After a frenzy and a chill, the premixed cocktail market has finally seen its bubble burst. A securities analyst who has long tracked the sector and once championed this 10-billion-yuan market admitted to our reporter, "Premixed cocktails lack substantial technical content and are mainly driven by advertising effects, but with heavy ad spending, the marginal returns are diminishing." He believes "everyone overestimated this market." Behind this madness lies the "mega product" mindset that the domestic beverage industry has long relied on. Premixed cocktails fall squarely within the ready-to-drink category that has produced many mega products. This category has seen numerous 10-billion-yuan hits, such as Wahaha's Nutri-Express, which reached 20 billion yuan in sales within 10 years of its 2004 launch. Similarly, the herbal tea giant JDB, through differentiated positioning, achieved 20 billion yuan in sales around 2011. Other examples include Want Want's dairy drinks, Red Bull energy drinks, and Yinlu peanut milk, each with annual sales exceeding 10 billion yuan. Yangyuan's Six Walnuts and Mengniu's Telunsu are also mega products with annual sales between 6 billion and 10 billion yuan. The emergence of premixed cocktails coincided with a downturn in beer, beverages, and other ready-to-drink products. According to CICC research data, from January to April 2014, sales of beer, tea drinks, and protein drinks all declined to varying degrees, with the tea beverage industry's revenue dropping 14.1% year-on-year. The arrival of premixed cocktails made the beverage industry dream of grabbing this "lifeline," and the idea of not missing the "wind" drove the industry into a frenzy. Similar scenarios have occurred before. Around 2000, tea drinks became popular in China, with rapid growth of Uni-President Green Tea and Master Kong Ice Black Tea prompting a rush of companies into the tea beverage sector. After this scramble, brands like Nestlé Iced Tea retreated. Categories that experienced similar curves include milk-containing beverages, plant-based drinks like walnut milk, premium water, and functional drinks. However, "frenzy" always precedes "rationality." After the frenzy, Yang Yonghua now sees premixed cocktails as an imported product that must first rise in specific consumption venues in first-tier cities. Only after reaching a certain volume can it gradually expand, requiring a cultivation process. When consumption becomes proactive, it enters a growth phase. "Distribution volume does not equal consumption volume. Many companies misjudged the market, leading to this frenzy. The whole market is prone to herd behavior." Lyu Xunxian, general manager of Haina Institution, told our reporter that past investment was overheated. "Premixed cocktails are never mainstream consumption, making it difficult to sustain growth or form a large category market." Before chasing the next so-called "10-billion-yuan mega product," perhaps the focus should not be on where it hides, but on leveraging one's own strengths. In Lyu's view, companies should be more cautious in the face of industry decline. "Companies today want to reach young consumers and rejuvenate their brands, but this idea cannot be pinned on a so-called innovative mega product. Baijiu companies often think about how to become younger and attract more young consumers. The rapid rise of premixed cocktails teaches companies the importance of learning how to communicate with young consumers and how to market, rather than simply achieving goals through innovative categories." Fan Xiangfu, general manager of Swellfun with decades of FMCG experience, said when discussing corporate transformation, "The most important thing for a company is focus and consistency. But now, when facing difficulties, everyone wants to change, change, change. In my view, if you cannot determine that the direction of change is effective, not changing is the best option. Maintain your existing consumers. When you want to change, you must ensure the change can be realized, not just wishful thinking." A premixed cocktail distributor surnamed Chen from Guiyang told China Business News, "Premixed cocktails are a small category with a short lifespan." He entered this category in 2012, experienced the craziest period from 2013 to 2014, and made some money, but he still says he won't get too deeply involved. "I won't give up this category because Rio's brand awareness remains and sales are gradually growing. But I won't increase my investment at this stage because it's a 'quick-win' product. Unlike beer or wine, it has no technical barrier and relies mainly on marketing to drive sales." Black Cow Food, which once bet on this trend, has now fallen into losses. Even after auctioning off some assets, the company's latest 2015 earnings forecast still projects a loss of 560 million to 660 million yuan for 2015. -END- The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and actionable tutorials for companies and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Boost Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's 18 Skills | 013 KA Operations Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | [Long press QR code to follow] Join QQ/WeChat groups: Click: Read Original