Recently, when discussing Wall's, I mentioned their key move to capture the Chinese market: the "freezer strategy." In fact, laying channels and grabbing freezers was not Wall's innovation; industry giants like Coca-Cola have used this approach worldwide. In the FMCG market, whether you sell ice cream or beverages, fighting the freezer war is a tactic that, while seemingly outdated, repeatedly proves effective. Especially in the past two years, traditional beverage giants like Coca-Cola and Nongfu Spring have joined forces to besiege the newcomer Genki Forest, pushing the freezer war to new heights. In this issue, I want to discuss several famous freezer wars in the domestic commercial market and why everyone refuses to let go of freezers.
01 First, before discussing the "freezer war," I wonder if you've ever thought: why do we call vertical units "refrigerators" and horizontal ones "freezers"? This naming seems inconsistent with our usual understanding. As Ma Weidu said on "Lecture Room": "In the Chinese concept, a cabinet has doors, and a box has a lid. Top-opening is a box, side-opening is a cabinet." By this standard, what we usually call a refrigerator should be called a freezer, and vice versa. It sounds confusing. In fact, the difference between refrigerator and freezer is not just about transliteration but also their development history. Generally, both are refrigeration equipment. Refrigerators have both cooling and freezing functions, while freezers focus more on freezing. Their birth is inseparable from the development of refrigeration technology. Since 1834, when a Boston merchant named Frederic Tudor shipped frozen New England lake ice to the Caribbean, Europe, and India, people realized that using ice for cooling was a lucrative business. But the development of artificial ice making owes much to a doctor named John Gorrie. In the 1840s, during malaria and yellow fever epidemics in Florida, hospital ice was insufficient. Gorrie, with a healer's heart, used the principle of air expansion absorbing heat to cool air, inventing an ice-making device to cool patients, and later patented it. However, as artificial ice-making technology matured, Tudor's ice business suffered, so he began to defame Gorrie's invention, spreading rumors that his ice was infected with bacteria. Thus, Gorrie's ice machine was not mass-produced. Yet, that era saw rapid technological progress; besides Gorrie, many others were exploring refrigeration. For example, in 1854, Australian James Harrison invented the first mechanical ice-making machine, applied in breweries; in 1879, German chemist and engineer Carl von Linde invented a freezer using ammonia as a refrigerant. After repeated improvements, in 1922, Swedish engineers Balzar von Platen and Carl Munters invented the world's first electric refrigerator. Subsequently, electric refrigerators entered the Chinese market. At that time, people saw these devices as similar to the "ice boxes" from the Qing Dynasty, but electric, so they called them "electric refrigerators," while the later-introduced freezing units were called "freezers." Generally, besides industrial use, refrigeration equipment like refrigerators and freezers is widely used in the food industry, such as frozen foods and ice cream. Especially for ice cream, freezers are indispensable shelves for storage and, as a ready-to-eat item, also display racks. Therefore, in the ice cream industry, grabbing freezers is a common tactic among merchants.
02 However, the earliest to recognize the role of freezers and use them to dominate the market and advertise was not Wall's, but the "Beauty Brand" ice cream that was popular in Shanghai in the 1930s. Its manufacturer was Haining Foreign Firm, originally engaged in egg export, founded by American Haining in 1913. In 1925, to address the off-season for egg processing, Haining decided to import American cold drink equipment to produce ice cream. With abundant foreign capital and technology, the "Beauty Brand" cold drinks, including popsicles, ice cream bars, and ice bricks, were well-received upon launch in the 1930s. To expand the brand's influence, Haining not only advertised in mainstream newspapers but also shipped 500 large, fully functional "electric refrigerators" from the United States at once. These custom counter-style large refrigerators are essentially what we now call freezers. At that time, Haining stipulated that distributors could use them for free as long as they only stocked "Beauty Brand" products, a practice identical to today's exclusivity deals. In the then market environment, this was a dimensionality reduction attack. A similar situation replayed in the mid-to-late 1990s when Wall's entered the domestic market. I won't elaborate.
03 Subsequently, using freezers to promote products became standard for major ice cream manufacturers, but the one that innovated was "Northeast Big Board," which suddenly rose to fame a few years ago. The producer is Hongbaoshi, established in 1992 in Daqing, Heilongjiang. Some northeastern students may have eaten this brand's popsicles as children. But its "Northeast Big Board" is a new product born in 2013, and from its path to fame, it's more like a genuine internet celebrity product. First, as a northeastern brand, "Northeast Big Board" chose Shanghai as its first stop. We know that for a long time, the domestic ice cream market was dominated by two major dairy brands, Yili and Mengniu, foreign brands like Wall's, and local brands operating independently. For a new brand to break through, especially to open the national market, is not easy. Northeast Big Board chose Shanghai, with the most concentrated resources, as its breakthrough point—the most competitive but also the most opportunity-rich. Second, Northeast Big Board took a differentiated route. It didn't initially try to enter large supermarkets or directly compete with established brands but focused on roadside shops, newsstands, and even milk tea shops. The key weapon was the freezer. Northeast Big Board eliminated intermediaries, directly contacting these retail shops and placing freezers in their stores. Compared to big-brand freezers like Wall's and Yili, Northeast Big Board's freezers were smaller, with green as the main color and red-bottomed green lettering as the main sign, making them recognizable even when placed alongside others. The small freezer became consumers' first impression of Northeast Big Board. The product's simple packaging and relatively low price, combined with the retro nostalgia trend sparked by films and TV shows in those years, perfectly resonated with public sentiment. With social media promotion, it became a standout in the ice cream industry from 2014. To this day, when discussing Northeast Big Board, its "small freezer" breakthrough strategy remains an unavoidable topic.
04 In the beverage industry, freezers are also essential. As we know, chilled Coca-Cola tastes significantly better than room temperature. As early as 1927, Coca-Cola entered the Chinese market, establishing its first bottling plant in Shanghai. At that time, Coca-Cola also built dedicated kiosks (similar to today's newsstands). Additionally, Coca-Cola was most commonly found in places like the Shanghai Club, foreign clubs, upscale hotels, and Western restaurants. In the 1930s and 1940s, Coca-Cola used extensive newspaper advertising to further boost its visibility. Moreover, by placing small freezers, Coca-Cola moved beyond upscale restaurants into streets and alleys. Back then, small freezers with Coca-Cola signage were standard in fruit stalls, tobacco and alcohol shops, small restaurants, and cinemas. This was the first phase of Coca-Cola's entry into the domestic market, establishing initial brand awareness. When Coca-Cola returned to the domestic market in the 1980s and 1990s, it faced a more complex environment, including the rise of domestic brands and constant attacks from rival Pepsi. Besides price cuts and heavy advertising, using freezers to dominate offline sales channels was a key measure. For example, Coca-Cola launched the "Terminal Revolution" in the early 1990s, providing freezers to retail stores and building a large sales force equipped with motorcycles to deliver products directly to retail outlets. Starting in 2001, Coca-Cola implemented the "101 Plan" , cooperating closely with distributors in second- and third-tier markets. They provided retailers with refrigerators, freezers, display racks, and other hardware, as well as industry training. With first-mover advantages and deep pockets, Coca-Cola effectively suppressed other brands. However, during the most intense market battles, Coca-Cola's freezer strategy almost became useless due to battlefield conditions. Do you remember a drink called "Future Cola" from childhood? This drink, launched by Wahaha in 1998, cleverly used a "patriotic" national mission to build brand awareness, following a rural-encircling-city route, using rural mom-and-pop stores as bases to gradually capture the market. Within a few years, it became the third-largest beverage brand after Coca-Cola and Pepsi. Of course, Coca-Cola, realizing there was a vast rural market beyond big cities, began targeting rural areas from 2003. First, Coca-Cola built a plant in Gansu to ensure production capacity; then, using rural areas in eastern coastal provinces like Zhejiang and Fujian as starting points, it deployed Coca-Cola shelves and freezers. Finally, with a fierce offensive of 7,000 freezers, it aimed to capture rural markets nationwide. However, despite Coca-Cola's intentions, the overall consumption environment in rural areas wasn't ready. Fortunately, the state's push to build rural mom-and-pop stores provided basic infrastructure for Coca-Cola's freezer strategy. Additionally, along with free giveaways, Coca-Cola implemented the "One Yuan Cola Plan." The extremely low price and the consumption habit of returning bottles after drinking aligned with rural habits, helping Coca-Cola gradually establish a foothold in rural markets, even squeezing Future Cola's market share with broader coverage.
05 Similarly, in the domestic beverage market, especially the bottled water segment, Nongfu Spring, which once battled Wahaha and fought Master Kong, is definitely a victorious warrior. Its founder, Zhong Shanshan, was a journalist, so Nongfu Spring excels at creating topics and marketing battles, as you may have heard. Slogans like "Nongfu Spring is a bit sweet" and "We don't produce water; we're just nature's porters" are deeply ingrained. But on the other hand, over the years, it has also been a veteran in channel distribution. According to Nongfu Spring's 2019 financial report, by the end of that year, it covered over 2.37 million retail outlets nationwide, with 78.9% in lower-tier cities, and over 360,000 outlets equipped with Nongfu Spring freezers. Therefore, when Genki Forest held its distributor conference in October 2020, and Tang Binsen proposed deploying 80,000 smart freezers (single-door, six-layer, with embedded cameras) to aggressively enter offline sales terminals, Nongfu Spring felt offended.
Image source: Interface News
06 Of course, Nongfu Spring wasn't the only one threatened. In a market with a stable pattern for years, the most feared thing is a catfish like this. Compared to Nongfu Spring, Wahaha, Coca-Cola, and Pepsi, Genki Forest is definitely a new species from another world. It grew up in the internet era, took a "lightweight" route, carved a path through online sales channels, and its signature "sugar-free sparkling water" revitalized a new track, making it an industry upstart in just four or five years. Genki Forest came on strong, so when it decided to look at traditional enterprises and expand offline, it naturally faced heavy resistance. In fact, in dealing with Genki Forest, these traditional brands are like the major orthodox sects in the martial arts world. Despite past grudges, at that moment, for a common goal, they would temporarily shake hands, unite, and jointly besiege this heretic. So, after Genki Forest's high-profile entry, Nongfu Spring immediately launched the "Heaven-Sent Wealth God" campaign, with one slogan: "Seize competitors' freezers, buy back our freezers." This year, the two major cola brands have also made internal threats to bring down Genki Forest. Genki Forest certainly knows the road ahead is tough. After all, before 2019, they didn't have freezers; their sparkling water was often sold in freezers belonging to brands like Nongfu Spring. Compared to Nongfu Spring's nearly 400,000 freezers and Coca-Cola's nearly one million, even if Genki Forest could deploy all 80,000 freezers at once, it would be a drop in the bucket. But Genki Forest has taken a shortcut, leveraging its internet genes to focus on smart freezers in lower-tier markets. In an interview with "LatePost" last November, when asked "What things would Nongfu Spring do that you wouldn't?", Tang Binsen replied: "We develop our own smart freezers that can remind salespeople to restock without needing to check on-site. Nongfu hasn't done this." To some extent, smart freezers are not just product display cabinets; they are terminal databases. By connecting to the internet, they can collect first-hand sales data and even user profiles, enabling more precise advertising. The change in Genki Forest's sales data also directly reflects the effectiveness of its smart freezers. Last March, sales power increased by an average of 118% compared to without freezers. Additionally, compared to traditional freezers over six months, smart freezers saw an average 74% increase in sales per unit and a 472% increase in efficiency. However, in hindsight, Tang Binsen's comments about Nongfu Spring were premature. Smart freezers don't have high technical barriers; if Genki Forest can deploy them, so can Nongfu Spring, Coca-Cola, and others. In fact, at the end of last year, Nongfu Spring's chairman Zhong Shanshan announced at a company meeting that they would invest 2 billion yuan to promote 4-door and 3-door smart freezers in terminals, and had already placed orders for over 30,000 units. It seems the freezer war in the beverage market has ignited, and all parties will join in, ultimately competing on who is willing to spend more and who has more resources.
07 From the current perspective, the "freezer war" will be a protracted one. After all, whether traditional or smart, freezers symbolize channels for these brands. The purpose of the freezer war is to firmly control sales terminals. Especially for FMCG like beverages and ice cream, flashy advertising and strong value propositions often can't compete with the convenience of buying the product at hand. Only by placing products closest to consumers, ensuring they can buy them even in remote areas, can the consumption loop be completed. It's foreseeable that in a market as large as China, there will always be areas not covered by brands. Thus, whoever can quickly seize these sales terminals will have more market share. When Genki Forest's early "internet + hit product" approach lost its effectiveness, it realized that to attract more consumers, it had to return to traditional channel competition. And the old brands that have been fighting over channels for years won't easily let newcomers succeed. It can be said that the freezer war sparked by Genki Forest at this stage is inevitable, and all parties will only perform more vigorously. But the freezer war has limitations; everyone is essentially using money to compete for resources. Whoever gives distributors more concessions and offers retailers better deals will have an easier time winning. So, high-end business wars often require the crudest means. Many times, you don't need to compete on quality, taste, or flavor; you directly cut off production lines, destroy sales channels, seize seals, and make products unsellable. After all, your product and quality don't matter to me, but your absence matters a lot.
References: "Freezers Become Their Battlefield," Feng Lun Feng Ma Niu "To Protect Freezers, Nongfu Spring and Genki Forest Fight," Daily People "Zhong Shanshan vs. Tang Binsen: Nongfu Spring's Offline Sniper War Begins with 80,000 Freezers in Mom-and-Pop Stores," Sina Tech "Why Is a Cabinet-Like Thing Called a Refrigerator and a Box-Like Thing Called a Freezer?", Yi Du "Shanghai Cold Drink Past"