The highly popular Vitality Relaxing Water: Dealers claim that the most troublesome problem is the shortage of goods.

Article | Li Su

"I've been staring at the computer for several days to get just a bit of goods," One of the most headache-inducing issues for Lao Xu recently is that Yuanqi Zizai Water is simply not enough to meet the demand. The "bit of goods" Lao Xu mentioned refers to 1,000 cases of Red Bean and Barley Water. It took him 10 days to place the order, but it was sold out quickly, "It was sold out within a week."

Lao Xu is a beverage distributor in Beijing, whose business covers thousands of traditional stores in the urban area, as well as hundreds of special and catering channels. Since this summer, Lao Xu has found that Yuanqi Zizai Water has always been in short supply in the channels, with a maximum monthly sales of 5,000 cases. He told 36Kr that out of stock is the most troublesome issue, "(Out of stock) at least affects the quantity of several thousand cases."

Lao Xu started to cooperate with Yuanqi Forest from 2021. Similar to other distributors, he initially only did the business of sparkling water, and then gradually increased the SKU. He started to sell Yuanqi Zizai Water in May this year. At that time, he noticed that the market response to this new product has been good since its launch. Up to now, he has only been selling this product for five months in total.

Initially, Lao Xu just had a try-it-out attitude and didn't have much expectation for the sales of this new product. One of the main reasons is that Yuanqi Zizai Water is not the only product in the channel. Before this, he had been selling Red Bean and Barley Water from another brand for three years, but after selling it for a few months, he found that, "It's not as good as selling Yuanqi Zizai Water for three months." Lao Xu told 36Kr that recently, their business with Yuanqi Forest has exceeded the target by 120% every month.

The same market enthusiasm is also felt by distributor Fu Qiang. Since the end of last year, Fu Qiang has started to sell Yuanqi Zizai Water. Initially, the market response was average, with a monthly sales volume of a few hundred cases. For some stores with poor sales, he needed to exchange the goods back to the warehouse. But after the beginning of spring, the sales volume has increased sharply. Those store owners who once exchanged goods have now asked him to deliver the goods quickly, "Many people are looking for this product."

The Sought-after Yuanqi Zizai Water: Doubling the Effort, Becoming the Top 1 Tea Drink in Sam's Club

The popularity of Yuanqi Zizai Water in the channels has exceeded many people's expectations.

This product was launched by Yuanqi Forest at the beginning of last year, positioned as a Chinese-style health water, featuring a slow-cooking process. It has launched three flavors: Red Bean and Barley Water, Red Date and Wolfberry Water, and Refreshing Mung Bean Water. In the highly competitive beverage market, Yuanqi Zizai Water did not initially attract much attention, but this year, its growth has been unstoppable.

According to the data from the third-party platform "Mashangying", as of September this year, the annual growth rate of Yuanqi Zizai Water's channel sales effort has reached 119.5%, among which the YTD (Year to Date) growth rate of Red Bean and Barley Water is as high as 1056.3%. Not only is it selling well in offline channels, but its performance in e-commerce channels is also very outstanding, with the contribution of e-commerce channel sales accounting for 22%.

Beverages themselves have the characteristics of immediate consumption, which means "seeing is drinking". Because of this, although the market scale is expanding year by year, the offline market remains basically stable. For various beverage manufacturers, the proportion of e-commerce channels is generally within a single digit. However, Yuanqi Zizai Water has opened up a new path in the e-commerce channel, truly achieving a two-legged walk from the very beginning.

The excellent performance of Yuanqi Zizai Water in the e-commerce channel actually had early signs. In February 2023, Yuanqi Zizai Water was launched on Tmall Flagship Store and was sold out within 5 days. According to 36Kr, currently, Zizai Water has achieved full-channel coverage. In 2023, Zizai Water ranked first in sales on the three major e-commerce platforms of Tmall, JD.com, and Douyin.

As the "top" warehouse membership supermarket, Sam's Club is not absent from the market of Yuanqi Zizai Water, and it has quickly become a popular beverage in Sam's. According to informed sources, Yuanqi Zizai Water sells 150,000 cases per month in Sam's, occupying the TOP1 position in Sam's tea drinks. On the Xiaohongshu platform, many Sam's users post and recommend it, and add it to the "Good Product Recommendation List".

Fu Qiang has been selling Yuanqi Zizai Water for less than a year, and now he no longer worries about the turnover. This summer, he has distributed this product to more than 1,000 retail outlets they cover, including traditional mom-and-pop stores, campus stores, catering, and sports venues. Fu Qiang told 36Kr, "The turnover rate is very good. Even for the most ordinary stores, the monthly sales volume is more than a dozen cases."

This is Fu Qiang's second cooperation with Yuanqi Forest. He once sold sparkling water a long time ago, but the cooperation was once interrupted due to the adjustment of his channel focus during the epidemic. The decision to sell Yuanqi Zizai Water was actually the information he learned from his peers.

The rapid popularity of Zizai Water has also exceeded the expectations within Yuanqi Forest. A salesperson of Yuanqi Forest told 36Kr that they didn't expect it to be so popular at the beginning. Everyone just had confidence in the product, "It definitely won't fail to survive."

Initially, Yuanqi Zizai Water only sold two flavors: Red Date and Wolfberry Water and Red Bean and Barley Water. It was not until April this year that the seasonal Refreshing Mung Bean Water flavor was launched, but "it became popular immediately after it was launched without much distribution", the aforementioned salesperson told 36Kr. This even didn't give them time to react, "Everyone is looking for it, including group buying and company benefits. Everyone is looking for Mung Bean Zizai Water."

The Rising Trend of "Health Preservation": The Pattern of Plant Beverages Has Changed

The pursuit of Yuanqi Zizai Water by the channels is partly due to catching up with the new "health preservation" trend in the beverage track.

With people's health awareness gradually increasing, sugar-free tea beverages have become popular rapidly since last year, bringing a group of brands such as Dongfang Shuye and Suntory to the fore. Among them, Nongfu Spring's tea beverage business grew by more than 80% in 2023, and Suntory Oolong Tea grew by as much as about 200% in the first half of 2023. The sugar-free tea that was once disliked has suddenly become a best-selling item that everyone wants to have.

But this year, the limelight of sugar-free tea has gradually been overshadowed by plant beverages. According to the data from Mashangying, in the third quarter of 2024, the growth rate of plant beverages led the major categories, with a market share growth of as much as 37.64% compared to the same period last year. Summer is the traditional peak season for beverages. In the past, it was more dominated by sports drinks, but this summer is somewhat different. Plant beverages have become a new "dark horse". In contrast, the growth rate of ready-to-drink tea categories in the third quarter has slowed significantly, with a year-on-year growth of only 4.1%.

The Chinese-style health water represented by Yuanqi Zizai Water is the driving force for the growth of plant beverages. According to the data from Mashangying, in the past third quarter, the two products of Yuanqi Zizai Water, Red Bean and Barley Water and Red Date and Wolfberry Water, have for the first time squeezed into the TOP5 of the plant beverage category.

From sugar-free tea to Chinese-style health water, it reflects that people's demand for healthy beverages has undergone new changes. The trend of healthiness is still the clear main line, but people have iterated from the basic "sugar reduction" to more diverse health concepts such as more health preservation and focus on efficacy. Behind this, it reflects that the dietary concept of "the same origin of medicine and food" is becoming more and more popular.

In fact, health preservation is no longer the exclusive domain of the middle-aged and the elderly. In recent years, it has shown a trend of becoming younger.

According to the "2024 New Health Consumption and Lifestyle Trend Report" released by CBNData, from traditional Chinese medicine physiotherapy to health-preserving diet, more and more young people are bringing health preservation into their daily lives. Among them, Chinese-style health water is the most adopted health-preserving method by consumers, accounting for as much as 71%, and from the perspective of online sales, the most popular ingredients of Chinese-style health water include red beans, mung beans, wolfberries, and red dates.

Beverages are essentially a bottle of flavored water, but being delicious is only a small factor influencing the decision. From the research results of CBNData, when it comes to the purchase motivation, the two most important factors that attract young people to Chinese-style health water are: a clean and natural ingredient list and diverse efficacies that meet individualized needs.

According to media reports, during the recent school opening season, a "Freshman Supply Station" event was held on a university campus. Yuanqi Zizai Water outperformed a group of popular beverages including Sparkling Water, Coca-Cola, Dongfang Shuye, Suntory Oolong Tea, and Kangshifu Yuanbing Black Tea, becoming the most favored beverage among students and was claimed within just 2 hours and 15 minutes.

Chinese-style health preservation can be said to be a water replenishing habit deeply rooted in the bones of Chinese people. Consumers are very familiar with the efficacy of Yuanqi Zizai Water, whether it is Red Date and Wolfberry Water or Mung Bean Water, and they will drink it according to the season. Fu Qiang told 36Kr that from the performance of the channels he covers, Red Date and Wolfberry Water sells well in winter, Mung Bean Water sells well in summer, and Red Bean and Barley Water sells better in spring and autumn.

"Tasty" and "healthy" are the most frequent feedback that Lao Xu and Fu Qiang have heard from consumers about Yuanqi Zizai Water. And from sensing the trend of health-preserving water to the eventual birth of Zizai Water, the product team of Yuanqi Zizai Water has done repeated product polishing.

According to 36Kr, the product team of Yuanqi Zizai Water found during the R & D stage that the taste of most red bean varieties processed in the factory is not good enough. For this reason, they have tried nearly 40 kinds of red bean varieties before finding that the Pearl Red variety may best restore the "taste of mom". And although the process efficiency is not high, they finally insisted on using the boiling process in order to "restore the taste of mom's cooking at home". Finally, through the aseptic filling production line, the fresh-keeping bottling is achieved without adding preservatives.

The sudden emergence of Yuanqi Zizai Water has also quietly rewritten the market pattern of Chinese-style health water. As early as 2019, Zhonghe Food, which started with red bean water, established Keyoung Beverage and officially sold the red bean water series under the name of Keyoung. Guozishule also launched the Red Bean and Barley Water product. But now, in some channels, Yuanqi Forest has emerged as a strong competitor.

Fu Qiang told 36Kr that from the sales situation of more than 1,000 retail outlets he covers, Yuanqi Zizai Water accounts for 50% of the entire Chinese-style health water volume. Lao Xu's situation is similar. According to his estimation, currently, Yuanqi Zizai Water sales account for 50 - 60% in the Chinese-style health water category.

With the popularity of Yuanqi Zizai Water, some beverage brands that smell business opportunities have also joined in. According to a statistics from Qianzhan Industry Research Institute, from 2018 to 2022, only 4 domestic brands have laid out Chinese-style health water in the past five years, and this track is still in its infancy. Only 5 brands entered the market in 2023, and in the first five months of 2024, 10 new players have entered the industry.

However, Lao Xu is already accustomed to this kind of brand following. When he started to sell Pulse Beverage more than 20 years ago, he had already experienced a similar situation. He judged that most of the followers will not go far, "More than 80 - 90% of the manufacturers will eventually be eliminated." Lao Xu told 36Kr that the brand impression is the most important for any product.

Yuanqi Forest, Has It Become a Hit Maker Again?

Before the popularity of Yuanqi Zizai Water, the last widely discussed hit product of Yuanqi Forest was Big Iced Tea.

Big Iced Tea is the large-packaged version of iced tea launched by Yuanqi Forest in 2022, which is a healthy upgrade of iced black tea. As the largest single product in tea beverages, iced black tea is almost a standard for beverage manufacturers, and the competition in channels and prices is very fierce. However, Yuanqi Forest has found a breakthrough in this red ocean market. The healthiness is only one aspect. The upgraded 900ml Big Iced Tea is only sold for 5 yuan.

In May this year, the ice tea product series has achieved a monthly sales performance of over 100 million yuan, becoming the third big hit product after Sparkling Water and Alien Electrolyte Water. According to 36Kr, in some channels, in addition to Sparkling Water and Alien Electrolyte Water, Yuanqi Zizai Water and Big Iced Tea are "almost 50 - 50".

Unlike the extreme cost performance of Big Iced Tea, Yuanqi Zizai Water catches the "small but beautiful" demand of beverages. Before Yuanqi Zizai Water, the packaging of the vast majority of health-preserving waters on the market is the common long-strip shape, which is not eye-catching on the shelves. Yuanqi Zizai Water redesigned the bottle body to be short and stout, which is more eye-catching and durable, and the 50