In 1768, British chemist Priestley accidentally dissolved carbon dioxide directly into water. This accident, over two centuries later, sparked a colorful beverage wave on the other side of the world. -01- The Devil's Water of Foreigners Four years later, the father of carbonated water again invented equipment to produce carbonated saturated water, opening the door to the soda world. In the mid-19th century, the West widely accepted this soda and passed on the joy of this 'happy water' to the world. In 1840, the Opium War opened the closed doors of the Qing Dynasty, and this Western 'devil's water' entered China under the leadership of the Dutch, known as 'Holland water.' In 1876, Ge Yuanxi's 'Miscellaneous Notes on Shanghai' recorded: 'In summer, there is Holland water and lemonade, made by machines filling water and gas into bottles. When opened, the cork pops out; beware of it hitting your face. Drink it immediately to relieve summer heat.' Since soda was imported, quantities were extremely limited, prices were high, and it could only be seen in some treaty ports. In 1900 and 1902, the British established the International Soda Water Factory and Shanhaiguan Soda Water Factory in Tianjin, but due to feudal thinking and strong anti-foreign sentiment after the Opium War, people considered it 'devil's water' and refused to drink it. Holland water's first encounter in China faced many difficulties. After six years of dealing with this 'devil's water,' China established Ruiji Company and Huihua Soda Water Factory in Suzhou and Shanghai respectively. Although these two Holland water factories were national enterprises, they faced resistance from traditional Chinese medicine that had been rooted for thousands of years. 'Water and gas are too stimulating, harming the stomach and intestines; they are not good things.' Under the sacred halo of these doctors, Holland water never became widespread nationwide, but instead became a unique historical mark in the Jiangsu, Zhejiang, and Shanghai regions. Even in the 1930s and 1940s, one could still see vendors on street corners carrying large buckets labeled 'Holland water' to bring a foreign coolness to people. The government was not idle either. In 1905, the Ministry of Health was established, requiring food and beverage companies to submit samples to the police department for inspection before obtaining a business license to sell. In 1907, regulations specifically for soda were introduced, clearly stating that soda must use edible white sugar, foreign sugar, and fruit juice, and containers must be sterilized, with no use of flavorings, colors, or saccharin. To this day, it's surprising that regulations from over a hundred years ago still apply, and that things prohibited a hundred years ago are still being done by some companies. -02- A Hundred Flowers Bloom In 1920, Zhang Zhiliang, then the official seal keeper of the Fengtian Governor's Office, although serving under Zhang Zuolin and enjoying endless wealth and honor, still wanted to start a business. This insightful Zhang Zhiliang saw a new investment direction: the spring well in front of Bawang Temple should be a business opportunity. What business opportunity could a well bring? We need to go back to 1778, when Emperor Qianlong toured Shengjing. Along the way, he drank Beijing Yuquan water carried by camels, but due to the long journey, the water had become turbid and unsuitable for drinking. What to do? He couldn't just not drink, but the emperor was used to Beijing Yuquan water. An official suggested mixing it with local Bawang Temple well water, and surprisingly, it was even sweeter than Yuquan water. Emperor Qianlong was so pleased that he designated Bawang Temple well water as imperial water. Subsequently, restaurants and teahouses in and out of the city came to fetch water from Bawang Temple, and the well was later called 'the sweetest spring in the Northeast.' After Zhang Zhiliang's investigation, he found that someone had beaten him to it. Zhu Shouchen, the owner of Beijing Shuanghesheng Brewery, had already seen the opportunity and came from Beijing to Fengtian to rent over three acres of land to build a soda factory. Just as Zhang Zhiliang was about to find time to talk to Zhu Shouchen, Zhu Shouchen came to him himself. It turned out that after renting the land, Zhu Shouchen found that not only a soda factory but even a small workshop was difficult to establish without local bigwigs' support. Hearing that Zhang Zhiliang had great influence in Fengtian and wanted to start a business, he came to him directly. When they met, Zhu Shouchen explained his intention, and they hit it off immediately. They decided not only to produce soda but also beer and soy sauce in the future, showing a modern cross-industry style. So Zhang Zhiliang took the lead in establishing a joint-stock company. Crowdfunding and listing. After the Bawang Temple Company was established, Zhang Zhiliang released 1 million yuan in shares, which were subscribed by the public, merchants, banks, and the government. Only after receiving the money did they start building the factory. Still short of funds, they mortgaged the fixed assets they had built, and with the money, imported German beer and soda production equipment, moving away from manual production. Beer and soda became the company's two pillars. Advertising and marketing. At that time, merchants adhered to the business philosophy of 'good wine needs no bush,' but Bawang Temple already chose to advertise in the media. In the then 'Shengjing Daily' and 'Dong San Sheng Min Bao,' slogans like 'The No.1 brewery outside the pass, the only sweet spring in the East Province' and 'Do you want clean and tasty beer, soda, and soy sauce? Please use Bawang Temple Beer, Soda, and Soy Sauce Company products' often appeared. National brand. Leveraging the reputation of Bawang Temple's 'sweetest spring in the Northeast,' Zhang Zhiliang named the soda factory 'Bawang Temple.' The trademark was also carefully chosen: 'Golden Duo,' symbolizing resistance to foreign invasion, revitalizing the national economy, and striving for world-class standards, responding to the public's sentiment of boycotting foreign goods and launching a mental business war. To squeeze foreign products out of the market, Bawang Temple Soda Factory adopted a strategy of small profits and quick turnover, sparking a price war. By 1928, Bawang Temple's annual soda production reached 2.88 million bottles. Even by today's standards, many beverage companies' so-called novel marketing tactics are leftovers from Zhang Zhiliang's playbook a hundred years ago. In 1927, Coca-Cola and Watson's jointly entered the Shanghai market. Targeting the preferences of young people at the time, they designed a billboard saying 'Please drink Coca-Cola.' In warm red lighting, a woman in gorgeous attire (Ruan Lingyu) sat in a corner of a bar, elegantly holding a glass of Coke, her gaze soft and flowing. The advertisement was a huge success. Leveraging Ruan Lingyu's popularity, Coca-Cola sales soared, becoming a trendy drink. Celebrity endorsements, which companies use today, also appeared a hundred years ago. During this period, beverage development entered a mode of a hundred flowers blooming. The eight major soda factories gradually formed: Beijing's Beibingyang, Tianjin's Shanhaiguan, Shanghai's Zheng Guanghe, Guangzhou's Asia, Shenyang's Bawang Temple, Chongqing's Tianfu Cola, Shandong's Laoshan Cola, and Henan's Shaolin Cola. -03- The Era of Heroes Rising Together In 1973, Li Jingwei, who had been sidelined, was transferred to a failing distillery in Sanshui as deputy director. It was a small workshop with only a few wine vats. The 34-year-old Li Jingwei carried rice wine on his back every day, going door to door to sell it. During a business trip to Guangzhou, he drank canned Coca-Cola for the first time and calculated that the profit was much higher than making wine, so he came up with the idea of making beverages. In 1984, coincidentally, the National Sports Commission developed a novel beverage that was said to help athletes quickly recover their strength. After the results came out, they were troubled by the lack of manufacturers willing to cooperate. At that time, Sheng Lian, the team's head coach, learned about it and introduced: 'My cousin runs a distillery in Sanshui. Why don't you go and try?' At that time, the Sanshui Distillery was still very shabby; the professors who came sat on benches. Li Jingwei cherished this opportunity. He treated the researchers to lavish meals and promised on the spot to provide financial and equipment support. Three months later, after more than a hundred experiments, an orange, alkaline electrolyte beverage was born. This was the future 'Oriental Magic Water' Jianlibao. In the same year, China participated in the Olympics for the first time in the new era. Li Jingwei used all his resources to make Jianlibao the official designated beverage for the Chinese delegation. At that Olympics, China achieved its first gold medal, and the women's volleyball team's three consecutive championships shocked the world. One miracle after another occurred. A Japanese journalist saw female athletes drinking a beverage they had never seen before, so he wrote an article titled 'Rapid Attack with 'Magic Water'?' which was widely reprinted by major media. Jianlibao became famous overnight, achieving annual sales of 200 million yuan in just two years. Subsequently, Longhuan Company (predecessor of C'estbon), Huiyuan, Coconut Palm, Robust, and Nongfu Spring appeared one after another. Wahaha also shifted from health products to beverages. In 1998, leveraging the World Cup, it launched Future Cola, with annual sales reaching 200 million yuan, surpassing Jianlibao and taking the lead in the beverage industry. This was an era of heroes rising together in the beverage industry, where reputation, marketing, and channels became the three axes of enterprises. -04- The Wave of Diversification In 2001, China officially became the 143rd member of the WTO, and foreign beverages accelerated their pace of exploring the Chinese market. Coca-Cola launched almost one new product every month, frantically attacking the market. After 2003, Wahaha's Activate, Nongfu Spring's Scream, Nestlé's Soothing, Uni-President's Energy, Master Kong's Jinpao, and Huiyuan's He+She sparked a wave of functional beverages. In 2011, a retro wave hit. Beibingyang soda, which had faded from people's sight, resumed production and quickly swept Beijing, with 480,000 boxes sold out daily. Six years later, hawthorn juice, represented by Xiaoshile and Kaiwei, entered an explosive period. In the beverage market, a new wave appears almost every few years. Is it a change in consumer demand, or is it that intense competition forces companies to expand into new categories? A large number of beverage companies promote themselves with various gimmicks, seeking differentiated competition: natural mineral water, brain-boosting walnut milk, anti-fatigue drinks... These are nothing compared to the imperial well water of Qianlong, but the breast-enhancing coconut juice is indeed a wild idea. In 2019, Coconut Palm Coconut Juice made it to the hot search multiple times due to its latest slogan 'Drinking from childhood to adulthood,' and it flooded social media. Many people didn't realize that Coconut Palm had been silently working for women's welfare for so many years. Produced under Hainan's intense tropical style, it seems ready to enter the micro-business market at any time and compete with various heroes for the breast-enhancing market. The market is constantly changing, and so are consumers' spending power and concepts. Looking at the century-long history of China's beverage industry, in the face of this nationwide consumption upgrade wave, both international giants like Coca-Cola and Pepsi, and domestic companies like Wahaha, Master Kong, and Uni-President, have encountered development bottlenecks, showing varying degrees of weakness. It seems that the beverage business, which has been making easy money for a hundred years, is becoming increasingly difficult. -05- The Wall Qian Zhongshu wrote in 'Fortress Besieged': 'Those inside want to get out, and those outside want to get in.' This is also apt for describing the beverage industry. Food is the first necessity of the people, and the beverage industry has become the primary target for many entrepreneurs. New people constantly enter the industry, trying to get a share or even disrupt the whole industry, but once they come in, they find things have changed. Red, orange, yellow, green, blue, indigo, violet—a mysterious aura fills the shelves. The beverage industry's competition intensity and update speed are second only to the internet. Over the past decades, many companies have come and gone, and there is no shortage of smoke and fire. A hundred years have passed; some things have changed, and some things remain unchanged. In traditional business wars, the most important thing is to know yourself and know your enemy, and you will win every battle. It's not that the whole industry only copies and doesn't innovate. Most companies see others launch a new product, immediately bring it back for research, and soon a similar product hits the market. Some companies with sincerity engage in follow-up innovation, improving on others' products. Some directly introduce foreign products, localize them, and open up the Chinese market. Some companies engage in independent innovation, investing huge human and material resources to research new products. R&D personnel work behind closed doors in the lab, and the final products are not accepted by consumers at all. In the end, it's better to directly 'borrow' from others, as it's low cost and low risk. What follows is severe homogenization. Most beverage companies have similar formulas, tastes, and packaging, and similar pricing, with no differentiation. In the end, they can only rely on price wars to grab market share, which further reduces profits. Distributors, wholesalers, and retailers make less money and are even less willing to sell your products, creating a vicious cycle. Take a 600ml bottle of beverage retailing at 4 yuan as an example. The factory production cost is only 1.4 yuan. Each box (15 bottles) costs 21 yuan at the factory, 40 yuan at the distributor, 43 yuan at the wholesaler, and finally 45 yuan at the retail end, which is 3 yuan per bottle, making only 1 yuan. From this perspective, it seems the factory does make more, but marketing expenses account for 30%, and after deducting VAT and income tax, the net profit is only 16.7%. Now entrepreneurs seem to have found another way to make money: directly from factory to retail terminal, saving 5 yuan per box, euphemistically called 'no middleman to take a cut.' Without middlemen, you have to rely on yourself, advertising and marketing, a flurry of activity. Is advertising really useful? Take a certain cocktail as an example. The carpet-bombing advertising has been taken to the extreme, infiltrating mobile phones, TV, the internet, variety shows, and endorsements. But this astronomical marketing hasn't brought sales increases for beverage companies; it has even started a pattern of sponsoring while sales decline. However, the year-end summaries of companies are strikingly consistent: raw material and labor costs rise; advertising investment is insufficient, conversion rates are low; product profit margins are insufficient, small distributors are unwilling to sell; physical display fees are insufficient; due to declining sales, sales commissions are low; competitive recruitment leads to a large loss of excellent sales personnel, or they directly defect to competitor companies. Entrepreneurs have done what they should and could do, and in the end, they can only mutter 'Buddha bless' before opening the financial reports. For consumers, a bottle of thirst-quenching water has been played with in various ways over more than a hundred years. Entrepreneurs have contended, and consumers have opened up new taste experiences. Various beverages are launched with various effects. Everything can be a beverage, as if a bottle of drink can solve all problems. In the TV drama 'Under the Zhengyang Gate,' there's a scene: 'Buy a bottle of Beibingyang soda, and two people take turns sipping it to taste the novelty.' What kind of feeling is that? Probably every sip is savored for a long time before being swallowed. Now there are too many types of beverages. Often, when you walk into a supermarket, you're confused. After finally picking one from the dazzling shelves, you don't care which company's product it is. If it tastes bad, you throw it away and never buy it again. Sometimes you encounter 'enthusiastic' salespeople with a set of scripts. You reluctantly buy one, but when you want to buy it again, you can't find it, and the salesperson has new 'good products' to recommend. In the eyes of companies, this becomes consumers' extremely low loyalty to products, leading to very short product life cycles. A new brand can go from prosperity to decline in just two months. Entrepreneurs have almost reached a tacit understanding: launch new products immediately when the product life cycle is about to end, to satisfy consumers' tastes. Consumers are too wronged and too troubled. After all, they really didn't remember who you are, so where does loyalty come from? There are five or six kinds of the same beverage. How to choose? Just grab one. Beverage companies are gambling on the probability of being chosen by consumers, and consumers can only gamble on the probability of buying a good-tasting beverage. -06- Redo In the extremely competitive beverage market, an industry with no competitive barriers, how should one win? Teacher Ai has always believed that every industry is worth redoing with the method of super products. From production organization to product organization The core competitiveness of beverages lies in the formula, but it is easily and quickly copied with modern technology. Entrepreneurs have very weak awareness of property rights. On the other hand, in a situation where users and demands change rapidly, products are easily forgotten or even disliked. In this case, intuitively, only marketing can seize the mind, but unfortunately, marketing is not a competitive barrier. What you can do, I can do, and as long as you're willing to spend money, you can definitely do it better. The so-called marketing played in the beverage industry was already familiar to Zhang Zhiliang a hundred years ago. What supports it now is only brief glory, or even useless. Usually, the correct thing is counterintuitive. The more players in the beverage industry want to fight a marketing war, the more they should do the opposite and find a more fundamental solution: the product itself. In the past hundred years of the beverage industry, from imported goods to domestic products, from one company to a hundred contending, domestic beverage companies have their own brands, but their products are often simple imitations. When they see a certain beverage become popular for a while, they immediately produce similar products. They are more like production organizations in the entire beverage industry chain, controlling costs, increasing output, and completing the production tasks assigned by the industry chain. Because what determines success or failure is not the product but the channel and brand, manufacturers put all their energy into channel construction and brand building, not the product itself. After more and more beverage products flood into limited channel resources, the channel is also confused, not knowing whose products to sell. Naturally, the tail wags the dog: whoever gives a higher profit margin gets more promotion and sells more. Brand building is even more varied and costly, but after spending hundreds of thousands on advertising, it's just a passing cloud in consumers' minds. The gross profit of beverages seems high, but under such pincer attacks, net profit is minimal, and what can be spent on products and users is pitifully small. In the end, they only resort to simple copying and imitation, including so-called 'micro-innovation' (more often 'blind innovation'), which is actually useless. The counterintuitive meaning is: the more you ignore, the more important it is. So on top of various methods like 'fighting for creativity,' 'fighting for formulas,' and 'fighting for packaging,' you should spend more effort on 'making products,' researching users' needs for beverages from the user's perspective. But this must be based on a specific user group. If you desire everyone to be your user, then no one will be your user. Trying to conquer the world with one product will definitely end in a miserable failure. Here are some typical unmet needs of users: The beverage needs of middle-aged men: tired of sweet and greasy, they only want a taste close to natural tea brewing, not a weird flavor made from a bunch of flavorings that tastes neither like tea nor like a beverage. The beverage needs during menstruation: a self-heating, warm drink for women during their period. The beverage needs of non-drinkers: at the dinner table, a drink that doesn't make non-drinkers lose face or be disliked. Drinking Coke or apple cider vinegar is really not appropriate. Of course, the above needs can only be clarified through the user analysis process of super products, and there are certain technical difficulties in product implementation. In the past, companies invested too little in products and R&D, leading to the ability to replicate a new product overnight. So the more difficult it is, the more you should step up R&D, not find a way out. The needs in drinking are far from being met, and there are countless cases of feeling unsatisfied after drinking. This market has great opportunities and huge space. Source: Ai Laosi (ID: ALS111222333) Once the tip is adopted, a reward of 400-2000 yuan will be paid.