---
title: "China's Beverage Market Faces Another 'Off Year' – Is the Industry at a Turning Point?"
description: "The once-popular 'One More Bottle' promotion has disappeared this year, replaced by various fan-engagement tactics. Although beverage companies have realized that emotional resonance with consumers drives sales more than promotions, the fan economy has replaced price wars. However, this round of fan-engagement campaigns has not saved the industry from an 'off year,' as extreme weather, cumbersome marketing methods, overly similar new products, and self-deprecating positioning have further muddied the already unclear beverage market. Rainy weather has dampened industry enthusiasm..."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-07-25"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/china-s-beverage-market-faces-another-off-year-is-the-industry-at-a-turn-7eb0ad58/"
markdown: "https://xinjignxiao.com/en/articles/china-s-beverage-market-faces-another-off-year-is-the-industry-at-a-turn-7eb0ad58.md"
original_source: "https://mp.weixin.qq.com/s/95t04d0Qz06mvZ6Uuqjq-A"
translation: "https://xinjignxiao.com/zh/articles/%E5%9B%BD%E5%86%85%E9%A5%AE%E6%96%99%E5%B8%82%E5%9C%BA%E5%86%8D%E9%99%B7-%E5%B0%8F%E5%B9%B4-%E8%A1%8C%E4%B8%9A%E6%8B%90%E7%82%B9%E6%98%AF%E5%90%A6%E5%88%B0%E6%9D%A5-7eb0ad58.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/china-s-beverage-market-faces-another-off-year-is-the-industry-at-a-turn-7eb0ad58/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# China's Beverage Market Faces Another 'Off Year' – Is the Industry at a Turning Point?

> The once-popular 'One More Bottle' promotion has disappeared this year, replaced by various fan-engagement tactics. Although beverage companies have realized that emotional resonance with consumers drives sales more than promotions, the fan economy has replaced price wars. However, this round of fan-engagement campaigns has not saved the industry from an 'off year,' as extreme weather, cumbersome marketing methods, overly similar new products, and self-deprecating positioning have further muddied the already unclear beverage market. Rainy weather has dampened industry enthusiasm...

The once-popular 'One More Bottle' promotion in the beverage industry has disappeared this year, replaced by various fan-engagement tactics. Although beverage companies have realized that emotional resonance with consumers drives sales more than promotions, in practice, the fan economy has replaced price wars. However, this round of fan-engagement campaigns has not saved the industry from an 'off year.' Extreme weather, cumbersome marketing methods, overly similar new products, and self-deprecating positioning have further muddied the already unclear beverage market.

Rainy Weather Dampens Industry Enthusiasm

After thirty years of rapid growth, China's beverage industry has entered a period of slow growth. The '2015 China Beverage Industry Overall Operation Report' released by the China National Food Industry Association in February this year showed that in 2015, the total cumulative output of China's beverage industry was 176.61 million tons, a year-on-year increase of only 6.23%; beverage manufacturing enterprises above designated size achieved main business revenue of 615.733 billion yuan, a year-on-year increase of 6.21%.

Despite maintaining positive growth, the beverage industry's growth rate has significantly slowed. According to data from the National Bureau of Statistics, in 2015, national soft drink sales volume increased by only 4% year-on-year. In 2014, this growth rate was 13%, and during the decade from 2001 to 2011, the average annual growth rate of national soft drink sales exceeded 20%. In the past two years, large enterprises such as Coca-Cola, Uni-President, Master Kong, and Wahaha have all experienced varying degrees of performance decline.

Notably, this year's extreme weather has also cast a shadow over the beverage industry's growth. "This year's beverage industry is relatively flat; all enthusiasm has been extinguished by the rain," a beverage industry practitioner succinctly identified the crux. After last year's off year, beverage companies had high hopes for a bumper year this year. During the summer, the golden season for the beverage industry, although high temperatures in the north brought an early surge in high-temperature consumption such as beer and beverages, continuous rainy weather in the south negatively impacted the beverage industry. Take Mizone, the leading brand of light beverages, for example: last year's sales reached 6 billion yuan, but in the first half of this year, Mizone's sales declined by 4% compared to last year. Zhu Danpeng, a researcher at the China Food Business Research Institute, pointed out in a media interview that Mizone's main sales areas are concentrated in South China, East China, and Central China, and the rainy weather in many places in South and Central China led to the sales decline. Although the beverage war will not reach its peak until early August, the current market's sluggishness has already made many companies hesitant about pinning their next hopes on the coming year.

Marketing Methods Make Consumers 'Waiting for Godot'

Bad news comes not only from the weather; this year's beverage marketing is also changing. "Winning the youth wins the world" has long been regarded as the industry's golden rule. Indeed, young consumers' preferences influence the direction of product development, and the young demographic is also the main consumer group in current society. However, the purchasing groups that companies expected have not arrived as promised, and a round of 'Waiting for Godot' is playing out in front of supermarket beverage shelves. In fact, against the backdrop of declining performance and consumption upgrades, beverage companies have long abandoned the 'price war' strategy, with the reduction of the 'One More Bottle' activity being the most prominent.

Although the 'One More Bottle' activity has decreased, consumers do not have much regret about it; they prefer to see companies invest energy in the quality of the products themselves. Additionally, some consumers have reported situations like 'easy to win, hard to redeem.' Indeed, in the past few years, besides some beverage packaging indicating redemption at the point of sale but merchants refusing to redeem, there have also been cases where winning bottles did not clearly state the redemption location, and retailers refused to redeem. Although relevant management departments and companies have coordinated, such issues have not been resolved in a timely manner. Some consumers have questioned, "Redeeming a two or three yuan bottle of beverage wastes a lot of time and travel expenses – isn't this deceiving consumers?"

In an era of overall industry slowdown and the prevalence of healthy eating and quality consumption concepts, the mainstream price range of beverages is also quietly shifting upward. Industry insiders point out that after lingering in the three-yuan mainstream price range for a decade, Chinese beverages have entered the five-yuan mainstream price range. Zhu Danpeng stated that the shift from three yuan to five yuan in the mainstream price range gives companies more funds to expand channels and increase fan numbers, "with more funds to interact with fans."

Based on the author's survey of some supermarkets in Beijing, it was found that current beverage promotions are mainly developing towards deep consumer bundling. At the same time, 'Life Times' also found that gimmicks on bottle caps have not completely exited the market; instead, they have been replaced by 'open-the-cap surprises,' ranging from phone credit to movie tickets to tickets for entertainment and sports events. Sports marketing and entertainment marketing have become the most important ways for beverage companies to communicate with consumers. Besides appearing on variety shows like 'Running Man' and 'I Am a Singer,' this year's European Championship became a hot spot for beverage companies to attach themselves to. From entering verification codes to check winning information, to scanning WeChat QR codes to follow, beverage companies' marketing efforts this round have all aimed at 'fan attraction.' However, reality is often harsh. An employee at a Lotte Mart supermarket in Dongcheng District told reporters, "We collect a large number of unscratched barcodes and unredeemed beverage bottles every day; in fact, many of them are winners." The above-mentioned person believes that cumbersome activity steps, delayed redemption information, unstable activity pages, and other issues are all reasons for the failure of promotional activities. "Consumers lose patience and interest in beverage companies' money-making methods."

New Product Survival Rate Only 5%

Capturing the young consumer market is not as easy as imagined. In the annual new product launch war, major brands are eager to try but face the embarrassment of few hits, because no matter what kind of FMCG product, new product launches seem unable to keep up with Chinese consumers' tendency to quickly tire of the old. This also makes companies helpless in the face of 'launching new products.' On the one hand, old products have overcapacity; on the other hand, they have to launch new ones. New products are given the expectation of 'rising with the tide' within the entire brand, adding more gambling elements to beverage companies' new product launches.

Besides the upward pricing shift, new products are all without exception playing the health card. Recently, the 'China Shopper Report' released by Bain & Company and Kantar Worldpanel showed that in 2015, China's FMCG market sales growth was 3.5% year-on-year, the lowest in five years, with beer sales declining by 3.6% and instant noodle sales plummeting by 12.5%. Corresponding evidence is that reports show that in recent years, domestic health-concept food products have performed excellently, such as yogurt sales increasing by 20.6%, functional beverages rising by 6%, and water purifier sales growing by more than 50% from 2011 to 2015. This has led almost all beverage companies to aim their new product development at health without exception. Data from China Resources Vanguard shows that there are currently 455 beverage SKUs on sale, with nearly 70 newly launched this summer, accounting for 15% of the total. From this, energy drinks, vitamin drinks, probiotic drinks, and 'quantum water' under the banner of high technology, goji berry juice, walnut milk, and so on are everywhere.

It is understood that the current survival rate of new products in the beverage industry is only 5%. In this regard, Zhu Danpeng believes that the low survival rate of new products is mainly due to several aspects: China is in a period of intertwined rapid development of informatization and industrialization, and the rise of the new generation of consumer groups has caused many product innovations to fail to match; the overall beverage product R&D capability is very lacking; new products have no major highlights and lack innovation.

In an era where the post-90s generation has become the mainstream consumer group, beverage companies have to adapt to trends. To escape the limitations of homogenization, they have resorted to 'self-deprecation.' Not long ago, a group of drinks dubbed 'the hardest to drink in history' appeared out of nowhere, with the slogan, 'If you don't drink this, you'll regret it for life; if you drink it, you'll regret it for life.' This positioning shocked people but also hit the psychology of those who love novelty. After this group of products went viral, one of the hard-to-drink products, Laoshan Mineral Water Company's WeChat official account released some original emojis, such as 'The other party doesn't want to talk to you and poured a bottle of Laoshan White Flower Snake Grass Water down your throat,' while two bottles of Baishuishan mineral water appeared in a live stream on Huajiao by streamer Juan Fu. Regarding this self-deprecating marketing, Zhu Danpeng believes that although it is creative, it is difficult to promote, because brand rejuvenation is not just about changing product definitions and packaging. Although he predicts that more and more beverage companies will use live streaming for marketing in the future, he still calls for beverage companies to enhance their new product development capabilities and let the value of beverages return to the product itself.

-END-

China's best FMCG distributor learning platform
Focusing on providing distributors and enterprises with professional, practical, and actionable tutorials
Committed to helping Chinese FMCG distributors grow rapidly
**The most professional and practical knowledge base in the FMCG industry**
Reply with the red number below to get corresponding content
Reply with number 1 to view the complete knowledge base
| **001** Excellent article selection | **002** Distributor market operations | **003** Terminal visit management | **004** Sales supervisor skills | **005** Sales improvement techniques | **006** Channel expansion | **007** Managing distributors | **008** Distributor development | **009** Distributor internal operations management | **010** Team management | **011** Efficient distribution techniques | **012** Sales manager's eighteen skills | **013** KA operation methods and strategies | **014** First lesson for new salespeople | **015** Internet, brand | **016** Distributor B2B transformation |
[Long press QR code to follow]


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671