Shouting the slogans of “I’m tired and sleepy, drink Dongpeng special drink”, “You must wake up and fight when you are young”, Dongpeng Beverage (605499, SH) landed in the capital market in May last year. On the evening of February 27, Dongpeng Beverage released its first annual report after listing. In 2021, the sales scale and efficiency will increase, and the year-on-year increase in revenue and net profit will be more than 40%.
On the morning of February 28, Dongpeng Beverage held a 2021 performance briefing. The reporter of “Daily Economic News” learned at the scene that Lin Muqin, chairman of Dongpeng Beverage, responded to hot issues such as market share and industry competition, product diversification, national regional expansion, and deep channel construction.
In the field of energy drinks, the topic that Dongpeng Beverage cannot avoid is the competition with the industry leader Red Bull. Lin Muqin admitted that Dongpeng Beverage has a gap with Red Bull in terms of retail unit price, terminal network coverage, and internationalization. In 2021, the market share will be the second in the country, lower than that of Red Bull, but it has obtained most of the market increment. The share increased by more than 4 percentage points.
For channel construction, Lin Muqin has repeatedly mentioned the importance of frozen display. In 2021, the company has increased channel promotion costs such as freezer placement by about 134 million yuan compared with the same period in 2020. “Our survey found that many consumers decide which drink to buy when they open the refrigerator. Therefore, the most basic thing to make a drink is to put the product on the shelf and freeze it in a good position.” He emphasized , In the future, Dongpeng Beverage will continue to grab the freezer and display space offline.
Dongpeng Beverage held a 2021 performance briefing Photo source: Photo by reporter Wang Fan
Talking about market competition: ranked second, accounting for most of the industry increment
On the evening of February 27, the annual report released by Dongpeng Beverage showed that in 2021, the company achieved operating income of 6.978 billion yuan, a year-on-year increase of 40.72%; net profit attributable to the parent was 1.193 billion yuan, a year-on-year increase of 46.90%. The company stated that the main reason for the increase in operating income was that the company continued to implement the omni-channel intensive cultivation strategy in the Guangdong region, and at the same time actively explored national sales channels, driving the continuous increase in the sales volume of 500ml golden bottles and other beverages, resulting in a relatively large operating income. growth of.
Among them, the sales volume of the main product Dongpeng Special Drink in my country’s energy drink market increased from 27.00% to 31.70%, making it the energy drink with the highest sales volume in my country; the national market sales share increased from 20.20% to 23.40%, and the market Ranked second.
At the performance briefing held on February 28, when talking about how to view the changes in market share, Lin Muqin, chairman of Dongpeng Beverage, said: “According to Nielsen’s data from January to November last year, the sales volume of our energy drinks, In terms of tons, it has surpassed Reignwood Red Bull to become the No. 1 energy drink brand in China. Of course, because Dongpeng Special Drink (unit price) sells cheaply, we are still in the second position in terms of sales. He analyzed, “Dongpeng Special Drink almost got most of the energy drink market growth last year.”
Referring to Red Bull, whose leading position is difficult to shake, Lin Muqin said frankly: “Red Bull and Dongpeng Special Drink belong to the first camp of energy drinks in China, and we have been benchmarking our ‘big brother’.”
He believes that the gap between Dongpeng Special Drink and Red Bull is mainly reflected in: “First, the price of Dongpeng Special Drink is lower than that of Red Bull. The retail price of Red Bull 250ml can is 6 yuan, while the Dongpeng Special Drink 500ml bottle has a capacity of 6 yuan. It is twice as expensive as Red Bull, and the price is only 5 yuan. Second, Red Bull is an international brand, sold in Europe and the United States, and has a relatively long history. Third, Red Bull covers more outlets. According to third-party statistics, Red Bull should have There are three or four million outlets, and Dongpeng only has 2.09 million outlets, and we still need to work hard.”
Lin Muqin believes that China’s energy drink consumer groups still have a lot of room for development. “Dongpeng Special Drink is consumed by the general population, but the heavy consumer groups are concentrated in the driving crowd, and their anti-fatigue needs are relatively strong; the second is the new blue-collar workers, especially those engaged in manual labor; the third is the white-collar workers who work overtime. Need to replenish energy. In the future, the company will continue to strengthen the coverage of consumer groups.”
Talking about regional expansion: mature markets and markets to be developed take two paths
The Guangdong region is the home base of Dongpeng Beverages, with sales accounting for half of the company’s total revenue for a long time. The company’s major single product, Dongpeng Special Drink, supports 90% of its revenue. In the future, how to get rid of regional and single product dependence and achieve balanced development of the national regional market and product diversification has always been a concern of investors.
According to the 2021 annual report, the company’s national expansion has already begun to bear fruit. The Guangdong region will achieve operating income of 3.199 billion yuan in 2021, a year-on-year increase of 29.67%, and its revenue will account for 45.94%, a decrease of about 4 percentage points; the revenue growth of East China and Southwest regions is relatively rapid, with a growth rate of 79.07% respectively. and 65.37%, the proportion of sales increased by 2.35 percentage points and 0.91 percentage points respectively.
Lin Muqin said: “The future development of Dongpeng Beverage must be accompanied by a gradual decline in the market share of Guangdong. The Yangtze River Delta region is a battleground for beverages, and the combined market capacity of Jiangsu, Zhejiang and Shanghai will not be smaller than the Guangdong market. Therefore, we believe that the East China market has the conditions to recreate a Guangdong market; the Southwest market is gradually showing its growth potential. Only when the growth of our market outside Guangdong is twice or even three times that of the Guangdong market, we can truly realize the nationalization process. “
He analyzed: “Our national expansion strategy is to take two paths for the mature market and the market to be developed. In Guangdong, a relatively mature area, we will gradually launch new products other than Dongpeng Special Drink; In the region, we will first use Dongpeng special drink to open up the market.”
The “Daily Economic News” reporter noticed that Dongpeng Beverage is building a “Dongpeng Energy +” product brand matrix. At present, Dongpeng Special Drink has been developed as the core, and “Dongpeng 0 Sugar Special Drink”, “Dongpeng Special Drink” and “Dongpeng Special Drink” have been developed successively. “Big Coffee” Shake Latte, “She Neng” Juice Energy Drink and other categories. In 2021, the above-mentioned other beverages will achieve sales of 372 million yuan, accounting for 5.34%. Compared with Dongpeng Special Drink’s sales performance of more than 6.5 billion yuan, accounting for more than 94%, the gap still needs to be narrowed.
Talking about the deep cultivation of channels: to grab the freezer, grab the display space
For fast-moving consumer goods, channel construction is the top priority. In 2021, Dongpeng Beverage has invested a lot of energy in channels.
Dongpeng Beverage’s secretary Liu Lihua revealed at the meeting that the number of Dongpeng Beverage distributors will increase from 1,600 at the beginning of the period to 2,312 in 2021, an increase of 44.5%; the number of terminal outlets has increased from 1.2 million at the beginning of the period to 209 at the end of the period 10,000, an increase of 74.17%. In the future, the company will still take the development of high-quality and powerful dealers, the development of terminal outlets, and the increase of single-point output as the main sales tasks.
The annual report shows that in 2021, Dongpeng Beverage will strengthen the development of traditional channels such as small stores, independent convenience stores, and newsstands in the national market, and accelerate the development of expressway service areas, gas stations, large supermarkets, chain supermarkets, and chain convenience stores. Equal special pass/modern channels to improve the overall market rate and coverage of products.
It is worth mentioning that in the laying of terminal channels, Dongpeng Beverage pays special attention to the launch of freezers. The annual report pointed out that with the idea of ”freezing is the best display”, the company has strengthened the freezer placement and product display at the channel side. In 2021, compared with the same period in 2020, the channel promotion expenses such as freezer placement will be increased by about 134 million yuan.
“Beverages are delicious only when they are frozen. Our survey found that many consumers decide which drinks to buy when they open the refrigerator. Therefore, the most basic thing to make drinks is to put the products on the shelves and freeze them on the shelves. Good location.” Lin Muqin said, “In the future, we will increase the display and freezing of products, so we will grab the freezer and the display space.”
In terms of channel incentives, Lin Muqin analyzed: “Products go from our distributors to wholesalers to retailers. This is a systematic chain. To build this marketing network, we need incentives. Distributors need incentives. , the profits of wholesalers and retailers, we collectively call channel profits. With the increase in prices and labor costs, it is difficult for manufacturers to provide channel operators with sufficient channel profits, and it is difficult to mobilize the enthusiasm of channel operators. “
He admitted that the channel profit of Dongpeng Beverage is 20% higher than the industry average channel profit, which is at a better level in the industry.
In terms of incentives for sales staff, Lin Muqin revealed: “Beverage sales is a labor-intensive industry. Sales staff account for two-thirds of the company’s total employees. The company will reward sales staff based on the implementation of product display and visiting lines. At the same time, the company gives equity to the sales chief, and the interests of the team are tied to the company’s development and stock price.”
Source of cover image: Photo Network-500510969
