Insiders say that a can of a certain energy drink costs only about 0.2 yuan in raw materials.

Exercise, exercise, get moving... As people pay more and more attention to physical fitness, activities like brisk walking, playing football, skateboarding, and running marathons are on the rise. At the same time, slogans like "Sleepy or tired? Drink Red Bull." "Your energy is beyond your imagination." "Drink Tiger, refresh and fight fatigue." — whether simple and direct or highly persuasive — are all telling consumers that if you feel tired, you might want to try these drinks.

In fact, marathon runners and those who work late nights often consume them. Even students cramming for exams drink these beverages to "refresh their minds." However, a recent investigation by reporters found that these so-called functional drinks, priced as low as 3 yuan and as high as 6 yuan, have shockingly low raw material costs. Insiders say that a can of Tiger costs about 0.2 yuan in raw materials. These so-called functional drinks, made from a combination of various additives, are not beneficial if consumed in excess.

1 Market Overview Functional Drinks Are Everywhere

"What do you drink when you're sleepy or tired?" Recently, reporters randomly interviewed several young people, including college students and IT professionals, and the answers were quite consistent — "Drink Red Bull." Why? Because they've heard it can refresh and replenish energy. It seems that after years of advertising, Red Bull's "effects" have been "deeply ingrained" in people's minds. In some gyms, functional drinks like Red Bull, Tiger, and East are available for purchase alongside mineral water.

In marathon running circles, runners carrying such drinks are also common. Reporters visiting convenience stores and supermarkets in Guangzhou found that multiple functional drinks, including Red Bull, Tiger, and East, are on sale, in both canned and bottled forms. Prices vary by brand and packaging, but generally range from 3 to 6 yuan per can or bottle.

When reporters asked a convenience store on Shishu Road, the salesperson couldn't provide sales data, but data from e-commerce platforms like Tmall and JD.com gives some indication. On Tmall Supermarket, in the Guangzhou region, canned 250ml Tiger at 5.3 yuan had 25 monthly orders; bottled 380ml at 4.6 yuan had 200 monthly orders. On JD.com in Guangdong, Tiger Amino Acid Vitamin Functional Drink 380ml15 bottles and Tiger Amino Acid Functional Drink 250ml4 cans were both out of stock, but had over 4,000 and 1,800 reviews respectively.

In comparison, Red Bull sells more. On Tmall Supermarket, canned 250ml Red Bull at 5.6 yuan had 4,808 monthly orders in Guangzhou; a case of 24 cans (250ml each) at 133 yuan had 695 monthly orders. On JD.com, Red Bull has over 100,000 reviews.

2 Cost Calculation Raw Material Costs Are So Low They Can Be "Ignored"

"These drinks sell for a few yuan, but their costs are actually very low," an insider told reporters.

Take canned Tiger as an example. How low are its costs? According to the main ingredients listed on the packaging: taurine, L-lysine hydrochloride, inositol, caffeine, vitamin B6, vitamin B12, niacinamide, white sugar, citric acid, sodium citrate, etc. The characteristic ingredients and their contents (per 100ml) are labeled: taurine 42mg, L-lysine hydrochloride 48mg, inositol 10mg, caffeine 13mg, vitamin B6 0.36mg, vitamin B12 1.1μg (1000μg = 1mg), niacinamide 3.7mg.

Reporters then consulted several food additive manufacturers in Guangzhou. One manufacturer, Chircty, provided quotes: taurine 25 yuan/kg, L-lysine hydrochloride 22 yuan/kg, vitamin B6 175 yuan/kg, vitamin B12 265 yuan/kg, citric acid and sodium citrate 8 yuan/kg. Another manufacturer quoted inositol at 108 yuan/kg and niacinamide at 70 yuan/kg. Only caffeine had no quote. According to the aforementioned insider, its price would not exceed 100 yuan/kg.

A salesperson from a company called Hongyi Food Additives said that prices could be lower for bulk orders. Based on current retail prices, reporters did the math. One kilogram equals one million milligrams. Based on the labeled contents, in 100ml of the drink, the cost of taurine is 0.00105 yuan, L-lysine hydrochloride is 0.001056 yuan, inositol is 0.00108 yuan, caffeine (at 100 yuan/kg) is 0.0013 yuan, niacinamide is 0.000259 yuan, and vitamin B6 is 0.000063 yuan. The vitamin B12 content is so small that its cost is negligible.

For a 250ml can, the cost of the labeled ingredients is only 0.01202 yuan, shockingly low. "You also have to calculate the cost of white sugar, ethanol, sodium citrate, and other additives, which overall won't exceed 0.2 yuan," an expert said. The empty can costs about 0.8 yuan, processing about 0.2 yuan, so the total cost is within 1.2 yuan.

"Look at the selling price, and you'll see how high the profit margin is," the expert revealed. Tiger and East are all imitations of Red Bull, with similar raw material costs.

3 Question: Are They Really "Health Foods"? Spending Tens of Millions Can Get You That

Experts believe that extracted and synthetic foods should be consumed less. But some functional drinks are labeled as "health foods," with a blue "hat" logo, commonly known as the "blue hat." A senior researcher in food studies told reporters that applying for the "blue hat" (health food certification) "costs over ten million yuan."

This reveals a corner of the functional drink industry where costs are low and prices are high. Advertising and marketing expenses are also necessary marketing costs; without advertising, there are no sales.

Medical professionals say that taurine and caffeine are stimulants. Caffeine stimulates the central nervous system and can also cause wrinkles. It has been reported that not all Red Bull drinks have the same formula in overseas markets. In Europe and the US, Red Bull is a carbonated soft drink. In Canada, to pass food safety reviews, Red Bull contains no caffeine, taurine, or other stimulants, and is marketed as a "liquid vitamin supplement drink."

According to the "Chinese Soft Drink Classification Standard," drinks that adjust the content and proportion of natural nutrients to meet the nutritional needs of specific populations mainly include sports drinks, nutrient drinks, and other special-purpose drinks. There is no such thing as "functional drinks." Functional drinks target special populations. Moderate use of caffeine can relieve fatigue and excite nerves, but long-term use can cause harm to the body and lead to addiction. Stopping use can result in withdrawal symptoms such as mental fatigue and weakness.

Experts from South China Agricultural University say that food additives are synthetic or natural substances added to food to improve quality, color, aroma, and taste, as well as for preservation, freshness, and processing needs. But now more and more synthetic substances are being added. "For example, citric acid and sodium citrate are generally used together in drinks with poor nutrition. Sodium citrate is added to drinks with few natural ingredients." He said that natural ingredients are expensive, while synthetic ones are cheap, and economic interests have led to the prevalence of low-cost functional drinks.

4 News Extension Food Additives Cannot Be Added Arbitrarily

The newly revised "Food Safety Law" stipulates in Article 40: Food additives should only be included in the permitted scope if they are technically necessary and proven safe through risk assessment. Certain food additives with some toxicity must be strictly controlled in usage to ensure that long-term intake is harmless to the human body.

Food additive production is subject to a licensing system. Enterprises without production qualifications will be removed from the food additive production industry. Food additive operators are also required to check the quality of goods upon purchase. When purchasing food additives, the purchasing enterprise should verify the supplier's license and product qualification certificates, and keep relevant vouchers for at least six months after the product's shelf life; if there is no clear shelf life, the retention period should be at least two years. Imported food additives should be inspected for the health certificate issued by the entry-exit inspection and quarantine department and the original or copy of the customs clearance certificate.

Originally published in Guangzhou Daily | Author: Li Guangyan

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