If you haven't noticed that the beverages we consume daily have quietly become 4-6 yuan, you might be drifting away from the younger generation. In consumer goods research, people over 30 rarely buy beverages proactively, so they miss new brands like Genki Forest's fruit-flavored sparkling water, Jian'ai's zero-additive yogurt, and Coca-Cola's new coffee cola, all priced above 5 yuan. Your awareness of these new products can roughly indicate whether you can still call yourself 'young'—harsh, right? Of course, why consumer brands always target the younger demographic has been analyzed and explained by many. Generally, there are three reasons:

1. The concept of spending ahead has led more young people to get credit cards, increasing their spending power and awareness. 2. Trying new things and embracing new concepts is what this group loves most. 3. This group has distinct characteristics and is easy to identify. This is my summary of the 'why young people' question. Based on this, let's discuss our topic: why have beverages become so expensive?

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The Foundation for Higher Prices

'WeChat or Alipay?' has become the background sound in our daily purchases. At the end of the year, the central bank issued new RMB notes, but many people were unaware. Some even tried to pay with the new notes and were mistaken for counterfeiters, leading to police calls. So, as wallets are replaced by mobile payments, our perception of 'money' has changed: 1. Our perception of 'change' has changed Previously, change meant coins and small bills under 10 yuan, often measured against a bottle of water, a pack of tissues, or a taxi fare. Today, change refers to 'balance' under 200 yuan. Why 200? Because WeChat Pay's red packet limit is 200 yuan; spending above that draws attention. 2. Our perception of 'rich or poor' has changed Previously, we judged wealth by the 'thickness' of our wallets. Now, we only judge by the 'numbers' in our balance. Notice how mobile payment has laid a huge foundation for consumption upgrades: by digitizing money, it dilutes our perception of money itself, significantly reducing the psychological pressure of spending. The weakened perception of price is the foundation for selling at higher prices.

-02-

How Companies Can Leverage This

Former Baidu VP Yu Jun proposed a formula: User Value = New Experience - Old Experience - Switching Cost. Simply put, it means providing consumers with a reason for the higher price that they can accept and perceive. Before dissecting this formula, we must first understand that the beverage industry entering the '5-yuan era' is an inevitable stage of industry development. Take the juice industry as an example. It has developed in China for nearly 40 years. What is its current state? Simply put, if classified by price, we see that in recent years, low-concentration concentrated juice drinks (juice content <20%) priced around 3 yuan have accounted for nearly 80% of the entire juice industry. What is this? It's a red ocean, almost purple. However, high-concentration concentrated juices priced between 8-15 yuan and NFC (Not From Concentrate) juices together hold less than 20% market share, representing a huge market gap and opportunity for the entire beverage industry. Therefore, companies must re-examine market opportunities amid industry changes, find new information asymmetries, and convert this trend dividend into product demand to complete the necessary category upgrade. Most industries face this issue. Once the demand for 'having it' is fully satisfied, the path of 'differentiation' becomes increasingly necessary, especially in FMCG, where switching costs are low. Without continuous new products offering new experiences, small and medium brands have no chance to occupy a place in consumers' minds like Wanglaoji once did. So the beverage industry, as a major FMCG category, must continuously upgrade products to create new consumer experiences. There are two ways to create new experiences: either transform old products or create new categories. This is the process of building 'new experience - old experience' in the formula. This process is also a time for companies to re-examine their 'foundation' and 'boundaries.' Foundation refers to the categories where a company has rooted deepest and the products that have sustained it. Do these products form a unified 'perception' among consumers? Do they meet a consensus 'need'? What position do they hold in 'competition'? What 'resources' have they accumulated? These determine what a company can do. Boundaries are what a company absolutely cannot and will not touch beyond its capabilities, determining what it cannot do. In our real service to companies, we've found that many expand categories based on founders' interests or management's beliefs that a category is good, leading to expanded product lines, supply chains, and channels. As product structures become more complex, resources get scattered, and when it's time to concentrate on solving one problem, they find they can't. So we help companies sort out their 'foundation and boundaries' to converge resources and strength, allowing them to invest overwhelmingly in transforming a product or developing a new category when needed, to catch a trend dividend or survive elimination.

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How to Create New Experiences

When companies make products, they are essentially building an experience chain. A product in the 5-yuan price band builds a '5-yuan value system' experience chain. We'll interpret this from three aspects: how to build this chain so consumers experience product value and accept the price. 1. Packaging Experience and Price Recall: when you walk through supermarket aisles and choose a beverage, you already have an impression of its packaging and price. White Tetra Pak milk, 2.5 yuan; red aluminum can cola, 2.5 yuan; transparent PET bottled water, 2 yuan... Notice that within the same category, almost all milk uses Tetra Pak, almost all carbonated drinks have aluminum can options, and almost all water uses transparent PET bottles. This phenomenon results from long-term competition in the beverage industry. Categories have imitated, borrowed, and made mistakes, eventually reaching a silent consensus based on cost, technology, health, and transportation. This consensus has educated consumers, teaching them to remember a category's packaging and its price. When we see a certain packaging, the corresponding price immediately comes to mind. Choosing a packaging means standing in that packaging's camp. What the beverage industry needs to do now is break this perception, using new packaging forms to disrupt this benchmarking and association, redefining price. Let's look at Xiangpiaopiao's meco fruit tea. In the first three quarters of 2019, it generated nearly 1 billion yuan in revenue, accounting for 37% of total sales. As a new category less than three years old, meco fruit tea has given Xiangpiaopiao a lifeline. What made Xiangpiaopiao dare to enter the ready-to-drink segment in FMCG, even when street-side milk tea was prevalent? Xiangpiaopiao meco juice tea is priced at 6-10 yuan, but many don't feel it's expensive because they can't find a comparable product in existing categories. For meco, they benchmarked their packaging shape against street-side milk tea, and their hand-feel design and material texture have reached a unique level in the juice industry. So meco created a new experience through new packaging, jumping out of existing category frameworks, cross-industry benchmarking, and re-establishing consumer perception of Xiangpiaopiao meco milk tea, redefining price from another dimension. Besides creating entirely new packaging, there's another approach to 'packaging experience.' Consider Nongfu Spring's NFC juice. NFC juice is directly canned through aseptic fresh-squeezing technology without additives. From production, the industry maximum shelf life is 14 days, and it must be transported cold. But Nongfu Spring's NFC juice has a 120-day shelf life. What does that mean? It's essentially not NFC juice, at best 'NFC-containing' high-concentration juice. However, they did one thing: placed the product in the terminal's 'cold storage area,' alongside yogurt and other cold-chain foods. When consumers walk into the cold storage area and see your product, their first instinct is that it's 'fresh,' 'healthy,' 'pure'... So placing packaging in the cold storage area is also a strategy to create a new experience—a referenceable idea. 2. Product Concept and Price Creating packaging experiences can redefine price, but not all companies have the resources and energy to develop new packaging. A lower-cost way to create new experiences is through new product concepts. A product concept essentially addresses a consumer need, especially one that others haven't discovered or articulated. Here we must mention a new brand: Genki Forest's sparkling water. It meets the three elements of a hit beverage:

1) Extreme taste 2) Significant efficacy 3) Rigid demand Genki Forest is essentially a soda water, naturally giving consumers a 'refreshing' feeling. Although they only chose three flavors—'white peach,' 'kaman orange,' and 'cucumber'—you can't find these flavors in soda or even carbonated drinks, which is their flavor positioning. Most notable are their strategies on points 2 and 3. Genki Forest's product structure consistently adheres to a 'sugar-free' strategy, focusing on a healthy line of 0 fat, 0 sugar, 0 calories. Is health an efficacy? No, it's a state everyone desires. But to achieve a healthy state, people need a way to perceive it. Genki Forest positions itself as the connection point to the path of health. Why can it be this connection point? Because of the 0-sugar concept, consumers feel no health pressure when drinking it, unlike girls who feel guilt while drinking milk tea. This concept satisfies consumers' 'desire for control.' Using the product may not make them healthier, but at least it won't make them unhealthy—a need for almost everyone wanting to be healthy, unprecedented in the same category. This is Genki Forest's reason for purchase and why it's widely accepted in the 5-yuan price band. Another product with a similar concept is 'Jian'ai.' Jian'ai's most resonant slogan is 'Raw milk, lactic acid bacteria, nothing else.' This straightforward ingredient display, like Genki Forest's '0 sugar,' instantly creates a positive expectation, making us feel the process toward 'the road to health.' Similarly, Jian'ai yogurt products are generally priced above 5 yuan. So what did they do right?

  1. They found a new information asymmetry and turned it into a simple, specific, perceivable concept.
  2. They quickly validated the authenticity of market demand. Although luck played a part, early insight directly determined the high probability of success.
  3. Their product structure is simple, precisely meeting needs.

Summary:

The beverage industry entering the 5-yuan era is an inevitable trend. So we need to understand why we can make more expensive products than before, whether we can, and if so, how. In fact, whether in beverages or the entire FMCG industry, whatever strategy you have, it ultimately comes down to packaging and product concept, even the words you say to consumers. We always talk about finding the product's selling point, but shouldn't we really think about the buying point? Find the reason consumers buy, then create an experience through packaging and concept to show why this product is worth 5 yuan.