Brand aging is the main problem for domestic time-honored soda brands. In Shaanxi, 'cold noodles, roujiamo, and another bottle of Bingfeng' form the cultural symbol 'Sanqin Set Meal'. 'No Bingfeng, no set meal'—Bingfeng is steeped in the memories of several generations in Xi'an and serves as a 'time machine' for locals to savor the past. There's a joke: to test a Xi'an native's 'purity', see how many bottles of Bingfeng they drink each year. Recently, this regional soda brand with 73 years of history signed an IPO tutoring agreement with Huachuang Securities, planning to list on the SME board of the Shenzhen Stock Exchange, with IPO application materials expected to be submitted before May 31, 2021. Not long ago, 'Old Beijing Soda' Beibingyang was listed via backdoor, and Heli Soda, one of China's earliest soda series products, also returned to the market through the replica 'Hankou No.2 Factory'. With the rise of the national trend, domestic sodas are sparking a collision between the Chinese trend and the new era in the beverage industry, and old soda brands are trying to use capital to return to the market and carve out a place. But in the new round of competition, facing diverse rivals, these regional soda brands cannot rely solely on 'nostalgia' to replicate their past success. Times have changed; setting aside the nostalgia label, domestic time-honored brands, even with 'capital support', must face the reality that it's hard to turn things around. -01- The Decline of Regional Sodas As an imported product, the history of carbonated beverages in China is longer than we think; Empress Dowager Cixi was a loyal fan of Dutch soda that crossed the ocean. After the founding of the People's Republic, the state independently developed the first batch of Chinese sodas—Laoshan Cola—starting the path of soda localization. In the 1980s, with the development of the market economy, soda factories across the country flourished. But due to the glass bottle packaging and transportation constraints, factory sodas could only be sold locally. Thus, there was a scene of 'one city, one IP'. Now, when mentioning 'happy fat house water', young people first think of Coca-Cola or Pepsi. But for the older generation, they first think of the eight major domestic soda brands full of childhood memories. They are: Beijing Beibingyang Food Factory, Tianjin Shanhaiguan Soda Factory, Shanghai Zhengguanghe Soda Factory, Wuhan Hankou Beverage No.2 Factory, Guangzhou Asia Soda Factory, Shenyang Bawangsi Soda Factory, Chongqing Tianfu Cola Company, and Shandong Laoshan Soda Company. At that time, these eight brands occupied nearly half of the national market share, not only as local specialties but also leaving an indelible mark on China's beverage development history. For example, Beijing Beibingyang, in its most popular year of 1961, when an ordinary worker's monthly salary was only 40 yuan, Beibingyang's annual sales profit reached 8.781 million yuan, truly the pride of domestic sodas. And next door to Beibingyang, Tianjin Shanhaiguan Soda Factory was even more impressive. It not only appeared at the wedding ceremony of the last emperor Puyi and Wanrong but was also designated as a special drink for state banquets after the 1950s. If 'cola with goji berries' is a modern 'punk health' joke, then in the last century, Shandong Laoshan Cola pioneered adding traditional Chinese medicine ingredients to cola, making people exclaim 'insider'. In 1990, Chongqing Tianfu Cola even sold overseas, establishing a bottling plant in Moscow, with Japan's Kazama Corporation as agent, and setting up a sales company in the World Trade Center in the U.S., successfully entering the American market. This was the best era for domestic sodas. For those who experienced it, the sweet and icy taste memories are intertwined with childhood and youth, and these delicious sodas have become a wistful recollection. Why can't we see these good drinks now? All this is attributed to the 'joint venture wave' that made domestic sodas regretful. In the 1980s, world-renowned beverage manufacturers represented by Coca-Cola and Pepsi rushed into the Chinese market. These foreign beverage giants, whether in management, sales, supply chain, or corporate management and business philosophy, were overwhelming to China's beverage industry, which still had planned economy characteristics. Rather than 'waiting for death', it was better to 'seek life in death'. In 1993, the 'GATT' was signed, and China decided to take a gamble. That year, the China Light Industry Federation signed memorandums of cooperation with Coca-Cola and Pepsi respectively to jointly develop beverage cooperation, requiring the 'two colas' to establish bottling plants and produce at least 30% of domestic brand beverages, designating the eight major factories to cooperate with foreign capital respectively, retreating to advance, and dispersing the siege. However, a vigorous 'borrowing a chicken to lay eggs' eventually evolved into 'conspiring with the tiger', and local beverage brands not only failed to survive the joint venture wave but were quickly marginalized until production stopped. This is the painful 'two colas flooding the seven armies' that domestic brands and practitioners lament.** -03- The Breakout Battle of Time-Honored Sodas The rise of China's domestic beverage brands originated from the reform and opening-up policy, and the eight major soda factories created the former glory, but their eventual decline and disappearance also came from the high 'tuition' on the road to opening up. As domestic beverage brands went to their end, the 'two colas' accelerated their sweep of China's beverage market using existing sales channels. With the 'eight major soda factories' shrinking and dying out, a group of local brands rising from grassroots launched successive market battles with foreign brands. Among them, the former national number one beverage Jianlibao seemed like a 'dazzling' presence. In 1984, a distillery in Sanshui County, Guangdong, boldly took on an alkaline electrolyte sports drink invented by the Guangdong Sports Research Institute, named it Jianlibao, and it became the preferred drink for the Chinese delegation at the Los Angeles Olympics that year. A Japanese journalist, after careful research, believed he had penetrated the ancient Eastern mystery and published a tabloid article in Tokyo Shimbun titled 'China Accelerates Attack with 'Magic Water''. When it spread back to China, all Chinese people knew the 'Eastern Magic Water' as foreigners called it. As the original electrolyte sports drink, Jianlibao, focusing on sports and health, was in the first tier of carbonated beverages for a long time. At its peak, Jianlibao spent $5 million to buy an entire floor in the Empire State Building as its office for entering the U.S.; The New York Times published a hard ad photo of 'newly elected President Clinton's wife Hillary raising Jianlibao at a party'... It is said that in America, three things are considered to require God's help: winning the lottery jackpot, being elected U.S. President, and defeating Coca-Cola. Unfortunately, Jianlibao almost did the last one. Due to equity risks and the arrest of Jianlibao's boss, capital chain breaks and management problems were exposed, causing Jianlibao to suffer heavy losses. After several changes of ownership, it returned to Jianlibao Company in 2016, riddled with holes. Interestingly, the 'Wahaha' Group also launched 'Future Cola', which once occupied the rural market with the slogan 'Chinese people's own cola'. But due to various mistakes in marketing strategy and market positioning, Wahaha Group grew stronger, while Future Cola has long disappeared. History seems to have played a not-so-small joke: the national brands 'eight major soda factories' and Future Cola failed to see the situation clearly in the ever-changing market environment, and Jianlibao finally fell in the complex interpersonal relationships. After the 'big brothers' in the industry fell one after another, Bingfeng, tucked away in the northwest, survived. What is not widely known is that it was Xi'an's local protectionism that gave Bingfeng a chance to fight back. In the 1990s, foreign manufacturers set foot in the Chinese market one after another. Under severe pressure from Coca-Cola, Jianlibao, Xuefeili, Jinmeile, and other brands, Bingfeng decisively formed a joint venture with Pepsi to establish 'Xi'an Pepsi', with the precondition that Pepsi was prohibited from producing glass-bottle beverages in Xi'an. Thus, glass-bottle Pepsi never appeared in the Xi'an market. And Pepsi could only sell cans in the catering channel, at a higher price than Bingfeng, and finally had to give up the Xi'an market. Therefore, Bingfeng became the only local brand to survive the 'flooding of the seven armies' battle. To this day, Bingfeng's position in Shaanxi's beverage industry is unshakable.** -03- What Future Do the Bingfengs Have? In the winter of 1948, heavy snow fell over Xi'an, and a businessman surnamed Li was anxious. He brought a set of equipment from a Tianjin soda factory, planning to pass through Xi'an to Xinjiang to build a factory, but the roads were blocked for days, and there was no end in sight. Helplessly, the soda equipment was left in Xi'an. Five years later, on another snowy day, when the Xi'an Soda Factory was producing soda, the well winch for drawing water was frozen like an ice peak, and everyone agreed to call this soda 'Bingfeng'. Rooted in Xi'an for 73 years, Bingfeng has occupied over 80% of the local market share for similar beverages, and Bingfeng soda has become an indispensable part of Shaanxi's catering culture. According to the prepared IPO application report, Bingfeng's performance is still impressive. From 2017 to 2019, its operating revenue was 251 million yuan, 284 million yuan, and 300 million yuan respectively, with net profits of 57.31 million yuan, 67.52 million yuan, and 81.45 million yuan. However, behind the fame, challenges for Bingfeng are also looming. In fact, Bingfeng announced its entry into the capital market as early as 2017, perhaps because of the 'loss of home turf' in the Xi'an market. In 2018, in the city specialty beverage list released by Ele.me, Bingfeng soda stubbornly ranked fourth in Xi'an, behind Sprite and the two colas. From 1953 to 2012, Bingfeng, which 'stuck to the same taste and packaging for decades', only produced one type of soda. In other words, Bingfeng never thought about segmenting the market, and its helplessness is evident when facing the choices of the new generation of young people. The trademark 'Bingfeng' is synonymous with 'soda', which prevents Bingfeng's audience from expanding. On the other hand, if it abandons the Bingfeng brand, it would be like starting from scratch. A prominent example is that besides producing 'Bingfeng' brand orange soda, Bingfeng has also launched various products including sour plum soup, purified water, and protein drinks, but except for 'Bingfeng Sour Plum Soup' which has a market locally, most consumers outside Xi'an have never heard of them. Returning to another old soda brand, Beibingyang, in 2011, after negotiations, Beibingyang made a strong comeback using nostalgia. In 2018 alone, Beibingyang's sales reached 600 million yuan, selling 12 million boxes a year. However, returning to the market with nostalgia also constrained it. From 2017, Beibingyang launched peanut and walnut plant protein 'Walnut Love'. In 2019, Beibingyang also launched 13 new products at once, including low-sugar, low-calorie, and health-oriented products, but none caused market reactions. As soda brands with strong regional attributes, the national expansion path for these old soda brands is not smooth. 'Xi'an people haven't forgotten Bingfeng', but Bingfeng sold outside is still consumed by Xi'an people living elsewhere; Beibingyang, now under Dahao Technology, is eager to go beyond Beijing, but its first production base was only put into operation in Ma'anshan in June 2018, yet consumers 'shelved' it due to the price of 5 yuan per bottle. It is worth mentioning that in the past two years, revenue of enterprises above designated size in the carbonated beverage industry has been declining, but Yuanqi Forest, founded just a few years ago, has set off a new trend with '0 sugar, 0 fat, 0 calories', stealing the spotlight. Nostalgia always evokes memories and considerable consumption desire, but people's nostalgic feelings will eventually fade; the nostalgia card can be played for a while but not forever. Returning to reality, in the fiercely competitive beverage market, how to win the favor of the new generation of young consumers is the secret to keeping these domestic old soda brands forever young. Source: Finance and Economics Wuji (ID: caijwj), Author: Xiao Tian Payment of 400-2000 yuan will be made once the tip is adopted.