Entering 2019, coconut palm coconut juice product packaging was deemed vulgar, sparking public outcry. The practice of pushing the boundaries of the Advertising Law in FMCG beverage marketing has long existed in the industry. Not only was coconut palm coconut juice's packaging considered vulgar, but earlier, Yangyuan Beverages' products were also sued by consumers for false advertising. And Yangyuan's main product is Six Walnuts. Yangyuan's most well-known product is walnut milk, and the slogan 'Use your brain often, drink more Six Walnuts' has left a deep impression on consumers. The reason Six Walnuts has built its brand over the years is closely tied to its extensive marketing: advertising on CCTV, hiring well-known hosts as spokespersons, and sponsoring numerous entertainment programs. Not only did they invite host Chen Luyu as a spokesperson, but they also placed ads in the prime time slot after CCTV's 'News Network', partnered with 'The Brain' to sponsor the show, and even signed on popular star Wang Yuan. During festivals, weddings, and funerals, if you didn't bring two boxes of Six Walnuts, you'd feel embarrassed to pay a New Year's visit. Six Walnuts' sales performance has been climbing steadily, from 30 million yuan in sales in 2006 to a peak of 10 billion yuan, regarded as a 'sales myth' in the industry. In 2018, Yangyuan Beverages achieved revenue of 8.144 billion yuan, with net profit reaching 2.678 billion yuan. The idea that drinking Six Walnuts nourishes the brain is deeply ingrained, but in its 2017 prospectus, we found a different perspective. According to the prospectus, the cost composition of a can of Six Walnuts is roughly as follows: 1. Aluminum can (0.57 yuan), 2. Walnut kernels (0.25 yuan), white sugar (0.05 yuan), other raw materials (0.13 yuan). Among the costs of each can of Six Walnuts, the aluminum can accounts for the highest proportion. Specifically, in direct materials, walnut kernel costs account for 23.3%; aluminum can costs rank first at 52.18%. In 2018, this situation remained unchanged, with aluminum can purchases accounting for 58.45% of total procurement, still ranking first; while walnut kernel purchases accounted for only 15.98%. Clearly, its biggest cost is not the product itself but the aluminum can, so the product's efficacy is not a particularly important factor. This contradicts the advertising claims. Many professionals have debunked the myths that walnuts don't boost brain power and drinking coconut milk won't make you grow from small to big. The well-known self-media account Dr. Dingxiang stated, walnuts don't boost brain power, and a can of Six Walnuts contains about 2 walnuts. Meanwhile, in Yangyuan's 2018 financial report, advertising expenses reached 279 million yuan, accounting for as much as 27.03% of total sales expenses of 1.032 billion yuan. The public and media have also been embroiled in controversy over such slogans, with voices questioning false advertising. From China Judgments Online, it was found that a consumer filed a lawsuit against Yangyuan Beverages for 'false advertising'. Yangyuan's product packaging is labeled with phrases such as 'Use your brain often, drink more Six Walnuts', 'Six Walnuts exclusive sponsor of Season 4 of The Brain', and 'Wisdom and Health'. Industry insiders say that Yangyuan Beverages perfectly played a game of brushing against the Advertising Law, using a series of advertising strategies to associate the product with 'brain use' without directly claiming the product has brain-boosting effects, allowing consumers to make the connection themselves, and then telling the public it's their own interpretation. In this regard, the reason Yangyuan's slogans haven't caused major problems is that it doesn't directly tell consumers the product has 'brain-boosting' functionality, just like Wanglaoji and JDB, it only hints at 'fear of getting heaty' rather than saying 'my product can dispel heat'. Because walnut kernels resemble the human brain, consumers influenced by the concept of 'like nourishes like' have always believed walnuts have brain-boosting effects. Similar to Six Walnuts, Chinese consumer goods companies have always been pushing the boundaries in advertising. Since 2002, coconut palm coconut juice's 'curvy and moving, drinking from childhood to adulthood' ads have been hard on the eyes. It's just that back then, the spokesperson's dress style wasn't as revealing, and the internet wasn't as developed. But now, coconut palm coconut juice's advertising style has gone over the top, even using breast-enhancement gimmicks, seriously violating consumers' legitimate rights and interests. Coconut palm has challenged the bottom line of society, ultimately causing public disgust. In previous years, Brain Gold was all the rage not because its efficacy was really good, but because through the slogan 'This year, don't accept gifts; if you do, only Brain Gold', it planted a shadow in consumers' minds. Repetition is a force; brainwashing chicken soup, repeated often enough, becomes truth. In addition to public pressure, Yangyuan Beverages has faced declining performance. From 2014 to 2017, Yangyuan Beverages achieved revenues of approximately 8.262 billion yuan, 9.117 billion yuan, 8.9 billion yuan, and 7.74 billion yuan, respectively. The latest annual report shows that in 2018, walnut milk revenue was 8.02 billion yuan, accounting for 98.51% of the company's main business revenue, a continued increase in proportion. The production and sales of other plant protein beverages both decreased year-on-year, by 8.06% and 13.91%, respectively. In other words, the situation of Yangyuan's relatively single product line remains unchanged. In the walnut milk market, Yangyuan Beverages is still the leading enterprise, but it faces pursuit from many companies. Currently, companies including Chengde Lulu and Yinlu have developed their own walnut milk products, and their entry has put pressure on Six Walnuts. In addition, in the plant protein beverage market, companies like Dali Foods, Mengniu, and Coca-Cola are also making moves, launching products such as soy milk and peanut milk. These companies have more mature sales channels and quickly distribute products to capture market share. In fact, Yangyuan Beverages has launched a large number of new walnut milk products beyond Six Walnuts, but from revenue data, their contribution to driving company performance growth is not obvious. Logging onto Tmall, no products other than Six Walnuts from Yangyuan Beverages were found. On the JD flagship store, all 7 products displayed are walnut milk; walnut almond milk, walnut peanut milk, nut milk, almond milk, walnut milk, and other products are nowhere to be seen. In addition, endless counterfeit products have also become a 'roadblock' for Yangyuan Beverages. According to media reports, 'Six Kernel Walnuts' and 'Nut Walnuts' are 10 to 20 yuan cheaper per box than Six Walnuts. Although Yangyuan's investment in R&D for related products is increasing, due to the relatively low market threshold, it is difficult to fundamentally solve the homogenization problem. Looking back at China's product history, from Sanzhu Oral Liquid to Six Walnuts, sometimes brushing against the boundaries is used to stimulate consumer demand. In the 1990s, when advertising regulations were not yet fully enforced and innovation was encouraged, Sanzhu pushed its publicity to the extreme. Some local marketing personnel, in order to expand the product's consumer base, arbitrarily exaggerated the efficacy of Sanzhu Oral Liquid, linking common diseases, acute diseases, and so on to it. But Sanzhu's glory also ended due to exaggerated publicity. In the era of Six Walnuts, consumers hope to strengthen protein content in various daily foods; the higher the protein, the more popular the product, with protein beverages becoming one of the categories consumers are most willing to purchase. The increase in consumer demand has also led to rising protein beverage production, accounting for over 10% of total beverage production, while sales revenue accounts for 19%. In the subdivided protein beverage market, plant protein beverages, with their 'natural' and 'healthy' advantages, have become a dark horse in healthy beverages, favored by young consumer groups. Six Walnuts rose because of this, but in recent years, the slowdown in plant protein beverage growth and the emergence of competitors have brought significant challenges to established brands. If brands do not upgrade and target the young market, simply relying on old marketing methods to expand will ultimately lead to crisis. Source: Finance and Economics Wuji (ID: caijwj) Once the tip is adopted, a payment of 400-2000 yuan will be made. China FMCG + Internet Professional New Media Dedicated to FMCG manufacturers' transformation, upgrading, and channel digitalization solutions