Walking through Beijing's subway stations, advertisements for Dayao Soda featuring Wu Jing are everywhere. From prime-time slots on CCTV to high-speed rail stations, airports, shopping malls, elevators, subway stations, and cinemas, the slogan 'Big soda, drink Dayao' dominates screens nationwide, especially in the northern market. Wu Jing's smile and the blue-white-red whirlwind are visible everywhere.
Despite extensive advertising, when Dayao Soda actually appears before consumers, it is very down-to-earth and focused—mainly targeting the foodservice channel. In many foodservice outlets in Beijing, Dayao Soda, with its glass bottle packaging, can be displayed alongside Yanjing Beer, making it very eye-catching. In the foodservice channel, especially in summer, the ordering rate for alcoholic beverages is naturally high.
To sum up Dayao Soda's strategy in one sentence: Overwhelming advertising, deep cultivation of the foodservice channel.
From the perspective of brand origin, Dayao and Beiyang are both part of the local old soda camp. In recent years, with the rise of domestic brands, many local old sodas have experienced a second spring. In 2014, Shanhaiguan Soda restarted its market; in 2016, Tianfu Cola launched its products... Domestic sodas entered a revival period. In 2022, Shaanxi's Bingfeng Soda once aimed to go public.
All these old soda market restarts often focus on regional sentiment and nostalgic memories. Beiyang in Beijing is no exception; its packaging design has obvious nostalgic traces, making many old Beijingers feel very familiar.
But these old sodas also face certain challenges. First, the two soda giants, Coca-Cola and Pepsi, have long been well-known brands nationwide without obvious regional traces. Second, in terms of product and category innovation, the beverage market has always been a hotbed of innovation, with a typical representative being Genki Forest.
In this context, Dayao Soda, emerging from Inner Mongolia, has become a dark horse and gained a reputation in the industry. Its outstanding performance in the Beijing market also proves the effectiveness of its business model. Dayao has clearly stated that it aims to become a national brand.
Will Dayao be the truly national local soda brand?
A 'Model' for Domestic Sodas Breaking Through
Who is Dayao? Dayao was founded in the 1980s and took a full 40 years to go from Inner Mongolia to the whole country.
Around 2014 was not only a turning point for old sodas but also for Dayao Soda.
Luo Yun, Deputy General Manager of Dayao Beverage, mentioned that in that year, the 30-year-old Dayao made three decisions that still have a major impact today: first, to focus on foodservice beverages and the foodservice channel; second, to pursue national brand operations and channel expansion; third, to establish a professional manager mechanism, emphasizing organizational collaboration and management-driven growth.
To seek living space, Dayao chose the most arduous and difficult path.
It was also from 2015 that Dayao began to step out of Inner Mongolia, setting up factories in northern China and entering other regional markets.
Focusing on the foodservice channel now appears to be a winning move for Dayao to break out of the encirclement.
Generally speaking, the key channel for beverage brands is the so-called mass circulation channel (supermarkets, convenience stores, etc.). Back then, Genki Forest became famous overnight by distributing to more than 80,000 convenience stores nationwide. The mass circulation channel is considered to be more aligned with beverage consumers and scenarios. The main consumers of beverages are young people who drink on the go. Although it has some social topic attributes, it does not have social functions, which is different from coffee and alcohol.
However, after research, Dayao Beverage judged that carbonated beverages have certain imaginative space in the foodservice channel. Currently, 80% of the domestic carbonated beverage market share is held by the 'Two Colas', of which 80% is in the circulation channel, leaving the foodservice channel as the only remaining opportunity. This is also the thinking behind most domestic soda layouts.
To break out, companies need to solve brand and category awareness issues. Dayao's approach is to create the big soda category and establish a clear big soda brand mindset.
In the northwest market near Inner Mongolia, Dayao conducted in-depth research and found that consumers had formed a habit of drinking small bottles, but they were very curious about large glass bottles entering the market. So they decided to create a scenario. Using big soda as a breakthrough point to influence previous consumer perceptions, Dayao divided soda into big soda and small soda, and based on this background defined the brand slogan 'Big soda, drink Dayao'.
This big soda product positioning determines that the consumption scenario must be a social scenario that can be shared. So when Dayao launched its first wave of marketing in the northwest market, it chose to cooperate with barbecue restaurants for the themed marketing 'Eat good meat, drink Dayao'. Summarize the methods and plans for breaking through from the north to the south, based on the preferences and hobbies of local consumers, and then advance nationwide.
Dayao officials told the author that Dayao's large bottle packaging also originates from the foodservice scenario. For example, glass bottles have the pleasure of clinking glasses, and the large capacity of big soda gives a sense of satisfaction and refreshing coolness. If someone nearby is driving or physically unable to drink alcohol, the glass bottle of big soda can fully blend into the atmosphere.
Therefore, focusing on the foodservice channel is a clever move that has had immediate results. Now, the main channel for Dayao Soda products is foodservice outlets, especially hot pot, barbecue, and snack shops, with more than 85% of its sales coming from the foodservice channel.
Dayao Beverage's channel strategy is: first strengthen the brand in the foodservice channel, achieve a certain market share, let consumers recognize the brand, and after there is some sell-through, then enter the KA channel, and mainly focus on the most mainstream community chain convenience stores or regional chain supermarkets.
From another perspective, focusing on the foodservice channel also seems more conducive to highlighting the big single product strategy.
Dayao's star product is Dayao Jiabin. The core product development revolves around upgrading and renovating the three main flavors of carbonated soda in glass bottles, and then developing cans and PET products to enrich the channels. But for ordinary consumers, the most seen is the red and blue Dayao Jiabin. The color and brand form an associative memory relationship, also highlighting the competitive advantage of the big single product strategy.
In addition, when a new product goes to market, the fit between distributors and channels is key.
High cost performance is Dayao's previous label. It is understood that the unit price of a 500ml bottled Dayao is as low as 3.5 yuan; the unit price of a 330ml canned Beiyang is over 5 yuan; the unit price of a 330ml bottled Bingfeng is over 3 yuan. In addition to the cost advantage brought by the national supply chain capability, Dayao provides distributors and partners with reasonable profit margins.
The author learned that within Dayao Beverage, there is a core value called 'altruism'.
The foodservice channel requires developing and maintaining stores one by one. Local enterprises can sometimes stand out by relying on hard work and endurance. Dayao first satisfies the emotional value of distributors, channel merchants, terminal stores, and consumers. For example, when the marketing team does terminal services, they often help greet guests, clean tables, sweep garbage, and even deliver packages or take care of children.
This superposition of emotional value and economic value is an important reason for Dayao's rapid growth.
How to Solve the Problem of Regional Expansion
In 2015, Dayao's first step out of Inner Mongolia was to set up a production base in Shizuishan, Ningxia. Subsequently, it laid out 10 production bases nationwide, covering five major regions: Northwest, North China, Northeast, East China, and South China, accelerating capacity layout.
This year, Dayao Beverage has set up factories in Shandong and Shaanxi. Among them, the Shandong intelligent production base project has started infrastructure construction and is expected to be put into production early next year.
However, in external expansion, going from a regional market to the whole country is not easy. Taking the Beijing market as an example, Dayao Soda faces stronger local competitors such as Beiyang. Expanding to the southern region also has to bear the challenges of self-built factory costs and differences in consumer brand awareness.
Execution is a key word for Dayao in developing regional markets. When entering the Beijing and Xi'an markets, because consumers did not know the brand, Dayao was completely in a state of hitting walls everywhere in the first year. Distributors had to start from tricycles, selling to foodservice store owners.
Su Caiyan, Market Director of Dayao Beverage, told the author that in the first year of entering the Xi'an market, even attracting investment was difficult. It took nearly five years to build trust with consumers, and the first four years were in a state of loss. In the Beijing market, it also took five years to achieve channel breakthroughs. In the first year of entering the Beijing market, foodservice owners rudely asked Dayao salespeople to leave because they had no idea about the brand.
Dayao gradually summarized its own set of methods and processes. When making friends with consumers and foodservice owners, they simultaneously help store owners with displays, tastings, and promotions, ultimately occupying more than one million terminal outlets nationwide.
When terminal distribution reaches a certain coverage capability, Dayao Soda has a foundation for expanding territory, gradually consolidating its battlefield and strengthening brand awareness upward.
Starting in 2021, Dayao began brand iteration and reshaping. In 2022, Dayao Beverage launched large-scale brand communication, cooperated with Hua & Hua, chose Wu Jing as spokesperson, and invested comprehensively in media such as CCTV, elevators, and subways, which led to the subsequent marketing breakout and accelerated Dayao's foothold in new markets.
In addition to consolidating the northern market, since last year, Dayao has begun to focus on the southwest region, including Chengdu, Wuhan, Xuzhou, Suzhou and other cities, to build a basic market network. Based on the preferences of local consumers, it is advancing nationwide.
Among them, 'building factories near water' is the key word for Dayao Beverage's future supply chain construction in the south. Dayao Beverage stated that because of the extremely high requirements for water source quality, southern factories will rely on core water sources. Now, Dayao Beverage's factory in Anhui has been put into production, which can cover part of the southern market demand, and will quickly expand capacity layout.
Su Caiyan, Market Director of Dayao Beverage, told the author that for Dayao Beverage, the market layout for the next five years is to consolidate the northern market, penetrate and strengthen the southern market, and use five years to move towards the national market. This is also Dayao's business vision.
In overseas markets, Dayao Beverage has exported to nearly ten countries and regions. However, the current main focus is still the Chinese market. Overseas markets mainly entrust distributors to conduct market testing and evaluation.
Luo Yun, Deputy General Manager of Dayao Beverage, emphasized that most FMCG companies will eventually converge. In addition to product capability, channel capability, and brand capability, they will all become system-driven, talent-driven, and supply chain-driven companies.
Unlike Genki Forest's internet-style product manager model, Dayao Soda is actually still a traditional enterprise driven by product strength and supply chain. However, he also said that the average age of Dayao Beverage employees is 32. Embracing innovation and encouraging trial and error is Dayao's talent-driven strategy. Whether it is online marketing or digital transformation, Dayao will become more and more closely connected with the digital era and internet technology.
Luo Yun, Deputy General Manager of Dayao Beverage, said that the future development direction of Dayao is 'addition, subtraction, multiplication, and division'.
'Addition' is to upgrade and iterate on products, channels, and brands; 'Subtraction' is to focus on the big single product strategy and reduce the product matrix; 'Multiplication' is to follow the trend, take advantage of the east wind of national confidence and cultural confidence, and rely on the momentum of digital transformation; 'Division' is to remove distractions, avoid noise, and focus on doing the right, difficult, and altruistic things.
After stirring up the beverage market, Dayao Soda plans to complete the national foodservice channel layout within five years, showing its confidence. But it is foreseeable that whether it is opening up the southern market or supplementing the KA circulation channel, the road ahead is full of thorns and opportunities.
Inner Mongolia FMCG Corps
Among old sodas, there is currently no completely successful enterprise that has returned and become a national brand. A very important point is that it is not difficult for old sodas to survive, but national expansion requires very high comprehensive capabilities in terms of brand, channel, and competitiveness.
From the perspective of 'origin', Dayao comes from Inner Mongolia, not the Pearl River Delta or the Yangtze River Delta, which also means it needs to move from a remote corner to more economically developed and densely populated markets. But interestingly, there are precedents for national consumer brands from Inner Mongolia, typically the dairy duo—Mengniu and Yili.
Both dairy giants come from Inner Mongolia. On the one hand, it is related to the milk source. But on the other hand, it is also related to the super execution ability and keen marketing response of Inner Mongolia enterprises. In terms of market investment, Mengniu and Yili also belong to the high-profile type, representing traffic entertainment programs, sponsoring large sports events, etc. The cross-border marketing that Coca-Cola and Pepsi play very well has also been mastered by the dairy duo.
Dayao officially replied to the author: Mengniu and Yili's brand power, channel power, and operational capability are all directions for Dayao Beverage to learn from. Luo Yun, Deputy General Manager of Dayao Beverage, said that in the ever-changing domestic beverage market, what is truly remembered are big single products. The FMCG industry needs to be done slowly, with patience, enduring loneliness, making friends with people, and also making friends with time.
Fortunately, the market for domestic sodas is still in spring. According to Qianzhan Economics, at an annual growth rate of 8.5%, by 2027, the domestic carbonated beverage market size will reach 162.2 billion yuan. According to forecasts, there will be 60 billion yuan of market increment space in the next four years.
Currently, the market size of carbonated beverages in China has reached 99 billion yuan. Excluding the market share held by Coca-Cola and Pepsi, there is still about 18 billion yuan of market occupied by various old soda brands.
Domestic sodas still have time. At present, the nationalization region is the biggest battlefield for these local players, and product strength and brand strength are becoming the decisive weapons. In this process, the most important thing is not only opportunity and choice, but also confidence and courage.