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We want to summarize the NFC juice market in 2017, why growth has slowed, and where future opportunities may lie. What kind of market is NFC juice, who are the players, and what are their characteristics?
For 2017, NFC juice brands may be disappointed. Compared to 2016, growth slowed in 2017. The way to expand the market was to increase the number of cities covered, but if city coverage is saturated, how can growth be achieved? Should they continue to bet heavily on the NFC juice category, or leverage existing supply chain and channel advantages to expand into new categories?
Wei Chuan used creative bottle labels in 2016 to bring the refrigerated 100% juice category into a field widely noticed by consumers, but how much did this drive NFC juice consumption, and will it continue to receive widespread attention after 2017? Even in the larger 100% juice category, the largest player is Huiyuan, with annual revenue of about 2 billion RMB. The second is Wei Chuan, a brand that has been very popular in recent years, with annual revenue of about 1 billion RMB.
One cannot help but wonder: Is the industry not mature enough, with consumer demand not yet formed on a large scale, or are there other reasons, such as a lack of companies with continuous iteration capabilities—not only in products but also in brand & marketing, channels & sales methods, and supply chain? Or is it because the channels are not mature enough, as China's offline retail environment lags behind mature markets like the US, Europe, and Japan?
In the US, Japan, and Europe, 100% juice market share often reaches 70%–80%, and NFC juice share is around 50%, especially in the UK where NFC juice share even reaches 70%. But back to the Chinese market, 100% juice market share is about 3.5%, and NFC juice share is less than 1%. This huge gap can be seen as an opportunity, but it also indicates a chasm. Where exactly does this chasm lie?
As mentioned in the title, an NFC juice brand that opens up household consumption may become a food giant, but this is difficult. From a penetration perspective, many consumers are still unfamiliar with this category, and most NFC juice brands have a weak understanding of household consumption as a consumption scenario and market, thinking that household consumption simply means large-pack NFC juice products. In fact, it involves not only large packaging but also flavors suitable for household consumption.
With these questions and aspirations, let's review the NFC juice market in 2017, understand what kind of market it is, and discuss where the future of NFC juice may lie, what the opportunities and breakthroughs are for players in this market.
This article is roughly divided into the following parts to give you a deeper and more comprehensive understanding of the NFC juice market:
- Who are the players in the NFC juice market, how did they fare in 2017, and what landmark events occurred in this market in 2017?
- As an NFC juice brand, what does it involve in terms of supply chain, channels, brand & marketing, and products? What are the key points of these important links and how to control them?
- Can NFC juice market share in China reach 50%, or at least 30%? If household consumption is an important path to achieving this possibility, what is the path to the household consumption market? What capabilities should an NFC juice brand that seizes this opportunity possess?
I. Who are the players in the NFC juice market, how did they fare in 2017, and what landmark events occurred in this market in 2017?
"It's not as big as imagined, and not as fast as expected!" This should be what every NFC juice brand felt in 2017.
Why did this happen? Mainly because expectations and reality diverged.
- NFC juice accounts for at least 20%–30% of the overall juice beverage market in Japan, the US, and Europe, with some countries as high as 50% or even over 70%, while in China it is less than 1%. This is seen by most NFC juice brands as an opportunity and potential. Based on China's juice beverage market of about 130 billion RMB per year, even reaching 20%–30% would mean a market of 300–400 billion RMB.
But the actual situation is that foreign eating habits are completely different from domestic ones. For example, in the US, there is a habit of drinking juice at breakfast and main meals, but this habit does not exist in China. Although a small number of consumers have accepted foreign consumption culture and dietary concepts due to healthy eating, this is a minority. After covering consumers with existing demand, the growth space lies in the blank area, which is difficult to cultivate. At least for now, no NFC juice brand is actively and effectively doing this.
- Since Zero Fruit Workshop first brought NFC juice into retail channels at the end of 2012, the NFC juice market has grown rapidly each year. In early articles by CBN Weekly interviewing Zero Fruit Workshop, monthly growth could maintain double digits, of course related to the small base in the early stage. Starting around 2015, NFC juice began to enter retail channels widely accessible to mass consumers in first-, second-, and third-tier cities, mainly convenience stores. Also from 2015, the number of brands entering NFC juice increased, such as Shanghai's Element Fresh restaurant starting to push bottled NFC juice in FamilyMart and other channels.
Chinese consumers' emphasis on food safety and consumption quality also began around the end of 2014 to 2015, which allowed this niche category to grow from tens of millions to hundreds of millions of RMB. After 2016, competition in this niche category became intense in convenience store channels. Element Fresh exited the NFC juice market, Huiyuan launched Xianzhafang NFC juice, Nongfu Spring launched 17.5° NFC juice, Fissler's NFC juice began large-scale distribution in Shanghai convenience stores and premium supermarket channels, and Taiwan's Chia Mei Group, one of Asia's largest concentrated juice producers, launched the retail NFC juice brand Ji Zi Ran. Outside convenience store channels, Zong Fuli's Hongsheng Group launched its own brand Kelly One into the NFC juice market, listed company Tianyi Holdings launched its own NFC juice brand Senmei, and Chic Group, which processes and exports fruit, shifted its HPP juice brand Fruiti's focus from online to offline retail channels, among many other examples.
This niche category relies on these players and retail channels to spread among Chinese mass consumers. Since most brands only expose themselves in channels without doing much to popularize the category, the target customer groups have been covered, and the channels have been laid out. Growth in this niche category in China has begun to slow, and NFC juice brands are mostly competing for each other's share.
With rapid growth in previous years, there were hopes to maintain such growth in 2017, but due to the above reasons, maintaining previous growth rates is no longer possible.
Let's look at 2017 and see how the main players in the NFC juice market fared?
1. First, let's review some not-so-good news.
Nongfu Spring has two NFC juice products: one is ambient NFC juice, and the other is 17.5° NFC juice. The 17.5° product line was launched in FamilyMart convenience store channels in 2016 but was removed in 2017. It should be noted that convenience store channels are currently the core sales channel for NFC juice, accounting for about 70%–80% of sales. FamilyMart, as the largest convenience store chain in East China, means Nongfu Spring lost this core market.
Additionally, Wei Chuan launched a new product with NFC+FC concept in 2016: Daily Body Management, but in 2017, this product line was completely cut, meaning Wei Chuan has no connection to the NFC juice category. However, Wei Chuan's Daily C 100% juice grew at nearly 50%, although this product line is FC juice.
Kelly One, the own brand under Hongsheng Group, was officially launched in mid-2016, mainly through online, WeChat self-operated, and customized sales, without offline retail channels. In 2016, it only delivered in Shanghai. Although in 2017, besides Shanghai, it added Hangzhou as a delivery city and also started to place products in some offline channels, it should be noted that these offline channels are not retail channels but special channels. Despite these actions, from our observations, it also stalled for a short period and remained lukewarm. Most products in the WeChat mall, except customized ones, have disappeared.
Fruiti, originally around 2014–2015, when NFC juice was still rare in retail channels and mainly dominated by Zero Fruit Workshop, this brand entered the market and took a good share from Zero Fruit Workshop. At that time, its distribution in supermarkets and convenience stores was very aggressive. Starting from 2017, this brand's NFC juice products disappeared, at least in convenience store channels in East China.
2. Let's review some relatively good news. This "good" can be understood as positive signals for the NFC juice market. Although it may not be a good result for every company, it has positive factors for the growth of the NFC juice market.
Fissler received a multi-million dollar financing in August this year, with investors including Chengwei Capital and Qianshu Capital under JD Finance. We mentioned this in our Weekly and briefly analyzed NFC juice at that time. Fissler's market has gradually expanded from its main base in Jiangsu, Zhejiang, and Shanghai to cities like Guangdong and Beijing. Also, in October this year, Fissler launched a product line other than NFC juice: fruit tea products. When it received financing in August, a media article mentioned that Fissler's estimated annual revenue this year is about 50 million RMB.
Zero Fruit Workshop is the NFC juice brand under Jiajun Beverage. Its 2017 revenue was about 100 million RMB. Besides Zero Fruit Workshop, there is also a fruit and vegetable juice brand called Fresh Day, which changed its packaging around April–May this year. Jiajun Beverage also launched two new brands: one is a fruit tea brand called Banguo Bancha; the other is a cold brew coffee brand called SAY COFFEE. In addition, Qiushui Juice, a company established by Jiajun Beverage at the end of 2015, mainly provides production and processing for its juice and fruit tea products. In 2017, it also took on OEM business for NetEase Yanxuan's NFC juice and Starbucks Reserve Shanghai Roastery's NFC juice. When NetEase Yanxuan first launched NFC juice products, we mentioned it in our Weekly; at that time, only 255mL was available, and recently a 960mL NFC juice product was added.
Fruiti's NFC juice focuses on HPP technology, which is ultra-high pressure sterilization, meaning sterilization is achieved through high pressure rather than high temperature. At the end of this year, it hired Taiwanese actor Wang Dongcheng as spokesperson and sponsored Xie Tingfeng's culinary variety show "12 Chives". As mentioned above, starting from 2016, Fruiti shifted from offline sales to offline retail channels, and in the second half of 2017, it began distributing in FamilyMart convenience stores. Fruiti's juice product SKUs are more abundant than other NFC juice brands, but only two SKUs are currently available in FamilyMart. Although this does not necessarily indicate good development for Fruiti in 2018, at least we see an NFC juice brand starting to popularize the category among consumers, even though the brand may not be willing to admit it is NFC juice.
After Huiyuan launched the NFC juice brand Xianzhafang in 2015, it launched another new NFC juice brand called Youmi in mid-2017. Huiyuan's financial reports do not mention specific sales data for NFC juice, but from the revenue growth of the 100% juice category, NFC juice products should have played an important role, as the annual report specifically mentioned that part of the revenue increase was due to price increases. As the leader in China's 100% juice field, Huiyuan's increased investment in the NFC juice category can also continue to promote the gradual maturity of this market.
Ji Zi Ran is currently an indispensable player in the NFC juice category. As the retail NFC juice brand under Taiwan's Chia Mei Group, one of Asia's largest concentrated fruit and vegetable juice producers, it is among the top three players in the current NFC juice market. In 2017, we did not see any representative major moves. But from the dimensions of distribution and market expansion, it is slightly better than Fissler in terms of market layout and sales scale, after all, it has been distributing in major cities nationwide since 2016. One more thing to note is that Chia Mei Group also has another NFC juice brand called Yangya, which does not go through retail channels but through special channels such as star-rated hotels and large chains, with representative ones including Starbucks, Häagen-Dazs, and 85°C.
Senmei, the NFC juice brand under Tianyi Holdings, is not commonly seen in convenience store channels, but we see this category being sold through vending machines. Specific sales data is unclear, but at a price of over 30 RMB per box, the proportion of buyers should not be too high. However, from another perspective, using a new way to popularize NFC juice among mass consumers has a positive effect on the growth of NFC juice.
Finally, let's review Nongfu Spring. Although we mentioned above that Nongfu Spring's 17.5° NFC juice was removed from FamilyMart, another ambient NFC product launched in the second half of 2016 became an internet-famous product this year. Although it is ambient, many industry insiders believe Nongfu Spring is disrupting the not-yet-mature NFC juice market. When it was first launched last year, there were two SKUs, and this year new SKUs were added. Although the NFC juice category is still too small for a beverage giant like Nongfu Spring, with the company's annual scale of hundreds of billions of RMB compared to the tens of millions of RMB revenue from this category, it is like a big mountain and a small temple. But Nongfu Spring's NFC juice revenue is growing, indicating that this potential market is still valued by large companies.
Basically, we have reviewed the NFC juice market in 2017 and found that this market is actually very interesting. The current market size is not large, and short-term growth is slowing, but there are many players, including food and beverage giants, companies in the industry chain, and startups.
At this stage of NFC juice development, startups have an advantage, such as Zero Fruit Workshop and Fissler.
II. As an NFC juice brand, what does it involve in terms of supply chain, channels, brand & marketing, and products? What are the key points of these important links and how to control them?
To deeply understand the various links involved in NFC juice, we first need to understand what kind of product NFC juice is and what processes are involved in its production.
NFC juice is relative to FC juice. NFC means not from concentrate, meaning after squeezing fruit, the juice is not concentrated but made directly into juice. In contrast, FC means from concentrate, where after squeezing, the juice is distilled to make concentrated juice. This is also convenient for storage. When producing juice, water is mixed with the concentrated juice, and different juice content requires corresponding proportions of water.
NFC juice generally uses frozen original juice as the product raw material. The production process involves thawing the original juice. If it is a mixed juice, after thawing, different fruit juices are mixed in proportion. After homogenization, it goes through sterilization, and after sterilization, it is aseptically filled and capped. However, during this process, different sterilization temperatures and durations can affect the shelf life, flavor, and nutrient retention. After sterilization, there are also cold filling and hot filling. Cold filling means cooling the high-temperature sterilized juice to about 20 degrees before filling. Cold filling and hot filling also affect shelf life, flavor, and nutrition. Generally, cold-filled juices have a shorter shelf life and require refrigerated storage.
It is also because of these differences in production processes that NFC juice is divided into ambient NFC juice and refrigerated NFC juice. Currently, refrigerated NFC juice dominates the domestic market. Among domestic NFC juice brands, Nongfu Spring is the main one doing ambient NFC juice.
Then let's view NFC juice as an industry. What chains are involved in this industry?
From the source and production, and supply chain perspective, the source involves fruit cultivation, fruit trade, juice original juice producers, and juice original juice traders. It also involves NFC juice filling manufacturers, as well as cold chain logistics companies, bottle, cap, label, and carton suppliers.
From the channel perspective, it involves distributors and channel providers. Current NFC juice distributors are mostly those who also do cold chain products. As mentioned earlier, the current NFC juice market is mainly refrigerated NFC juice, so cold chain is the core facility needed for NFC juice. Channel providers include hypermarkets, supermarkets, convenience stores, and fresh food e-commerce. Of course, in the channel, some links also involve some cold chain logistics providers. There are also some special channels such as catering, baking, and hotels, which are also called closed channels in the industry. Another part is through self-operated e-commerce, where the core becomes cold chain logistics and distribution companies, such as SF Cold Chain, Anxianda, Black Cat Cold Chain, and Jiuye.
From the supply chain perspective, the core is fruit cultivation, fruit juice original juice producers, and NFC juice filling manufacturers. Generally, fruit juice original juice producers have their own orchards and long-term cooperative orchards.
From the channel perspective, the core is distributors, channel providers, and cold chain logistics companies.
Generally, current NFC juice brands divide their distribution networks into several types. The first type is to hand over to distributors with cold chain resources to be responsible for regional market product sales. This involves the distribution of juice from warehouses to terminal warehouses or shelves, as well as retailer entry and terminal site management and promotion. This is also the core distribution type for NFC juice.
The second type is to directly face channel providers. Some NFC juice brands use this as the main method, such as Fissler mentioned in the Weekly. Some NFC juice brands also use this as the main method in certain regional markets. There is also a special type: convenience store channels, because large chain convenience stores generally have their own cold chain distribution systems, achieving daily delivery to terminal stores, so brand owners do not need to deliver products. Therefore, NFC juice brands generally directly connect with convenience store retail channels. Some fresh food e-commerce platforms are also channels that NFC juice brands directly connect with, only needing to deliver juice to the central warehouse.
The third type is self-operated channels and consignment channels, which are channels directly facing consumers. Among current NFC juice brands, self-operated channels are still in the minority, and sales proportion is very low. Consignment channels refer to e-commerce apps with traffic such as Xiaohongshu, Xiachufang, Yitiao, and ENJOY. These channels are responsible for sales commissions but do not involve juice delivery; delivery is still completed by the brand owner. Whether self-operated or consignment channels, NFC juice brands generally do not build their own cold chain distribution systems, usually outsourcing to third-party partners. Therefore, the third type of channel also involves cold chain logistics companies.
Brand and marketing are currently weak points for most NFC juice brands. Since distribution types are mainly through distributors and direct retail channels, the situation is that products represent the brand, and distribution rate represents market publicity and brand exposure.
In our view, what the NFC juice category urgently needs is not exposure but awareness. It needs more consumers and those who know NFC juice but do not understand it to understand what kind of product NFC juice is.
Finally, returning to the NFC juice product itself, how does NFC juice currently on the Chinese market differ from foreign ones?
Since the domestic NFC juice market is still in its infancy, we analyze from the following dimensions: specification, price, and flavor.
First, from the specification perspective, there are two common specifications for NFC juice. One is around 300ML. Due to slight differences between brands, for example, Zero Fruit Workshop, Ji Zi Ran, and Fruiti are 300ML, while Fissler is 310ML, and Nongfu Spring's 17.5° is 330ML, so we classify them as around 300ML. The general price is 17.8 RMB per bottle, and in some premium supermarkets, it is 18 RMB per bottle. Nongfu Spring's 17.5° is priced at 13.8 RMB per bottle. The other is 960ML, mainly sold in hypermarkets and supermarkets, targeting the family market with family packs.
From the specification perspective, we can compare with Wei Chuan's 100% FC juice sales data. According to Wei Chuan's 2016 annual report (Wei Chuan is a Taiwan-listed company, and the annual report shows 105 years), in the mainland market, 300ML sales accounted for 45%, and 601ML-1300ML accounted for 45%. This data is for reference only. Since NFC juice sales mostly come from convenience store channels, the 300ML specification should be higher than Wei Chuan's FC juice 300ML proportion.
Wei Chuan's annual report also mentioned that orange juice accounted for 36% of all flavors. Next, let's analyze NFC juice flavors and the differences between domestic and foreign NFC juice flavors.
Zero Fruit Workshop and Ji Zi Ran focus on single-flavor pure juices. Fissler and Fruiti focus on multiple fruit blends, and even fruit and vegetable blends. Zero Fruit Workshop and Ji Zi Ran have relatively similar flavors, both including kiwi, orange, mango, grapefruit, and blueberry-strawberry blends. The difference in flavors between the two brands is that Zero Fruit Workshop has red guava and lychee flavors that Ji Zi Ran does not have, while Ji Zi Ran has peach and grape flavors that Zero Fruit Workshop does not have.
Fissler, since it originally made cold-pressed fruit and vegetable juices, is one of the NFC juice brands that made flavor differences earlier, such as mango and orange blend, wheatgrass and apple blend, apple and pineapple blend, and raspberry and strawberry blend. Fruiti's blends are somewhat less innovative, with 80%–90% of flavors being other fruits blended with apple, and only a few single-flavor pure juices without apple, such as coconut water and citrus.
Foreign juice brands have quite different flavors compared to domestic ones. Since foreign juice markets are relatively mature, such as the US and UK, single-flavor pure juices account for a relatively smaller proportion, and most flavors are blends, with fruit and vegetable blends being common, and the variety of blended fruits and vegetables is relatively large. For example, UK smoothie & juice brand innocent and Starbucks' US juice brand Evolution Juice products mostly have more than 5–6 different fruits and vegetables blended.
The above basically covers what an NFC juice brand involves in terms of supply chain, channels, brand & marketing, and products.
III. Can NFC juice market share in China reach 50%, or at least 30%? If household consumption is an important path to achieving this possibility, what is the path to the household consumption market? What capabilities should an NFC juice brand that seizes this opportunity possess?
To think clearly about whether NFC juice can have a larger market share, we need to first think about two directions:
- Who is currently drinking NFC juice, why do they drink it, and in what occasions do they generally drink it?
- Where might other blank markets appear? Are they more segmented or more mass-market? Who might they be, and what are their needs for NFC juice?
As mentioned earlier, the current channels for the Chinese NFC juice market are mainly convenience stores, and convenience stores are mainly large chain convenience stores. Large convenience stores are currently mainly located in first- and second-tier cities, with a small number radiating to third-tier cities. Since convenience stores in cities are mostly concentrated near office areas, public areas (such as airports, hospitals, train stations, etc.), and streets with concentrated communities, convenience store consumers are mostly young people, with urban white-collar workers being the main consumer group. The business format determines that NFC juice in convenience stores has strong random consumption.
For example, buying a bento in a convenience store and pairing it with a bottle of juice, buying a bottle of juice to quench thirst and supplement vitamins or nutrition, or simply wanting to drink something healthy and tasty. This optional purchase results in a single convenience store selling about 10–20 bottles of NFC juice per day. It should be noted that a convenience store has daily customer traffic of over a thousand or even several thousand, and the proportion buying NFC juice is very small. Moreover, NFC juice also competes with Wei Chuan's FC juice Daily C, as well as yogurt and milk in the refrigerated shelves of convenience stores.
Why do consumers drink NFC juice?
Simply because it is healthy, nutritious, and tasty only meets the needs of a small number of consumers. Previously, media also mentioned that NFC juice penetration is low, perhaps due to high prices, after all, not everyone can afford a bottle of juice at around 18 RMB. Let's think about this in reverse: if the retail price of NFC juice dropped below 15 RMB, or even close to 10 or 11 RMB, would it attract more consumers? Not necessarily. If simply lowering retail prices could penetrate a broader mass consumer base, then Nongfu Spring's 17.5° NFC juice would not have been removed from FamilyMart, and Nongfu Spring's ambient NFC juice would have taken some of Wei Chuan's market. In reality, these situations did not happen.
In Chinese food culture, there is no habit of drinking juice. Even if there is, it exists among a small minority. That is to say, most Chinese consumers do not have a strong demand for NFC juice, which is why NFC juice is currently mainly sold through random consumption channels like convenience stores, while supermarkets and hypermarkets are weaker than convenience store channels.
For example, in the US, the food culture does not sufficiently include fruit and vegetable intake, so it is very common to pair juice with breakfast and main meals. In Japan, fruit and vegetable juices and vegetable juices are more popular than fruit juices. Although vegetable juices taste worse than fruit juices, they can meet certain functional needs, which are stronger and more obvious than the need for health and taste.
So back to the Chinese NFC juice market, do current NFC juice products meet the majority of consumer needs in the Chinese market? Are there any needs that the existing product system does not meet? Or from another perspective, is there no room for improvement in Chinese NFC juice products themselves, or is there still great room for improvement to make product characteristics (or functions) strongly relevant to potential consumer needs?
For example, orange juice is a popular flavor, and the cost of oranges is relatively cheaper than some other fruits (such as blueberries, grapes, peaches, etc.). Can the sweetness and acidity of orange juice be adjusted to be closer to the sweet and sour feeling of fresh oranges? Also, orange juice has a wide audience and low cost. Can the retail price of orange juice be appropriately lowered?
On the one hand, for relatively mass-market needs, let more consumers consume at a lower cost. On the other hand, strengthen the demand for some niche needs. The former tests supply chain capabilities, and the latter tests product R&D & innovation and consumer insight capabilities.
The ideas mentioned above are about making increments in the existing market, that is, increasing the sales scale of existing NFC juice in various channels and increasing the proportion of mass consumers accepting and consuming NFC juice.
Besides these, are there blank needs to be developed?
For example, targeting children, women, men, and even more segmented groups, including sports enthusiasts, meat eaters, etc. Sports enthusiasts can be further segmented, such as fitness, running, yoga, etc. Meat eaters are easier to understand: to maintain a balanced diet, you cannot just eat meat, and if you do not want to eat vegetables, then use fruit and vegetable juice or vegetable juice to supplement vegetable nutrition.
The more segmented groups mentioned above are just hypotheses. Although there are corresponding cases abroad, such as the coconut water category and the American watermelon juice brand WTRMLN WTR, which once received investment from Beyoncé. Besides more segmented groups, it is actually easy to overlook children and female consumers.
This is also related to the domestic consumption environment and social culture. In the entire consumer market, women account for the majority. At the same time, the post-80s and post-90s have higher health consumption awareness than other groups. After these two groups marry and have children, they will pay great attention to their children's diet, not only eating healthily but also not giving children foods with additives or that are not fresh and healthy. They will also pay attention to the nutritional structure of the diet. Although NFC juice is currently relatively expensive in China, young parents are not stingy with their children; on the contrary, they will buy good and high-quality food for their children.
NFC juice products targeting children can achieve good breakthroughs, which will also promote the popularization of NFC juice in China. After children develop consumption habits, adults may also become long-term consumers of NFC juice when appropriate opportunities arise.
For female consumers, there are also some fruit and vegetable juice brands in China focusing on them. A relatively larger one is the Beijing fruit and vegetable juice brand Hey Juice. When cold-pressed light fasting fruit and vegetable juice became a trend abroad, this trend was introduced to China. From 2013 to now, about 4–5 years, Hey Juice has achieved tens of millions of RMB in scale through celebrity endorsements and fashion and entertainment marketing. Of course, cold-pressed light fasting fruit and vegetable juice is only one of the juice products suitable for female consumers.
For women, relatively mainstream needs for juice products include good figure, slimness, and beauty. But are these good needs for the juice category? From another perspective, do female consumers have strong needs for supplementing certain ingredients through fruit and vegetable juice? Technically, it is relatively easy to achieve.
The above are opportunities to find blank markets outside the existing NFC juice market. More vertical or more segmented groups will have stronger consumer demand, which also places higher requirements on product R&D and innovation.
Finally, let's return to the proposition of household consumption. Is the household consumption market valid for the NFC juice category? If so, how should we seize this opportunity? We analyze from two dimensions: one is what household means for NFC juice, and the other is which channels are closer to household consumption.
First, we can regard household consumption as a consumption occasion for NFC juice. Existing scenarios include pairing with main meals, breakfast, quenching thirst, snacks, nutritional supplements, and after meals. These can be met with large bottles to suit the household consumption scenario, but it is not just about family packs; it also involves which flavors are more suitable for this consumption scenario.
Second, we can regard the household as a transfer station. From the perspective of refrigerated NFC juice, the refrigerator at home plays an important storage and transfer role. If we look at the transfer role, large bottles are obviously not suitable. NFC juice products for during or after exercise may need to be carried out, and at this time, the role of the refrigerator as a transfer station becomes prominent.
Let's analyze channels again. Due to China's retail environment, hypermarkets and supermarkets for household consumption are not as mature as abroad, and China's e-commerce development is much better than abroad, with higher penetration. Channels closer to household consumption, in the long run, e-commerce will play a greater role than offline retail channels.
Roughly, the above three parts are our review of NFC juice in 2017.
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