---
title: "The Pain of Low-Alcohol Drinks"
description: "Some low-alcohol drink brands have died in Shanghai this spring. Unlike the 2020 pandemic, which was almost beneficial to the industry, this round has brought supply chain tightening, poor freight, and a longer recovery period. The market is far smaller than the imagined 'hundred-billion' scale, and low repurchase rates have become a hidden pain for brands."
author: "昭晰"
publisher: "New Distribution"
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published: "2022-07-09"
language: "en"
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# The Pain of Low-Alcohol Drinks

> Some low-alcohol drink brands have died in Shanghai this spring. Unlike the 2020 pandemic, which was almost beneficial to the industry, this round has brought supply chain tightening, poor freight, and a longer recovery period. The market is far smaller than the imagined 'hundred-billion' scale, and low repurchase rates have become a hidden pain for brands.

********Click to read the original article for details********
Some low-alcohol drink brands have "died" in Shanghai this spring.
This pandemic is different from previous ones. Low-alcohol drink practitioners told HUXIU that the 2020 pandemic was almost beneficial to the industry. At that time, the life pressure and revenge consumption induced by the pandemic allowed brands to better grasp some attributes of the alcohol category itself. At the same time, the pandemic gave birth to the live-streaming economy, bringing online channel dividends to emerging brands.
But this year's pandemic is "different from last time." The difficulties are obvious. Supply chains have tightened, freight is not smooth, consumer enthusiasm has been severely hit, and the economic recovery cycle seems longer.
****△Image source: Visual China
Low-alcohol drinks have been the darling of new consumption in recent years. "This is a young people's market with great future opportunities, with a market size of 100-200 billion yuan," said a person in charge of a leading e-commerce platform in an interview.
However, the low-alcohol drink market is not as big as imagined. **Alcohol expert Cai Xuefei told HUXIU that the visible capacity of the entire domestic low-alcohol drink market is less than 20 billion yuan. This is a huge gap from the "hundred-billion market" concept.** According to the "Alcohol Beverage User Insights Report - Low-Alcohol Drinks and Wine" released by iResearch, in the first quarter of 2022, affected by the pandemic, low-alcohol drinks achieved e-commerce sales of 1.7 billion yuan. E-commerce sales are the main channel for low-alcohol drinks, showing the market size.
The low-alcohol drink industry, still in the early stage of market education, has many players. Whether there has been "overdevelopment" is unknown, but problems have already emerged. **After the trial customers brought by advertising and trendiness finish their purchases, the low repurchase rate has become an unspeakable "pain" for low-alcohol drink brands.** "Many investors regret it," an industry insider told HUXIU.
Investors have seen this good business since two years ago. In 2021, according to incomplete statistics, there were 56 financings in the entire low-alcohol drink track, with a total investment of over 2.5 billion yuan. Low-alcohol drink players mainly focused on angel and Series A financing, with each financing amount basically in the tens of millions. Among them, well-known investment institutions such as ByteDance's strategic investment department, Hillhouse Capital, Matrix Partners China, Plum Ventures, Sequoia Capital China, and Tiantu Capital have entered.
Traditional alcohol cannot meet the needs of young people, and the huge market gap stimulates the industry. **Now the tipsy track is already very crowded.**
In addition to new brands that have received financing, as early as 2014, old brands such as Moutai, Wuliangye, and Luzhou Laojiao have already laid out low-alcohol drinks. With the boom in the past two years, they have increased their efforts and launched new products. At the same time, beverage cross-border players such as Nongfu Spring, Mengniu, 7UP, Beibingyang, and Heytea have also entered, launching alcoholic or alcohol-flavored drinks to compete for the young alcohol beverage market.
Marketing has always been a top priority in the low-alcohol drink industry. Ten years ago, the "ancient brand" Breezer made massive product placements in the once-popular sitcom "Ipartment." Subsequently, competitor RIO began investing heavily in advertising and marketing, hiring Zhou Xun as spokesperson, and placing products in popular variety shows like "Running Man" and TV dramas like "Boss & Me." After a fierce marketing war, RIO surpassed Breezer in 2014 to become the industry leader, and in 2015 pushed China's premixed drink market to its peak.
With the development of the pandemic, brands' marketing budgets have visibly decreased. **After stripping away marketing, what is the core competitiveness of low-alcohol drink brands? A more worthy question is: do low-alcohol drinks solve consumers' real needs and real problems?**
White Claw, an American soda wine brand founded in 2016, single-handedly popularized the entire Hard Seltzer category. Within just three years, White Claw's sales exceeded $1.5 billion (approximately 10 billion yuan), capturing 55% of the "soda wine" market share, prompting global beverage and alcohol giants to enter the market. In July 2020, White Claw announced a 246.7% sales increase compared to summer 2019.
In this regard, most voices in the market summarize its success as "low alcohol and easy to drink," "healthy and low calorie," "low price," "youthful/social media communication," and "meeting party scenarios." These vague concepts are well known to the public and are also used by domestic low-alcohol drink brands to label themselves.
However, these labels, which show no differentiation, do not touch the core of White Claw's success. An analysis in "Humanistic Business Review" stated that White Claw did two things right: **specializing in the hard seltzer subcategory, truly achieving beverage-ization of alcohol in terms of taste; and choosing a neutral style, making the "guilty pleasure" of men drinking low-alcohol drinks no longer guilty.**
As an investor at a leading investment institution who has long focused on consumer goods said, in the low-alcohol drink industry with homogeneous products and marketing, "the real test is still the team's understanding of the alcohol industry and execution ability."
**01 Insights from the Pandemic**
During the two-plus months of Shanghai's lockdown, Tang Huimin, founder of emerging low-alcohol drink brand MissBerry, felt fortunate: MissBerry laid out a complete offline national channel at the end of last year. At the same time, MissBerry also laid out on Ele.me and entered many local online channels, such as community group buying channels in South China and Shanghai.
**The early layout at the business level brought risk resistance:** Although the East China market was affected, other markets across the country were still operating normally.
This year, MissBerry will conduct regional pilots in offline catering channels. It first chose East China and South China, targeting terminals where young people gather and per capita consumption is over 150 yuan.
Channel capability has always been a weak link for emerging low-alcohol drink brands. **Under the pandemic, channels have also become fragmented. Therefore, it is very important to quickly change strategies based on market dynamics and improve offline sales capabilities.**
When MissBerry entered the new retail collection store KKV, it sold its star product, the small square bottle. But the unit price of 49 yuan did not match the "trial" psychology of KKV's consumer group. So they quickly adjusted their channel strategy and switched to selling 19.9 yuan, 100ml mini bottles, which were easier to buy, and sales surged.
MissBerry continues to pay attention to new channels. Tang Huimin believes that brand growth is inseparable from channel growth. Any brand or category that wants explosive growth must leverage channel dividends: "When Tmall was growing the fastest, brands like Three Squirrels appeared in consumers'视野. Later, this wave of new consumer brands got the dividends brought by Xiaohongshu and Douyin."
**Efficiency is the core of marketing.** When doing Xiaohongshu promotion, Tang Huimin found that there were very few notes about low-alcohol drinks. Compared with crowded categories like beauty and fashion, low-alcohol drinks are easy to gain recognition, "and can run out faster."
Last year, MissBerry launched multiple new products with the goal of innovation iteration and trial and error, and also made co-branding attempts: co-branding with Daily Black Chocolate for sea salt hazelnut chocolate wine, and co-branding with trendy IP WHIKO to develop "Mala Xiang Guo Wine" and "Iced Green Plum Wine."
This year, MissBerry aims to expand scenarios and make products more suitable for the dining table. MissBerry observes and researches channel needs. For example, 60% of the audience for Sichuan and Hunan cuisine is female. Hot pot, Sichuan cuisine, and crayfish restaurant owners told MissBerry that women have not found better alcohol products in their stores.
"This is a manifestation that the market has not fully met consumer needs," Tang Huimin said. "Consumer needs do not entirely start from the product. Making products visible and purchasable is also part of the demand chain."
Currently, MissBerry has covered large supermarkets such as Metro, RT-Mart, and Tesco, convenience store chains such as 7-11, Lawson, and FamilyMart, and new retail channels such as Hema Fresh and 7fresh. MissBerry products are available in more than 30,000 terminals nationwide.
"Last year, there was more noise in the market, with product homogeneity and people unable to distinguish between brands and categories," Tang Huimin said. "I think this pandemic is a reshuffling process for emerging brands, and excellent brands will be more strongly proven by the market."
**"New consumer brands, accelerated and supported by capital, have run the distance of traditional brands in 10 or even 20 years in 3 years. But there are always some capabilities that need to be沉淀 and operated long-term, such as communication with consumers, product R&D capabilities, supply chain capabilities, and channel capabilities."**
**02 Innovation Within Cognition**
Insight is the lifeblood of new consumer brands.
When making canned sparkling wine, many emerging brands were making zero-sugar products, and investors also challenged MissBerry to enter zero-sugar.
MissBerry quickly conducted consumer research, and consumers反馈 said they must not change to zero sugar: "If you launch zero sugar, I will never buy it again." Consumers are very health-conscious; they know that zero-sugar products may add erythritol and other sugar substitutes, which are neither truly healthy nor tasty.
"The key is still taste," Tang Huimin said. If you send out a questionnaire, consumers will say they want healthy drinks, but their actual consumption decisions are not based on this. **"Consumers sometimes don't tell us the truth. Only after careful analysis can we know what they really want. Don't deliberately guide consumers, but carefully sort out what they want."**
Within one year of its launch, MissBerry completed five rounds of financing, with amounts in the hundreds of millions. From CNY 2022 to CNY 2021, it achieved a 3-fold increase in total GMV, and is known as the new darling of the low-alcohol drink track. At the end of 2021, AB InBev invested in MissBerry. AB InBev is the world's leading brewing manufacturer and the third-largest consumer goods company globally.
Tang Huimin previously served as the digital retail director of RIO Cocktails. During her 3 years at RIO, e-commerce performance grew more than tenfold.
When making products in traditional enterprises, the process from R&D to birth can take up to more than a year. By the time the product is launched, it can no longer timely reflect the brand's ideas and true consumer insights. Emerging brands' insights are closer to young consumers, and their trial-and-error and iteration speed is faster. In the earliest one or two years of MissBerry, they conducted consumer research and follow-up visits every three months.
At RIO, she observed the截然不同 drinking needs between genders, and at the start of her entrepreneurship, she focused on researching this.
"Men's demand for canned sparkling wine is only one: refreshing and thirst-quenching. Women's needs are very diverse: good looks, diverse flavors, not getting drunk, etc.," Tang Huimin said. "When women watch dramas or listen to music at home, or when they are with someone they like, they develop a need for alcohol. For female consumers, alcohol is not just a drink, but an emotion and a scene."
"We can look at female drinking and young people's drinking together. We found that young people and women don't dislike drinking; they just don't like drinking with people they don't like." This deepened MissBerry's determination to serve women and do the female market.
"(Research) data is not everything," Tang Huimin told HUXIU. **Derived from real consumption behavior, taste is the most important factor affecting repurchase.**
The research method is crucial. MissBerry's star product, the small square bottle, is innovative in appearance, referencing perfume bottle design. "If you ask consumers whether they prefer square or round bottles, it's meaningless," Tang Huimin said. "More qualitative insights are needed. We ask consumers in what scenarios they drink our products, how they hope to drink them, and what feelings they hope the products bring them."
After associating the square bottle with a refined and comfortable lifestyle, consumers spontaneously kept the empty bottles as aromatherapy bottles or vases. MissBerry took advantage of this by attaching aromatherapy refills with the product, allowing the small square bottle to be used as a fragrance bottle, occupying more of consumers' living space and time.
Some reports mentioned that MissBerry developed the solo scene and even referenced new-style tea drinks in drinking methods, testing breakfast, dessert, and tea snack scenes.
Tang Huimin denied this: "The keywords for alcohol are still reward and relaxation. The formation of 'day coffee, night alcohol' makes sense. It's hard for alcohol to enter scenes like breakfast and dessert. **Innovation must be done within people's cognition."**
During the pandemic, Tang Huimin read many books at home, including "Understanding the World Pattern with Economic Thinking" and "The Origin of Brands." Her biggest feeling was that history is always similar and has reference significance. The economy, market, and brand investment all have certain cycles.
She thought that the most important thing is to maintain the original intention and persist in innovation, avoiding some complexity and noise.
"Cycles will always pass, stay optimistic."
Source: 十亿消费者 (ID: gjgc168) Author: 昭晰
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