In view of the still strong influence of TCM on Chinese eating and drinking habits, China is a paradise for functional beverages
I already mentioned functional beverage in my general post on drinks, but the developments on the Chinese functional beverage scene have been so rapid lately, that it is time to dedicate a special post to this market. The interest in this type of drinks is not a surprise. TCM-based tonics have been an essential part of Chinese life almost since the beginning of Chinese culture. As has been introduced in the post on that topic, TCM has a much larger overlap with food than Western medicine. A core term in TCM is bu‘to supplement’. Most Chinese herbal medicines are in fact supplements, helping the human body to regain balance. The following pie graph shows the market shares of the main brands in 2019.
The very first functional beverage, obviously based on TCM, in China probably is Wanglaoji, also known by its Cantonese pronunciation: Wong lo kat. Wanglaoji is said to be a product that was invented by Wang Zebang (nicknamed Wang Ji ) from Heshan in Guangdong province in 1828. It withstood the turbulent modern history of China from the fall of the Qing Dynasty, the civil wars and the war with Japan and the foundation of the PRC and is currently sold as a herbal tea, with the ingredients being seven different kinds of Chinese herbal plants.
Water, sugar, mesona, dan hua (Apocynaceae species), Bu zha ye (Microcos paniculata Linn), chrysanthemum flowers, jin yin hua (Lonicera japonica Thunb.), Prunella vulgaris, and licorice.
Although these are all medicinal herbs, Wanglaoji is basically consumed as a soothing drink, not for curing a particular ailment. However, due to the high sugar content, it does provide quite a lot of energy. One sip a few years ago was enough for me. Wanglaoji has become extremely popular during the early 21stcentury, but has been plagued by a trademark dispute between the state owned Guandong-based producer and a Hong Kong-based company set up by a descendant of Wang Zebang who moved to Hong Kong after the founding of the PRC.
When Wanglaoji was gaining popularity, Red Bull had already been introduced in 1995. Red Bull China is marketed by the Reignwood Group, which also markets another energy drink: War Horse, together with Voss mineral water from Norway, Vita Coco, a coconut drink and Capri Sun fruit juice beverages. Reignwood got in conflict with Red Bull’s Thai-based creator TC Pharmaceutical Industries in the course of 2019 in which the latter tried to stop the cooperation with Reignwood. TCPI started a law suit in Beijing, but lost early 2020. Red Bull, this foreign, though also Asian, energy drink was welcomed by many, but also greeted with suspicion by the authorities. Red Bull was ordered to indicate on its cans that the wonder liquid was ‘not suitable for young children and pregnant women’. Reignwood opened China’s (and possibly the world’s) first functional beverage museum in its own Reignwood Centre in Beijing in August 2020.
Until that time, the only indigenous drink resembling a modern functional beverage was Jianlibao, an electrolyte drink launched in 1984, when it was made the official beverage of the Chinese participants of the LA Olympics.
It was a best-selling drink through the 1990s, but has since then suffered from mismanagement. Recently, Red Bull China has also become troubled by quarrels among its investors. You can read all about that on the Net. This strife seems to be a common ill of Wanglaoji, Jianlibao and Red Bull. Perhaps the managers involved are drinking too much of their own beverages. Still, Red Bull alone generated a turnover exceeding RMB 20 billion in 2018 in a market whose value is estimated at RMB 50 billion by insiders, making Red Bull still China’s number one functional beverage, by far.
With the growing spending power, combined with an increased interest in health and wellness, of Chinese consumers, several new functional drinks have been launched during the past 2 – 3 years: sport drinks, vitamin drinks, energy drinks, you name it. Not all of these new beverages have been able to reach a critical mass, but some of them seem to be there to stay, at least for a while. In this post, I will introduce a two more that seem to have good prospects.
Dali Food Group has been mentioned in several earlier posts in this blog, but always for its bakery products: bread and biscuits. However, Dali is also the producer of Hi-Tiger energy drink. One look at the ad is sufficient to see that not much R&D had to spent on developing this product. The ingredients list confirms this impression.
Taurine, L-lysine, inosine, caffeine, vitamins B6 and B12, sugar, citric acid, sodium citrate, tartrazine.
Dali advertises heavily and is producing the drink various local plants to ensure a continuous supply. The brand sponsors the China Basketball Association.
Eastroc Beverages was established in Shenzhen, Guangdong, in 1987, as a state owned enterprise. It was privatised in 2003 as the Eastroc Group. It launched its energy drink in 1998 and once more the design of the bottle resembles that of Red Bull. The ingredients list is also getting a little boring.
Water, sugar, citric acid, flavours, caffeine, inositol, sodium benzoate, amaranth, nicotinic acid, vitamins B6 and B12, lysine, taurine.
Eastroc sponsored the Portuguese football team during the World Cup in Russia in 2018. It is also the Official Supplier of the 2018/2019 Chinese Super League (CSL). Eastroc’s turnover increased from RMB 3 billion to 5 billion in the years 2016 – 2018.
These are the top energy drinks in China at the moment. The most salient feature of this market is that it is on one hand huge and on the other hand extremely boring, with the numbers two and three doing the utmost to imitate the leader. This leaves lucrative opportunities for the a genuinely innovative product; I would say: one based on TCM, or perhaps herbal traditions from other parts of the globe?
The other side: drinks that help you sleep
Amidst this fierce battle between older and newer suppliers of energy drinks, candy maker Want Want launched its Dream Dream Water (Mengmengshui) in 2019. It is a herbal tea that claims to make you sleep better. Its main ingredients in GABA, that is sometimes taken for relieving anxiety and improving mood. The market, professionals and consumers have received the drink with mixed feelings. As soon as I have an opportunity to try it, I will add my personal comments here.
New Hope Dairy has launched a milk drink fortified with casein peptides that induces sleep even better than your regular bed time glass of milk. It is marketed as Shuo Wan’an ‘Say Good night’.
Eurasia Consult Consulting can help you embed your business in Chinese society.
Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.