Juice is returning to the public eye in a form that caters to health trends. After 2021, the shrinking domestic demand for juice gradually recovered. According to data from the '2022 China Shopper Report, Series II' jointly released by Bain & Company and Kantar Worldpanel, juice became the fastest-growing beverage subcategory in sales during the first three quarters of that year. Under this growth trend, the popular form of juice products on the market has shifted from the previously popular FC (From Concentrate) to NFC (Not From Concentrate). The biggest difference between the two lies in the processing technology; the latter reduces the concentration and reconstitution steps, preserving the original flavor and nutrition of the fruit to the greatest extent. Under this trend, even some old juice companies have reversed their decline. For example, Huiyuan has returned to the public eye in the past two years with its pure juice products such as NFC prune juice and NFC sea buckthorn juice. Even some more niche HPP (High Pressure Processing) juices have begun to enter the broader consumer market. Whether NFC or HPP, they all aim to achieve fresher, shorter-shelf-life, and balanced healthy juice products. Behind this product form change, the entire juice supply chain is undergoing deep-seated transformation. Among them, the retail side, brand side, processing and production side, and even the upstream fruit producing areas have all undergone varying degrees of change. These changes have contributed to the increasing number of 'fresher' juice products on the market today. This article will focus on HPP juice, which has recently gained market attention, to unfold the changes behind the chain. HPP Better Preserves Flavor But Also Relies More on Cold Chain HPP is essentially a food processing and sterilization technology. It uses ultra-high pressure of 400 to 600 megapascals to sterilize freshly squeezed fruit and vegetable juices. During the entire process, the temperature of the juice does not rise, preserving the original color and taste of the juice and extending its shelf life. This is the core difference from NFC. Although NFC is freshly squeezed juice, it uses high-temperature sterilization, during which some heat-sensitive nutrients may be lost, or discoloration may occur under high temperatures. For some heat-sensitive fruits and vegetables, HPP can better preserve their color and flavor. For a long time, HPP was a unfamiliar concept in the domestic market, although some companies had already started entrepreneurship around this product direction more than 10 years ago. Veggie Fresh is one of the earliest companies in China to make HPP fruit and vegetable juice products. It started in 2012 focusing on the niche field of 'light fasting', launching healthy cold-pressed vegetable juice, and later developed HPP vegetable juice products. 'We essentially skipped NFC and went directly to HPP,' said Niu Li, General Manager of Veggie Fresh. When they first entered this field, the most common juice products on the market were FC juices (concentrated reconstituted juice), and NFC juice products were very rare. Niu Li introduced that the company chose to stick with this technology direction not only because no one else was doing it, but also because the founding team was betting on the overall health trend. For a long time, they served a very niche group of people, with high pricing and small scale. In the early days, their cold-pressed vegetable juice was priced as high as 50 yuan per bottle. Three years after the company was founded, people gradually entered this field, but according to Niu Li's observation, most did not last more than a year, and the reason was cost. At that time, the costs of R&D, channels, and logistics for HPP juice were all high. In 2017, Sun Jun, founder of Zero Fruit, said in a media interview that raw materials, cold chain, and preservation are crucial in the production and sales of juice, and processing technology is only one part. At that time, this brand, one of the earliest NFC juice brands in China, was entering a period of rapid development. When asked about HPP technology, Sun Jun also said they were not opposed to it, but the immaturity of the domestic market and high costs made them still choose the traditional high-temperature pasteurization process. In the following years, the consumer market, retail channels, and cold chain infrastructure continued to undergo new changes. This gave HPP an opportunity to enter the public eye. Taking Hema's HPP juice as an example, Xiao Qi, the beverage R&D and procurement specialist for the retail brand, revealed that they began cooperating with Veggie Fresh in 2020 and launched HPP juice products. This type of juice has now grown into one of Hema's main product lines. 'We designed the subcategories within our category based on the consumer's purchasing path.' In addition, the sales of HPP juice in Hema's channel have achieved growth for two consecutive years, showing a good repurchase rate. Among them, the red heart apple juice launched two years ago saw sales increase fourfold this year. Behind HPP's Move to the Mass Market New Demand and Channel Promotion Behind the growth is a transformation in the entire circulation supply chain that is conducive to HPP entering the mass market. First, with changes in urban population structure and the demand structure of urban middle class, retail channels have found new application scenarios, helping juice technologies like HPP, which have low public awareness and high costs, enter the mass market. Taking Hema's juice product line as an example, they continuously seek new technology implementation solutions around unmet pain points during R&D. On one hand, the large single population among urban middle class has a demand for fresher juice that better restores fruit flavor. This group often lives alone and has concerns when buying certain specific fruits. For example, fruits like watermelon and muskmelon, which are popular in summer, are not friendly to single people. Because the fruit is large, high in sugar, and not easy to store. After buying one home, it is hard to finish at once, but alternative cut fruit options have hygiene and food safety concerns, and at that time there were no NFC juice products for melons on the market. On the other hand, for some juice lovers, the popular NFC juices on the market are highly homogeneous, and they cannot meet users' diverse needs for blended fruit juices. In fact, this homogeneity is caused by the limitations of sterilization technology. NFC uses high-temperature sterilization, during which many fruits and vegetables may change color or taste. Therefore, the mainstream NFC juices on the market mostly use heat-resistant orange juice, or prune juice and sea buckthorn juice that are not prone to discoloration. Based on this, Hema, in addition to its NFC product line, cooperated with Veggie Fresh to launch a new HPP juice product line. Before that, Hema had been purchasing Veggie Fresh products since 2020. The differentiated products developed through their cooperation, in turn, provided an opportunity for Veggie Fresh's HPP products to expand market awareness. Niu Li summarized that after cooperating with KA channels on the retail side, the company gradually moved from a 'small and beautiful' brand to the mass market. Retail channels played an important role. They greatly helped the brand improve R&D and implementation efficiency. Based on the market scale of retail channels, Veggie Fresh obtained a more economical circulation chain, and costs for raw material procurement, sales, and logistics were also compressed. A more vivid example is reflected in logistics costs. Since its products require cold chain transportation, the brand's own retail pricing must absorb the high logistics costs. 'When transporting, we need foam boxes, cartons, bags, plus next-day cold chain delivery, which translates to 7 or 8 yuan per bottle in shipping costs,' Niu Li said. After cooperating with retail channels, this part of transportation is borne by the channel, alleviating the brand's cost pressure. In terms of pricing, it is two-thirds less than the original price. In addition, as a short-shelf-life product requiring low-temperature preservation, it inherently demands extremely high coordination efficiency across the upstream, midstream, and downstream of the industry chain. Without support from large-scale channel orders, the brand's new product development and trial-and-error face high cost pressure. In the cooperation between Veggie Fresh and Hema, the former had already planned to develop new products that balance health and taste as early as 2017. 'Previously, our R&D focused more on vegetables, and we cared more about health, but it might not taste good. Now we have a slight change in direction; we want it to be both delicious and healthy,' Niu Li shared. Since then, Veggie Fresh has conducted basic research on nutritional density and combination formulas for a large number of vegetables and fruits through cooperation with the Organic Research Institute of Nanjing Agricultural University. However, the development and market testing of new products were only further advanced when they cooperated with retail KA channels. The accelerated digital transformation, product development, consumer research, and organizational resource integration in the domestic retail industry during the pandemic objectively provided conditions for brands like Veggie Fresh to sell and break through with new products. Among many channels, Hema became one of Veggie Fresh's choices. At the beginning of their cooperation, the traditional sales channel of hotels was declining, while the new retail channel was in a growth stage, relying on its online sales and fulfillment capabilities. After years of development, Hema has formed a clear brand mindshare among urban middle class. This demographic segmentation highly overlaps with the positioning of brands like Veggie Fresh. 'We choose channels based on our customers,' Niu Li shared. When they started expanding KA channels in 2020, they considered the target customer positioning. In addition, the cooperation between the two parties can achieve higher efficiency through supply chain synergy. This is beneficial for product sales and R&D, as well as quality control. At the product sales and R&D level, the channel's years of supply chain construction in the fresh food circulation sector have now released the ability to synergize with the deep processing industry chain. Taking the meteor melon juice developed in cooperation as an example, this new product direction was proposed by Hema, which also provided the melon origin support, while Veggie Fresh conducted product R&D and formulated quality control standards for each link. Melon juice is not suitable for high-temperature sterilization, so the two parties chose HPP cold-pressed juice rather than NFC juice. The product implementation was a three-party cooperation involving the melon base, Hema, and Veggie Fresh, which maximized the implementation of quality control standards, and quality control directly affects the flavor of the melon juice. Niu Li introduced that after product testing, the most popular sugar content for meteor melon juice was within 11 degrees. To ensure the melons are picked at this sugar level, close communication and cooperation between Hema's procurement and the base are required. 'Our final test showed that the tail melons of the first crop should be controlled at about 37 days for the best taste, when the sugar content is 10.8, just right,' Niu Li said. At the circulation level, Hema's years of investment in circulation supply chain construction also support the transportation of raw materials and delivery of HPP juice products. In the case of meteor melon juice, after picking, the melons are initially screened at the production site according to Veggie Fresh's standards, including size and appearance. The screened melons are then transported through Hema's circulation chain to Veggie Fresh's factory in Shanghai. At this stage, the melons, still as fruit, undergo a second screening. Melons with bruises are removed again and flow into Hema's other processing lines or circulation chains. Only the remaining melons finally enter the juice processing line. The finished products also have strict temperature standards for display in stores and final delivery. Due to the high sugar content of this product, large temperature fluctuations can easily cause spoilage, so it must be displayed in a cold cabinet and must be delivered with ice packs. Quality control in the fulfillment process was also one of the reasons Veggie Fresh chose to cooperate with Hema. Deep Changes in the Industry Chain From the current juice product trends, HPP juice is still a niche product direction. Public awareness of it remains low. During the interview, Xiao Qi provided an interesting observation—now there are products on the market labeled as HPP+NFC. 'This is particularly funny, because NFC is already high-temperature sterilized juice, it has already been sterilized, but they still attach the HPP concept to it, just to sell you at a high price,' Xiao Qi said. But this new internet-famous juice product follows the major trend of the domestic juice industry—while moving towards health, juice is becoming fresher, shorter-shelf-life, requiring low-temperature refrigeration, or emphasizing certain functionality. Such products require close cooperation across the upstream, midstream, and downstream of the industry chain. Through the cooperation between Hema and Veggie Fresh, we can clearly feel this. This is a complete supply system involving fruit and vegetable production, post-harvest circulation, juice processing, and sales. It includes not only the construction of circulation supply chains in retail channels, the improvement of cold chain logistics infrastructure and service models, but also the overall industrial transformation and upgrading of more upstream production areas. These changes provide structural support for the product transformation of the juice industry. In terms of changes in the circulation supply chain on the retail side, channels increasingly emphasize direct procurement or contract farming models, which in turn promotes the development of commercial value in deep-processed agricultural products. Taking Hema's first internet-famous HPP product, red heart apple juice, as an example, the development and implementation of this product involved not only the juice processor but also the fruit procurement department. The original intention of this product was to solve the problem of Aksu red heart apples not selling well. Compared with Fuji apples, this variety has coarser flesh and is less competitive in fresh consumption, but its taste and flavor are good, making it valuable for juice development. Through cooperation with Veggie Fresh and using HPP technology, Hema finally launched red heart apple juice. Behind this linkage is the reflection of organizational resource integration and efficiency improvement within the retail enterprise. 'We now sit together with the fruit department. The fruit department has strong sourcing capabilities. They will get the first information about what fresh or niche fruits are available on the market today, and whether any of them can be squeezed into juice products,' Xiao Qi introduced. Now in Hema's internal fruit grading system, in addition to the category of commodity fruits, there is also a classification for juice fruits. The integration of fruit circulation supply chain resources helps the retail side reduce losses of fresh products such as fruits and vegetables, and also helps them extract higher commercial value from existing procurement resources. Compared with fresh fruit sales, juice is a more industrialized production and circulation chain, which also means higher product premium. Not only retailers hope to find new growth points, but also production areas. Taking Ganzhou, a famous navel orange production area in China, as an example, it is not only an advantageous production area for navel oranges but also has a complete NFC juice processing line. As a fruit category with many varieties and the largest global planting scale, oranges are the natural choice for juice raw materials. After Ganzhou's navel orange planting gradually moved towards scale, it began to seek industrial transformation. Juice is one of the key directions it has seized, and it actively introduced Nongfu Spring's juice processing plant to Xinfeng County, Ganzhou. This processing plant is now the largest agricultural product processing plant in Asia. At the end of last year, Nongfu Spring launched a new product '17.5° Seasonal Fresh Orange Juice', emphasizing freshness. Such a high-freshness juice product requires not only an efficient processing chain but also efficient cooperation from the fruit production area. Ganzhou's navel orange production area stands behind Nongfu Spring. On one hand, the factory must ensure that after picking, the navel oranges are cleaned, sorted, and juiced within a certain time frame; on the other hand, the brand also needs close cooperation with the planting side. This includes not only standardized picking and grading in the harvesting process, but also understanding the field management process during the planting stage, and even helping local orchards deal with large-scale pests and diseases. Only with close cooperation with planting can 'freshness' be expressed in juice products. Although fresh fruit sales still dominate in Ganzhou, relying on stable orders from major brands for juice products and fresh fruit sales, the local planting management model and experience have been influenced and are gradually changing. Behind this, the deeper change comes from the planting side's demand for industrial transformation. Of course, not all fruit and vegetable production areas can seize such a huge industrial opportunity. Some specialty production areas that fit the juice product trend are relatively easier to make this transition early, like Ganzhou. A longer-term change occurs in the continuous interaction between product innovation and planting bases. Niu Li introduced that now their fruit and vegetable juice cooperation bases are partly deeply cooperative bases and partly self-owned bases. Their product needs drive them to have a relationship with the bases that is not just a simple harvesting relationship, but further participation in the planting management stage of the bases. For example, in their kale juice product, in addition to cooperating with universities on breeding research, the seeds used by the cooperative base are also provided by Veggie Fresh. Field management during the planting stage is not only required to have clear agricultural records for traceability, but Veggie Fresh also regularly sends personnel to the site to follow up on planting conditions. This is the development trend of the upstream, midstream, and downstream of the industry chain gradually moving towards synergy based on juice products, and it is also the support behind the many fresh, short-shelf-life juice products we see on the market today. The upstream changes are much slower, but with the support of consumption trends and circulation channel changes, the changes are still continuing. From August 20 to 22, 2024, the '2024 6th China FMCG Conference' with the theme 'Crossing the Era of Shrinkage', along with the '3rd China FMCG Hard Discount Conference' and the '3rd China FMCG Distributor Conference', will be held grandly in Shanghai. 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