-01- The 'Question of Fate' Hanging Over Leading Brands For managers of leading brands, there is a perpetual question of fate: "When will our decline (and that of the industry) come? What should we do then?" This question is complex and lacks a definitive answer, yet it weighs heavily on many entrepreneurs. Bill Gates once said, "Microsoft is only 18 months from bankruptcy," later shortening it to "180 days." Observing brands that have thrived through multiple cycles, their managers often share a deep sense of crisis, with mottos like "How many days are we from bankruptcy?" Some entrepreneurs feel even stronger crisis during success. In 2001, when Huawei first topped China's top 100 electronics companies, Ren Zhengfei warned of "Huawei's winter," noting that "the Titanic set sail amid cheers." Tsingtao Brewery, a pride of Chinese national brands, is the undisputed leading beer brand in China. Founded in 1903, it has a 116-year history and is the world's fifth-largest beer producer. In 2014, China's beer industry revenue reached 188.624 billion yuan, up 5.10% year-on-year; total profits were 13.801 billion yuan, up 11%. But behind these seemingly impressive figures, industry growth was showing fatigue. Before 2008, China's beer industry experienced over a decade of rapid growth; from 2008 to 2014, it grew steadily; but after 2014, beer consumption began to decline from its peak. Meanwhile, domestic beers suffered from high homogeneity in products, prices, channels, and sales methods, while imported beers' rapid growth further eroded domestic market share. Tsingtao Brewery, having weathered many eras, must possess a strong sense of urgency. During the industry consolidation after 2014, what did Tsingtao, as the leading brand, do? What was its answer to the question of fate? -02- The Mission and Purpose of Tsingtao's Blue Army In 2014, Tsingtao Brewery made a strategic change, pioneering the establishment of the "Tsingtao Brewery Innovation Marketing Division." This team, with a completely new concept and significance, was distinct from Tsingtao's traditional teams and was dubbed the "Blue Army." In 2015, AB InBev formed its own "Blue Army"—ZX Ventures. Thus, Tsingtao's innovation marketing division was ahead of international large breweries and was truly the first Blue Army team in China's beer industry. What is the "Blue Army"? In military terms, there is a unit that plays the role of the enemy, mimicking any army's combat characteristics for targeted training against the Red Army. This special unit is often called the "Blue Army," akin to Tsingtao's "Wolf Warrior Squadron." The movie Wolf Warrior defines it: "Wolf Warrior Squadron, the Blue Army within special forces. Composed of elite special forces, equipped with the finest weapons, simulating foreign special forces' tactics, constantly challenging our elite units, using every means to cripple and temper them—the special forces within special forces." Tsingtao aimed to build an elite Blue Army like the Wolf Warrior Squadron. What were its tasks and missions? Mission One: Pioneer of Tsingtao Innovation As a 116-year-old national brand, Tsingtao has gained international acclaim and domestic longevity. It deeply understands that brands must evolve with the times. The 116-year-old Tsingtao must both inherit and innovate. But for an old brand, maintaining is easy; continuous innovation is hard, especially in brand image. Transforming from "old" in consumers' minds to "young," contemporary, and fashionable is a major challenge for Tsingtao. In Tsingtao's own words, the Blue Army's most important task is to use product, brand, and marketing innovation to make Tsingtao a beer that today's youth love, not "the beer my dad drinks." Mission Two: Incubator for New Products Any leading brand must plan for the future with new products and sub-brands to maintain product competitiveness. Traditional new product incubation often suffers from habitual thinking, unable to break free from existing mainstream product mindsets. Many "new" products aren't new; they're the same product for the same audience, often just with changed packaging and price. Such incubated new products are inherently flawed, often facing reluctance from sales teams, channels, and consumers, and typically die within three months. You can't find new continents with an old map. Tsingtao adopted the Blue Army's independent innovation model, ensuring from organization, talent, and resources that innovative products or brands have a suitable "soil environment" and "seeds." Once incubated successfully, the Blue Army hands products to the Red Army to leverage its large-scale operational advantages and amplify product value. Mission Three: Pioneer of Tsingtao's Transformation Brand rejuvenation is a systemic project that requires deep changes. It's hard to achieve breakthrough innovation with old organizational models, teams, methods, and thinking. By establishing the Blue Army Innovation Marketing Division as a new organizational form, selecting elite talent from across the country, Tsingtao ensured organizational innovation for brand breakthroughs. In Tsingtao's plan, the Blue Army's mission is to compete with the mainstream "Red Army" in new products, channels, and marketing methods, thereby launching more novel products and brand activities that the Red Army hasn't achieved, attracting more consumers. But limiting the Blue Army's significance to this level is insufficient. Tsingtao hopes the Blue Army's operations will stimulate the entire enterprise, injecting and cultivating a culture of innovation and change. Indeed, due to the Blue Army's outstanding brand innovation marketing in recent years, it has greatly stimulated the willingness and courage of Tsingtao's original marketing teams to change. This innovative atmosphere has even influenced internal production and other departments, as well as sales channels. In this innovation transformation, the Blue Army acts like a lively catfish, bringing vitality and energy to Tsingtao's vast organization, infusing a culture of daring innovation, responsibility, and selfless dedication. -03- How Does Tsingtao Support the Blue Army? Building the Blue Army is one of Tsingtao's key strategic initiatives in recent years. How does Tsingtao support it? What aspects are crucial for its development? Organizational Support: Learning Ability, Younger As China's beer industry growth slows, the rise of younger consumer groups has spawned niche and segmented products. Facing the massive Tsingtao, large-scale group operations clearly can't cope with this emerging market. The establishment of the Innovation Marketing Division pioneered a new organizational structure in the beer industry. In August 2014, a group of people with different backgrounds, abilities, and ages were curious and confident about this department. They didn't know their actions would become the source of Tsingtao's innovation. Two born in the 1960s, one in the 1970s, and four in the 1980s—these seven pioneers officially started, and over time, this vanguard team grew, shouldering Tsingtao's innovation responsibilities. Divergent thinking, love of learning, daring to innovate, and taking responsibility characterize these pioneers. In a highly homogeneous beer industry, each new idea could become a new brand. Innovations like Whole Wheat White Beer, private custom cans, and joint IPs gradually emerged from these pioneers' minds and were implemented, all with full support from Tsingtao Group. Process Support: High Goals, Fast Decisions As a key department, the Innovation Marketing Division received maximum support in organization, resources, and finance from headquarters. Previously, a product took over a year from idea to launch due to complex approval processes, during which market changes could render the new product obsolete. Tsingtao Group provided the division with a streamlined decision-making process and full authorization, allowing it to move quickly at every stage. From idea to product launch now takes only half a year. Resource Support: Superior Equipment, Strong Support The Innovation Marketing Division is independent yet closely attached to Tsingtao Group, receiving full support in R&D, design, production, and logistics. In R&D, it leverages Tsingtao's National Biological Fermentation Laboratory, providing a strong R&D system for new product ideas. Tsingtao's factories serve as the production line for the division's products, where personalized, private custom, and IP co-branded products reach consumers. Continuously innovating logistics meets the needs of decentralized distribution and small orders. For example, Tsingtao's co-branded product with KFC requires delivering 10,000 cases to dozens of stores, necessitating a more flexible logistics system. Besides Tsingtao's own logistics, third-party logistics partners ensure fast and efficient delivery of innovative products. Institutional Support: Responsibility and Courage "An imperfect hero is still a hero; a flawed soldier is still a soldier." To enable the Blue Army to fulfill its mission, Tsingtao established a correct view of heroism and set up systems to protect innovators. If systems provide safeguards for innovation, then each member's inherent responsibility and courage are key to the division's rapid growth. They turn internal misunderstandings into motivation, work under extreme pressure to create products consumers love, fill gaps quickly, and meet the demand for novelty under consumption upgrades—all out of selfless dedication to Tsingtao, because they deeply love this cause. As the Blue Army, the Innovation Marketing Division, in a sense, charges at failure every day, knowing failure is likely. Smiling and embracing failure, finding paths to success through repeated failures—this is a game for the brave. Not every idea becomes a product, but the costs are unavoidable. In such cases, Tsingtao allows trial and error, encourages innovation, avoids setting overly high quantitative targets, and truly maximizes creativity, preventing marketing actions from being distorted by cost concerns. Tsingtao provides immense backend support for Blue Army innovation. In fact, the Blue Army's effective operation has transcended the organizational boundaries of this special department, resulting from cross-departmental collaboration and transformation around the Blue Army strategy. Most importantly, company leaders gave full trust and authorization, handing over all marketing authority for innovative products—brand planning, communication, promotion—to the innovation division. Thus, the division can fully leverage its professionalism, initiative, and creativity on this free platform, mobilizing resources for the survival and growth of innovative products. This earned cross-departmental collaboration and support, gradually winning trust and recognition from functional and marketing teams, leading to full cooperation. -04- Five Years, Four Victories: Tsingtao's Passionate Blue Army To date, the Blue Army has been established for five years. What have been its achievements? In these five years, the Blue Army has launched at least four major campaigns: First Battle: Segment Innovation—Tsingtao Whole Wheat White Beer Wins In 2015, the Innovation Marketing Division launched Whole Wheat White Beer, which received unanimous praise from beer enthusiasts for its unique taste and excellent after-drinking experience. After years of promotion, it has become a representative brand in this segment and an industry benchmark. The emergence of Tsingtao Whole Wheat White Beer changed the lager-dominated Chinese beer market. The Blue Army didn't treat it as just a new product but promoted a new category and a craft beer lifestyle in China. Promoting a product versus promoting a category has entirely different implications. Category marketing requires both vision and precise expression of consumer benefits. As the promoter of the whole wheat white beer category, the Blue Army targeted digital marketing trends from the start, building digital marketing platforms and using social marketing to make a strong statement as category builders, achieving a qualitative leap from 0 to 1 in three years. In 2015, the "Tsingtao Craft Beer Community" public account was born, hailed as a test field for innovative marketing in the digital economy. It proposed the brand value proposition "Savor Craft, Enjoy Life," advocating a savoring culture. Based on this content, in 2017 and 2018, it researched and released the "China Craft Lifestyle White Beer Book" versions 1.0 and 2.0, actively promoting a "healthy, joyful, quality, and non-compromising" refined lifestyle. Over the years, Whole Wheat White Beer has gained increasing acceptance, and more beer brands have followed suit, proving it could become the next mainstream variety. Its successful launch drove the development of the white beer category and met consumption upgrade demands. Tsingtao always prioritizes consumer needs, creating the best marketing concepts and models. With its healthy market growth, Whole Wheat White Beer naturally became the representative brand in this segment. It not only achieved self-sustaining growth but also became a lever for the innovative family brand portfolio marketing. From the initial brand planning, the innovation team designed a "family portrait" promotion concept and model, seizing opportunities to revitalize existing resources and build the "Savor Craft, Enjoy Life" family portfolio brand, combining product displays with brand concept cultivation, playing a leading innovative role over five years. Second Battle: Ultra-Premium Breakthrough—Auguste Wins For the past two decades, domestic beers have fought in the mid-range mainstream price band, while the ultra-premium segment (15 yuan and above) was dominated by foreign brands. The birth and successful operation of Tsingtao Auguste marked a strategically valuable breakthrough in the price band forbidden zone for domestic beers. As the flagship of the innovative family portfolio, Auguste's success meant Tsingtao gained another major product in the high-end segment besides Tsingtao Pure Draft. The Blue Army led the "Auguste" ultra-premium battle. This staged victory not only cultivated a strategic major product for Tsingtao but also proved the effectiveness of the Blue Army strategy, which is worth continuing. Moreover, Auguste's success injected confidence into domestic beer brands, representing a pioneering advance for China's beer industry. From this perspective, it's the industrial value the Blue Army created for the industry. Third Battle: Personalized Demand Innovation—Private Customization Wins In the internet era, consumer sovereignty has greatly increased, and personalized demands are growing. In an era where both demand and technology are ready, whoever captures personalized needs will gain significant advantages in consumer experience, brand preference, and loyalty. Based on this, the Blue Army struck again, pioneering the era of beer customization. Private customization is relatively common in the baijiu sector due to high product value, making higher customization costs affordable. But beer is a typical scale-advantage industry, relying on large-scale production of standard products for competitive advantage. For Tsingtao to use flexible manufacturing to meet personalized needs while keeping customization costs affordable was undoubtedly a huge challenge. The Blue Army team, undaunted, worked with production, filling, design, logistics, and other departments, innovating extensively in internal processes, IT, and supply chain manufacturing. Ultimately, Tsingtao became the first brand in the industry capable of directly supplying private customization services to consumers! This capability allowed Tsingtao to pioneer beer customization services. In the future, besides broad consumer connections through brand promotion, Tsingtao can also satisfy consumers with unique products tailored to each individual. At that point, the product is no longer entirely Tsingtao's; it's a product imbued with consumer emotions, co-created by consumers and Tsingtao. Fourth Battle: E-commerce Showdown—Building the Strongest E-commerce Team, Tsingtao Wins Big As a channel for direct interaction with countless consumers, online e-commerce is a must-win battleground for every leading brand. This area was also a tough nut for the Blue Army to crack! In recent e-commerce battles, the Blue Army has won repeatedly, stunning the entire industry with its outstanding performance. In 2019, during the 618 mid-year promotion, Tsingtao toppled perennial leader Budweiser, earning the title of "Double Champion," taking both the "Beer Brand TOP10" and "Beer Store TOP10" crowns. Additionally, Tsingtao's official flagship store ranked first in both "618 Day Store Ranking" and "618 Full Period Store Ranking." In several e-commerce battles, the Blue Army achieved major victories! Moreover, through deep user analysis, the Blue Army discovered the logic behind beer consumers' e-commerce shopping scenarios, launching the industry's most unique product specifications and combinations. While almost the entire beer industry's e-commerce was losing money and debating self-operation vs. agency operation, Tsingtao's e-commerce achieved significant profitability—a rare feat. Conclusion The Tsingtao Innovation Marketing Division, this Blue Army, is Tsingtao's innovation pioneer, new product incubator, and transformation forerunner. It's also a new growth engine and a training ground for new marketing talent. Similarly, the Blue Army's successful operation over five years has not only created immense value for Tsingtao but also become one of the best innovation cases in China's beer industry. Its successful Blue Army experiment provides valuable case studies for Chinese enterprises on maintaining team vitality and brand innovation. To help more Chinese enterprises and distributor companies understand how to apply the "Blue Army strategy" in business, New Distribution will send reporters multiple times to delve into the Blue Army's operations, comprehensively interpreting its new marketing experience from dimensions like organization, product, brand, communication, promotion, and e-commerce. Readers are encouraged to follow New Distribution's special series, "Tsingtao's Passionate Blue Army Series."