Before home quarantine, I happened to see ColaCao's rolled cake at a convenience store near my office. ColaCao? A familiar yet unfamiliar name. Reflecting on it, it seems we haven't seen the iconic yellow can with a red lid of ColaCao's powdered drink on shelves for a long time. Even the rolled cake still on sale is squeezed into a small corner of the shelf. ColaCao cocoa powdered drink and rolled cake Image source: ColaCao In contrast, Ovaltine is always visible in convenience stores and supermarkets: Ovaltine oat milk drinks, Ovaltine sandwich cookies, Ovaltine sandwich cakes, Ovaltine lava bread, and even Ovaltine-flavored ice cream... However, in our childhood memories, the most common form of Ovaltine was a powder similar to ColaCao's. Ovaltine snacks at a Lawson convenience store Image source: Lawson Shanghai As the tide of the times surges forward, why has ColaCao, a childhood memory, 'disappeared'? And why has Ovaltine chosen to step out of the powdered drink category? Two international brands with many similarities, yet why do they have such different fates today? The 'Disappeared' ColaCao In the public eye, ColaCao has been gone for a long time. The familiar ColaCao song no longer plays on TV, most post-00s don't know the name of the cartoon characters Le Dian Yi Zu from ColaCao ads, and even ColaCao's Chinese website hasn't been updated for years. However, ColaCao's products haven't completely disappeared from the Chinese market, because there are always people who reminisce about this familiar yet unfamiliar taste.

1. ColaCao is becoming synonymous with nostalgia

On various social apps, people occasionally record their experience of drinking ColaCao after encountering it in a supermarket, successfully triggering a wave of nostalgia. ColaCao sharing on social platforms Image source: Screenshot from Xiaohongshu Online, ColaCao's sales data is relatively impressive. However, in the product review sections, words like 'childhood taste' and 'loved it as a kid' appear more frequently than 'rich' or 'delicious'. Even the official brand has firmly grasped this traffic password, placing the theme of childhood taste directly on the store's splash page. ColaCao JD flagship store splash page poster Image source: ColaCao JD flagship store Some netizens write articles reminiscing about their childhood with ColaCao, while others turn others' 'nostalgia' into a business. On second-hand websites, an empty ColaCao can from over a decade ago is priced from tens to hundreds of yuan, several times more expensive than the current product. ColaCao on second-hand websites Image source: Screenshot from Xianyu search page

2. 'Nutritional supplement' in parents' eyes, childhood delicacy for kids

When watching 'Home with Kids' before, did you ever envy Liu Xing's family for being able to drink ColaCao every day? After all, in 2005 (the year the first season of 'Home with Kids' aired), the average annual wage income of urban residents in China was 7,798 yuan, with an average monthly income of about 650 yuan [1]. A 500ml can of ColaCao cost over 20 yuan, making it a genuine 'high-end drink'. For children at that time, being able to drink a can of ColaCao was something worth showing off to friends. ColaCao frequently appeared in 'Home with Kids' Image source: Clip from 'Home with Kids' As one of the representatives of the childhood taste of China's post-80s and post-90s generations, ColaCao is actually a brand from Spain. After World War II, Spain experienced a long civil war, leading to material scarcity. To improve this situation, two businessmen from Barcelona, Mr. Ferrero and Mr. Ventura, decided to develop a high-nutrition, high-calorie food. In 1946, ColaCao was born, made from defatted cocoa powder, sucrose, grains, and other ingredients. It was a powdered drink that needed to be mixed with milk. Because Europeans had the habit of drinking milk at breakfast, this cocoa powder quickly became a bestseller. ColaCao early poster, full of vintage vibes Image source: ColaCao Along with the rich aroma of ColaCao's hot cocoa, the ColaCao song also floated in the air: 'Drink it, football players are sure to win; drink it, swimmers glide through water like fish. Drink it, cyclists become masters of the road; drink it, boxers are invincible.' ColaCao song ad footage Image source: ColaCao In 1990, the Sino-Spanish joint venture ColaCao (Tianjin) Food Co., Ltd. was established, marking ColaCao's official entry into the Chinese market. Mr. Samaranch, then President of the International Olympic Committee, attended the opening ceremony and cut the ribbon. From then on, ColaCao entered a glorious era tied to the Olympics and athletes. In 1992, ColaCao became a sponsor of the Barcelona Olympics. During the 1996 Atlanta Olympics, ColaCao was designated by the Chinese Olympic Committee and the National Training Bureau as the designated nutritional food for the Chinese Olympic team. In 2008, ColaCao also became the exclusive product for the Chinese gymnastics team. Chinese gymnastics team endorsing ColaCao Image source: ColaCao ad clip Despite the endorsement of Olympic officials and athletes, ColaCao's core customer base in China was not adults looking to build strength, but children in their growth stages. Therefore, while the Spanish origin began researching high-fiber, sugar-free flavors, ColaCao in China launched various fruit-flavored powdered drinks, also including freebies like automatic stirrers and shaker cups to capture children's hearts. ColaCao freebie toy shaker cup Image source: ColaCao Additionally, ColaCao designed the Le Dian Yi Zu cartoon characters. Dali Ke, Tan Chi Tie, Gai Qi Mei, Wei Ling Na, Da Tou Xin, etc., each character corresponds to a nutritional component. This not only made children love ColaCao but also helped parents understand its 'nutritional' attributes. ColaCao iron element representative - Tan Chi Tie Image source: ColaCao The Chinese name 'Gao Le Gao' (literally 'high, happy, high') often evokes thoughts, making it hard for parents not to associate it with 'growing taller'. But can ColaCao really help children grow taller? The official ColaCao once gave a long, euphemistic answer. However, the final conclusion is clear: ColaCao is not a health supplement with special functions. ColaCao original name vs. Chinese translation Image source: ColaCao

3. What ColaCao lost is more than just the big screen

With the rise of domestic nutritional drink brands like Wahaha, and the increasing variety of juices, sodas, herbal teas, and other beverages, ColaCao faced numerous challenges. At the same time, internal crises emerged. In 2015, Tianjin ColaCao Food Co., Ltd. was acquired by LIWAYWAY, the Philippine food company behind the 'Oishi' brand. ColaCao's sales team in China was integrated into Oishi. Since then, ColaCao has rarely advertised. Oishi official website showing acquisition information Image source: Oishi China official website In June 2017, ColaCao products produced by Tianjin ColaCao Food Co., Ltd. were found to have mold exceeding standards, and production was forced to stop. In August 2018, ColaCao's wafer snack 'Cui Ka Ka' was fined for false advertising because it lacked health benefits. As the Le Dian Yi Zu characters, representing various nutrients, disappeared from ColaCao's packaging, the marketing legend of 'healthy and nutritious' became a thing of the past. ColaCao on the blacklist Image source: Screenshot from CCTV2 Consumer Advocacy news The 'Leaving' Ovaltine In the same year ColaCao was fined for false advertising, Ovaltine, mainly concentrated in South China, was also undergoing significant changes. In 2018, Ovaltine discovered through consumer surveys that its brand awareness was declining, especially in Central and North China where its penetration was low. Additionally, its target consumer positioning and usage scenarios were limited. Ovaltine powdered drink family pack Image source: Ovaltine So, Ovaltine's general managers from around the world were summoned to Shanghai for a meeting to redefine Ovaltine's strategic direction [2]. Unlike ColaCao's strategy of developing various fruit flavors, Ovaltine believed that its classic flavor was its core competitiveness. Since then, Ovaltine's brand positioning gradually shifted from 'nutrition' and 'health' to 'deliciousness'. The target audience also changed from children to young people aged 18-35.

1. More common than Ovaltine is the 'Ovaltine taste'

Ovaltine's concerns were not unfounded. Since entering the Chinese mainland market in 1993, Ovaltine's sales have always been driven by the classic cocoa powder drink; its subsequent new products like oat flakes and oat drinks did not perform well. Although the powdered drink carried the sales volume, under the impact of ready-to-drink beverages, Ovaltine was in a loss-making state in the Chinese market for years. On the basis of the original powdered drink, Ovaltine also added honey to launch a new flavor 'Mi Hua Tian', but it didn't match the classic original. All these phenomena seemed to indicate that Ovaltine needed to step out of the powdered drink category. Ovaltine and Mi Hua Tian promotional gifts Image source: Ovaltine promotional page 1) Supermarket channels: ready-to-drink beverages as the mainstay, snacks as a supplement On May 1, 2017, Ovaltine authorized Master Kong to exclusively produce and sell its malt nutritional ready-to-drink milk series. Leveraging Master Kong's offline channel capabilities, Ovaltine not only placed its ready-to-drink beverages in major supermarkets but also entered school convenience stores and kiosks. While boosting sales, it also cultivated the next generation of consumers for the brand. To integrate into the young consumer group, the 'century-old brand' Ovaltine added slogans popular among young people on its packaging, such as 'Water retrograde dispelled', 'Pass every exam', 'Highlight moment', etc., and combined with the Teddy Bear Collection IP to present the entire image. When the new product was launched, it coincided with one month before the college entrance exam. As a result, the 'Pass every exam' version quickly became popular and sold out nationwide. Ovaltine packaging designed with Teddy Bear Collection IP Image source: Ovaltine Furthermore, Ovaltine expanded its category to include snacks and desserts. Ovaltine crispy sauce, Ovaltine sandwich cookies, Ovaltine cocoa volcano bread... striving to make everything Ovaltine-flavored. Ovaltine crispy mood sandwich cookies Image source: Ovaltine 2) Foodservice channels: enriching product forms and textures based on classic flavors Ready-to-drink beverages and snacks in supermarket channels are one of Ovaltine's faster-growing lines, but they are only part of Ovaltine's category expansion. In June 2019, Ovaltine collaborated with Heytea, marking its entry into the foodservice sector. Co-branded products like Ovaltine Bobo Ice, Ovaltine Coffee Ice, and Ovaltine Crispy Cone became internet-famous items. Ovaltine X Heytea co-branded products Image source: Ovaltine At the end of March last year, Ovaltine and McDonald's launched eight snacks for the first time: Ovaltine latte, Ovaltine heart-frozen corner, Ovaltine crispy McFlurry, Ovaltine-flavored pie... Subsequently, the Weibo topic #McDonald's Ovaltine is amazing# trended, with cumulative reads reaching 150 million. After that, Ovaltine partnered with bubble tea brand 1点点 to launch Ovaltine ice cream boba, and with dessert brand Westure to launch cocoa crispy Ovaltine puff, both becoming hot-selling internet-famous items. Ovaltine X McDonald's co-branded products Image source: McDonald's In an interview at the 2021 China Catering Industry Summit, Du Gang, General Manager of Ovaltine China, revealed: 'We previously conducted a brand awareness survey. The results showed that if we continued to focus on such a small category as powdered drinks, many people who know Ovaltine would not have actual consumption scenarios.' Du Gang also stated that Ovaltine does not want to be just an ordinary ingredient supplier in the foodservice channel, but hopes to demonstrate the creativity of this century-old brand through deep participation in co-branded product design. He used making a cup of Ovaltine Bobo Ice as an example: 'The base of the milk tea might be brewed with powder to bring out the Ovaltine flavor, then crispy sauce is used for the wall effect. For the topping, we usually make a cream top. On top of the cream, we sprinkle our crispy cookie crumbs or crispy stars.' Products made this way not only satisfy young people's need for photo-worthy check-ins but also their pursuit of multiple textures. In Du Gang's view, 'attractive and substantial' is the main reason for the popularity of Ovaltine co-branded products. Ovaltine Bobo Ice Image source: Ovaltine Since 2020, Ovaltine's business in China has achieved counter-trend growth. The post-80s and post-90s who grew up drinking Ovaltine powdered drinks have once again become the core consumer group of the 'Ovaltine taste'. However, this time, they are attracted by the product's own characteristics, not just nostalgia.

2. Ovaltine's changes did not start in 2018

1) Changes in Ovaltine's consumer base Ovaltine comes from Switzerland, originally named Ovomaltine in Latin. In 1865, a pharmacist named Dr. George Wander extracted 'malt soup' from barley malt, creating a nutritious drink. Later, Dr. Wander's son added milk, chocolate, and other ingredients to the original formula and used vacuum drying technology to turn it into powder. That's how Ovaltine's powdered drink came to be. To cater to different drinking scenarios, Ovaltine successively launched powdered canned packaging for breakfast, and boxes and bottles for travel and sports. The target audience also expanded from specific groups needing nutrition to athletes and adults who exercise regularly. In Switzerland in the 1920s, athletes in ice hockey and skiing often drank a cup of Ovaltine after competitions to help ward off cold and replenish energy. Athletes drinking Ovaltine Image source: Ovaltine In the 1930s and 1940s, Ovaltine entered Hong Kong. At that time, Hong Kong was in an economic downturn with scarce materials, so Ovaltine expanded its target consumer group to include pregnant women, the elderly, and children, gradually becoming a popular drink. Poster of Ovaltine launched in Hong Kong Image source: Ovaltine In later TV commercials, we could see: a little boy who drank a cup of Ovaltine winning an arm wrestling match against a strong pirate, and easily solving math problems... Many parents believed that Ovaltine could make children stronger and smarter. Until 1993, when Ovaltine officially entered the mainland market, its focus on teenagers and children became even more pronounced. So much so that many people still remember the slogan: 'Children who drink Ovaltine are not ordinary, they are extraordinary.' Ovaltine early ad Image source: Ovaltine 2) Ovaltine in the foodservice circle As early as the Hong Kong period, Ovaltine was constantly integrating with various foods and selling its 'peripheral products' through different channels. First, there were Ovaltine mooncakes, lou nai hua (French toast with condensed milk), and children's yuen yeung milk tea in cha chaan tengs (Hong Kong-style cafes). Second, ice rooms also added Ovaltine milkshakes, Ovaltine red bean ice, and other options like zhan gui with cream and chocolate crispy bits. Ovaltine lou nai hua is one of the signature dishes in Hong Kong cha chaan tengs Image source: Xiaohongshu user @Bao Zao Lao Ban Niang With changes in the times and market environment, Ovaltine's consumer base, product forms, and sales channels have been constantly evolving. In recent years, Ovaltine's moves into the foodservice channel and its efforts to cover various snack and beverage flavors were actually foreshadowed in its earlier development. Why did the childhood taste 'disappear'? While Ovaltine evokes childhood memories through product innovation, one might wonder if anyone thinks of ColaCao, which also has a cocoa flavor. Why has ColaCao's cocoa powdered drink faded from public view? Is it because it's unhealthy? But even some of Ovaltine's higher-calorie products are still attractive to many young people. Or is it because the powdered drink format itself is somewhat 'outdated'? But with the upgrading of powdered drink technology, many new consumer brands are starting to eye powdered drinks.

1. Sugar control cannot control people's innate sweet tooth

In recent years, people have started to 'talk about sugar and change color'. The Chinese Academy of Sciences' '2021 China Sugar-Free Beverage Market Trend Insight Report' points out that 'with the enhancement of public health awareness, the market size of sugar-free beverages will continue to maintain growth momentum, expected to double in the next five years, reaching 22.74 billion yuan by 2025.' [4] But the rising consumer demand for sugar-free drinks does not prevent them from intermittently consuming 'calorie bombs' to fill the emptiness in their mouths. As the American movie 'Sex and the City' says: 'Do you know where the best dessert shops in New York are? Next to the weight loss centers.' Ovaltine's cross-border collaborations with Heytea, McDonald's, and other brands not only made the co-branded products popular but also boosted sales of Ovaltine's powdered drink. Searching 'Ovaltine' on Xiaohongshu reveals many videos of netizens making their own Heytea-style Ovaltine Bobo tea. When faced with a delicious cup of hot cocoa milk, our first consideration is not how many calories it contains, but the 'healing feeling' it brings us. As a netizen said when checking in at McDonald's for an Ovaltine soft serve: 'Ovaltine not sweet is like life without bitterness, good but not essential.' Ovaltine X McDonald's co-branded soft serve Image source: Ovaltine During its heyday in the domestic market, ColaCao vigorously promoted a series of fruit flavors like peach, banana, vanilla, and strawberry. The appearance of fruit flavors seemed to give consumers more choices, but many families, after 'spending a fortune' to buy a can of the then-new fruit-flavored ColaCao, found they couldn't get used to the taste and were unlikely to repurchase. Even now, the best-selling powdered drink in the online flagship store is still the classic cocoa flavor. Fruit-flavored ColaCao Image source: ColaCao In fact, sweetness and calories are not the main reasons for ColaCao's disappearance; the key is its failure to find its product positioning and competitive advantage.

2. 'Niche' cocoa can also become a popular flavor

When ColaCao first entered the Chinese market, people generally didn't have the habit of mixing cocoa with milk. This was one of the reasons ColaCao later launched a series of fruit flavors. But now, focusing on cocoa as the main ingredient has actually become a growth point that ColaCao has not fully developed. Cocoa is one of the world's three major soft drinks alongside tea and coffee, and is also a superfood recommended by the Food and Agriculture Organization of the United Nations. In recent years, many international brands have targeted the Chinese cocoa market. In 2016, British century-old tea brand Whittard tested the Chinese market through Tmall Global, with hot chocolate cocoa powder sales exceeding its tea product sales. At the end of 2019, American cocoa brand Swiss Miss entered China, tailoring solid cocoa products for Chinese consumers. In 2020, Japanese dairy giant Morinaga also entered the Chinese cocoa market, launching pure cocoa and milk cocoa powder products. Swiss Miss powdered drink Image source: Swiss Miss Domestic new consumer brands have also seen the potential of the Chinese cocoa market. Wuli Keke, founded in 2021, aims to be 'the first cup of cocoa for Generation Z', and specifically states that its ingredients contain no artificial flavors, non-dairy creamer, or additional additives. The health trend of cocoa drinks helps reduce consumers' concerns when choosing cocoa drinks. At the same time, new brands have noticed subtle changes in cocoa consumption scenarios. The large family-pack cans of cocoa powder have decreased, replaced by more individual single-serving packages. Individually packaged Wuli Keke Image source: Wuli Keke No longer insisting on competing with soy milk for the 'breakfast standard', cocoa has found a new approach: drink a cup when craving a snack in the afternoon, drink a cup before bed, drink a cup at gatherings with friends. Because compared to nutrition, consumers now choose cocoa more for happiness.

3. Powdered drinks are being eyed by new consumer brands

With the popularity of ready-to-drink beverages, the original 'convenient and easy' advantage of powdered drinks has become less significant, and they even add steps to drinking. Is the reason why domestic ColaCao gradually declined and Ovaltine had to break out of the powdered drink category because powdered drinks themselves have limitations? Of course, the beverage category itself has no inherent superiority or inferiority; the key is whether the brand can keep up with the times and whether the product can meet specific consumer needs. In recent years, the powdered drink industry has developed rapidly. Data from China Business Industry Research Institute shows that from 2017 to 2020, sales of powdered drink manufacturers increased from 64.5 billion yuan to 72 billion yuan. [3] On one hand, technological progress has gradually made powdered drinks a new category. For example, instant coffee, which was once processed using spray drying, was seen as synonymous with cheap coffee. But its disadvantage was not the powder form itself, but essentially the taste. With the advent of freeze-drying technology, even instant coffee can retain its flavor well. Technological progress has not only upgraded instant coffee but also given opportunities to new brands. SanDunBan, founded in 2015, topped the coffee category sales list on Double 11 in 2019 with its '3-second dissolving' 'ultra-instant premium coffee'. SanDunBan ultra-instant premium coffee Image source: SanDunBan official Weibo Additionally, the emergence of solid probiotics is also a reflection of technological progress. Probiotics beneficial to gut health were previously mostly found in low-temperature dairy products. The development and application of embedding technology allow probiotics and other nutrients to survive at room temperature. New nutrition brand WonderLab small blue bottle probiotics Image source: WonderLab On the other hand, powdered drink brands themselves are constantly adjusting their positioning and promoting product upgrades. For example, beverage brand 'Yi Bao Sheng Huo' aims to be a 'low-calorie, healthy milk tea alternative'. In spring and summer, it promotes mango pomelo sago and peach oolong flavored milk teas, striving to replicate freshly made milk tea while being low in sugar and fat. In autumn and winter, it promotes hazelnut cocoa milk tea, emphasizing its deliciousness and stomach-warming properties. Additionally, it pre-mixes milk powder and cocoa powder so that consumers can directly brew with water without affecting the taste. Yi Bao Sheng Huo's hazelnut cocoa cheese foam milk tea Image source: Yi Bao Sheng Huo Conclusion With Ovaltine's successful transformation, the upgrade of instant coffee, and new brands targeting the powdered drink category, is there a new answer to why solid cocoa drinks represented by ColaCao have declined? As a form of beverage, the powdered drink category itself will exist for a long time. Rather than agonizing over whether to break out of the powdered drink category, 'ColaCaos' should think more about what differentiated needs of the new generation of consumers remain unmet? And what are the main pain points? After all, the times move forward without warning anyone in advance. Every brand should learn to keep up with the times. Source: FBIF Food & Beverage Innovation (ID: FoodInnovation) References: [1] 'Rapid Growth in Income and Expenditure of Urban Residents During the 10th Five-Year Plan Period', March 20, 2006, National Bureau of Statistics Comprehensive Department [2] 'Dialogue with Ovaltine: Not an Internet Celebrity, but a Long-lasting Brand, the Innovation Path of a Century-old Brand / Full View Big Shot', October 28, 2021, Huoquanquan [3] '2021 China Sugar-Free Beverage Market Trend Insight Report', December 2021, Key Laboratory of Big Data Mining and Knowledge Management, Chinese Academy of Sciences [4] 'Analysis of the Market Size and Development Prospects of China's Solid Beverage Industry in 2021 (Figure)', April 13, 2021, China Business Industry Research Institute Are you 'watching' me?