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Huge Money Is Pouring Into The Beverage Industry. Two Opportunities That Manufacturers Should Seize!

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(Last Updated On: February 22, 2021)

Zhang Weize, a national expert in the beverage industry:
A large amount of capital has poured into the beverage sector, and manufacturers must grasp two opportunities!

Speaking of Mr. Zhang Weize in the beverage industry, all give a thumbs up and call him a hero.
As a national expert in the beverage industry and the founder of Zerun Food Research Institute,
Teacher Zhang Weize has always had a thorough and sharp view of the beverage industry.

Combining the industry’s situation in the first half of the year, and the trend of the second half of the year, Zhang Weize recently shared the theme at the Jiangsu Station of the 2020 Huatang Cloud Fair. “Penetrating the epidemic, turning “danger” beverages into “opportunities”! 》During the sharing process, he explained three questions on the spot:
  • The beverage industry was affected by the epidemic from January to June,
  • Some welcome changes in the beverage industry from July to September,
  • And how will beverage manufacturers turn crises into opportunities?

The following is what Zhang Weize shared:

Huge money is pouring into the beverage industry.Two opportunities that Manufacturers should seize!

01.

In the first half of the year, the production and sales volume of the beverage industry fell by 11%-12%

Since the reform for 40 years, China’s beverage industry has been snowballing.
Until 2013, the beverage industry entered the first round of adjustment period. By 2019, I judge that the first round of adjustment is coming to an end. Starting in 2020, it should develop in a right direction. But, affected by the pandemic this year, the adjustment rhythm has been disrupted.
 
From January to June, China’s beverage industry’s production and sales revenue fell by 11% to 12% year-on-year. Business costs have increased, and profit margins have declined due to various reasons. From the perspective of specific impact, it can be roughly summarized as below:

First, the sales of beverage companies during the Spring Festival encounter Waterloo

The Spring Festival is the peak sales season for the traditional beverage industry. When I visited in January, many companies and distributors were confident in the Spring Festival in 2020. And they prepared enough inventory a year ago. But, the coronavirus outbreak has caused a lot of beverage products to be compressed and stagnated. They are forced to reduce prices and promote sales, which greatly affects sales.

Second, the marketing of beverage companies in February was not proportional.

Few beverage companies started operations in February, and almost no sales revenue. Many companies with monthly expenses of nearly 10 million RMB have only a few hundred thousand monthly orders.

Third, the resumption of work and production has also been affected by the industrial chain's disruption.

In particular, the supply of certain imported raw materials is cut off. The logistics are not smooth, and some materials’ prices have risen sharply. Which puts some pressure on some enterprises. Among them, coconut milk companies have been affected this year.

02.

The capital boom broke out, and a lot of funds poured into the beverage sector.

The beverage industry was under pressure in the first half of 2020. Both in production and marketing.
The peak beverage sales season from July to September is quietly undergoing new changes.

Change 1: Professional beverage marketing agencies have sprung up.

Beverage manufacturers have shifted from focusing on the market to product innovation. Include raw material, treatment process, beverage equipment, and beverage marketing innovation. This year, professional beverage marketing agencies have sprung up in the Yangtze River Delta and the Pearl River Delta. More than a thousand professional beverage marketing companies have newly registered. So far, the trend of specialization and social division of labor in the entire beverage industry has taken shape.

Change 2: A large number of funds poured into the beverage industry.

Although some beverage companies have not had a good life this year, they have ushered in a massive influx of funds not seen in years. The first type is the transfer of funds withdrawn from the real estate industry. The second type is the cross-bank acquisition and investment in beverage companies by some listed companies.

Change 3: Most companies actively seek a way out for transformation and upgrading.

The beverage is an industry with full market competition. And the surviving companies are learning from it. We are reflecting, discussing, looking for a breakthrough. And finding a way out for transformation and upgrading.

03.

In the future, beverage manufacturers will turn crisis into opportunity!

Compared with the 1980s, China’s beverage industry’s market scale has expanded a lot.
There have been two richest men: Wahaha Zongqinghou, who has twice aspired to be the richest man. And the second is Nongfu Spring Zhong Sui Sui. We can see that the beverage industry has a lot to do. So, where is the opportunity?

Opportunity 1, the opportunity of carbonic acid + bubbles.

This year, carbonated drinks are selling better than last year. Enterprises’ market performance is very gratifying. Including the well-known Yuanqi Forest, Zhenzhen and Jianlibao.
In the future, carbonated beverages still have much room for the second wave of development. Especially adding carbonated water to tea beverages, dairy beverages, and other categories. Sparkling water+ can fully meet the needs of different consumers. Simultaneously, adding other gases through technology research and development. Especially hydrogen will bring more significant business opportunities to health drinks.

Opportunity two, the elderly drink, is a blue ocean.

China’s beverages are aimed at young men and women, but no one is suitable for the elderly. Especially the elderly over 60 years old. They have a high demand for high-quality protein, dietary fiber, sleep aid nutrients, and calcium, etc. The best carrier for these elements is beverages.

04.

SUMMING UP​

I have been working in the beverage industry for nearly 52 years. and I have full confidence in the beverage industry! After five years of adjustments, with the effect of coronavirus, there will be hundreds of billions of beverage companies.
Our massive market with a population of 1.4 billion will surely have great beverage companies and great distributors.

05.

Reference

Please click below to watch the production process of bottled water production.

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