Sina Finance has learned that none of the year-end bonuses for the main departments of Yuanqi Forest have been issued. Although front-line employees have received year-end bonuses, they have shrunk significantly compared to previous years. According to sources, both Coca-Cola and Pepsi have given an “ultimatum” to Yuanqi Forest: this year, Yuanqi Forest sparkling water will be eliminated. Many signals show that the life of the vitality forest is not easy.
“Both of the two have had a meeting, and they are determined to destroy the forest of vitality”
A senior executive in the fast-moving consumer goods industry directly concluded that he was “not optimistic” about the vitality forest.
Back in 2021, Yuanqi Forest is facing the double attack of Nongfu Spring and Coca-Cola. For example, Zhong Suisui launched the “God of Wealth” sniper battle and used real money to besiege the vitality forest. As long as the storekeeper puts the products of Nongfu Spring in the freezer of the vitality forest, they can get the same amount of Changbaixue mineral water. There is a saying in the fast-moving industry, don’t provoke the farmer if you provoke anyone, because Zhong Suisui is aggressive and will end badly.
But Tang Binsen, who is a gamer, doesn’t care about these rules in the circle. He wants to break the silent traditional beverage circle. Friends who are close to Tang Binsen describe him as a Mongolian iron hoof, with empires and territories as far as he can see. Vitality Forest threw the freezer offline and seized the position of Nongfu Spring, which was regarded as a direct door-to-door provocation.
On the other hand, industry insiders close to Coca-Cola’s middle and high-level officials told Sina Finance: “Coke said that in 2022, there will be no more sparkling water from the vitality forest in the market; both parties have held a meeting and are determined to destroy the vitality forest.”
Unlike Nongfu Spring’s misfire, Yuanqi Forest has touched the lifeblood of Liangle.
In terms of category, sparkling water and Coca-Cola are similar. What worries Liangle the most is that if Yuanqi Forest continues to promote sugar-sweetened beverages (including Coke) as unhealthy, and parents control their children’s Coke, Coke is likely to lose its memory in the next generation of children, and be replaced by the generation that drinks sparkling water. .
In the sparkling water market, Yuanqi Forest is also under pressure from Nongfu Spring, Coca-Cola, Wahaha and other products. However, it is an obvious fact that in addition to the big single product of sparkling water, Yuanqi Forest has not yet had a larger explosive market. However, Yuanqi Forest is not a big single product strategy, and it has not fully understood the model of single products such as Red Bull and Coconut Tree. The most important thing is that there is no threshold for sparkling water. Yuanqi Forest has done a good job in the market education of 0 sugar and 0 fat, but anyone can make the product.
For example, in March 2018, Yuanqi Forest launched a truly broken product, 0 sugar and 0 calorie soda sparkling water. Seven months later, HEYTEA launched a drink with low-calorie steviol glycosides as the source of sweetness. Heat is reduced by 90%. HEYTEA is trying to counteract the impact of sugar-free bottled beverages by introducing low-calorie sweeteners in freshly-made teas in offline stores.
Sina Finance visited a number of offline supermarkets and found that the most popular online sales of Yuanqi Forest are still sparkling water.
Unlike traditional online celebrity products, the sales of Yuanqi have gradually shifted to offline. This means that Yuanqi Forest is facing the same pressure as traditional enterprises to deal with offline personnel management. An obvious indicator is that the number of salespersons in Yuanqi Forest is increasing, and the large number of salespersons also dilutes the year-end bonus of old employees.
However, Ma Lei, an observer of the tea industry, also directly pointed out the expansion risk of Yuanqi Forest: “Farmers and Wahaha are both cutting people. In the past, one person could achieve sales of more than 2 million; but in recent years, just adding people , it may not have practical benefits, and offline is too convoluted.” However, the logistics cost of beverages is high, and it is naturally not suitable for online sales. Offline is the inevitable trend of vitality forest.
In December last year, according to media reports, Yuanqi Forest was making large-scale adjustments around the organizational structure, and founder Tang Binsen would focus more on channels, sales management and product development. This move was interpreted as negative by industry insiders.
“Tang Binsen personally grasped the channel, which shows that their life is not easy.” A former high-level analysis of a leading FMCG company.
Another weak move is that Yuanqi Forest has been doing new retail since the second half of last year, selling smart cabinets. “New retail is like a convenience store, and the valuation is not too high. Traditional fast-moving consumer goods companies start new retail after they have grown to a certain extent. Vitality Forest should be forced to do smart cabinets.” The aforementioned head FMCG Corporate top-level analysis.
Accused of inflated valuations, new consumption investment cools
On the other hand, investors’ enthusiasm for new consumption has generally decreased, and this statement is already very obvious in 2021. Beginning in the second half of 2021, the number and amount of new consumer financing will decline significantly. According to industry statistics, there were only 127 new consumer investment and financing events in August, down 17% from 153 in July.
“The valuation is inflated and the return is unclear,” a person in the investment circle said bluntly to Sina Finance.
In November 2021, there were media reports that Yuanqi Forest was about to complete a new round of financing of nearly US$200 million, led by Temasek and followed by many old shareholders such as Sequoia China and Warburg Pincus. Subsequently, the valuation of Yuanqi Forest has also risen several times within a year, reaching a new high of 15 billion US dollars. During the same period, Master Kong’s valuation hovered around $12.5 billion, lower than Yuanqi Forest.
“Compared with Master Kong and Uni-President, the cost and profit margin of Yuanqi Forest are all there. Compared with these two companies, it is unrealistically high; it cannot be said that it is a special case of Internet celebrities or Internet genes. Online sales are very easy. When it hits the top, Yuanqi now also accounts for the majority of offline sales, which is more and more similar to traditional fast-moving consumer goods companies.” The former senior executive of the aforementioned top fast-moving consumer goods companies analyzed.
At the end of last year, Chayan Yuese was exposed to a salary civil strife. At the beginning of 2022, the news of layoffs from Heytea and Wenheyou also broke the cold water for the cooling of new consumption. Taking Wenheyou as an example, last year Wenheyou successively obtained B rounds and C rounds of financing. Among them, the investors in the B round are Sequoia China Fund, IDG, and Warburg Pincus, with an amount of 500 million yuan. Sources close to Wen Heyou have revealed that the valuation of Wen Heyou in this round exceeds 10 billion yuan.
(Shenzhen Wenheyou, who queued up for 50,000 openings, has undergone a complete “makeover” after half a year)
However, Wen Heyou’s overseas expansion has not been smooth. In July 2020, Guangzhou Wenheyou opened, with an area of 5,000 square meters and a three-storey building; in April 2021, Shenzhen Wenheyou opened, with an area four times that of Guangzhou, but the two stores experienced a brief period of opening and peak period. After the lively, they all fell into the situation of cold business. After six months of opening, Shenzhen Wenheyou directly changed its signboard, and “Super Wenheyou” became an “Oyster Market in Old Street”. The decoration style, the merchants and the catering categories were all changed.
Searching for relevant shops of Guangzhou Super Wenheyou on Dianping, Chen Tianji, Apo Niu Za, Wynn Hotel and other well-known old stores in Guangzhou are mostly rated at around 3.5 points, which is a low score.
Epilogue
In the new consumption track, Yuanqi Forest and HEYTEA are leading companies. The situation at the beginning of the year was not clear, and news such as layoffs, shrinking year-end bonuses, and store closures came out one after another. If you look optimistically, it is that after the rapid development, companies have begun to make internal adjustments, which may also be a transformation to consolidate their internal strength.
Text | Sina Finance Liu Yadan
Editor | Han Dapeng