“I’ve started selling beverages too.” When I heard this, I was taken aback. The speaker was a traditional household goods distributor who had focused on supermarket channels for over a decade, selling groceries, paper products, and kitchen cleaners, never touching beverages. Logically, such low-frequency, long-tail category operators have nothing to do with water drinks. But recently, this kind of feedback is becoming more common. Distributors of seasonings, daily chemicals, household goods... are all proactively adding water drinks, especially high-frequency SKUs like bottled water. They put it bluntly: “Beverages don’t make money, but they help move my original stock.” At first, I didn’t understand, until after in-depth conversations with several distributors, I realized: this is not an occasional decision, but a “self-rescue tactic” being spontaneously replicated in the frontline market. Supermarkets can’t hold up, small shops can’t move Forced to use “beverages” to stay afloat “It’s not that I’m optimistic about beverages, but I really can’t hold on anymore.” Mr. Wang (pseudonym) is a daily chemical distributor. He admitted: more and more distributors like him, who deal in long-tail categories, are trying to use water drinks to drive their original business. Their goal is actually the same—to get the business moving first. In the past, they mainly relied on supermarkets for shipments, using inventory pressure and rebates to drive volume. But in the past two years, supermarkets have frequently “gone offline”: “Before, we helped supermarkets make money; now we’re bearing risks for them.” Some have been owed hundreds of thousands that they can’t recover; some have been cleared out and had goods returned, leaving them to absorb the inventory themselves. When business stops, it leads to organizational paralysis: salespeople lose motivation, customers stop ordering, and delivery teams have nothing to deliver. So they turn their hopes to small shops, trying to find a way out through community stores and mom-and-pop shops. But the reality is equally cruel:
Long-tail categories are not suitable for high-frequency replenishment; small shops have short replenishment cycles and don’t give you the chance;
The average order value is low; a single replenishment is only a few dozen yuan, which can’t cover vehicle, fuel, and labor costs;
The frequency doesn’t pick up, customers don’t see you, and the person-product relationship breaks. At this point, beverages become the “life-saving” brick: high-frequency, essential, stable replenishment, which can drag the original slow categories along. “It’s not about making money from water drinks, but using water drinks to deliver goods.” This is the consensus among many distributors. It’s not that beverages are easy to do, but that the original structure can’t run anymore. You must first get the business moving before you can talk about goods and sales. This all sounds like a tactical adjustment, but for many distributors, beverages have even become the key to “propping up the main business.” Next, I will share two typical cases. Not for the sake of selling beverages But using beverages to deliver goods “As long as water drinks can drive 10% of my household goods, I’m making a profit.” Mr. Lu (pseudonym) is an old distributor in Central China, doing household goods for over a decade, with a full range of categories and mixed SKUs—pots, pans, bowls, brooms, mops, cleaning supplies, everything. He was originally the main supplier to several medium-sized supermarkets locally, relying on rebates and inventory pressure to drive volume, achieving tens of millions in sales a year. But as supermarket business declined and large amounts of debt piled up, his organization began to lose cash flow. “The money pressed in is like throwing it into water; it won’t come back. When customers clear out, the goods are given away for free.” Supermarkets didn’t settle accounts, inventory couldn’t move, and to survive, he led his team to run small shops. But after a short time, he found a bigger problem: “I bring a mop and a few rolls of garbage bags, one order is a few dozen yuan, and I have to spend on people, vehicles, and fuel.” Long-tail categories are hard to get into small shops, and even if they do, they don’t replenish; they come once a month, and customers don’t even want to see you. The rhythm of business broke, salespeople were too lazy to go out, customers were too lazy to replenish, and the team collapsed. It was then that he noticed some peers starting to run water drinks. Bottled water is replenished every three days, with stable customer demand and fast shipment. So Mr. Lu thought: this thing doesn’t make money, but can it be used as a “rhythm product”? In 2023, he started trying bottled water. His exact words: “I don’t expect to make money from water drinks; I just want a turnover rhythm.” With water drinks replenished every three days, he had a reason to visit a small shop every three days. “As long as one trip can bring out 10% of household goods, it’s not a loss.” Now, his household goods and beverage shipments have reached a 1:1 ratio, but he never sees this as a “transformation”: “Beverages are just a reason to attract business; household goods are my main business.” A similar approach appears with Mr. Zhang (pseudonym), a daily chemical distributor in Shandong. The difference is that he’s more “aggressive.” Supermarket daily chemicals decline by 10% every year, and payment terms get longer and longer. He tried Pinduoduo, Meituan, and online group buying, but the result was that sales went up, but profits disappeared; the faster he ran, the more he lost. “Online can at most maintain sales, but not profits, and not the team.” So he changed his approach—using water drinks as an entry point to run small shops, but as he ran, he found that restaurant outlets are the “cash kings”: when business is good, they pull a whole truckload at once, with stable demand and timely payment. He decisively adjusted his direction and led his team to sweep the streets for restaurants. In just a month and a half, he swept 1,700 outlets, most of which were restaurant clients. Water drinks led the charge, with daily chemical goods like disinfectant, dish soap, and tissue hanging behind. “Water drinks are my door opener, but daily chemicals are the main course that makes money.” One uses beverages to drive goods, the other uses beverages to sweep outlets, but the consensus is the same: it’s not for the sake of selling beverages, but to use beverages to deliver the original goods; it’s not that you must sell water, but that the business must run. What they solve with beverages is not a category problem, but an operational problem. The deep structural mismatch is the real gap they need to fill. Can beverages really solve the problem? Can beverages really solve the problem? It seems not necessarily. But what we see is that in a period of overall business pressure, distributors are unanimously looking for a category that can “run fast and turn over” to drive their basic business. It could be beverages, or snacks, non-staple foods, or even fresh produce and dairy. The key is not the category itself, but: can it solve structural problems? Can it make you run, turn over, survive, and then seek growth? In the end, the real issue distributors face is not “whether to do beverages,” but that market demand has shifted gears, and the organization hasn’t kept up; consumption is accelerating, while supply is still lagging. The business threshold has risen, supermarkets are no longer stable supply channels, and the pace of consumers and brands is no longer aligned. The entire trading system is reshuffling. So, what’s the next step? What viable paths can we reference? Which tactics, platforms, and models? From August 19-21, in Shanghai, at the [New Demand · New Supply 7th FMCG Conference] and [5th China FMCG Distributor Conference], we will gather outstanding regional distributors, representative industry B2b platforms, leading brand owners, and retailers—frontline operators—to engage in deep co-creation focused on practical combat and underlying logic around this topic. **🔺