This article is from WeChat public account: Quick Consumer (ID: fbc180) , author: Zhang Xia, from the head of FIG: IC photo
For Magic Claw Beverages, China is a cake that is visible but “unable to eat”. Although it is not disadvantageous in exploring multiple markets around the world, at present, Chinese consumers are still more accustomed to buying Red Bull or Dongpeng special drinks … In addition to the Chinese market that has been slow to attack, Magic Claw Beverage in the United States has to face from Starbucks’ sniper.
I. “Frustrated”
Not long ago, (Monster Beverage Corporation) released its fourth quarter and full-year results for 2019 .
Magic Claw Beverage CEO Sax (Rodney C. Sacks) mentioned that compared with a year ago, the magic claw series in the fourth quarter of 2019 Distribution activity throughout China continues to grow, but the situation in China remains challenging.
In 2019, the sales of Magic Claw Beverage Company in China accounted for less than 1% of the company’s consolidated net sales. (about RMB 290 million) .
Magic Claw Beverage is headquartered in Delaware, USA, and officially entered the functional beverage market in 2002. Against the background of the continuous expansion of the functional beverage market, magic claws have risen rapidly. In the ten years from 2007 to 2016, the magic claw beverage company createdWith the stock gains of nearly 690%, it is the star of the American functional beverage brand and resisted in the US and Red Bull Chamber.
In 2016, Coca-Cola was favored by Magic Claw Beverage Company. In the way of asset swap, Coca-Cola acquired 16.7% equity of Magic Claw Beverage Company with USD 2.15 billion and became the largest shareholder of Magic Claw Beverage Company. Since then, Magic Claw Beverage has accelerated its global deployment.
At that time, Sachs once said, “ (Global) The power of the industry ultimately comes down to Red Bull and ourselves.”
Now, in China, one of the world ’s largest consumer markets for functional beverages, the market expansion speed of Magic Claw Beverage is obviously not so optimistic.
Globally, Magic Claw Beverage’s 2019 net sales are US $ 4.2 billion. (approximately RMB 7.071 billion) , an increase of 10.1% year-on-year, Among them, the net sales of customers outside the United States accounted for more than 30%.
It is worth noting that, while the management of “Magic Claws” is “looking at the Chinese market”, its base market is constantly “provoked” by other leaders in the industry.
In 2019, Starbucks launched Triple Shot (Chinese version: Starbest sharpen series) Ready-to-drink products, this product is understandable For the coffee “Red Bull”, the product is supplemented with vitamin B and guarana. Each jar contains 225 mg of caffeine. Earlier, Starbucks had launched Double Shot canned beverages with a caffeine content of 145 mg per can.
In response to Starbucks’s pressing steps, Magic Claw Beverage announced that it will release the Java Monster 300 in the United States in 2020. This product contains 300 mg of caffeine, and offers Triple Shot and Mocha flavors.
In addition, Magic Claw Beverage will launch the Reign Inferno line for its Reign brand. According to foreign media reports, the product’s packaging is shown to match another functional beverage brand, the Ranus brand, HeatThe series are similar.
At the end of the conference call after the results were released, Sax mentioned some cases of coronavirus.
“The outbreak of coronavirus may adversely affect our business, such as the temporary closure or suspension of our and our partners’ business in China; raw material procurement may be disrupted or delayed. However, it is now time to calculate more precise data Too early. We will continue to monitor the situation closely, “Saks said.
Furthermore, Sax reiterated the growth potential of Magic Claw products in China and India, and mentioned plans to launch new energy drink brands in the future.
Second, continue to “accompany”
Before accepting Coca-Cola’s investment, Magic Claw Beverage Company hoped to show its strength in markets outside North America, especially China.
This may be related to the development trajectory of Magic Claw Beverage Company. Magic Claw Beverage Company aimed at the functional beverage segment in 2002. By sponsoring extreme sports such as cross-country motorcycle racing, the positioning is more in line with the “powerful” American culture. In addition, the functional beverage market is booming, and Magic Claw has quickly been recognized by the American youth The sales are gradually equal to the veteran Red Bull who entered the United States in 1987.
In 2015, after obtaining a stake in Coca-Cola, according to the cooperation agreement, Coca-Cola has the market distribution rights for Magic Claw Beverages in different regions. It can be said that this deal meets the conditions for the rapid expansion of Magic Claw Beverages in markets outside North America.
So that after completing the deal with Coca-Cola, Saks drew a beautiful “blueprint” for the outside world. He once said, “Some markets we have not been to, such as China. But I believe that China will be a very large market in the next 5-6 years. For us, it is a long-term strategic goal, and I hope that soon Get there. “
Only, after entering the Chinese market in 2016, “the reality is very skinny”, the magic claw drink has gone through a lot of hardships.
First is the price of the product. Saks said that the price of Reignwood Red Bull is lower than the price point of “high-quality” functional beverages considered by other industries in the world. Therefore, the magic claw beverage needs to adjust the local pricing to enter the wider parity market.
At that time, another challenge for Magic Claw Beverages in China was product display. They need to talk to their partners to make sure that the product is placed next to functional drinks such as Red Bull, not in the refrigerator next to Coca-Cola and Sprite.
One of the differences between Red Claw Beverage and Red Bull is that the product contains steam, which is more popular with young people. However, judging from the real situation understood by Kuaweijun, many readers have limited acceptance of carbonated functional beverages.
In addition, Magic Claw also hopes to establish an identity for target consumers in China as in the US market through marketing, but this is not easy due to cultural differences and media environment differences. What’s more, despite the emphasis on the Chinese market, the development of Magic Claw Beverages in other countries’ markets is also progressing simultaneously, and problems in various places obviously need to be addressed.
In 2018, the market was changing. Coca-Cola, which thought it was a “backer,” suddenly threw a blockbuster and announced the launch of “Coca-Cola Energy Drinks Coca-cola Energy) “. In 2019, the arbitral tribunal ruled that because of different product ingredients and different types of product ingredients will attract two different consumer groups, Coca-Cola can legally sell the functional drink under its brand “Coca-Cola Energy Drinks (Coca-Cola Energy) “.
After that, all the company can do is accept the ruling, and strictly require bottling partners everywhere to place magic claw drinks on the shelves of functional drinks. Although this shelf space is what Coca-Cola energy drinks want to occupy.
Sacks mentioned the issue during the aforementioned conference call, saying: “The Coca-Cola Energy Drink has been launched and unfortunately or fortunately, there does not seem to be a large number of repeated purchases. But we believe that Coca-Cola will continue to invest in this product A lot of money. “
At present, Coca-Cola energy drinks are not widely distributed in mainland China, and its impact on magic claws cannot be predicted. However, for the magic claw, in the Chinese market, wanting to have almost equivalent influence with the word “Red Bull” and avoiding “accompany running”, there are many internal and external challenges that need to be faced and resolved.
This article is from the WeChat public account: FMCG (ID: fbc180) , author: Zhang Summer