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BIZCHINA> Top Biz News
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Soft-drinks firms sip mixed flavors
By Liu Jie (China Daily)
Updated: 2009-05-27 08:08 Part of the new investment, amounting to 90 million yuan, has been earmarked for the establishment of a research and development center in Shanghai, which will be devoted exclusively to non-carbonated soft drinks. Indeed, Coca-Cola moved to the top among non-carbonated soft drinks vendors in the Chinese market last year. China is now the world's second largest market after the US for the company's Minute Maid brand of juice. The local soft drinks vendors are putting up a stiff fight though. Nongfu Spring, for instance, began pushing its Lemon C 100, a mixed drink with 12 percent concentrated lemon juice, last summer. The company claimed that it was a success, with total sales of 100 million yuan by year-end. Market shares Early this year, Hangzhou-based Wahaha launched a similar product, which it called Happy C. Even the packaging looks similar to Nongfu's original. Huiyuan Juice Group, the largest juice producer in China with a 44 percent market share, announced on April 15 that it would focus on sales of low-concentration juice this year. The campaign kicked off with a product named Lemon Me, which the company claims contain 15 percent raw lemon juice sweetened with honey. "The three lemon drinks all come in white bottles and in similar shapes and patterns; they also do not taste much different. Even the prices are all fixed at 4.5 yuan. I don't know why these companies copied each others' designs instead of creating their own products," said Wu Jia, a 27-year-old accountant in a foreign company, adding that she preferred Lemon C 100, as it was the original version. "Soft drinks consumption in China is still at an affordable level in general, and Chinese consumers prefer the light taste of low-density juice. Moreover, the profit margin of low-density juice is higher than that of 100 percent juice and others, including soda, tea drinks and water," Chen Jing said, explaining the reasons for producers' keenness on the low-concentration juice market. The price of low-concentration juice is, in general, 30 percent higher that that of other soft drinks. Any profit-driven business is not likely to ignore the huge potential of the low-concentration juice market and will try its best to grab more market share, analysts said. Chen Chen, food and beverage analyst at China Investment Consulting said foreign behemoths in China are developing new flavors in a bid to stay on top of competition and avoid intellectual property problems. "Minute Maid's cold orange flavor, combining orange and a Chinese herb, and the tropical fruit mix by Tropicana are distinctive ideas," said Chen Chen. He pointed out that low-sugar and fresh flavor tea drinks with traditional Chinese cool herb ingredients, such as wild chrysanthemum and peppermint, are also the new favorites this year. Beverage seller Hou had the last word, of course. He said Cha'er Pishuang was the most creative drink he had ever come across. "Combining the taste of beer with healthy tea, but without any alcohol content, it is really great and is the bestseller in my shop this month."
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