Click the image above for details In just nine months, emerging beverage company Genki Forest has once again refreshed its 'dark horse' track record—its valuation may jump from 4 billion to 14 billion yuan. On July 15, according to 36Kr, Genki Forest is about to complete a new round of financing with a post-investment valuation of about 2 billion US dollars, roughly 14 billion yuan. In addition to some old shareholders following the investment, Sequoia Capital China and Yuansheng Capital may become new investors. Genki Forest has declined to comment on this. This domestic beverage brand, founded in 2016, has seized on the health and body-shaping needs of young consumers, promoting its '0 calories, 0 sugar, 0 fat' label. With its 'internet-famous' sparkling water product, it quickly opened up the market and completed four rounds of financing in just four years. In early July, Genki Forest publicly unveiled its first self-built production base in Chuzhou, Anhui Province. The exterior walls of the first-phase factory, covering 100 mu, are uniformly painted pure black, setting off the bright yellow Genki Forest logo. The first-phase factory put into operation this time has three production lines with an annual capacity of 450 million bottles, capable of producing Genki Forest's various bottled beverages. Genki Forest's Chief Quality Officer Bing Qian revealed that the second-phase factory in Chuzhou, Anhui, will break ground in August, and self-built factories in Zhaoqing, Guangdong, and Tianjin are also on the agenda. Before this, Genki Forest outsourced production to Changshu Toyo and Uni-President's Tongshi factory. Genki Forest's founder, who was also its investor, Tang Binsen, was formerly the CEO of social gaming company Zhiping Mingtong, whose works include the classic game 'Happy Farm.' On June 11 this year, Tang Binsen officially resigned from Zhiping Mingtong. So far, the entire team has not revealed an obvious beverage industry background. Compared with traditional FMCG, perhaps this team is better at using internet thinking to tell stories. And on the official website homepage, Genki Forest also describes itself as an 'Internet+ beverage company.' Currently, Genki Forest's product lines are still streamlined: the earliest known 'Ran Tea,' the star product sparkling water, the potential new product milk tea, the yogurt brand 'Beihai Ranch,' and the functional beverage brand 'Alien.' Within the limited product lines, apart from the consistent health route, the iteration speed of flavors is faster than traditional beverage products. According to Genki Forest's PR person, Ran Tea was not its first product. The company initially launched a fruit tea that is still sporadically sold on the market, but market feedback was poor. It was only after confirming the '0 sugar' direction that subsequent products were launched in a targeted manner. '0 sugar' beverages usually refer to using sweeteners as sugar substitutes, replacing the commonly used sucrose. As the enlightenment for most domestic consumers on sugar-free beverages, Diet Coke, Diet Pepsi, and other products typically use aspartame and acesulfame potassium as sweeteners. Genki Forest, however, focuses on erythritol and other relatively rare sugar substitutes in China. Genki Forest's related R&D personnel said that erythritol has been used relatively maturely in foreign markets, and Genki Forest is considered one of the first domestic industrial beverage brands to introduce this raw material. 'We extract it through microbial fermentation, so the cost is definitely much higher.' At the same time as opening the factory, Genki Forest released two new sparkling water flavors, 'Lactic Acid Bacteria' and 'Lime Light Ginger.' These seemingly niche compound flavors are a common choice for Genki Forest. For example, Ran Tea has flavors like 'Strawberry Jasmine Oolong Tea' and 'Peach Oolong Tea.' Genki Forest's Chief Operating Officer Xiao Yang said that to achieve a balance between health and taste, 'each product goes through thousands of adjustments and tests, and the design goes through hundreds of surveys. This is our core and one of our difficulties.' As for why they are making products with greater span such as yogurt and functional beverages, Genki Forest said it is to test the company's R&D and production capabilities for different products. It can be speculated that Genki Forest is conducting multiple experiments to build strength for finding the next hit product. In addition to rapid iteration R&D capabilities, Genki Forest has also shown market ability to follow trends and create topics, but this has also brought controversy. Genki Forest's earliest label was 'resembling a Japanese brand.' On the packaging of Genki Forest sparkling water, Genki Forest enlarges the Japanese kanji '気' instead of the Chinese character '气', and on the back of the bottle it says 'Supervised by Genki Forest Co., Ltd., Japan.' Recent new products also more or less carry a 'Japanese' flavor. For example, Beihai Ranch yogurt uses the words 'Hokkaido 3.1 Sugar-Free Yogurt,' and a product named 'Beihai Ranch Japan LP28 Yogurt' is marked as jointly developed with the Plant Lactic Acid Bacteria Research Institute of Hiroshima University in Japan. Genki Forest's PR person said that the initial focus on Japanese style was because, according to consumer research, young people like two-dimensional culture and Japanese culture. The reason for choosing 'Genki' and 'Forest' was that among hundreds of alternative options, they were selected based on consumer feedback, filtering out names like 'Mingming Bu Pang' (literally 'Obviously Not Fat'). But Genki Forest also said that as consumer preferences become more diverse, 'we will further adjust our strategy.' At the same time, Genki Forest clearly stated that it focuses on the mid-to-high-end route and has seized the convenience store channel and e-commerce channel over the past four years. The high-net-worth consumer group of convenience stores matches Genki Forest and can afford its 5 yuan price point. During Tmall 618 in 2019, Genki Forest was the best-selling brand in the beverage category on Tmall. By Double 11 in 2019, Genki Forest ranked second in online sales across the entire network, surpassing Coca-Cola and Pepsi. Genki Forest is also a master of various social media marketing tactics. On the lifestyle platform Xiaohongshu, there are more than 10,000 related posts about Genki Forest, basically related to reviews, fat loss and body shaping, and healthy living. And in the e-commerce livestreaming channel that became popular last year, Genki Forest also took the lead in the beverage industry. On March 8, it sold 150,000 units in Li Jiaqi's livestream room. With a different approach from its predecessors, in the already red ocean beverage market, Genki Forest surprisingly broke through to fame, thus attracting investors. So in 2020, Genki Forest's actions are clearly bolder than before. This year, Genki Forest joined Tmall's Super Brand Day and will further utilize Alibaba's full-domain marketing resources. The milk tea launched in 2019 is expected to become the next hit after sparkling water, and they jointly launched the 'Milk Tea Zai X Tmall Super Limited Gift Box' with Tmall. Source: First Financial YiMagazine (ID: CBNweekly2008) Reporter: Wang Yiyue, Editor: Ni Ni