---
title: "Genki Forest 'Gains Weight'"
description: "Genki Forest, known for its sugar-free sparkling water, is aggressively diversifying into multiple beverage categories and beyond, driven by the anxiety of sustaining high growth and the need to justify its high valuation. The company faces challenges in building a moat and replicating its initial success."
author: "谭丽平"
publisher: "New Distribution"
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published: "2020-12-25"
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# Genki Forest 'Gains Weight'

> Genki Forest, known for its sugar-free sparkling water, is aggressively diversifying into multiple beverage categories and beyond, driven by the anxiety of sustaining high growth and the need to justify its high valuation. The company faces challenges in building a moat and replicating its initial success.

"Genki Forest Full Line 14 Low-Calorie Drinks Review". On Xiaohongshu, a blogger named "Kabi Lab" shared a taste test of Genki Forest's products, with images filled with 14 products from 4 series. The post attracted over 400 likes, with many netizens commenting, "Milk tea is just okay, but the sparkling water's peach flavor is the best" and "Cucumber is really not (good), but the peach and sour plum flavors are tasty"...
There are many similar posts. On Xiaohongshu, Genki Forest is no longer just the spokesperson for sparkling water; new products like Alien electrolyte water, Manfen micro-bubbled grapefruit, Genki Forest blind boxes, and coffee latte milk tea are appearing.
As the main battlefield for Genki Forest's initial popularity, Xiaohongshu is now showcasing a more diverse Genki Forest.
According to Genki Forest's leader Tang Binsen, 95% of Genki Forest's products have not yet been launched, and 2021 will be the real "big product year" for Genki Forest. As the year-end approaches, Genki Forest is accelerating its layout. Recently, besides investing in a light meal company and enriching its product line, Genki Forest also applied to register trademarks such as "Genki Forest Soy Milk" and "Oats Are Crazy", venturing into plant-based products.
This is already the nth time this year that Genki Forest has been reported to diversify. Up to now, Genki Forest's products cover sparkling water, tea drinks, functional drinks, ready-to-drink milk tea, juice drinks, electrolyte drinks, energy drinks, coffee drinks, and even yogurt.
As a dark horse in the beverage industry, Genki Forest's latest valuation has reached 14 billion yuan, surpassing the market value of listed companies such as Xiang Piao Piao, Chengde Lulu, and VV Group. Whether a single product can support such a high valuation has become a concern for outsiders. It is understood that in Genki Forest's current product sales structure, soda sparkling water and Jian tea account for 60% and 30% of its total sales respectively, while other products have little response.
In the industry's view, Genki Forest's success relies more on marketing, and the company itself has no moat. Shen Meng, director of Chanson Capital, told Hefan Finance, **"The problem with such internet-famous products is that they use capital leverage to quickly expand scale, and after achieving scale expansion, they monetize through securitization as soon as possible. Once the capital chain tightens or breaks, they may become shooting stars."**
"Before going public, Genki Forest needs to maintain continuous high-speed growth to continue financing and sustain its business model."
How to maintain high-speed growth has become a practical test for Genki Forest. Genki Forest seems to be caught in the anxiety of finding the next "sparkling water".

**-01-****-Marching Towards Diversification**
"Ran Hao, former head of human resources at Luckin Coffee, has joined Genki Forest", with the rise of Genki Forest's voice, the news of new executives joining Genki Forest spread quickly.
Soon, this veteran of Luckin Coffee was thoroughly investigated. According to public information, at the end of May this year, Yin Honglei, CHO who had just joined Luckin Coffee for 3 months, resigned, and his work was taken over by Luckin Coffee's HRD Ran Hao.
Ran Hao joined China Auto Rental in 2005, was promoted to HRD after two years as recruitment manager, and worked in the Shenzhou system. He joined Luckin Coffee in October 2017 and built Luckin's human resources management system from scratch. According to Luckin employees, Yin Honglei was brought in because Ran Hao was transferred to be responsible for China Auto Rental and Borgward.
With the addition of the former important executive of Luckin Coffee, Genki Forest was rumored to be entering the coffee market. This rumor is not unfounded. In October this year, Genki Forest shareholder Challenger Capital invested in bottled ready-to-drink coffee Never Coffee. Earlier in August, Genki Forest also launched a new coffee latte milk tea product.
In response, Genki Forest's reply was, **"It needs to be determined based on business development."** Neither confirming nor denying, this response gave the outside world much room for imagination.
However, even if it ventures into coffee, it is understandable. The coffee market has been a battleground in the beverage industry in recent years. After Luckin's self-reported financial fraud incident, Heytea and Nayuki also entered the coffee market. Moreover, within Genki Forest, a research and development center was established long ago, continuously launching new products.
Currently, besides sparkling water, the Genki Forest family also includes Jian tea, energy drinks, milk tea, yogurt, sparkling juice, and other products, with dozens of flavors. It can be seen that Genki Forest is trying to break free from the limitations of a single hit product and move towards a multi-category parallel development.
On e-commerce platforms, you can see the new products that Genki Forest has been closely deploying this year. In the second half of the year alone, it launched Disney milk tea lucky gift box blind boxes, Disney limited edition milk tea, Alien electrolyte water, Manfen juice micro-bubbles, mini small milk tea, Summer Black Grape flavored sparkling water, Summer Black Grape juice, 0 sucrose Beihai Pasture yogurt, and energy drinks, among others.
The overall layout logic mainly revolves around enriching product flavors and textures, upgrading products, introducing new gameplay such as customization, co-branding, and blind boxes, and making efforts in more segmented fields. Taking sparkling water as an example, Genki Forest vice president Zong Hao once revealed that they launched more than a dozen flavors in two years to meet the segmented needs of "Generation Z" in different scenarios and moods.
Overall, Genki Forest's product lines are mostly built around health. Recently, Genki Forest invested in the parent company of the light meal brand "Tianyuan Zhuyi", Hangzhou Light Meal Health Technology Co., Ltd. The brand mainly deals in meal replacements and low-fat diets, including sugar-free bread, sugar-free biscuits, low-fat whole grains, and chicken breast jerky. The two have many similarities. Tianyuan Zhuyi is also good at marketing, targeting the "no sucrose, no oil, real whole wheat" selling point.
In November, Genki Forest also applied to register trademarks such as "Genki Forest Soy Milk" and "Oats Are Crazy", venturing into plant-based products. Genki Forest confirmed that the soy milk product has entered the trial drinking stage, but whether it will eventually be launched is not yet determined.
Abroad, Genki Forest has already attacked more than 30 overseas markets, including the US, Canada, UK, France, Germany, Australia, New Zealand, Japan, and South Korea. In December, media reported that Liu Zhen, former senior vice president of corporate development at Toutiao, had joined Genki Forest, responsible for overseas business.
In markets beyond beverages, Genki Forest is also rapidly reaching out. Qichacha shows that since 2018, Genki Forest's trademark applications have increased significantly, covering food, beer and beverages, catering and accommodation, clothing, shoes and hats, office supplies, and other categories. This year, the total number of trademark applications exceeded 2,400.
Image source: Qichacha
Obviously, Genki Forest's ambition is far beyond the beverage industry, targeting the full-category consumer track.

**-02-****-Abandoning Light, Turning Heavy**
Tang Binsen introduced at the distributor conference that Genki Forest's two core strategies are: first, using technical tools to continuously improve supply chain efficiency and save management costs; second, continuously upgrading product formulas, increasing R&D, even "raising costs" to make the best products with better raw materials.
Genki Forest still has 95% of its products not launched. 2021 will be Genki Forest's "big product year", with R&D expenses and R&D personnel tripling from 2020.
The richness of products poses higher demands on production lines. Previously, Genki Forest mainly relied on OEM, which had adverse effects on quality system control, product response speed, supply chain improvement, and future capital presentation. One story is that Genki Forest developed a new product, but at that time, the OEM's production line was unable to directly produce it. When Genki Forest proposed upgrading the production line, it was rejected.
Since 2019, Genki Forest has changed this "asset-light" route and started to take the "asset-heavy" path. By September 2020, Genki Forest's first phase factory in Chuzhou, with an annual output of 450 million bottles, had been completed and put into operation, while the second phase in Chuzhou, as well as factories in Guangdong and Tianjin, had also started or were about to start construction.
Genki Forest explained to the outside world that under the OEM model, Genki Forest's response time generally takes more than a month, which is not conducive to keeping up with the pace of product iteration and upgrade in the beverage market. Therefore, Genki Forest began to build its own factories.
Building its own factories allows Genki Forest to improve control over core products, achieve higher response speed than the OEM model, which is conducive to further expanding production capacity, as well as new product testing and process optimization, enhancing the R&D and market competitiveness of subsequent new products.
Presumably, after building factories, Genki Forest can launch timely new products in a shorter time, paving the way for creating "hit products". However, for Tang Binsen, who advocates "zero budget" competition with big companies, the shift from light to heavy in Genki Forest's model seems somewhat helpless.
Currently, the main market share in the beverage industry is still offline. According to industry estimates, more than 60% of Genki Forest's sales come from offline. For offline channels, the OEM model lacks trust, and the asset-heavy model is essential.
Genki Forest plans that once all self-built factories are put into operation, they will bear 80% of Genki Forest's production capacity. Genki Forest also uses this to emphasize to the outside world that it is "not just an internet celebrity", intending to tear off the internet celebrity label.
**However, Genki Forest, which is now focusing on traditional offline channels, will face the mature systems of the wealthy predecessors in the industry. It does not have an advantage itself. Once the existing model fails to operate smoothly, the factories may become a burden, which also poses new challenges to Genki Forest's future operations.**

**-03-****-The Anxiety Behind**
Behind Genki Forest's continuous proactive "weight gain" is anxiety. As an internet-famous brand, even if it stands at the forefront, it can still be instantly replaced.
Tang Binsen, who previously created multiple hit products in the gaming field, officially entered the beverage industry around 2015. With the business philosophy of "After 10 years of hardship, I found that to make big money, you must first learn to choose", Tang Binsen chose to enter the "tropical rainforest" of fierce business model competition—the ready-to-drink tea and carbonated beverage industry with a huge market and giants. However, the segment he cut into was the niche sugar-free and sparkling water, which can be said to be a different approach.
Sugar-free and sparkling water are not concepts first proposed by Genki Forest, but Genki Forest combined the two.
On the one hand, it used the more expensive erythritol instead of traditional chemical sweeteners to improve the taste. On the other hand, in terms of packaging, it combined a fresh and stylish Japanese style to capture the preference of the new generation of consumers for the appearance economy, establishing differentiation from traditional sugar-free beverage products on the market. It then set a moderate price of 5 yuan that young people generally accept, and through high-profile marketing online and offline, quickly occupied the position of "first in category" in consumers' minds with the product image of "0 sugar, 0 calories, 0 fat".
Some in the industry describe Genki Forest with this sentence: **"Rather than saying Genki Forest sells beverage products, it's better to say it sells internet companies' insight into user needs."** Shen Meng, director of Chanson Capital, prefers to attribute Genki Forest's success to marketing.
Tang Binsen himself also publicly stated, "We dare to spend 1.8 billion on advertising when we create 2 billion in revenue."
"The success of marketing is not the success of the product itself. We should view this differently." Zhang Yi, CEO of iiMedia Consulting, analyzed to Hefan Finance (ID: daxiongfan) that companies driven by marketing often use capital to exit after making an impact and data.
Generally speaking, such companies have certain shortcomings in long-term development. "In the beverage industry, the most important factor is functionality. Whether it's Red Bull, Wang Laoji, or Six Walnut, they all have distinct functionality, such as brain nourishment, reducing heat, replenishing energy, etc. This is very important."
In the industry's view, Genki Forest has not formed its own moat. Zhu Danpeng, a Chinese food industry analyst, believes that for beverage companies, the moat has several dimensions.
**First, technical barriers and formula barriers. Second, brand barriers, such as Nestlé. Third, scale barriers,** such as Danone, Master Kong, and Red Bull. Currently, Genki Forest has not formed a moat. In the absence of barriers, relying on following trends, hype, and internet celebrity effects is difficult to sustain development.
Shen Meng also said that for the sparkling water market, Genki Forest's marketing space is gradually reaching its peak, and there are challenges and doubts in the sparkling water market. Therefore, only by opening up new markets can it replicate the experience of sparkling water and maintain rapid growth. This is not only the anxiety of the company's self-development, but more of the passive pressure formed by market competition. Before going public, Genki Forest needs to maintain continuous high-speed growth to continue financing and sustain its business model.
The threshold for sparkling water products is not high. At present, many competitors have begun to attack Genki Forest's territory, including excellent challengers. Currently, Heytea, Wahaha, Yili, and other brands have launched sparkling water or sugar-free products, with similar product specifications, prices, and health concepts to Genki Forest.
At the same time, another internet-famous beverage brand "Hankou No.2 Factory", which also focuses on sparkling water, is rising and has completed a financing round of over 100 million yuan.
In addition, controversies about Genki Forest's pseudo-Japanese packaging and sugar substitutes have always existed. Zhang Yi also said that Genki Forest's single sparkling water market is currently encountering a bottleneck. A major problem is seasonality. Only summer is the peak season, and for almost half of the year, sales may be sluggish. Seasonality affects the expansion of the entire enterprise scale and also brings uncertainty to Genki Forest.
Beyond existing hit products, within the limited product life cycle, how to create long-term dividends for the brand has become a question Genki Forest is thinking about.

**-04-****-Is "Full" Good?**
Now, Genki Forest is taking the common path chosen by internet-famous players after their hit products: increasing product lines, exploring product matrices, and extending channels.
In fact, Genki Forest has already launched products like Jianmeiqing tea and energy drink Alien, but they have not made a splash. Currently, among Genki Forest's multiple products, only sparkling water and Jian tea have achieved some success, accounting for over 90% of the company's sales.
Zhang Yi analyzed that it can be seen that **Genki Forest wants to stretch the product line within the same channel. Theoretically, revenue still requires significant scale expansion to improve.**
Whether Genki Forest can sustain depends on whether the layout of other horizontal products can succeed, which in turn depends on consumers. Sparkling water mainly targets the post-95s generation. Seasonal and user group factors mean that if it continues to deepen, there will be problems. Whether the horizontal layout can succeed depends on future layout and market response.
"For example, the soy milk and oats that Genki Forest is testing are not aimed at the post-95s. The so-called 'success and failure are both due to the same factor'. Can the past fame and success use the same marketing methods to attract customers and gain trust for new horizontal products? The uncertainty is still quite large, and there may even be a decline if not handled well."
In fact, the beverage industry is already a red ocean. Any brand's anxiety about sustained growth is an unavoidable curse.
Take Wahaha, which has been established for 33 years. Currently, its most active products on the market are purified water, AD calcium milk, Nutri-Express, and Shuangwaiwai, but these products are all somewhat old. AD calcium milk was launched in 1996, 24 years ago, and Nutri-Express was launched in 2005, 15 years ago.
In terms of products, over the past decade or more, Wahaha has always wanted to "win by surprise". In 2008, it launched "Pir Chun Cha Shuang", a 0 alcohol mixed tea drink; in 2010 and 2018, it launched "Jingjing" drinks and "Tianyan Jingjing" fermented milk, trying to make a point on relieving visual fatigue; in 2015, it launched the claimed first children's room-temperature yogurt "Edison Cheese Yogurt"; at the end of 2019, it also launched the claimed sixth 10-billion-level product—the sleep-aid Miaomian yogurt drink.
Besides these special moves, Wahaha also launched many ordinary products, but they all disappeared in the vast sea of beverages due to insufficient groundwork or doubts about functionality. Wahaha's next hit product has not come out, and the entire brand is still living on its "old capital".
It is worth mentioning that Wahaha's "alternative" diversification attempts—children's clothing, milk powder, dairy products, commercial real estate, liquor, micro-commerce, etc.—all failed without exception.
The newly rich Nongfu Spring, its hit products in the beverage industry, Scream and Tea π, were launched 12 years apart. Nongfu Spring relies more on drinking water for profit.
In horizontal comparison, the internet-famous snack brand Three Squirrels, which is occasionally compared with Genki Forest, has also experienced a leapfrog expansion of its product matrix.
Last year, Three Squirrels, which started with nuts, announced that the company had completed the transformation from a nut brand to a full-category snack brand. In April this year, it added four sub-brands: Xiaolu Lanlan, Yanglege Maohai, Tiegongji, and Xixiaoque, corresponding to infant food, pet food, craft gifts, and other segmented markets, interpreted as exploring new fields beyond leisure snacks. In addition, in terms of channels, it also began offline expansion plans.
However, due to difficulties in making profits from offline expansion and the lack of significant sales in new fields, Three Squirrels faced slowing revenue growth, high operating costs, and falling stock prices. Three Squirrels finally had to urgently slim down. Now, Three Squirrels no longer frequently mentions its store opening speed, and the founder also said that it will cut 300 SKUs before the end of the year.
At the same time, Three Squirrels plans to transform from a full-category brand to a "nuts and dried fruits + selected snacks" brand.
Over the past few decades, new upstarts in the beverage market have come and gone, but only old giants like Nongfu Spring and Wahaha have remained standing. **In the future, as market competition intensifies, whether Genki Forest can maintain high-speed growth, successfully replicate the next "sugar-free sparkling water", and break through the encirclement remains to be tested by time.**
Source: Hefan Finance (ID: daxiongfan) Author: Tan Liping
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