Source: Consumer Titanium (ID: xiaofeitaidu)
Jianlibao, the pioneer of sports drinks in China, is now entering the functional beverage market. Recently, Jianlibao announced the launch of a new generation of "Oriental Magic Water" – Chaodeneng compound peptide energy drink, developed in collaboration with the China National Research Institute of Food and Fermentation Industries.
Since last year, many consumers have noticed that this once pioneering brand is becoming more like "Genki Forest": launching "Weipao Shui" sparkling water, and "Jianlibao Fiber+" claiming to be zero sugar and zero fat – a familiar formula.
The new functional drink "Chaodeneng" also comes after products like Genki Forest's "Alien" and Uni-President's "Gouran". This national brand, which achieved 5.4 billion yuan in sales in 1997, has experienced two lost decades, and its road to revival is long.
New Product with No Splash
On Tmall's Jianlibao official flagship store, the new functional drink Chaodeneng is priced at 78 yuan for a 200ml*6 can pack, available in sugar-free original and low-sugar blueberry flavors.
"The zero-sugar or low-sugar formula is a boon for people controlling sugar intake, and it better aligns with modern taste preferences, suitable for various people and occasions."
Functionally, Jianlibao boasts that Chaodeneng uses core technology, with each can containing 5 grams of Chaodeneng compound peptide.
The product description states: "According to research and testing by an authoritative sports medicine research institute, it can repair damaged cells, maintain normal cell function, inhibit cell mutation, and enhance immunity... Drinking Chaodeneng after exercise can quickly restore vitality."
Consumer Titanium noted that Jianlibao's efforts in functional beverages are not limited to co-developing new products with the China National Research Institute of Food and Fermentation Industries.
At the end of May this year, at the signing ceremony for the "Jiangnan University - Guangdong Jianlibao Co., Ltd. Joint Research Center," Jianlibao Chairman Ye Honghan stated that he hopes to develop a new generation of functional healthy drinks suitable for Chinese people's physique and taste through this cooperation.
Since the launch of the new product Chaodeneng a month ago, monthly sales on Tmall's Jianlibao flagship store currently show 100+, struggling against the classic orange-honey soda with the discus thrower logo. Not lacking new products, but "no splash" is Jianlibao's current predicament.
It is reported that after the classic orange-flavored big product in the 1980s, Jianlibao launched fruit drink "Fifth Season" in 2003, carbonated juice drink "Baoguoqi" in 2014, and new product "Love Sports" in 2019.
Since last year, many consumers have also felt that this old-fashioned Oriental magic water is becoming more "Genki Forest-like": public reports show that in April 2020, Jianlibao launched a sparkling water drink called "Weipao Shui", and in June, "Jianlibao Fiber+" claiming zero sugar and zero fat was launched.
Jianlibao, with its long history, is also seen by the industry as following in its new entry into functional beverages: mature brands like Red Bull, Dongpeng, and War Horse have been battling in the market for a long time, and previous entrants include Uni-President's "Gouran", Yili's "Huanxingyuan", and Genki Forest's "Alien".
Regarding the launch of Jianlibao's Chaodeneng product, Zhu Danpeng, a food industry analyst in China, told Consumer Titanium: "New products need a long process from consumer awareness to recognition. Jianlibao's current scale of over one billion yuan may not be enough to support the marketing of new products." Li Yingtao, a senior analyst in the new consumer industry at Analysys, also analyzed to Consumer Titanium: The niche track of Chaodeneng is attractive enough, but Jianlibao's organizational and operational capabilities face huge tests.
Three Changes of Ownership, Falling into OEM
Public data shows that in 1997, Jianlibao's sales reached 5.4 billion yuan, marking the "highlight moment" of this national beverage. From 2013 to 2015, Jianlibao's total operating revenue was approximately 1.933 billion yuan, 1.785 billion yuan, and 1.682 billion yuan, respectively, far from its peak.
"There are many reasons for Jianlibao's decline. There are failures in founder's decisions, turmoil from 'three changes of ownership', slow product innovation and iteration, and losses in industry competition," Zhu Danpeng pointed out.
According to public reports, Jianlibao's predecessor was the Sanshui County Sanshui Winery in Foshan, formed after public-private partnership in 1956. It wasn't until Li Jingwei was transferred to the winery as director in 1984 that Jianlibao stepped onto the historical stage.
After a glorious period of over ten years, the situation turned in 1997 when Jianlibao sought a Hong Kong listing. Product sales continued to decline at a rate of tens of thousands of tons per year, while beverage brands like Wahaha and Robust quickly rose.
Two years later, Jianlibao proposed an employee stock cooperative plan within the company, but the plan ultimately did not pass, yet it opened the path for Jianlibao's multiple changes of ownership.
In early 2002, Jianlibao welcomed its first buyer. The Sanshui Municipal Government transferred 75% of Jianlibao's shares to Zhejiang Guotou for 338 million yuan.
Afterwards, Zhang Hai, the actual controller of Zhejiang Guotou, took over Jianlibao. During this period, Jianlibao once had debts of nearly 3 billion yuan. In 2004, Jianlibao was acquired by Taiwan's Uni-President Group for $100 million.
At the end of 2016, Uni-President Group announced that it had signed an equity transfer contract with Guangdong Jianlibao Group Co., Ltd., selling its 100% equity in Foshan Sanshui Jianlibao Trading Co., Ltd. to the latter for 950 million yuan.
In fact, the acquirer of Jianlibao Trading was Beijing Chunxin Capital Management Co., Ltd., under CITIC Asset Management Co., Ltd., supporting Jianlibao Group to repurchase 100% equity of Jianlibao Trading Company. In June 2019, the 35-year-old Jianlibao changed its slogan from "If you want to be healthy, drink Jianlibao" to the current "This is China's Jianlibao".
After many twists and turns, the halo has faded, and Jianlibao has gone from a front-runner to a follower. Some have also noticed that in recent years, Jianlibao has been working for "internet celebrities".
Last year, media reported that on the packaging of many Genki Forest bottled sparkling water products, there were words like "Commissioned Party: Beijing Guangdong Jianlibao Beverage Co., Ltd.", "Commissioned Party: Jianlibao (Zhenjiang) Beverage Co., Ltd.", "Commissioned Party: Foshan Sanshui Jianlibao Food Co., Ltd.", and "Commissioned Party: Guangdong Jianlibao Co., Ltd.".
This is consistent with the commissioning party printed on Jianlibao's packaging. This means that many Genki Forest products are produced by Jianlibao as OEM.
The latest information on Jianlibao's official website shows that Jianlibao's headquarters is located in the China (Sanshui) International Water Capital Beverage and Food Base in Foshan. The company has 5 beverage production plants nationwide, located in Foshan, Beijing, Xianyang, Zhenjiang, and Kunming, capable of producing and processing sports drinks, carbonated drinks, tea drinks, fruit juices, functional drinks, and other categories.
Difficult to Rise Again
In the eyes of industry insiders, Jianlibao working for new brands also has the meaning and value of biding its time.
Xu Xiongjun, a strategic positioning expert and founder of Jiude Positioning Consulting, analyzed that when Jianlibao is not selling well, choosing to OEM for internet celebrities has three benefits: first, it can earn some profit to support its own brand; second, it can learn the formulas of other best-selling drinks while OEMing; third, it can better grasp Genki Forest's development layout, thus forming differentiated competition.
Consumer Titanium noted that this summer, Jianlibao also launched a glass-bottled soda priced at 2 yuan in Xi'an, competing with regional brand Bingfeng for market share.
Public reports show that this is the first time in 36 years that Jianlibao has launched a glass-bottled product. The new product is 238ml, larger than Bingfeng's 200ml glass bottle, but priced at only 2 yuan, nearly 1 yuan cheaper than Bingfeng's retail price.
Regarding the launch of this product, a Jianlibao spokesperson publicly stated that the main reason is that local consumers like orange-honey flavored drinks, Jianlibao's product sales have been good, and Jianlibao has a factory in Xi'an to meet local logistics needs.
It was revealed that "market promotion will be determined based on the turnover rate of the catering market and regional market acceptance. If the effect is good, it will be rolled out nationwide."
Regarding Jianlibao's OEM and low-price strategies, Li Yingtao said: "When original products are difficult to fully revive, lowering posture, expanding other businesses, and focusing on regional markets can be a path of steady growth and gradual exploration."
Jianlibao, which fell from the altar but never stopped, was rumored to be seeking a listing in 2018. At that time, a Jianlibao spokesperson also revealed to the media that Jianlibao was undergoing internal adjustments, expected to be completed in 2019. But so far, no new news has emerged.
In the current beverage market with fierce competitors, can Jianlibao still "catch up" and have the possibility of listing? Zhu Danpeng said: "Looking at the development of the domestic beverage market, Jianlibao relying on its current scale of over one billion yuan to rise again basically has no big chance. If a food company does not reach a scale of over 5 billion yuan, its ability to resist risks is very poor."
Li Yingtao also believes "it is very difficult": "The difficulty of traditional enterprises transforming again is far greater than the difficulty of new brands starting from scratch, because they have to overcome problems like fixed thinking, rigid organization, aging brand, aging employees, and internal friction. Therefore, companies that can rise again are all great companies with strong organizational capabilities. For most companies, 'external incubation' of new brands is more likely to succeed."
Are you "watching" me?