Online voting is in full swing; click 'Read Original' to view. Two years ago, Tianfu Cola, which had disappeared from the market for nearly two decades, made a comeback to the beverage market. At the relaunch ceremony, many were moved to tears. Two years later, the reality of cumulative losses exceeding 30 million yuan has left this former state banquet beverage, once pursued by both Coca-Cola and Pepsi, in an awkward position, forcing it to seek change through mixed-ownership reform. Consecutive Losses, Mixed-Ownership Reform for Change In the 1980s, Tianfu Cola's market share was nearly dominant, even becoming the 'state banquet beverage.' At its peak, Tianfu Cola had 108 affiliated factories nationwide, with annual sales exceeding 200,000 tons and profits and taxes surpassing 70 million yuan. The good news is that in 2016, after a series of upheavals including Pepsi's equity stake, being 'marginalized,' and regaining the brand, Tianfu Cola returned to the market. The bad news is that data shows: in 2016, Tianfu Cola series beverages produced a total of 995,700 cases, with sales of 38.18 million yuan and a loss of 13.87 million yuan; in 2017, production was 705,400 cases, sales were 31.96 million yuan, and losses were 16.95 million yuan. In July, Chongqing Light Industry Group, Tianfu Cola Group (hereinafter referred to as Tianfu Cola), and 'strategic partners' signed a series of cooperation agreements including the 'Tianfu Cola Co., Ltd. Promoters Agreement' to establish a mixed-ownership enterprise. Tianfu Cola will contribute core technology and production equipment for a 20% stake, while the other party will contribute cash for an 80% stake. Now, mixed-ownership reform may become the last lifeline for the 'First Cola.' Speaking of the 'setbacks' over the past two years, Xu Yang, deputy general manager of Chongqing Light Industry Group, stated that the cooperation model of collecting brand management fees was too simplistic. Under this 'loose' cooperation framework, the partner lacked core assets such as trademarks and formulas, fearing they would 'work for others,' so they dared not increase investment in product development and capacity expansion, nor boldly expand the market, ultimately leading to unsatisfactory market response. With the launch of mixed-ownership reform, how will Tianfu Cola plan for the future? In response, Xie Yingming, chairman of Chongqing Light Industry Group, said that the reformed Tianfu Cola will focus on Sichuan and Chongqing and expand nationwide. After implementing mixed production and operation, product positioning is crucial. The new Tianfu Cola will be positioned as a carbonated beverage with plant-based health benefits, concentrating resources to achieve market breakthroughs, and on this basis, gradually expand production lines to seize beverage market share. This time, Tianfu Cola has shown the determination to cut off its own arm, but whether ambition alone can achieve 'nirvana' remains to be seen with anticipation. To some extent, 'Tianfu Cola's positioning as a 'herbal plant health drink' is quite market-attractive. Around this positioning, Tianfu Cola neither deviates from cola nor is it identical to cola. Containing Chinese herbal ingredients and having certain health benefits, it aligns with consumption trends and has the potential to become a major product,' said an industry insider. However, for the general public, Tianfu Cola has almost 'nothing' besides the product. Looking back, since 1994, Tianfu Cola has undergone multiple equity transfers and personnel losses, leaving product positioning, marketing, and channels as a 'blank slate.' 'We urgently need to listen to suggestions from consumers, industry professionals, and experts,' said Qian Huang, general manager of China Tianfu Cola Group Company (Chongqing), at a marketing meeting before Tianfu Cola's second launch. However, judging from Tianfu Cola's market performance two years after its launch, this statement seems somewhat 'self-serving.' A major point of criticism is Tianfu Cola's PET packaging, with its main color being 'China Red' (though most consumers consider it 'Coca-Cola Red'), yet it aims to highlight Tianfu Cola's 'refined herbal plants,' while the other side reads 'Not Just a Familiar Taste.' 'After being 'enslaved' by Pepsi for over twenty years, it revived under the banner of a national brand, yet it makes itself look like a 'knockoff' version of Coca-Cola,' a consumer told reporters. Compared to the 'careless' design, the pricing is even more criticized. At a time when the carbonated beverage market share is shrinking and both Coca-Cola and Pepsi face category crises, Tianfu Cola's retail price per bottle is 1 yuan higher than Pepsi and Coca-Cola. Is this 'nostalgia' worth a higher value? 'When it was first launched, consumer enthusiasm was high, but soon the heat subsided, and repeat purchases were not good,' a terminal dealer in Chongqing told reporters. Marketing Is the 'Emperor's New Clothes' 'The times have changed, but Tianfu Cola hasn't; 'nostalgia' cannot be sold directly without packaging,' a senior FMCG distributor told reporters. In his view, Tianfu Cola's product form, positioning, and marketing methods are all too 'outdated.' 'The familiar taste sounds like JDB... Moreover, the bitter history of this national brand with foreign capital is unlikely to evoke much sympathy. The slogan 'A Famous Drink of a Generation, Tianfu Cola' hardly moves consumers or resonates,' a distributor lamented. Why doesn't nostalgia work for Tianfu Cola? The reason is that to win more market share, Tianfu Cola should win the hearts of more young people. However, due to historical reasons, Tianfu Cola, which has not changed its 'original intention,' can at most evoke sighs from the 'old-timers,' who have long forgotten 'cola' due to health or wellness concerns. As an old enterprise and an old brand, in a new retail business environment where 'post-90s' and 'post-00s' are the backbone, it has not solved the fundamental problem. 'Tianfu Cola is a regional brand, like Shanghai Bright, Nanjing Weigang, and Chengdu New Hope; the latter three are dairy companies that focus on supply chain efficiency to ensure freshness control and benefit from local government resource protection, with higher R&D barriers. In contrast, cola is a soft drink category that requires strong trendiness, strong cultural labels, and consumption scenarios that move people and create identification, making it the first choice in consumers' minds. Marketing is the skeleton of the brand, and the brand is the outer garment of the marketing service process system. Without rigorous marketing planning, even with a beautiful package, it will eventually reveal its true form, like the emperor's new clothes,' said Shen Boyuan, a senior brand marketing expert. Missing the Foodservice Market Opportunity Additionally, Tianfu Cola's main sales channels are chain supermarkets and large KA stores. Although it has some e-commerce presence, sales are minimal; in the foodservice channel where it should be most present, Tianfu Cola is hard to find. 'Not choosing foodservice but retail supermarkets is wrong,' the aforementioned person said. In his view, as a regional brand that has been out of the market for years, adopting a channel strategy that directly competes with the 'two colas' is unwise. 'Among the old regional soda factories, two are doing well now: one is Beijing's Arctic Ocean, and the other is Xi'an's Ice Peak. They both understand the importance of deeply cultivating the foodservice channel.' Unlike Tianfu Cola, Ice Peak's sales have never been interrupted. Continuous and stable cultivation of the local foodservice market has made Ice Peak deeply embedded in the minds of Xi'an and even Shaanxi consumers. Ice Peak soda, along with roujiamo and liangpi, forms the 'Sanqin set meal' in the hearts of Xi'an people. 'Even in other cities, wherever you see a Xi'an restaurant, you can see a large amount of Ice Peak soda, and these products sell well among Shaanxi people in any city,' a senior FMCG insider told reporters. In fact, the Sichuan-Chongqing foodservice market that Tianfu Cola abandoned is being occupied by another company that once suffered the same fate: Arctic Ocean. Arctic Ocean, a northern brand that also cooperated with Pepsi and was 'shelved,' directly invested in Tianfu Cola's home turf—the Sichuan-Chongqing foodservice market—at the end of 2016. Even its single-bottle price is 1-2 yuan higher than Tianfu Cola's. According to informed sources, 'In the Sichuan-Chongqing region, Arctic Ocean's sales in 2017 increased two to three times year-on-year.' A senior food industry practitioner said, 'Tianfu Cola has effectively utilized the consumer demand for northern barbecue to undergo a youthful transformation, continuously interacting with young people in the scene, but Tianfu Cola has done poorly in these aspects.' Tianfu Cola's current situation can be described as 'attacked from both sides.' Although 24 years ago, Tianfu Cola and Pepsi also experienced the same 'sweetness,' it ultimately ended in a 'bad marriage.' Now, although it has reappeared on the market, it faces many twists and turns. Currently, Tianfu Cola has not yet disclosed the identity of the 'strategic partner' in this mixed-ownership reform. However, a relevant person in charge said that this partner has certain strength and was chosen after multiple comparisons. The partner's investment intention was based on the brand value of Tianfu Cola. Shen Boyuan believes that Tianfu Cola's efforts in channels have shown signs of fatigue. Once, Tianfu Cola tried to introduce capital, technology, or visibility from partners to boost itself, but now it seems to be a failed case, not only unsuccessful but also wasting many market opportunities. At the mixed-ownership reform signing ceremony, Xie Yingming boldly stated that he would strive to achieve annual sales of around 2 billion yuan, annual production of 600,000 to 1 million tons, and annual profits of 200 to 500 million yuan within 10 years. However, Tianfu Cola should still position itself as a 'newcomer' and start from scratch to live up to the 'nostalgia.' If it is merely to 'borrow money to solve problems,' it might just be 'old wine in a new bottle.' Reporters called Tianfu Cola regarding mixed-ownership reform issues, and Tianfu Cola responded that 'due to time constraints, we cannot reply on time.' Source: Kuaixiao -END-