 million) as its investment. According to the agreement, the joint venture was to produce Tianfu Cola at no less than 50% of total beverage output. But unexpectedly for Tianfu, after the joint venture was established, Tianfu, which had previously held over 75% market share, suffered consecutive losses, and sales plummeted year after year. Eventually, the Tianfu brand nearly disappeared from the market. Meanwhile, burdened with debt, in 2006, Tianfu sold all its shares to PepsiCo for 130 million yuan, turning itself into a distressed enterprise in Chongqing. Can It Make a Comeback? Li Peiquan said that in the first year of the joint venture, PepsiCo had not yet built a bottling plant in Chongqing and produced from its Sichuan plant, so Tianfu Cola was able to maintain over 75% market share that year. In the second year, Tianfu Cola's production share dropped to 50%; in the third year, 20%; and in the fourth year, 1%. At that point, Tianfu Cola was virtually defunct. In 2008, Tianfu Cola Group Company began to reclaim the ownership of the Tianfu Cola formula and production process, and in 2010, it successfully regained the formula and process. In 2013, the series of trademarks for Tianfu Cola were finally reclaimed by Tianfu Cola Group Company through judicial means. This was a difficult lawsuit. "During the joint venture process, we basically didn't understand market rules, and we were deceived and suffered many losses," Li Peiquan said. During the joint venture with PepsiCo, Tianfu Cola only contributed its land, factories, and production equipment as equity, holding 40% of the shares in Pepsi Tianfu Company, while PepsiCo contributed cash and held 60% of the shares. However, precisely because the Tianfu brand and technical secrets were not valued as equity in the initial joint venture, Tianfu Cola was able to use legal weapons to counterattack PepsiCo 16 years later. But the other seven Chinese beverage brands from 20 years ago did not have this opportunity. Li Peiquan said that in the wave of joint ventures with the "two colas" (Coca-Cola and Pepsi), China's "seven water armies" were completely wiped out. Among them, Tianfu Cola, Guangzhou Asia Soda, and Beijing Beibingyang Beverage were under PepsiCo, while Shenyang's Bawangsi, Tianjin's Shanhaiguan, and Qingdao's Laoshan Soda were under Coca-Cola. However, Shanghai's Zheng Guanghe escaped being "westernized" because its equity could not be clarified at the time. Previously, except for Zheng Guanghe, all other brands had faded from the market. The operations director of Tianfu Cola Company believes that the comeback of Tianfu Cola has three pillars: first, the brand; second, products that are healthier and better than foreign colas; and third, good reputation and awareness. But times have changed. How far the former cola leader Tianfu Cola can go in its comeback remains to be tested by the market. 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