---
title: "Deepening Channel Roots: Genki Forest's Humble Transformation"
description: "In early 2023, media reports highlighted Genki Forest's distributor channel issues, prompting New Distribution to conduct market research. A Genki Forest distributor told New Distribution, \"Old Tang is changing, very sincerely.\" Since its explosive debut, the young brand and its founder Tang Binsen have been media focal points, with discussions centered on marketing tactics and hit products. However, the past two years have seen a shift: the 2021 freezer war and joint crackdown by giants, and in 2022, channel crossing and price chaos, lowered targets, and team restructuring. Now, Genki Forest is actively adjusting its approach, focusing on traditional channel depth distribution to compete with beverage giants."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-03-15"
language: "en"
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---

# Deepening Channel Roots: Genki Forest's Humble Transformation

> In early 2023, media reports highlighted Genki Forest's distributor channel issues, prompting New Distribution to conduct market research. A Genki Forest distributor told New Distribution, "Old Tang is changing, very sincerely." Since its explosive debut, the young brand and its founder Tang Binsen have been media focal points, with discussions centered on marketing tactics and hit products. However, the past two years have seen a shift: the 2021 freezer war and joint crackdown by giants, and in 2022, channel crossing and price chaos, lowered targets, and team restructuring. Now, Genki Forest is actively adjusting its approach, focusing on traditional channel depth distribution to compete with beverage giants.

"Old Tang is changing, very sincerely." In early 2023, many media outlets were discussing Genki Forest's distributor channel issues. To this end, New Distribution conducted market research, and a Genki Forest distributor told New Distribution this.

Since Genki Forest burst onto the scene, this young brand, including Tang Binsen himself, has become the focus of media attention. Discussions have mostly centered on Genki Forest's marketing moves and hit products. But in the past two years, the tone has changed dramatically: in 2021, the freezer war and joint encirclement by giants; in 2022, channel crossing and price chaos, lowered targets, and team restructuring; in early 2023, Tang Binsen visited distributors across the country, showing unprecedented support for distributors, investing more funds than previous years in distributor development, training, and market promotion to ensure they sell products better.

Whether intentional or not, public attention has greatly boosted Genki Forest's development, making more people aware of and interested in the brand. Now, being besieged by traditional giants offline, with distributor channels suffering, Genki Forest has proactively lowered its targets. These stories convey a grim atmosphere: Genki Forest is truly in trouble.

Founded in 2016, the company focuses on "0 sugar, 0 fat, 0 calorie" sparkling water products. Through a series of effective marketing tactics and leveraging the convenience store channel dividend, sales exceeded 7 billion yuan in 2021, an astonishing rise. But the growth path has not been as idealistic as imagined; ideals are full, but reality is harsh.

Image source: Genki Forest official Weibo

It's important to note that the domestic beverage industry is dominated by seasoned giants. For Genki Forest at present, establishing and perfecting a deep distribution network in traditional channels is the top priority. Only by achieving this can Genki Forest truly qualify to compete with the giants. Now, seven years after its founding, Genki Forest has stepped into the true battlefield of the giants.

**Genki Forest Advancing Under Pressure**

Beverage giants that started offline all know a truth: **Behind deep distribution lies patience!**

In 1979, Coca-Cola re-entered the Chinese market. Over the next 20 years, it couldn't even rank in the top 10 in sales. It wasn't until around 2000 that Coca-Cola's sales in small shops were still dismal. After completing channel layout and adjustments in the Chinese market, relying on the "101 model" for direct terminal control, Coca-Cola established its leadership in China's carbonated beverage market.

According to one of Master Kong's earliest beverage distributors, the brand's supervisory leader clearly told distributors at the time that the company did not pursue profits in the early stage, and in the first three years, distributors should not overly pursue sales and profitability. Instead, they should first do a good job of covering the outlets and terminal services. This distributor remembers clearly that in his responsible area, he covered all possible outlets, but sell-through was poor, so much so that in the second year he almost gave up. But in the third year, sales suddenly started to rise, "from 50 boxes a day to 100 boxes, from 100 to 200 boxes, multiplying."

Without patience, you can't do well in offline channels, which is completely different from the pace that many new consumer brands are used to. **Online, spending money on traffic has a deterministic formula; you can create miracles with force, but offline is different.**

Consumers need time to develop consumption habits. Especially, when consumers walk into a store and are willing to pick up your product among many brands, only then does the terminal have natural sell-through. After such terminals reach a certain proportion, the market will turn around. But before that, you must ensure that every small shop has your product displayed long-term, and more and more shops carry your product. This requires not only long-term development and relationship maintenance by salespeople but also timely distribution and after-sales support from local distributors. In short, it requires a persistent and stable sales strategy in the regional market.

Why is it very difficult to use online logic to attack offline? Online, everything has data feedback. Relatively, individuals are not that important, but offline is different. For example, when salespeople hand over, distributors advance expenses, terminals verify rewards, shop owners maintain relationships, etc., successors need weeks or even months to sort out the mess left by predecessors. **FMCG people know that if a brand frequently changes personnel in a market, that market is basically ruined, and no amount of money can solve it.**

Genki Forest is different from brands that go from 0 to 1 offline. Before officially focusing on traditional circulation channels in 2020, Genki Forest had already expanded in modern channels (chain supermarkets, chain convenience stores) in first- and second-tier cities, with offline sales accounting for an increasing proportion. This gave Genki Forest confidence in circulation channels.

However, Genki Forest's brand consumer base is mainly concentrated among young people in first- and second-tier cities. **For lower-tier markets and the millions of various sales terminals nationwide, Genki Forest is still a unfamiliar face. From the logic of offline big single products, a single sparkling water is not solid enough.**

Starting in 2020, Genki Forest hired a large number of traditional FMCG personnel and recruited distributors extensively. Some distributors reported that in 2021, the profit margin for distributing Genki Forest products was significantly higher than Nongfu's. Genki Forest's distributor policies were very attractive, including providing freezers and year-end rebates, which greatly boosted distributors' enthusiasm.

**But establishing a complete offline sales system, including channel strategy, team integration, distributor development and management, is not something that can be done overnight.**

**When the team and sales management system are still unstable, relying on distributors to push products and setting high collection targets can indeed yield impressive data in the short term, but it will inevitably lead to market chaos.**

On one hand, the generous early investment allowed distributors to earn profits far above the industry average without much effort, but basic market work, such as terminal relationships, displays, and effective freezer placement, was not done well. On the other hand, under continuous high-growth targets and pressure to stock up, distributors would find various ways to dump goods, leading to Genki Forest being plagued by channel crossing and price chaos in 2022.

A veteran beverage distributor told New Distribution that offline channel distributors are important, but not the most important. "Distributors do icing on the cake, not fuel in the snow." He cited a brand as an example: a city has 30 million boxes of beverage circulation, and nearly 100,000 boxes go through the sales system to every terminal daily and are consumed. It cannot be chaotic; it must operate stably. The core is that the brand has built a stable operating system, not the effort of individual distributors.

**Deep distribution relies on distributors, but distributors are just a lever. The premise for the lever to work is a stable fulcrum, which is the company's organizational capability and sales management system. When the fulcrum is unstable, continuously adding leverage is extremely dangerous.**

Of course, Genki Forest quickly realized this problem and proactively lowered targets twice in 2022. On January 14, Tang Binsen said bluntly in an internal open letter that in 2023, Genki Forest would increase attention to sales work from all aspects, and everyone should "climb our snow mountains and walk out of our grasslands" together. Learn seriously from traditional industries and pay every step of tuition.

Additionally, compared to previous years, Genki Forest's channel strategy this year is clearer: first, continue to focus on key consumer groups, enhance terminal brand presentation, and effectively display more healthy products; second, refine channel management, such as optimizing channel layout, unifying execution standards, and expanding key channels; third, continue to deepen channel sinking and strive to develop emerging channels; fourth, improve the supply chain system and enhance supply chain resilience.

**The True Battlefield for Beverage Giants Is Offline**

In recent years, new consumer brands have emerged rapidly, and beverages have always been a hot spot for entrepreneurship. The reason is simple: the market capacity is large enough, high-frequency, rigid demand, low consumer loyalty. As long as you hit the needs of even a small segment of consumers, you can quickly ramp up sales.

Therefore, in the past few years, we have seen various new brands, with the support of capital and traffic, quickly achieve tens of millions or even hundreds of millions in sales. In other industries, hundreds of millions is not low, but for beverage giants, they wouldn't even glance at it.

In China's beverage market, annual revenue exceeding 10 billion yuan is a threshold. Above 10 billion, you have a chance to enter the top 10. A big single product selling 1 billion yuan is considered "entry-level."

The disparity in scale is only one aspect. **What truly reassures industry giants is that these new consumer brands are only fluttering in marginal markets. Beverage consumption has the characteristics of non-planning and immediacy, coupled with low unit price and high transportation costs. Offline channels are the main battlefield for beverage giants.**

According to retail sales estimates, China's soft drink market exceeds one trillion yuan. At least 70% of sales come from offline. Further segmentation includes modern channels (chain supermarkets, convenience stores), catering channels, traditional circulation channels (mom-and-pop shops, community grocery stores), special channels (airports, stations, gas stations, hospitals), and vending machines.

Among these, nearly 6 million traditional circulation channel terminals are the focus of brands. They are inconspicuous and scattered, but they are deeply embedded in communities and close to consumer groups. Only by placing products on their shelves and getting millions of shop owners willing to promote and sell your products can you truly build up sales of tens of billions or even hundreds of billions for beverage giants.

These terminals are distributed across 333 prefecture-level cities, 2,844 districts and counties, and 41,658 townships and streets in China. In such a super-large, three-dimensional, multi-level market, truly reaching these terminals and making them effective sales points is an extremely complex matter.

But this is the true battlefield for beverage giants.

In this battlefield, a bottle of water costs only 1-2 yuan, but it has successively pushed the founders of Wahaha and Nongfu Spring to the position of China's richest person. Stable beverage sales allow giants like Coca-Cola, Master Kong, and Uni-President to steadily achieve tens of billions in revenue. Even amid trademark disputes, China Red Bull still holds sales of over 20 billion yuan.

**But to stand firm in this battlefield, you must rely on deep distribution, build your own distribution network, place products in terminals, do good shelf displays, maintain relationships, and make shop owners willing to sell your products.**

Whether it's Coca-Cola's "101 model," Jinmailang's "four-in-one model," or Master Kong's "channel intensive cultivation," the core goal is the same: seize terminals—because sales come from terminals.

Deep distribution is a complex and huge circulation value chain, in which distributors are extremely important because brands cannot effectively connect with millions of terminals themselves. Distribution, ordering, delivery, and after-sales service—they are the relay nodes.

When Genki Forest enters traditional channels, distributors are an unavoidable key link. According to relevant information, Genki Forest's sales exceeded 7 billion yuan in 2021, with over 1,000 distributors. Compared with giants, there is still a gap. But it's a good start. However, in 2022, Genki Forest faced unprecedented challenges, with sales far below expectations, forcing multiple target reductions. Distributor channel crossing and price chaos became common phenomena.

**"In the long run, relying on distributors to develop our sales network is the right path. The so-called decentralization, this internet thinking is poison, and it shows insufficient understanding of sales."**

At the distributor conference at the end of 2022, Tang Binsen faced the problems head-on. His transformation has been expressed very thoroughly. This is a positive signal, but things are not that simple.

"Genki Forest is still the beverage brand to reach 7 billion yuan in annual sales the fastest so far: Uni-President, Coca-Cola, and Dongshen Te Yin all took about 15 years, Master Kong was faster at 10 years, while Genki Forest was founded only 7 years ago." Some media compared Genki Forest's development pace with other giants. "Fast" is indeed an advantage of Genki Forest's early development with internet genes, but in traditional offline channels, this may be precisely the problem, and it also harbors huge potential.

**The Fundamental Skills of Deep Distribution**

In 2021, Genki Forest announced it would place 100,000 freezers at terminals. The first to react was Nongfu Spring, the leader in packaged drinking water. That year, the freezer war was a hot industry term. **Being able to make the industry leader nervous actually proves Genki Forest's success. Nongfu Spring's nervousness is not unreasonable; it knows that offline terminals are the foundation of its industry leadership.**

Nongfu Spring entered the packaged drinking water track in 1997 and has maintained the number one market share in packaged drinking water since 2016. But Nongfu Spring's path to the top was a long process.

The first packaged drinking water to debut was "C'estbon" distilled water in 1990, but it was Wahaha that truly shone. In 1996, Wahaha launched purified water. Through celebrity endorsements and the joint sales system model, from the 1990s to 2005, Wahaha maintained its position as the leader in packaged drinking water. From 2007 to 2015, Master Kong, Wahaha, Nongfu Spring, and C'estbon competed fiercely, with marketing wars frequently reported in the press. It wasn't until 2016 that Nongfu Spring finally established its leadership in packaged drinking water.

According to industry research reports, Nongfu Spring currently holds a 34% market share, while Wahaha has only 8%.

What happened between Wahaha and Nongfu Spring?

From "Nongfu Spring is a bit sweet" to later "We don't produce water, we are just nature's porters," including its "natural water" vs. "purified water" dispute and the "weak alkaline theory," Nongfu Spring gives us the impression of a company very good at marketing. This is actually just the side we easily see. What truly made Nongfu Spring rise is its direct terminal control distribution network.

In 1994, Wahaha established the joint sales system, signing agreements with nearly 8,000 distributors nationwide, stipulating that at the end of each year, first-level distributors must deposit 10% of that year's sales as a guarantee into Wahaha's account. Wahaha pays interest higher than bank deposits, and goods are shipped only after distributors pay. At the same time, provinces are divided into first, second, and third-level wholesale, with price tiers set, strictly limiting sales within their own regions.

Nongfu Spring also learned from Wahaha in its early days, but at that time Wahaha had the most stable distributor channels in the industry. Latecomers relying on step-by-step imitation could not defeat the industry leader.

In 2008, Nongfu Spring began a market intensive cultivation model, with the core being direct terminal control. Nongfu's sales staff were responsible for terminal maintenance and order taking, and brand promotion activities, while distributors cooperated with delivery. Later, Nongfu made two more reforms, launching a partnership exclusive model where Nongfu pays base salary and distributors pay commissions. Distributors are given a fixed 8% channel fee, and regional managers have a certain expense quota. This greatly increased business enthusiasm, with higher salaries and reduced corruption. From 1997 to 2016, from founding to the top, Nongfu Spring took nearly 20 years.

Wahaha bound itself to distributors, while Nongfu Spring further sank down to direct terminal control. This is the reason Nongfu Spring won. Not only Nongfu Spring, but also beverage giants like Coca-Cola, Master Kong, and Uni-President adopt this model, from headquarters to large regions, provinces, cities, streets and towns, down to individual terminal shops. This is a huge and complex sales network.

Management guru Peter Senge said, **Every company has two theories: one it professes and one it uses.**

This sentence applies equally to an industry.

**When we view deep distribution from an industry perspective, it is a model, a circulation value chain, a sales network, but behind it, it is actually a management system that maintains the operation of this system, and the strong organizational capability of an enterprise.**

An industry practitioner lamented: **Beverage companies maintain frontline sales teams of tens of thousands of people year-round. In terms of geographical breadth, chain length, and network density, I don't know which industry has management difficulty comparable to FMCG companies with deep distribution.**

Indeed, as Shi Wei, the advocate and promoter of the deep distribution model, said in his book "Deep Distribution: Controlling the Channel Value Chain": "Deep distribution means intensive market development and operation, which will inevitably increase the management difficulty of the marketing team. In other words, only enterprises that can build, control, and manage a huge marketing team can implement deep distribution."

**Because of this, implementing deep distribution is extremely difficult, and few succeed. But if you really do it well, you will likely become a long-selling enterprise with a channel moat.**

Looking at the current domestic beverage head brands, they have all taken more than a decade or even decades to reach their current positions, building huge sales networks and coordinating tens of thousands of salespeople, thousands of distributors, and millions of terminals. This is not something that can be done overnight.

**"The premise of respecting laws is to have patience. The internet logic of creating miracles with force doesn't work in offline channels."** A senior industry insider commented on Genki Forest's channel business.

**Genki Forest Respecting Industry Laws More**

"Genki Forest has been around for about 7 years now... In the past 7 years, we have been too lucky. Our products are okay, but some problems have indeed been exposed in the process. Later, at the end of the year (2022), we set a theme called 'Starting Over.'" At the national distributor conference last year, Tang Binsen reviewed 2022 with three words: "high-spirited, disheartened, and prodigal son returning." The transformation in 2023 is happening at Genki Forest...

Image source: Genki Forest official Weibo

After the Spring Festival, Tang Binsen visited distributors intensively. Genki Forest, just 7 years old, is learning how to deal with distributors. **But intensive visits to distributors may just be a direct manifestation of "increasing attention to sales work." To stand firm in the main battlefield offline, the key is to understand and respect the laws of this market.**

Relevant sources told New Distribution that Genki Forest's 2023 targets are already very pragmatic. Tang Binsen emphasized internally: **Less is more, slow is fast.**

Tang Binsen has repeatedly stated that he wants to learn from predecessors in traditional industries, respect industry laws, and embrace traditional experience. The expansion and market cultivation of traditional offline channels require time and patience. The internet's logic of rapid growth does not work offline; this is industry consensus. **Information can be transmitted, but cognition cannot.** "What you get on paper is shallow, but you know it must be done personally." After experiencing the rapid advance, ups and downs, and various problems of the past three years, Tang Binsen should have understood this thoroughly.

"Proactively slowing down and cooling off can make the company respect the laws of the beverage industry more, and the development pace will be more stable. Such organizational planning can also go further in the future." In fact, **Genki Forest had already started organizational restructuring in 2022, aligning everything with traditional enterprises.**

Traditional FMCG companies all have a management system from headquarters to large regions, provinces, city (group) managers, and business supervisors. Genki Forest's sales business also follows this structure. Now it has changed the previous amoeba management model, **which matched the internet's "fast trial, fast iteration" pace but was incompatible with offline operations.** This is a change at the "internet gene" level, indicating that Genki Forest is truly starting to fight in this battlefield with the posture of traditional giants.

There is a lot of talk about Genki Forest's channel issues now, with channel crossing and price chaos appearing frequently in the media. Negative and pessimistic information naturally shows a kind of "depth," but from an objective perspective, this is also an inevitable pain in the growth of young Genki Forest.

New Distribution interviewed several Genki Forest distributors. They have not given up on Genki Forest's business, mainly because Genki Forest already has considerable brand power. "Genki Forest is a very responsible company, not a short-sighted one that only cares about the present." This is the reason they still favor it.

A Beijing distributor said that for a brand to be stable, deep, and solid in offline channels is a very difficult thing, requiring time to settle, and problems in the middle are inevitable.

He told New Distribution that Beijing distributors, with the support of Genki Forest's Beijing regional head, established a chamber of commerce in 2021. The initial purpose of the chamber was to establish rules to control channel crossing and price chaos. Starting in August 2021, by the end of the year, they investigated over 70 cases of channel crossing. This self-governing organization worked very well. In 2022, when channel crossing was most severe, Beijing only investigated over 20 cases, more than 50 fewer than in 2021. Since the chamber was established, it has played a role not only in controlling channel crossing and price chaos but also in coordinating resources and organizing learning on finance, taxation, law, and market operation experience.

According to New Distribution's research, some distributors did give up distributing Genki Forest in 2021 and 2022. Some actively left after making money in the face of continuous pressure to stock up, and some terminated cooperation due to poor communication after team adjustments.

**But the vast majority of distributors still choose to move forward with Genki Forest. Genki Forest's distributor base is still there, and core distributors have even increased.**

"Genki Forest has only been around for six or seven years. Compared with traditional brands, it has been very, very fast. Why is it stabilizing now, slowing down, and reducing speed? It is to settle down, make the market stable and solid. Like those giants, Genki Forest will definitely have a group of core distributors who will stay with it for 10, 20, or even 30 years."

A distributor made this remark after attending the annual meeting of another major brand he distributes.

In addition to organizational optimization adjustments in line with business development, what gives distributors confidence is Genki Forest's ability to continuously create hit products. In 2022, despite the overall decline in the beverage market, Genki Forest's sparkling water achieved counter-trend growth, firmly occupying the sugar-free track. Its "0 sugar, 0 fat, 0 calorie" product concept has driven the growth of China's sugar-free beverage market.

Public data shows that by 2020, the domestic sugar-free beverage market had grown 7 times compared to 2014. Now, Genki Forest sparkling water has become a new social currency for young people, a brand they are particularly willing to share and discuss.

In addition to sparkling water, in 2022, Alien electrolyte water achieved breakthrough and rapid growth, with breakthroughs in product selling power, brand power, and key channels. More and more consumers are actively seeking Alien electrolyte water, and good sell-through has greatly boosted distributor and terminal confidence in the product.

Image source Weibo: Alien_alienergy

**Winning the hearts of distributors is the result of systematic efforts.** Distributors want a stable offline sales system and a brand they can profit from continuously in the long term. If they can make money by following the manufacturer's requirements, they have no motivation to cross channels or disrupt prices. The key lies with the brand itself.

In China, tens of thousands of beverages are launched every year, and the vast majority never get a chance to meet consumers. Only a handful sell over 100 million yuan. In the past few years, only Genki Forest has achieved a scale of 7 billion yuan, truly entered offline, and caused panic among giants.

"A general's success comes from the bones of ten thousand." Coca-Cola, Master Kong, Uni-President, Nongfu Spring, C'estbon, Red Bull... Behind these giants is a long list of brands that were once popular but eventually disappeared. This list can be stretched very long.

Genki Forest is not participating in a sprint or a long-distance race, but a marathon. In a marathon, the worst thing is to lose your rhythm.

In the initial stage, due to lack of experience, Genki Forest's offline sales were unsteady, stumbling forward. Fortunately, Genki Forest has not stuck to its own ways. It respects laws, cultivates patience, and adjusts its rhythm.

Genki Forest's offline campaign has just begun. As the saying goes, "the spring breeze is still chilly." How to break through the cold and bring new growth and harvest in the changing seasons of the new year, Genki Forest gives us more expectations.


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