Shouting the slogan “tired and sleepy, drink Dongpeng special drink” and “you should fight awake when you are young”, Eastroc Beverage (Group) Co.Ltd(605499) ( Eastroc Beverage (Group) Co.Ltd(605499) , SH) landed in the capital market last May. On February 27, Eastroc Beverage (Group) Co.Ltd(605499) released its first annual report after listing. In 2021, the sales scale and benefits achieved double growth, and the year-on-year growth of revenue and net profit was more than 40%.
On the morning of February 28, Eastroc Beverage (Group) Co.Ltd(605499) held a performance briefing for 2021. The reporter of “daily economic news” learned at the scene that Lin Muqin, chairman of Eastroc Beverage (Group) Co.Ltd(605499) company, responded to hot issues such as market share and industry competition, product diversification, national regional expansion and channel deep cultivation construction.
In the field of energy drinks, Eastroc Beverage (Group) Co.Ltd(605499) can’t avoid the topic of competition with red bull, the leader of the industry. Lin LinQin frankly said that Eastroc Beverage (Group) Co.Ltd(605499) has a gap with red bull in retail unit price, terminal network coverage and internationalization. In 2021, the market share was the second in China, lower than red bull, but it has obtained most of the market increment, with a market share increase of more than 4 percentage points.
For channel construction, LinQin repeatedly mentioned the importance of frozen display. In 2021, the company increased the channel promotion expenses such as freezer delivery by about 134 million yuan compared with the same period in 2020. “Our research found that many consumers only decide what to buy when they open the refrigerator. Therefore, the most basic thing to make drinks is to put the products on the shelf and freeze them in a good position.” He stressed that Eastroc Beverage (Group) Co.Ltd(605499) will continue to grab freezers and display spaces offline in the future.
talk about market competition: ranked second, accounting for most of the industry increment
On February 27, Eastroc Beverage (Group) Co.Ltd(605499) released its annual report, which showed that in 2021, the company achieved an operating revenue of 6.978 billion yuan, an increase of 40.72% year-on-year; The net profit attributable to the parent company was 1.193 billion yuan, a year-on-year increase of 46.90%. The company said that the main reason for the growth of operating revenue was that the company continued to implement the omni channel intensive cultivation strategy in Guangdong and actively explored national sales channels, driving the continuous increase of sales volume of 500ml gold bottles and other beverages, resulting in a significant increase in operating revenue.
Among them, the sales volume of Dongpeng special drink, the main product, increased from 27.00% to 31.70% in China’s energy beverage market, becoming the energy beverage with the highest sales volume in China; The share of national market sales increased from 20.20% to 23.40%, ranking second in the market.
At the performance presentation meeting held on February 28, we talked about how to view the change of market share, Eastroc Beverage (Group) Co.Ltd(605499) chairman Lin Muqin said: “according to Nielsen’s data from January to November last year, the sales volume of our energy drinks, in tons, has surpassed Huabin Red Bull and become the first brand of energy drinks in China. Of course, because Dongpeng special drink (unit price) sells cheaply, we are still in the second place in terms of sales volume.” “Dongpeng special drink almost got most of the increase in the energy beverage market last year,” he said
Referring to red bull, whose leading position is difficult to shake, Lin Shuqin said frankly: “Red Bull and Dongpeng special drink belong to the first camp of China’s energy drinks, 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 selling price of Dongpeng special drink is lower than that of Red Bull. The retail price of Red Bull 250ml can is 6 yuan, while Dongpeng special drink 500ml bottle has twice the capacity of Red Bull and the selling price is only 5 yuan. Second, Red Bull is an international brand and has a long history of sales in European and American countries. Third, Red Bull covers more outlets. According to the statistics of third-party institutions, Red Bull should have 34 million Dongpeng has only 2.09 million outlets. We still need to work hard. “
Lin Muqin believes that there is still a large development space for the consumer group of energy drinks in China. “Dongpeng special drink is consumed by a wide range of people, but the heavy consumer group is concentrated in the driving group, and their demand for anti fatigue is relatively strong; the second is the new blue collar workers, especially the workers engaged in manual labor; the third is the white-collar workers who need to supplement energy in the overtime scene. In the future, the company will continue to strengthen the coverage of consumer groups.”
talk about regional expansion: two paths: mature market and market to be developed
Guangdong is the base of Eastroc Beverage (Group) Co.Ltd(605499) , with sales accounting for half of the company’s total revenue for a long time. Dongpeng special drink, the company’s big single product, supports 90% of the revenue. How to get rid of the dependence on regions and single products in the future and realize the balanced development of the national regional market and product diversification has always been the concern of investors.
According to the 2021 annual report, the company’s national expansion has achieved initial results. In 2021, Guangdong achieved an operating revenue of 3.199 billion yuan, a year-on-year increase of 29.67%, accounting for 45.94% of revenue, a decrease of about 4 percentage points; The revenue of East China and southwest China increased rapidly, with the growth rate reaching 79.07% and 65.37% respectively, and the proportion of sales increased by 2.35 percentage points and 0.91 percentage points respectively.
Lin Qin said: “The development of Eastroc Beverage (Group) Co.Ltd(605499) in the future must be accompanied by the gradual decline of the market share of Guangdong. The Yangtze River Delta is a must for beverage strategists, and the market capacity of Jiangsu, Zhejiang and Shanghai will not be less than that of Guangdong. Therefore, we believe that the East China market has the conditions to recreate a Guangdong market, and the southwest market gradually shows its growth potential. Only Guangdong The growth of markets outside Guangdong is twice or even three times that of Guangdong market, so that we can truly realize the process of nationalization. “
“Our strategy of nationwide expansion is to adopt two ways for mature markets and markets to be developed. In Guangdong, a relatively mature region, we will gradually launch new products other than Dongpeng special drink; in less mature regions, we will first use Dongpeng special drink to open the market,” he said
The reporter of the daily economic news noted that Eastroc Beverage (Group) Co.Ltd(605499) is building a brand matrix of “Dongpeng energy +” products. At present, with Dongpeng special drink as the core, it has successively developed “Dongpeng 0 sugar special drink”, “Dongpeng big coffee” shake latte, “taneng” fruit juice energy drink and other categories. In 2021, the sales of the above-mentioned other beverages reached 372 million yuan, accounting for 5.34%. Compared with the sales performance of Dongpeng special drink, which exceeded 6.5 billion yuan, accounting for more than 94%, the gap still needs to be narrowed.
talk about deep cultivation of channels: grab the freezer and the display space
For FMCG, channel construction is the top priority. In 2021, Eastroc Beverage (Group) Co.Ltd(605499) invested a lot of energy in channels.
Liu Lihua, the Board Secretary of Eastroc Beverage (Group) Co.Ltd(605499) revealed at the meeting that the number of dealers of Eastroc Beverage (Group) Co.Ltd(605499) in 2021 increased from 1600 at the beginning of the period to 2312, with an increase rate of 44.5%; The number of terminal outlets increased from 1.2 million at the beginning of the period to 2.09 million at the end of the period, with an increase of 74.17%.
The development of high-quality distributors will still be the main task of the company in the future.
According to the annual report, in 2021 Eastroc Beverage (Group) Co.Ltd(605499) in the national market, it strengthened the development of traditional channels such as grocery stores, independent convenience stores and newspaper kiosks, accelerated the development of special / modern channels such as expressway service areas, gas stations, large stores, chain supermarkets and chain convenience stores, and improved the overall market rate and coverage of products.
It is worth mentioning that Eastroc Beverage (Group) Co.Ltd(605499) pays special attention to the delivery of freezers in the laying of terminal channels. The annual report pointed out that the company strengthened the freezer delivery and product display at the channel side with the idea of “freezing is the best display”. In 2021, compared with the same period in 2020, the channel promotion expenses such as freezer delivery were increased by about 134 million yuan.
“Drinks should be frozen before they taste good. Our research found that many consumers only decide what to buy when they open the refrigerator. Therefore, the most basic thing to make drinks is to put the products on the shelf and freeze them in a good position.” Lin Shuqin said, “in the future, we will increase the display and freezing of products, so we will grab the freezer and display space.”
In terms of channel incentives, Lin Qin analyzed: “Products from our dealers to wholesalers and then to retailers are a systematic chain. What we need to build this marketing network is incentive. The profits of dealers, wholesalers and retailers are collectively referred to as channel profits. With the increase of prices and labor costs, it is difficult for manufacturers to provide sufficient channel profits for channel operators The enthusiasm is aroused. “
He admitted that Eastroc Beverage (Group) Co.Ltd(605499) ‘s channel profit is 20% higher than the industry’s average channel profit, which is at a good level in the industry.
In terms of incentives for salespeople, “Beverage sales is a labor-intensive industry, and sales personnel account for two-thirds of the company’s total employees. The company will reward the sales personnel in combination with the implementation of product display and visit routes. At the same time, the company will give equity to the regional headquarters of sales, and the team interests are tied with the company’s development and stock price.”
