Since 1995, Reignwood Group, the parent company of Red Bull, introduced Red Bull Vitamin Functional Drink to the Chinese market, marking 23 years by 2018. Over two decades of partnership, Red Bull has pioneered a new era for functional beverages in China and become the number one energy drink brand. In recent years, Reignwood has successively introduced brands such as Vita Coco, Capri-Sun, and VOSS (Foss Water). Leveraging Red Bull's powerful sales channels and brand strength in the FMCG sector, these brands have achieved favorable market responses and gained recognition from consumers.

Entering 2018, this year is also crucial for Reignwood Group. Ahead lies the unresolved trademark case, and behind are new products facing intense competition. How to resolve the trademark dispute and ignite the new product market in 2018 are urgent issues for Reignwood. Recently, New Distribution exclusively learned the strategic direction for all Reignwood product lines in 2018, which we will analyze in detail for our readers.

VOSS (Foss Water)

In September 2015, Zhuxi County in Shiyan City signed a high-end mineral water cooperation agreement with Reignwood Group. The project has a total investment of 1.1 billion yuan, with an expected annual production capacity of 250,000 tons after the first phase is completed.

Water source outlet

According to insiders who revealed to New Distribution: "It is expected that domestically produced VOSS (Foss Water) will be launched in May 2018, with retail prices set at 4 yuan for 300ml and 5 yuan for 500ml."

The domestically produced VOSS (Foss Water) will initially launch in two specifications: 330ml and 500ml, in plastic bottles with pearl-white caps, both still (non-carbonated). It is particularly noteworthy that the bottle of domestically produced VOSS (Foss Water) is similar to the imported plastic bottle, with only the cap color differing. The imported plastic bottle cap is silver, while the new domestic Foss Water cap is whitish, lighter in color than before.

Imported VOSS (Foss Water) currently has multiple specifications in China, with both glass and plastic packaging. There are two types: natural spring water and sparkling soda water. Silver caps indicate non-carbonated natural spring water, while black caps indicate carbonated soda water.

In 2018, Reignwood's VOSS (Foss Water) will adopt a dual strategy of "imported products + domestic products," with different positioning. Imported products are brand-driven, continuing to establish a high-end image and appearing in retail channels with a more premium image and higher prices. In contrast, the new domestic VOSS (Foss Water) leverages the brand's high-end image to drive sales and enhance brand value.

Warhorse

It is understood that in 2018, Reignwood Group set a sales target of 1.5 billion yuan for Warhorse.

A Red Bull distributor told New Distribution reporters that since last year, market expenses for Red Bull have been continuously reduced, and even many promotional materials have been eliminated. The reduced resources are being transferred to Warhorse.

Warhorse Promotion Strategy 1: Forced Bundling with Red Bull to Drive Sales

Last year, Warhorse and Red Bull distributors signed contracts with two separate companies, using a consignment system. The two products were sold separately. This year, Reignwood Group has merged the two products, forcibly bundling Warhorse with Red Bull. Regarding market expenses, supermarkets must have Warhorse displays to receive display support. This deeply binds Warhorse with Red Bull products, leveraging Red Bull's existing channels and influence to push Warhorse down the distribution chain.

Warhorse Promotion Strategy 2: Changes in New Canned Warhorse

Recently, Warhorse launched a new canned product in a red can, retaining the name Warhorse Energy Vitamin Drink, with a specification of 310ml. Regarding retail pricing, Reignwood requires that the price be close to or equal to the original Red Bull price, while leaving higher profit margins for distributors and retailers than Red Bull.

Previously, the suggested retail price for bottled Warhorse was 5 yuan, lower than Red Bull. The new canned version directly competes in the same price band as Red Bull, and with a capacity of 310ml, it is larger than Red Bull's current 250ml. It is evident that Reignwood positions Warhorse to share the market with Red Bull, or possibly to capture a portion of Red Bull's market.

Additionally, New Distribution noticed that the original bottled Warhorse did not display any information about "Red Bull," but on the new red canned Warhorse, the entrusted manufacturer is listed as: Red Bull Vitamin Beverage (Hubei) Co., Ltd. This means that the packaging now shows a connection to Red Bull. (Previously, when bottled products were distributed, many store owners suspected they were counterfeit.)

Vita Coco

Since 2014, Reignwood Group and Vita Coco, a coconut water brand holding a 60% market share in the United States, jointly established a Chinese company and officially entered the Chinese market. After two years of promotion, Vita Coco coconut water's brand awareness is on the rise. Reignwood's strong sales channels and marketing strategies have enabled Vita Coco to quickly establish a foothold and distribute across various channels.

According to insiders: "Reignwood and Vita Coco's brand owner have an agreement with a bet mechanism, so last year they invested heavily in Vita Coco to build influence and market presence."

The change for Vita Coco in 2018 is that overall market investment will be significantly reduced. 2017 was a very aggressive investment period; 2018 will slow down, with market expenses greatly reduced. Vita Coco will shift from aggressive expansion to moderate waiting.

"This year, market expenses for Vita Coco are being comprehensively reduced nationwide," a Vita Coco distributor told New Distribution. "However, this may be the most promising profit growth point for Reignwood in the future."

Capri-Sun

Although the Chinese fruit juice beverage market is highly competitive with formidable rivals, Capri-Sun has a huge inherent advantage—focusing on the children's market. Looking at existing juice brands in China, very few are involved in children's juice business. So even though the overall juice market is highly competitive, the children's juice market remains a blue ocean. "In 2017, Capri-Sun sold quite well. Although awareness in this segment is not high, it is already quite impressive within the specific niche," a Capri-Sun product manager revealed to New Distribution.

Red Bull Trademark Issue

Since the Red Bull trademark expired in October 2016, it seems that this matter has become taboo within Reignwood, and everyone avoids mentioning it. To outsiders, Red Bull continues production and sales as usual, and Reignwood appears to have made no major moves. When public opinion repeatedly pushed this issue to the forefront, Reignwood only issued a brief statement saying it would properly resolve the matter and hoped for a mutually acceptable outcome. How this will develop—whether in court or through private settlement—we must wait for the official final answer.

Afterword

Red Bull's classic slogan: "Your energy is beyond your imagination!" has indeed become deeply ingrained in China over more than 20 years. It is rare in the industry for a brand to achieve such a position. The value generated by Red Bull China should not be underestimated. Even so, if Red Bull China loses the trademark case, Red Bull might disappear from China. Even if it is powerful, the well-known name 'Red Bull' and the image of the two bulls may completely vanish from the sight of Chinese consumers.

The relationship between Reignwood Group, Thai Tiansi, and the individuals involved is complex, and the intricate connections are not yet known. We will not discuss the legality of selling Red Bull after the trademark expiration, but Reignwood Group is indeed in an awkward situation, hoping to fend off impending risks through internal maneuvering. In fact, it is not just Reignwood Group that is connected to Red Bull China; it links the entire industry chain, including upstream and downstream suppliers, employees, distributors, and consumers. As the saying goes, 'a single move may affect the whole situation.' A settlement may be the outcome everyone hopes for and the only way to protect the interests of all parties.

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