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Hebei Yangyuan Zhihui, a beverage company on the brink of bankruptcy in the 1990s, turned its fortunes around after 2003 with a plant-based protein drink called "Six Walnuts." From sales of 3 million yuan before 2003, it has grown to around 3 billion yuan today—a nearly thousand-fold increase in a decade.
The miraculous rise of Six Walnuts has sparked much debate in the industry, giving experts a wealth of practical and theoretical marketing topics: "The Importance of Product Naming," "The Potential of Breaking into Tier 3 and 4 Markets," "How to Win Through Category Strategy," "The Advantages of Product Focus Strategy," and more.
These highly theoretical marketing topics have begun using Six Walnuts as a model for marketing interpretation. If we can agree that a regional company promoting a mass-market product achieved nearly a thousand-fold growth in a decade, then every aspect of its execution—from positioning, market strategy, channel building, terminal control, to concept communication—seems flawless.
But the facts tell us that Six Walnuts' marketing model is hard to clone. Established plant-based protein beverage companies like Lulu and Dazhai can only follow Six Walnuts' lead in the walnut beverage market, while the "N Walnuts" imitators, despite having a successful template, only grasp the surface and lag several levels behind in market performance.
Why is this? Perhaps we should return to the fundamentals of FMCG marketing theory—any strategy, plan, or tactic is just a theoretical weapon; persistent, effective market execution is the true guarantee of FMCG success.
I. Decoding Six Walnuts: Six Key Moves
Interpreting the development history of Six Walnuts is essentially interpreting the decade-long history of the beverage market. In the highly open beverage market, the success of any product relies on "timing, location, and harmony." Besides following the "4P" principle in market promotion, products must also align with the prevailing market atmosphere and marketing environment. In other words, behind every successful product are both inevitable and accidental factors.
Move 1: Product Naming—Winning at the Starting Line
In his book "The Wisdom of China," the renowned scholar Lin Yutang noted that compared to Westerners, "Chinese people are filled with common sensibility." This cultural trait is evident in differences like Western medicine's emphasis on empirical diagnosis versus traditional Chinese medicine's dialectical approach, and Chinese painting's focus on freehand expression versus Western oil painting's realism. Therefore, it's not hard to see that Chinese consumer psychology is often more sensitive to emotional appeals in products.
In the consumer market, a good product name is undoubtedly more easily accepted by Chinese consumers. Six Walnuts, in its naming, maximally catered to the emotional appeals of Chinese consumer psychology: it allows consumers to clearly understand the literal value of six walnuts, while also reserving rich marketing resources for future product promotion. Marketing experts analyze that plant-based protein drinks are marketing-driven products; their product concepts and value propositions need a carrier and channel for release. The name "Six Walnuts" itself hints at the product's value: one can contains the nutritional essence of six pecans. We won't delve into its rational connotation, but at least the name's literal meaning allows its target consumers—those in tier 3 and 4 markets—to quickly recognize and accept the product concept.
On the other hand, the "walnut milk" (核桃乳) label on Six Walnuts' packaging also differentiates it from competitors and provides the most effective, vivid positive suggestion to emotional consumer psychology. "Lulu and Dazhai produce 'walnut dew' (核桃露), while Six Walnuts produces 'walnut milk' (核桃乳). Don't underestimate this one-character difference. In fact, 'dew' and 'milk' are most commonly used in the daily chemical industry, like 'shampoo milk' and 'shampoo dew.' Many consumers have feelings about these two characters. 'Dew' easily reminds people of 'dew drops,' suggesting more water content; 'milk' reminds people of 'cow's milk,' as white and rich as milk, suggesting less water content." Compared to competitors, Six Walnuts' appeal advantage lies not only in the quantity "more" but also in evoking associations of higher concentration, richer taste, and whiter color, laying the foundation for capturing consumer minds.
Move 2: Product Differentiation—Subtraction for Focus
Before Six Walnuts was launched, Hebei Yangyuan had a wide array of products. "At that time, Yangyuan was making soda, juice, and everything else—it was messy and chaotic. Yangyuan was just an ordinary small and medium enterprise among thousands in Hebei, with very low sales per product, relying on many single products to achieve annual sales of two to three million yuan."
The turning point came from the Yangyuan marketing team's proposal to do "subtraction" on the product line: although Yangyuan had the excellent implication of "nourishing the foundation," and had accumulated brand value through years of marketing, it also had insurmountable drawbacks—brand aging, difficulty in efficiently connecting with target consumer groups in brand communication and appeal, and using limited resources on too many items, which not only failed to create marketing synergy but also hindered sales breakthroughs. So they proposed a product line reduction strategy, focusing on walnut milk as the leading product, drastically cutting the product line to no more than 10 main items, and concentrating all marketing resources on the dominant product. Yangyuan Six Walnuts focused on walnut protein drinks, with walnut milk as the core product, based on differentiation, to build a strong brand with distinct characteristics.
As industry competition intensifies, more companies recognize the importance of brand building. With tight budgets, an overly long product line consumes significant marketing resources, and in the red ocean, the marginal value of these investments is very low, often wasting manpower and materials, missing market opportunities, and affecting product sales—essentially burning money.
In the era of high market segmentation in the food and beverage industry, focus is a viable method to open market gaps at low cost; otherwise, new products find it hard to find a market entry point. For example, Yangyuan early on did subtraction on its product line, launched Six Walnuts to innovate the walnut beverage category, focused on finding a blue ocean in tier 3 and 4 markets, refined the brand's core value of "brain health," and through channel focus, achieved current sales of 3 billion yuan. This shows that for small and medium enterprises, sometimes product focus strategy is more suitable than multi-item operations.
It's worth noting that focused promotion must align with product characteristics and meet sales needs; one cannot blindly pursue focus and market segmentation while ignoring market capacity. Walnut beverages, as plant-based protein drinks, have always been one of the mainstream beverage categories in China, especially after the 2008 dairy crisis, when market capacity grew significantly, becoming a key factor in Six Walnuts' sustained market success.
Move 3: Category Victory, Leveraging Innovation
The dairy crisis of 2008 gave plant-based protein drinks a golden opportunity. The long-standing stagnation of plant-based protein drinks can largely be attributed to manufacturers' positioning issues. In terms of nutritional value, plant protein is indeed slightly inferior to animal protein. Clearly, manufacturers are well aware of this, so they have avoided the word "nutrition" in positioning to prevent direct confrontation with milk. Thus, Lulu and Coconut Palm both chose the functional positioning of "beauty and skincare." However, taking a different path can easily lead astray. After 2008, when consumers' nutritional demands for plant protein suddenly increased, a huge gap formed between the solidified brand images and consumer expectations. Since they failed to adjust their product positioning in time, they inevitably missed the "entry ticket" to this industry feast. Six Walnuts seized the opportunity during this market upgrade.
On the other hand, Six Walnuts' brand and market positioning at launch was also well-considered. The foundation of category victory must be built on concrete indicators like precise market space research, product R&D strength, commercial innovation thinking, and accurate control of consumer market trends, not just a hollow slogan.
According to the law of mind acceptance for new categories, occupying the first attribute of a category is the best way to position a new beverage category. For example, walnuts have many recognized benefits in public perception—brain health, stomach health, blood enrichment, lung moistening, and spirit nourishment. Research found that "brain health" is the most widespread and deep-rooted, so Six Walnuts defined "brain health" as the first attribute of walnut milk.
Six Walnuts is classified as a plant-based protein drink, but in the broader consumer mind, there is a recognition of "walnuts for brain health" as the first attribute. A walnut milk drink made from walnuts naturally inherits the perceived efficacy of walnuts. Although there was an implicit association with brain health due to the walnut ingredient, no brand had clearly articulated it. Previously, walnut milk was always a plant-based protein flavored drink with insufficient reasons for choice, and there were many substitutes like other plant-based protein drinks: almond dew, coconut juice, peanut dew. When positioned as a brain health drink, Six Walnuts successfully jumped out of the plant protein mold, occupied the first attribute of walnut milk, and approached the beverage category with unique brain health functional associations.
Move 4: Tier 3 and 4 Market Fine Management and Joint Promotion—Gift Positioning
As a strong product with billions in sales, Six Walnuts' largest sales volume does not come from tier 1 and 2 markets but from tier 3 and 4 markets. "Six Walnuts' sales model in county-level and below markets offers many insights for similar enterprises, and it's worth learning from."
Tier 3 and 4 markets are not key markets for many large-scale beverage companies. On one hand, product positioning must match the market environment; on the other hand, companies need to persistently invest manpower and resources to cultivate these markets. Yangyuan did well on both fronts. On one hand, Six Walnuts' "gift" positioning suits rural market consumption trends. In Henan and Hebei, rural relatives and friends often bring gifts when visiting. In the past, it was instant noodles; now, with better living conditions, gifts have upgraded, and the nutritious, higher-priced Six Walnuts is more presentable. In a county in Hebei, annual sales of Six Walnuts exceed 10 million yuan...
Yangyuan's base is Hengshui, with Hebei Province as its home base, rolling out to surrounding provinces within 500 kilometers, step by step. It maximizes penetration of surrounding markets, builds a solid home base, then implements rolling replication of the marketing model, steadily and meticulously cultivating, ultimately forming a broad market advantage. In 2011, Six Walnuts' total sales in Hebei were around 1 billion yuan, mostly from county-level markets.
To maximize the effectiveness of limited marketing resources, it is necessary to select the most active key markets for focused investment. The most valuable prefecture, county, and township markets are selected as strategic markets for meticulous cultivation, aiming to create a batch of model markets, then use them to drive the surrounding areas and seek regional strength. "If you go to Six Walnuts' key markets, you'll find that small shops often recommend Six Walnuts first, and the product displays are well done. This shows that Six Walnuts' channel profit margins are high, boosting terminal shops' sales enthusiasm, and its joint promotion management in the market is excellent."
In market strategy, Six Walnuts adopts a "surround the point, hit the circle" approach. First, define a center: a region starts with the urban area, a county market starts with the county seat, a township market starts with the township's main street. Then, it targets the leading consumer group. It first conducts community and campus promotions. After promotions, when consumers have awareness, it begins distribution. Its distribution is explosive; once the "point" is established, it invests heavily. General companies do market "top-down," from wholesalers to retail stores; it does "flooding," with high density and deep penetration.
In rural markets, it focuses on campus promotions at the township level. "Township focuses on campuses, county seats focus on communities." Its rural promotion completely appeals to parents. During the 2011 Spring Festival, it promoted the gift channel; its marketing strategy is very flexible. In summary, it's a two-area promotion model: "campus as the vanguard, community as the foundation." It offers tastings in schools; children go home and tell their parents, and parents buy.
Move 5: Reverse Pricing—Channel Profit Margins
Pricing in FMCG is an eternal topic. The price system of hot-selling products encompasses product value, positioning orientation, market acceptability, consumer price sensitivity, differentiated competition, primary and secondary product distinction, and alignment with the consumption environment. A one-size-fits-all low-price strategy is not the decisive factor for winning the market; the key is precision, not the level of price. From a marketing perspective, if you adopt a follow-the-leader pricing strategy and set the same price as competitors, it can cause direct market conflict, easily alerting competitors and triggering strong counterattacks, creating many obstacles and resistance for marketing. If you successfully avoid direct conflict through pricing strategy, you might catch competitors off guard and occupy the market high ground.
Since walnuts are more expensive than almonds, and as a brain health drink, logically, it should be priced higher than other plant-based protein drinks. Therefore, Six Walnuts chose a higher price than typical protein drinks. The retail price for a whole box of Six Walnuts is over 5 yuan higher than the market leader. Such a high price not only guarantees product quality and efficacy but also serves as a direct marketing weapon for brand image association. Of course, this high-price strategy also leaves ample room for channel operations. "Currently, Lulu's distributor profit is 1-2 yuan per box, and terminal profit is 2-3 yuan; Six Walnuts' distributor profit is 5-6 yuan per box, and terminal profit can reach 7-8 yuan. Which product do you think channel operators and retail points are more enthusiastic about selling?"
Currently, the whole-box price of Six Walnuts is over 5 yuan higher than Lulu. Market reactions since launch show that this high-price strategy not only didn't hinder market promotion but further shaped the brand's high-quality image and established its market position.
Unlike bottled water, plant-based protein drinks have high virtual value and are marketing-driven products, so a low-price strategy may not suit them. In mature markets with high brand concentration, if a new product's price and concept appeal approach or exceed those of strong brands, it often faces strong suppression and terminal interception from competitors in overlapping markets. For plant-based protein drinks, competition is relatively insufficient, and new products have some pricing premium space. Six Walnuts chose a "high-price strategy," which not only matches its "gift product" positioning, giving consumers a full sense of product value, but also allows it to invest in the market with higher channel profits than competitors, supplemented by joint promotion, thus smoothly controlling the terminal network.
Move 6: Channel Management—Execution Is Competitiveness
At the initial launch of Six Walnuts, its main channels were not traditional circulation channels but catering channels like hotels and restaurants. This was not the ideal channel for Six Walnuts; to some extent, it was "forced." At that time in Hebei, Lulu was the undisputed industry leader, with a strong say in traditional channels like supermarkets and wholesale departments. As a newcomer, Six Walnuts found it hard to break through on Lulu's turf. Fortunately, most of Six Walnuts' sales team came from Hengshui Laobaigan, with rich experience in catering channel operations. Six Walnuts began distributing through hotel sales channels, focusing on catering channels for promotion and guiding consumers. As a result, restaurants sold very well, and consumers went to wholesale departments and supermarkets to buy, which in turn stimulated channel merchants to stock up. By meticulously cultivating and patiently nurturing non-traditional channels like restaurants and hotels, it reversely stimulated the sales enthusiasm of traditional channel distributors. This tactic is commonly used by many small and medium enterprises, with both success and failure cases. Ultimately, Six Walnuts' success also had some "luck" factor."
However, marketing experts believe that "luck" in the marketing field is closely related to how companies "act" in sales management. The good manufacturer-distributor relationship formed between Six Walnuts and its distributors ensures the product's sales heat. Six Walnuts proposed a "star-level joint promotion" service model, assisting distributors with distribution, customer maintenance, terminal visualization, and other tasks. At the same time, the company regularly trains distributors, guiding them in internal management such as personnel, warehousing, and store operations, improving their business level in both concept and method. Coupled with high rebate rates, this greatly boosted distributor enthusiasm.
Football star Franz Beckenbauer once said: "Luck is also part of strength." This is the same as our common saying, "Opportunities only come to those who are prepared." Many people say Six Walnuts' marketing tactics are very conventional—whether product concept, market strategy, network construction, or promotional methods, they are all standard, with no major differentiation from current corporate marketing tactics. But what's commendable is the diligent performance of the sales team in the frontline market. Returning to the essence of marketing, execution is the most important link. No matter how good the strategy, plan, or means, without execution, they are castles in the air. Therefore, Six Walnuts' success is not just luck but a reward for its meticulous market cultivation.
II. Six Walnuts in the Eyes of Distributors
"Star-Level Joint Promotion" Model Assists Distributors
In manufacturer-distributor relations, Six Walnuts proposed a "star-level joint promotion" service model, playing a meticulous "nanny" role, assisting distributors with distribution, customer maintenance, terminal visualization, and other tasks. The company regularly trains distributors, guiding them in internal management such as personnel, warehousing, and store operations, improving their business level in both concept and method. Six Walnuts also proposed a "zero-risk operation" commitment. Through team assistance, it ensures effective product distribution, reduces distributor inventory pressure, and eliminates distributors' concerns about "stock not selling." Additionally, it established a strict return and exchange guarantee mechanism, offering "unconditional" return and exchange. These measures greatly boosted distributor enthusiasm, and distributors' loyalty to Six Walnuts has deepened.
Product Appeal Meets Consumer Needs
As the "king of nuts," walnuts have long been recognized for their nutritional and brain-boosting value, with a universal consumption base that requires little consumer education. The brain-boosting function of walnuts cannot be replaced by milk, and its acceptance is clearly higher than other plant proteins like almonds and coconuts. For Six Walnuts, the product has a wide range of applications and is a neutral product. Its taste has no restrictions, suitable for men, women, young, and old. Currently, a box of regular Six Walnuts costs around 60 yuan, within an acceptable range for consumers. Because of its wide audience, Six Walnuts is also largely consumed as a family product, with many citizens buying it by the box. At the same time, the advertising slogan "Use your brain often, drink more Six Walnuts" hits the mark for parents, students, and urban white-collar workers, driving the enduring gift craze for Six Walnuts.
Channel Control Implemented
The hot market for Six Walnuts is inseparable from Yangyuan's market protection. It is reported that Yangyuan has a strict fine system, resolutely prohibiting cross-region sales (channel stuffing) among distributors. Once discovered, goods are confiscated and fines are imposed as a warning. Moreover, if a distributor is seriously involved in cross-region sales, Yangyuan will immediately revoke their agency qualification. In addition, Six Walnuts has a complete price system, including guide price, ex-factory price, and retail price, and distributors cannot arbitrarily change product prices according to their own wishes. Otherwise, they will be severely punished. Strict market protection and an orderly price system ensure that distributors seriously cultivate their own regions without chaos. Furthermore, Six Walnuts provides relatively large profit margins for distributors at all levels, with a box profit typically between 8 and 9 yuan, greatly stimulating distributor enthusiasm.
Reverse Pulling Channel Enthusiasm
Yangyuan's unique marketing also opened the way for Six Walnuts' rapid rise. Initially, Yangyuan did not sell beverages through circulation channels. Instead, leveraging the hotel channel sales experience of Hengshui Laobaigan, Six Walnuts meticulously cultivated and patiently nurtured non-traditional channels like restaurants and hotels, reversely stimulating the sales enthusiasm of traditional channel distributors. At the same time, Six Walnuts invested heavily in advertising and product promotion. In August 2010, Yangyuan made a major move, signing with CCTV for tens of millions of yuan, and launched a new advertisement with Phoenix TV host Chen Luyu, starting CCTV advertising for Six Walnuts, sounding the clarion call to expand from regional to national markets, with sales growing day by day. According to statistics, in 2011, Six Walnuts' sales growth rate exceeded 100%, becoming the industry leader with over 70% market share in walnut-based beverages.
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