Recently, Xiangpiaopiao Food Co., Ltd. (603711.SH) announced that it has signed a strategic cooperation framework agreement with Oatly (Shanghai) Beverage Co., Ltd. ("Oatly Shanghai"). The two parties plan to establish a project company for business cooperation, focusing on the R&D, production, and sales of oat-based plant-based beverage products in the Chinese market. According to the agreement, both parties will jointly develop pre-packaged plant-based beverages (including but not limited to coffee and milk tea) under the Lanfangyuan and OATLY INSIDE brands. Currently, two new products have been launched: Camellia Tieguanyin Oat Milk Tea and Yashixiang Oat Milk Tea, which are now officially available on an e-commerce platform. One is the pioneer and leader of cup milk tea, and the other is a global leader in oat-based plant-based products. What considerations lie behind the strategic cooperation between Xiangpiaopiao and OATLY, and what sparks will it ignite? In this article, New Distribution, from the perspective of an industry observer, analyzes the insights into industry trends and future strategic layout behind this cooperation.
01 Entering the Plant-Based New Track Promoting the Health-Oriented Upgrade of the Milk Tea Category In recent years, the milk tea category has been in a period of rapid development, especially among young consumer groups, with many consumers considering milk tea as part of their daily lives. According to data from the Prospective Industry Research Institute, the milk tea market size is expected to exceed 120 billion yuan in 2023. The booming track has also brought intense competition, with many companies increasing their investment in the milk tea market, seeking dividends through imitation and following trends. Despite the increasing number of milk tea products on the market, the problem of homogenization is severe, and quality varies greatly. Many milk tea products have health issues such as high sugar and high calories. How to transition from providing "a good cup of milk tea" to "a healthy cup of good milk tea" is a deep question that brand owners need to consider. As a leader in cup milk tea, Xiangpiaopiao has always been committed to providing consumers with good products. This cooperation is Xiangpiaopiao's innovative breakthrough, focusing on "healthification" based on the milk tea category. First, the combination of "old + new" continuously stimulates brand vitality. "Old" refers to the 70-year-old traditional tea-making craftsmanship inherited by Xiangpiaopiao's Lanfangyuan brand, while "new" refers to the healthy and environmentally friendly new plant-based ingredients. The combination of "traditional methods" and "new technology" endows the Lanfangyuan brand with new vitality and life, not only promoting the improvement and upgrading of the time-honored brand in the new era but also changing and leading new consumption patterns. Second, focusing on multiple dimensions such as product, formula, and concept, we carry out all-round innovation for ready-to-drink milk tea, making products that consumers can trust. Taking the two new products as examples, Camellia Tieguanyin Oat Milk Tea and Yashixiang Oat Milk Tea not only use high-quality OATLY oat milk but also have no other additives in the production process, truly achieving milk tea with 0 lactose, 0 cholesterol, and 0 trans fat. This practice may become the standard pursued by the industry, driving the health-oriented upgrade of the milk tea category.
02 Focusing on Health-Oriented Strategic Layout Leading the Industry's Green Development With the improvement of material living standards and changes brought by consumption upgrades, health has become a new demand in people's daily lives. Mintel's "2022 Global Food and Beverage Trends" mentions that as consumers' awareness of health deepens, food and beverage products are increasingly attracting consumer attention from nutritional components to functional ingredients. Undoubtedly, consumers' demands for beverages are no longer satisfied with just good taste but have generated higher-level health needs. Xiangpiaopiao has long been insightful about changes in consumer behavior and needs. As early as the "dual-wheel drive" strategy in 2018, Xiangpiaopiao integrated health into its brand development strategy, continuously launching green and healthy products to lead consumption trends toward healthy development. On the one hand, we are committed to promoting the health-oriented upgrade of instant milk tea. We have successively launched new products such as cold-brewed crispy boba milk tea and thick milk tea, all using high-quality milk powder, low-sugar formulas, and 0 non-dairy creamer, bringing consumers a different healthy experience. On the other hand, we have launched ready-to-drink milk teas, such as Boxy Coconut Milk Tea and Black Oolong Milk Tea, focusing on creating high-quality, healthy products.** At the same time, the products adhere to the "five no additions" principle: no non-dairy creamer, no preservatives, no flavor enhancers, no sweeteners, and no coloring agents, ensuring authentic taste and green, healthy products. This entry into the plant-based new track is also an important part of Xiangpiaopiao's health-oriented strategic layout. Xiangpiaopiao stated, "Launching oat-based plant-based milk tea is a high-quality choice we provide for consumers pursuing a healthy diet, which will help upgrade the health of the entire Xiangpiaopiao milk tea category and also promote the health-oriented upgrade of Xiangpiaopiao's overall business, thereby truly implementing the corporate health strategy." This cooperation not only accelerates the advancement of Xiangpiaopiao's health-oriented strategy but also, in a sense, will lead the entire industry's green and healthy development.
03 Seeking Change and Innovation, Creating Sustainable Value What is the biggest "moat" of a brand? It is lasting competitive advantage. This competitive advantage cannot be built overnight but is gradually established through the sedimentation and polishing of time, always practicing long-term value. In the past two decades, China's economy has grown by leaps and bounds, and in this process, a wave of brands has emerged. Unfortunately, many brands have only been a flash in the pan in the long river of time. The fundamental reason is that they lost their competitive advantage at a certain stage and were abandoned by the times. For Xiangpiaopiao, a national brand established 17 years ago, it has always been able to lead the cup milk tea industry because, no matter how the external environment changes, it can always maintain its competitive advantage. How does Xiangpiaopiao build this lasting competitive advantage? It's simple: stay true to the original aspiration and always put consumers first. Change based on market and consumer needs, actively seek transformation, seek innovation, and proactively innovate. Whether it is the overall health-oriented strategic layout or this entry into the plant-based new track, it is essentially Xiangpiaopiao's insight into the trend of consumption health upgrade and innovative practice. It is believed that under the guidance of the current health-oriented strategy, it will inevitably further promote Xiangpiaopiao's development and create sustainable value.