The beverage category is now absolutely a red ocean market. In a red ocean market, how to innovate? Some might do: under the new consumption trends of sugar-free and health, innovate a good product within existing categories, with better quality, higher aesthetics, and newer concepts. But if innovation is only from these dimensions, can it carve a path? Probably not. Because in the current market environment, frankly speaking, if there are only one or two points of innovation, it is already difficult to gain a place under the siege of giants. Beverages, a well-known commodity, where is the key button for innovation? Perhaps today's protagonist can bring us some inspiration and thought. A while ago, New Distribution visited Mr. Gao Peng, founder of Letikong, and had an in-depth exchange with him. With nearly 20 years of experience in the FMCG industry, he has served as National Sales Manager at Danone, North China KA Manager at Bright Dairy, Assistant to the President and National KA Director at Mengniu, National KA Director at Nongfu Spring, and General Manager of Marketing and General Manager of Southern Marketing Center at Xiaoyangren. In 2019, he left his job to start a business. After a year of polishing the product, it was launched in June 2020. Now, as it develops rapidly as expected, how does he think about entrepreneurship in the beverage field? Facing the classic and popular beverage giants, how does he plan his business path? Let's explore together.
-01- Behind a bottle of beverage, multiple thinking patterns are hidden You might see from the introduction above that Gao Peng is a senior FMCG brand operator and professional manager, but besides these, Gao Peng also has multiple identities: music circle, film circle, variety show circle, and two-dimensional (anime) circle, all more or less involved. In his words, because he loves to play, he formed a band; through the band, he organized music festivals; through music festivals, he met a group of film friends and began investing in web movies. After investing in movies, he thought entertainment marketing was interesting, so he did variety shows. After doing variety shows, because he had more contact with young people, he entered the two-dimensional field. Because of this series of cross-border "tinkering," contact and communication with young people made Gao Peng feel that consumer goods might be done in other ways. Besides the basic work of distribution, display, and advertising, some more interesting elements and fun things could be added. This idea came to him in 2018. Although he wasn't doing consumer goods, he knew in his mind: using internet thinking + cultural creativity thinking + entertainment thinking, combined with healthy consumer goods, a new species is sure to emerge. By the second half of 2019, Gao Peng officially began his entrepreneurial journey. Along with various thinking, combined with consumer goods, he continued to expand: First, it must be a healthy product; health is irreversible. Second, it must be a youthful product, ideally effectively combined with game control, movie control, and uncle control; these are the basic conditions. Then, it must have emotion, emotional components; happiness is the most universal emotional expression. At that time, he still didn't know what product to make, but the three characters "乐体控" (Letikong) were already spinning in Gao Peng's mind, with both sensibility and rationality. There is a strong functional implication, and also an extension of emotional culture. With a specific direction, Gao Peng began to select categories like a funnel. On one hand, he carefully studied a large amount of industry data and reports; on the other hand, he went to North America, Europe, and Japan to investigate. Initially, Gao Peng chose the meal replacement field, but after careful study, he found it was against human nature. Conform to human nature, high frequency and rigid demand, the category is wide enough, and the space is large enough. Finally, after screening, he found that beverages were the most suitable. In Gao Peng's words, after going around in circles and researching, he returned to his old profession. Although he returned to the starting point, through extensive verification, Gao Peng was also convinced that doing beverages was the right direction. Regarding beverage opportunities, obviously, the previous generation of beverage brands can no longer meet the needs of this generation and the next. The changing consumption needs across generations, in fact, can create entrepreneurial opportunities. With the beverage direction, he further thought about specific categories. The milk category is a good category, but it is highly related to the upstream; it is essentially an agricultural product, and for now, Letikong doesn't have the ability to touch it. Mineral water is related to water sources, and these resources have been largely divided up by giants. So, return to consumers: if a bottle of beverage can satisfy the need for happiness and bring a little light function, making consumers thinner, more beautiful, and happier, that is feasible. Therefore, Gao Peng also defined Letikong as "a new generation of healthy light-functional drinks." Now "sugar-free" is already the standard for beverage innovation. To add light functions on top of the standard, how to do it? The fast-moving consumerization of health products. If it's just health products, it's too heavy, and the gameplay is completely different from conventional FMCG. Health products become fast-moving; FMCG becomes functional; this is the functional core of the product. Gao Peng said, "High dietary fiber has always been a concept of health products. The core recognition of dietary fiber is body control, supplementing fiber to make people beautiful and slim. I don't need to describe the function like a panacea as health products do; I just pick out one item: body control. Let you maintain happiness and not become a fat otaku. Food and sex are human nature; eat, drink, and indulge. Letikong can provide a relatively simple and easy solution: drink a bottle of water, intake some dietary fiber, and do body control well." After a year of thinking and testing, in June 2020, Letikong released its first product and conducted internal testing in 2,000 designated stores to see if consumers liked it. If not, they would take it back and continue to adjust and optimize. In October of the same year, Letikong received angel round financing from Sequoia Capital and Tian Tu Capital. After November, Letikong was officially launched, from 2,000 outlets to 8,000, and now, as of April 2021, it has covered 35,000 outlets, and this time is only 2 months. This year, Letikong's goal is 100,000 terminal outlets.
-02- With Cola ahead and Genki Forest behind, how can Letikong win? Speaking of competition in the beverage market, Gao Peng said that competition in the beverage track is relatively difficult because no opponent is small; there is no intermediate state. In other categories, you might do a few live streams, invest in a few KOLs, and a small niche group might follow, but beverages don't have that. To build a beverage brand, you must become bigger and stronger, get on the table and wrestle with Nongfu and Cola; otherwise, you will slowly disappear. Of course, looking at the entire consumer goods track, consumer goods have never had a moat. If you can make a good-tasting juice, opponents can definitely make a better-tasting juice. If you can sell at a price, opponents can definitely sell at a lower price. In the beverage category, the only thing that can ultimately win is consumer mindshare, that is, what consumers think you are! Gao Peng told New Distribution that Letikong wants to establish a "body control" mindshare, and stick to this mindshare all the way, from a small group of people to a group of people, gradually gaining recognition. Maintain health incentives for consumers and insist on high-cost investment. All consumer goods will go through three stages: from internet-famous to popular to classic. At this stage, Letikong can only be considered internet-famous, Genki Forest is popular, and Coca-Cola is classic. Genki Forest is positioned as a sugar-free specialist, making improvements and upgrades in well-known categories. For example, if tea beverages were not done well in the past, see if there is an opportunity to improve tea beverages a bit, and improve milk tea a bit. Following this logic, Genki Forest continues to move forward, and I believe it can carve its own path. When someone has done it, Letikong doesn't need to do it. The beverage track is very large; the future beverage market cannot only have Genki Forest emerge. New young people have new needs. In addition, in seizing mindshare, whether it's Coca-Cola or Master Kong, even if they come to grab the "body control" concept, they might only launch a few defensive products. Just like in the early days, when Nongfu Spring launched sugar-free tea, Master Kong couldn't compete because the original iced black tea and iced green tea had established mindshare, and consumers already had clear recognition. Letikong believes that in the future, there will always be a group of people who, when they walk to the shelf and see familiar brands and various concepts, will ultimately choose something good that they can feel in their bodies.
-03- Cross-border cooperation, continuously entering and exiting circles In specific tactics, Letikong also has its own style. With the maturity of the current backend flexible supply chain, Letikong enters various circles through continuous cross-border cooperation. Letikong has launched co-branded products with Bilibili UP masters. UP masters can give the products to their fans or distribute them to channels to let more people know. Letikong is also cooperating with Tencent Animation to do "Shanhe Sheji Tu" (a map of mountains and rivers), with various beautiful scenes and cartoon characters, which anime fans will love. Currently, Letikong is also planning to cooperate with the musical instrument brand Gibson to launch a co-branded product. It can not only be pushed into musical instrument stores as member benefits, but also into sales outlets, allowing more music fans to know the Gibson brand. This is a mutually beneficial thing. Following this line of thinking, Harley-Davidson, Lululemon, and movies can all form alliances. Gao Peng said, "I am not thinking about this business in beverages at all, but rather thinking about what young people in the fashion circle, cultural circle, entertainment circle, game circle, and anime circle like. I can completely combine with them to launch different products, target different circle groups, and provide them with healthy and happy goods." And this bottle of Letikong beverage is more like a carrier. Because for current consumers, drinking a bottle of beverage is not only to satisfy thirst and taste needs, but also preferably to have more emotional, hobby, and interest elements. Everything can be body-controlled. When we open our minds, we can find that anything can be done; this is a new species. What Gao Peng wants to do is the quality health foundation behind Letikong and the tone of Le culture. On top of this, overlay various matching new fashions. When maintaining such a health foundation, through the infusion of different cultures, "Letikong" may become a cultural symbol, and the beverage becomes a display carrier, not a fancy package, but the circle behind the music, anime, and games on the picture. Gao Peng continued to say that at the current stage, Letikong still needs to focus on selling beverages, first occupy a place, and when there is a place for Letikong in the beverage track, it can truly realize the above ideas. Accumulate bit by bit, add points to the Letikong brand bit by bit, like laying bricks, doing something that can empathize with young people. Le is a high-frequency emotion, and beverages are also a high-frequency commodity. With these two foundations, plus new elements, you can gain consumer recognition and following. Gao Peng joked that Letikong is to make a very stupid beverage play not stupidly!
Summary: The innovation idea is good, but frankly, it is not easy to complete and smooth this path. Gao Peng said with a wry smile, "I didn't know making beverages was so tiring. I just had a passion and wanted to think of something different. Who knew it would be so bitter?" He even told friends that beverages are the track he least recommends for entrepreneurship. Standing on the periphery, New Distribution sees that this is different from product or category innovation like sugar-free, but rather a brand innovation. Although difficult, at least Letikong has found an innovative path, which is worth the industry's common expectation! Focusing on new distribution for FMCG distributors / new marketing cases for brand owners If you need to communicate, you can add WeChat by long-pressing. When adding, please indicate your company, position, and name. If a tip is adopted, 400-2000 yuan will be paid.