PaiDong Research Institute: Have you ever drunk a coconut juice called Special Forces? For this question, people from different places will give completely opposite answers. At a banquet in Jiangsu, a friend told me that locals only choose Special Forces for coconut juice. Compared to Coconut Palm coconut juice, which created the category in 1988, Special Forces coconut juice appeared twenty years later. But in terms of revenue, Special Forces is second only to Coconut Palm; in 2016, its sales in Jiangsu Province alone reached 1 billion yuan. This makes one curious: in the coconut juice market where Coconut Palm firmly holds the leading position and the pattern is relatively solidified, how does Special Forces take root and become the synonym for regional coconut juice? As a microcosm, what opportunities and difficulties does Special Forces reflect in the coconut juice track? (Note: Special Forces coconut juice has now been renamed SUSA; this article continues to use Special Forces.)

Breaking Out: Special Forces

In the business world, the "people, goods, and scenes" we often discuss remain the underlying logic for driving consumption.

People's needs are the premise for the birth of products, and scenes create opportunities for the convergence of people and the generation of needs. Different scenes often gather different people and shape different consumption habits.

For example, when it comes to coconut juice drinks, some people's first reaction is the Coconut Palm coconut juice and HelloCoco commonly seen in convenience stores; others immediately think of Feino coconut milk, which tops e-commerce rankings and is known as the coffee companion; and some, like my friend who has eaten at all kinds of banquets, have an impression of coconut juice as 1.25L large-bottle Special Forces coconut juice.

Image source: SUSA Special Forces Coconut Juice Official Store

In fact, as a typical table drink, nearly half of the consumption demand for coconut juice drinks comes from dining occasions. Whether it is marriage, birthday celebrations, housewarming, or academic success, Chinese people always hold a banquet and add cigarettes, alcohol, candy, beverages, and other foods. We found that the success of Special Forces coconut juice began with leveraging the banquet market.

Coconut Juice Blue Ocean: Banquet Market

1. Single product + single channel

How big is the domestic banquet market? Data shows that in 2021, there were 7.636 million couples getting married in China, and the scale of the wedding banquet market exceeded one trillion yuan; in 2022, the number of people taking the college entrance examination was 11.93 million, and the consumption capacity of beverages for升学宴 (banquets celebrating admission to higher education) was at the level of tens of billions; if banquet consumption is further segmented, there are also birthday banquets, full-month banquets, teacher-appreciation banquets, and other categories. We unexpectedly found that Special Forces coconut juice in 2012 avoided the crowded retail track and chose to focus on the banquet market in Jiangsu. In response to the characteristics of large crowds and high consumption at banquets, Special Forces mainly promoted large-bottle share-pack single products, and then gave consumers the choice of 1L and 1.25L according to the scale of the banquet, successfully opening up the coconut juice market.

2. Fresh-squeezed concept + price grabbing

In traditional domestic banquets, alcohol and beverages are a fixed combination. In terms of meaning, alcohol is nothing more than social currency alcohol and staple alcohol; the circulating products in the banquet market are naturally the former. Therefore, driven by alcohol priced at hundreds or even thousands of yuan, consumers also have a higher price acceptance for beverages. When other coconut juice brands maintain the price of 1L at around 10 yuan, the large-bottle Special Forces coconut juice is priced at 15 yuan. On the one hand, Special Forces pioneered the "fresh-squeezed" concept, seizing a higher-end positioning with higher quality; on the other hand, it chose a price higher than similar products, leaving sufficient price space for distributors to promote.

3. Word-of-mouth fission + product repurchase

"If a banquet averages 30 tables, with 10 people per table, 300 people drink Special Forces coconut juice. As long as the product quality is excellent, it can produce a fission effect from hundreds to thousands." For banquet consumption, what matters most is often not before and during consumption, but in the feedback stage after the consumption behavior is completed. A distributor told us, because Special Forces coconut juice uses banquets as the communication node, consumer feedback will continue to influence consumption behavior. "Doing storefronts and advertising is a form of publicity, but at most it can make customers see your product; doing banquets is the best way to let them go from perception to repurchase."

Channel Intermediary: Cigarette and Alcohol Stores

After focusing on banquets, it is not only necessary to have appropriate product positioning, but also to select channels. Unlike other coconut juice brands, Special Forces coconut juice's channel is not in hotels, convenience stores, or wholesale markets, but in cigarette and alcohol stores. Perhaps this is the special feature of Jiangsu and Anhui: if you stroll on the street, you will see a cigarette and alcohol store on the left, another one a few hundred meters ahead, and another one on the right. Tianyancha data shows that in 2012, there were 813,300 existing cigarette and alcohol stores in China, which grew 3.97 times to 3.2271 million by 2021. The larger the population and the more developed the economy, the more vigorous the livelihood consumption market represented by cigarette and alcohol stores. Through interviews, we found that in the ubiquitous cigarette and alcohol stores, Special Forces coconut juice is penetrating regional markets through bundled sales, cross-industry alliances, rural banquets, and other methods.

1. Combined sales of famous liquor and cigarettes

In different regions, the alcohol that appears with Special Forces is also different. For example, in Anhui, Gujing Gongjiu and Special Forces coconut juice are often a fixed combination; opening the WeChat Moments of a Jiangsu distributor, Special Forces and Yanghe Dream Blue appear side by side. The competition in the banquet market, from white wine and red wine battles to carbonated beverage battles, fruit juice beverage battles... new brands and new products emerge in endlessly. The common practice in cigarette and alcohol stores is combined sales. Distributors, while acting as agents for Special Forces coconut juice, also act as agents for regional famous liquor and cigarettes, achieving maximum consumer conversion through friendly recommendations or product bundling.

2. Cross-industry alliances with hotels and wedding planning companies

"Doing the banquet terminal deeply and thoroughly is not easy. In addition to the combination of cigarettes, alcohol, and beverages, it is more important to link up in the procurement scenarios of banquet consumers." A cigarette and alcohol store owner told us that uniting with hotels, wedding planning companies, 4S stores, and other cross-industry alliances can quickly distribute goods to the dining table. For example, some distributors conduct joint promotions with wedding planning companies—holding a wedding banquet with Special Forces coconut juice not only saves customers the time cost of choosing beverages, but also seeks the good omen of "adding joy to joy."

3. Opening up the "one-stop rural banquet service"

China is a large agricultural country. National Bureau of Statistics data shows that in 2012, the rural population accounted for more than 70% of the total population. The human interactions and red and white affairs in rural areas are condensed in rural banquets. Those who truly understand rural banquet consumption know that from the procurement of banquet raw materials to the arrangement of pots, pans, bowls, and tables, it is often handled by the more professional "one-stop" service in the village. Cigarette and alcohol store owners who move in the human society have captured the popularity of the rural banquet market, and distribute goods through rural banquet chefs and red and white council. Perhaps it is also for this reason that among a broader age group of consumers, Special Forces has become the synonym for coconut juice in a certain region.

Terminal Interception: Local Advertising

Channels and terminals can be said to be the two key factors determining product sales; the former determines the way and place of product entry, and the terminal directly affects consumers' purchase behavior. However, banquet consumption also needs to consider the consumer psychology of "saving face." Holding a banquet requires face, so Special Forces coconut juice definitely needs advertising support. For the sinking market, internet advertising is not necessarily effective; local advertising and ground market have great potential. Online, if you turn on Jiangsu Satellite TV, Anhui Satellite TV, or Jiangxi Satellite TV, you can see the sponsor Special Forces coconut juice on popular variety shows such as "If You Are the One," "The Brain," "Boys and Girls Forward," and "Gold Mediation Officer." Offline, if you visit county towns in northern Jiangsu, Anhui, Jiangxi, Hunan, Hubei, and other places, you can also find Special Forces coconut juice in the form of wall advertisements, store signs, and window paintings.

The Coconut Juice Track Is Getting Competitive

Head Leopard Research Report shows that from 2017 to 2021, the market size of coconut liquid beverages in China grew from 10.28 billion yuan to 14.44 billion yuan, and the plant protein beverage category to which coconut juice belongs is impacting the scale of 100 billion yuan. To a certain extent, the popularity of Special Forces coconut juice benefits from the small but beautiful coconut juice business. Compared with the nearly trillion-yuan market size of domestic soft drinks, coconut juice occupies a small share, and no tycoons like Zong Qinghou or Zhong Shanshan have ever emerged. But in terms of gross margin, coconut juice drinks (50%) are generally higher than market-flavored beverages (30%). When consumers' demand for beverages upgrades from taste satisfaction to natural, healthy, and enjoyment, how "beautiful" the coconut juice business is can be seen from the swarm of competitors in the track. In September this year, "Keke Manfen," which was established only two years ago, completed a Series A financing of tens of millions of yuan; in July last year, Genki Forest launched the low-sugar coconut juice "Summer Wind"; Hello Coco, which targets the young market, has successively completed terminal coverage in chain convenience stores such as Lawson, 7-11, and FamilyMart... In April last year, Luckin Coffee launched the raw coconut latte, selling more than 4 million cups in a week, and completely popularized Feino thick coconut milk. The "2022 China Beverage Industry Product Report" shows that among 40 freshly made coffee and tea beverage brands, 92.5% launched products with coconut elements, and the frequency of coconut use ranked first, exceeding strawberry by 108 times. With the breakout of sugar-free coconut juice and thick coconut milk products, coconut juice drinks have entered the next round of innovation. In 2021, the NFC-focused Special Forces Third Generation coconut juice was launched, with 1.25L large bottles for the banquet market and 420ml and 250ml portable bottles for the convenience store immediate consumption market. According to the official website, SUSA coconut juice, renamed due to trademark disputes, has been focusing on developing eight major markets including Zhejiang, Anhui, Shandong, Hunan, and Hubei since 2016, and will accelerate the nationalization process in the future. But from the relatively "stable" revenue in recent years, Special Forces coconut juice, which is advancing nationwide, faces similar crises as traditional coconut juice and regional brands.

Difficult to Advance Nationalization

Product: Lacking Innovation

For example, compared with more and more new coconut juice brands, Special Forces, which pioneered "fresh-squeezed coconut juice" ten years ago, seems to have stagnated. When product concepts and selling points remain unchanged for a long time, the dilemma of brand upgrading and weak nationalization follows. To a certain extent, this is also a common dilemma for traditional coconut juice brands. In recent years, flavored beverages have undergone upgrades and transformations in terms of carbonation, sugar-free, NFC, compounding, and flavor derivation, while the dairy industry has experienced category expansion from basic pure milk to Ambrosial, Pure Zhen, and then to Jindian, Telunsu, and Juanshan. In contrast, Special Forces coconut juice, the Third Generation coconut juice has not yet completed a new round of promotion and popularization, and the diversified fruit compound juice, SUSA lactic acid bacteria, and whole-component corn juice have performed mediocrely.

Channel: Geographical Limitations

It cannot be denied that Special Forces coconut juice's "hegemony" in the Jiangsu market cannot be shaken even by the leader Coconut Palm, but in the process of nationalization, such a regional model still has significant limitations. As the second largest economic province in China, Jiangsu has the hardcore economy of 25 top-100 counties, and the luxury of banquet traditions is more than in other regions. This means that if Special Forces coconut juice can only form a trend of banquet consumption in Jiangsu, Anhui, and other places, it may be difficult to obtain nationwide, long-term brand popularity. After all, when the once irreplaceable cigarette and alcohol stores are transforming towards chain models such as Huazhi Liquor Store and 1919, when high-end beverages like coconut juice are flowing to more dispersed township markets, how to reshape channels and how to prevent counterfeits are almost common problems for regional brands.

The Confidence of Regional Brands

Regions are always diverse and complex. The sample of Special Forces coconut juice cannot represent the entire situation of regional brands, but it is still a window for us to observe the market. When we walked into a trading company that acts as an agent for "Special Forces coconut juice, Mengniu yogurt drinks, and Great Wall dry red wine," at a glance, we could only see a narrow aisle in the middle, with coconut juice stacked as high as the door on both sides. The boss, clerk, cashier, delivery rider... Old He's day at the trading company begins with multiple roles. "I have almost visited all the farmhouse restaurants, supermarkets, barbecue restaurants, and flower shops on the main street of the county town. On 618, 818, and Double 11, when customers order my products for banquets, I give them coupons for other supermarkets, barbecue restaurants, and flower shops, and on holidays I follow the manufacturer to do activities like smashing golden eggs and square promotions." Old He told us that it is true that business has become increasingly difficult in recent years, but if you are willing to put effort into customers and human relationships, you can still continue. Customers and human relationships may be the confidence for a regional coconut juice old brand to live well and even form a distinction, amidst the emergence of new coconut juice brands. On the other side of confidence, there is also competition. Because of differences in economy, culture, customs, and tastes, the vast domestic market can always form several independent territories. If we stretch the timeline longer, how to overcome cross-regional development and how to maintain long-term advantages are the next propositions for Special Forces and similar brands.