Xiangpiaopiao has set up a new ready-to-drink team to enter the mainstream bottled beverage market

After two years of downturn, Xiangpiaopiao (603711. SH) is trying to enter the mainstream bottled beverage market through two new products.
In the beverage industry, changes in containers mean different market segments. “The consumption scenario for bottled beverages is static, while bottled beverages can be carried around, with more dynamic scenarios and greater track capacity.” Company Secretary Zou Yongjian said that the new business is also expected to balance the distribution of annual performance, reversing the current situation where the company’s annual performance is concentrated in Q4 due to its reliance on brewing milk tea business.
In order to achieve a breakthrough from “0 to 1” in the bottled beverage circuit where giants gather, Xiangxiang has to overcome numerous challenges.
From the perspective of the industry environment, the concentration of the domestic soda market continues to decline, the competition is becoming increasingly fierce, and the demand side needs to recover. “More monks than porridge” is a common dilemma for beverage manufacturers.
In addition, new players need to address their weaknesses in teams and channels. According to Zou Yongjian, after years of exploration, the company has decided to establish a new team for the ready-to-drink business this year.
Or due to the impact of new business, the attention of incense institutions has increased significantly this year, attracting more than 340 institutions to conduct research this year. The company’s stock price has swept away the haze of the past two years, with a range increase of more than 30% this year, returning to the level of the same period in 2020. 1、 Lock in mature category iterations
upgrade
It is understood that the offline retail price of two new products, Lanfangyuan frozen lemon tea and Xiangpiaopiao milk tea, is 5 yuan/bottle. In terms of appearance, these two products have abandoned the cup packaging characterized by fragrance and adopted a more popular bottle packaging.
In the beverage industry, the change in containers means a completely different market. In the field of bottled milk tea, Uni-Assam is a well-deserved king. For more than 10 years, it has been selling well, and the sales volume will reach 5.7 billion yuan in 2022, far exceeding the annual revenue scale of many beverage enterprises, including Fragrant.
Currently, two fragrant bottled products have undergone small-scale offline trial sales. From the feedback results, Zou Yongjian believes there are “opportunities”.
“Xiangpiaopiao has always been making milk tea, which is closely related to the category of milk tea. We used to make brewed milk tea, but now we make bottled ready to drink milk tea, which is a natural extension.” Zou Yongjian said, “Consumers recognize bottled Xiangpiaopiao milk tea.”.
The first battle for bottled fragrant drinks is mainly to seek iteration opportunities for mature categories. Bottled milk tea and bottled frozen lemon tea are both very mature racetracks. The former produces Assam milk tea with an annual sales volume of over 100 million yuan, while the latter also produces super products such as Vita Lemon Tea and Master Kang Iced Black Tea.
Compared to Assam with a retail price of 3.5 yuan/bottle, the long and short boards are very obvious.
“We certainly have no advantage in terms of channels, but we have an opportunity in the price range of 5 yuan. We expect that 5 yuan will become the mainstream price in the next two years. We will promote this price range by providing more upgraded and healthier products,” said Zou Yongjian.
At the same time, Zou Yongjian also stated that the company has made some innovations and upgrades in lemon varieties, sugar content, and other details.
2. Channel reform and establishment of an independent ready-to-drink team
According to a reporter from Cailian News Agency, Xiangpiaopiao has launched three new products this year.
Two of these bottled drinks have recently been launched, but offline channels are still rare. Another Lanfangyuan oat milk tea was launched in the fourth quarter of last year. The partner is Oatly, a brand of oat milk, with a retail price of 12.9 yuan/cup. Consumers can purchase at convenience stores such as Family Store and 711 Store.
In order for consumers to quickly perceive new products, Xiangpiaopiao needs to open up core channels such as supermarkets and convenience stores. To this end, the company has made significant adjustments to its channel strategy.
It is reported that the channel system of Xiangpiaopiao in the past mainly served brewing products, namely Xiangpiaopiao milk tea. By 2018, the company began to transform its cup ready to drink products and launched two brands, Lanfangyuan and Meco.
However, around the new business, Xiangpiaopiao has not established a separate team to operate. The same team operates two business models, brewing and ready to drink, making the promotion of the latter difficult.
“After several years of trying, we found that the two things could not be combined well, and gradually realized the differences between the two businesses. Originally, as the distributor of our brewing milk tea, we also made melon seed and egg yolk pie, which is very different from drinks. The company’s own team is also a mature business, ready-to-drink is a new business, and the two businesses are very different, and the team energy cannot be balanced.” Zou Yongjian said, after years of exploration, This year, Xiangpiaopiao decided to form a new team for the ready-to-drink business.
“Currently, the management of beverage (ready to drink) sales centers mainly relies on external employment, and the team is gradually improving. The beverage sales team will be basically formed in August to September. In addition, we are also helping existing distributors transform and recruit new distributors simultaneously,” said Zou Yongjian.
“After nearly two years of testing, it should be said that the company’s most difficult time has passed,” Zou Yongjian pointed out. From 2021 to 2022, Xiangpiaopiao’s annual revenue was 3.466 billion yuan and 3.117 billion yuan, respectively, declining for two consecutive years. Attributed net profit decreased to 223 million yuan and 210 million yuan year-on-year, basically stabilizing in the range of 200 million yuan https://store.stonetech 。
Looking ahead to this year, Zou Yongjian said that from the perspective of income structure, brewing contributed about 80% of the income. Generally, the profit contributed by brewing is relatively stable every year. The variable is whether the new bottled product can run. “Last year, we increased our average price by 5%, basically covering the pressure of rising costs in 2021. This year, the raw material end is expected to be relatively stable, so there is still room for improvement in brewing profits.”“