October 2023 is still the peak season for beverage sales in the East China market. In a Hema Fresh Supermarket store located in Nanxiang, Jiading, Shanghai, Nongfu Spring's sugar free tea drink "Dongfang Ye" not only occupies the entire shelf of the room temperature and refrigerator, but is also built into a small mountain and placed in a prominent position in the center of the mall. Turning to early December, it was still this supermarket where even a bottle of Oriental leaves could not be found. A salesperson replied, "It's been over a month since we ran out of stock."

In the hottest months of the weather, Dongfang Ye's supply to big cities like Beijing, Shanghai, and Guangzhou was also experiencing a famine. Zhang Dacheng, a salesperson at Nongfu Spring in Guangzhou, told YiMagazine that in order to help replenish his daily maintenance of over 200 retail stores in a timely manner, he needs to work hard on his phone every day - squatting on the internal ordering system of Nongfu Spring to refresh, and immediately placing orders for customers when it shows that Dongfang Ye is in stock. Among them, "jasmine tea" is the most difficult product to compete for among several flavors, and many retail stores cannot restock normally in the past one or two months.
 
Out of stock has become the keyword for Dongfang Leaves in 2023. This situation indicates that Nongfu Spring itself has underestimated the speed at which this product has reached the market's peak, and its production capacity is seriously insufficient.
 
According to monitoring data from third-party market research institutions, the acceleration of Dongfang Ye's market share in this round of offline retail networks in domestic county and above markets began in the second half of 2022, with a market share of 8.4% and ranking fourth in the industry. It first surpassed products under the "Uni President" brand in the fourth quarter of that year, and then surpassed another fruit flavored tea beverage "Tea π" by Nongfu Spring in the second quarter of 2023. As of the monitoring deadline in the third quarter, the gap between Dongfang Ye and the top ranked Kangshifu in the market narrowed from 24 percentage points the previous year to 7 percentage points. Dongfang Ye Ye is also the largest sugar free tea in the domestic market share, and the second place in this sub field is currently Suntory in Japan. According to monitoring data from Instant Win, its overall market share in China's ready to drink tea is still less than 7%.

Looking back at the history of Dongfang Ye becoming a hot seller, the most exciting scenes were not all performed in just the past year and a half. After the first batch of products was launched in 2011, Dongfang Ye sat on a cold bench for 10 years in terms of sales and reputation. The most famous joke of the brand was being rated by netizens as one of the "Five Hardest Beverages", but it did not encounter the fate of exiting the market. The decision of Nongfu Spring seems unusual even in the entire fast-moving consumer goods market.

The beverage consumption market is filled with new hot selling products every year. Hot selling products may mean that a product has the opportunity to compete in the market, but it does not necessarily mean that it has reached the end of victory. Nongfu Spring is willing to bet for 10 years, hoping not for a certain product to become a so-called seasonal hit, but for a real big fish.
 
 
Founder's Choice
 
Nongfu Spring has been trying to build a diversified product line for the past 20 years, and the core goal of multi line implementation is to find a second growth curve that supports the company's revenue growth in the coming decades, in addition to packaged drinking water.
 
Nongfu Spring was once optimistic about the fruit juice category because the gross profit margin was indeed high, and if done well, it could exceed 40%. However, from the perspective of the revenue contribution of this category to the company in the past 6 years, the juice with the most product lines is an "unstoppable Ah Dou", and its revenue share has not only never exceeded double digits, but has even decreased year by year.
 
At present, the correct answer to the question is increasingly approaching tea drinks.
 
Among the 14 beverage products listed on the official website of Nongfu Spring, only 2 belong to tea beverages: Dongfang Ye and Tea Pi. In the first half of 2023, they contributed 25% of the company's revenue - this figure was only 13.5% in 2020. During the same period, the packaged drinking water of Nongfu Spring achieved a revenue of 10.442 billion yuan, a year-on-year increase of 11.7%; The tea beverage business achieved a revenue of 5.286 billion yuan, about half of the packaged drinking water, and set a record growth rate of 59.8%. These data all point to the possibility that tea beverages may become a new revenue growth engine for Nongfu Spring.
 
Dongfang Ye is not the first tea beverage tested by Nongfu Spring. According to incomplete archaeological discoveries, from 2005 to 2010, Nongfu Spring launched tea beverages to the market, including at least carbonated tea, low sugar Nongfu tea, and soda black tea. Originally, Nongfu Spring had used trendy labels such as "sparkling water" and "low sugar" more than a decade ago, but none of these products escaped the result of being hastily phased out by the company.
 
Liu Feng was once a city manager at Nongfu Spring and participated in the early market distribution of Dongfang Ye. As soon as he took his first sip of Dongfang Ye Ye, Liu Feng and the dealer had little confidence, and the retail price at that time was set at 4 yuan, which was considered an expensive beverage. In his memory, "Dongfang Leaves were unsold as soon as they were launched," half of the goods were taken back and destroyed, or the second bottle was sold at half price. In 2011, the sugar free tea brand "Tea King" launched by Uni President in 2004 withdrew from the market due to poor sales. But inside the Nongfu Spring, everyone can clearly perceive that the founder Zhong Gui has a far greater determination than the previous three "premature death" teas to leave behind the leaves of the East.
 
Speaking of the reason, Liu Feng believes that the listing of Dongfang Ye has encountered a "better era": in 2011, Nongfu Spring's packaged drinking water surpassed Kangshifu to become the industry's number one, and is currently reaching its annual sales target of billions of yuan.
 
"The founder's firm confidence stems from the product structure and positive profitability of Nongfu Spring reaching a new height in 2011, which made him more patient and slowly cultivate new products. In Liu Feng's impression, until 2015, Zhong Ting was still a" strong follower "of Dongfang Leaf - he personally inquired about many details of taste, craftsmanship, packaging, and channel distribution strategies." Some new products will not be followed up by Mr. Zhong after a year. In my impression, he attaches the highest importance to Dongfang Leaf and has personally followed it for the longest time. "
 
Many innovative ideas of Chinese beverage brands have borrowed from Japan's experience. Since 1990, the sugar free rate of the overall beverage market in Japan has gradually increased from 12% to nearly 85%, and the earliest brands to lay out sugar free tea were Ito Garden and Suntory. Afterwards, with its strong channel capabilities and the selling point of "authentic Chinese tea", Suntory surpassed Ito Garden to become the market leader in the field of oolong tea.
 
Whether it's the founder's persistent attitude or the subsequent product storyline of Dongfang Ye, you can see many shadows of the above experiences. For example, Nongfu Spring uses the brand name Dongfang Ye to emphasize that the tea soup is made entirely of tea leaves rather than tea powder, retaining the color, aroma, and flavor of the original tea. In addition, Dongfang Ye rejected the "sugar substitution" plan in its initial product positioning and insisted on making sugar free tea without any sweetness.
 
In the following 10 years, Dongfang Ye relied on the production line capacity and mature channel network laid by Nongfu Spring's packaged drinking water to survive a long dormant period. In order to promote more flavors in retail terminals, Nongfu Spring even broke the traditional practice of packaging individual flavors in full boxes and launched a "colorful packaging" for Dongfang Ye, combining four flavors into one box with 24 bottles per box. The shop also offers 3 bottles of 550ml Nongfu Spring natural water as a gift for every box of Oriental leaves they bring in. Nongfu Spring's frontline salespersons in various regions have established a long-term presence in the outdoor entrance areas of many supermarkets, pulling ice buckets in the summer and plugging in warm cabinets in the winter.

Continuous improvement in process technology
 
Before Dongfang Ye, including Japan's most popular green tea or oolong tea, the mainstream packaging used a dark bottle body, with the entire bottle body almost completely wrapped in plastic packaging paper. One important reason for this design is that tea extracts are prone to light oxidation, and the oxidized tea soup will change color, causing consumers to feel that the beverage has "spoiled".
 
Dongfang Ye is the first ready to drink tea on the market that uses a semi transparent bottle body and intentionally leaves clear tea soup visible on both sides of the bottle in the design. This can be achieved first because Nongfu Spring has developed a tea beverage production method and applied for a patent in 2011. The tea beverage produced by this method has a fresh tea aroma, reducing the problem of tea soup quality decline caused by hot water soaking extraction and high-temperature sterilization process. The color of tea soup turning brown during storage is also significantly reduced.
 
To make sugar free ready to drink tea that Chinese people can accept, it is necessary to make the taste of tea infinitely close to freshly brewed tea. The patent application from Nongfu Spring in 2013 showed that Dongfang Ye further improved the tea extraction process by mixing volatile and water-soluble extracts in an appropriate proportion to form a tea soup, which coordinated the taste and aroma of the tea soup and was closer to the quality of freshly brewed tea.
 
In 2011, Zhong Junyi went to Japan to inspect production equipment and introduced the first domestically produced Log6 level sterile cold filling production line for the production of Oriental leaves. The cost of such a Log6 production line is 200 million yuan, while the cost of a regular juice beverage production line is only 1/10 of it. Chen Kaili, the head of the sterile production line at Nongfu Spring, mentioned in a media interview that in the first few years of the production line's operation, due to poor sales of Oriental leaves, even during the peak sales season, this expensive sterile production line can only operate for up to two days per week, leaving the team with almost nothing to do.
This money burning production line helped Nongfu Spring complete more product innovation and iteration years later, and Tea Pi and NFC juice were born on the Log6 sterile production line. According to information released on the official website of Nongfu Spring Company, at that time, 14 of Nongfu Spring's 31 beverage production lines in the country met the sterile standard of Log6.

Following Nongfu Spring, in the past decade, other domestic beverage brands have also strengthened their attention to aseptic packaging technology. For example, Jinmailang, Yili, and Yuanqi Forest have all laid out Log6 bottle preform dry aseptic production lines. Feng Junli, Technical Manager of Sensitive Products at Sidel, a food and beverage packaging equipment supplier in China, told YiMagazine that tea is a low acid product in beverages and is prone to microbial growth, while sugar free tea pursues a minimalist ingredient list. If no preservatives are added, a higher level of sterilization is required. At the same time, the cleanliness level of the filling area used in aseptic technology is equivalent to that of the pharmaceutical environment.
 
In the process of product launch for consumers, Dongfang Ye also drew inspiration from the winter beverage packaging in Japanese convenience stores, and heated and reinforced the bottle body. In 2019, it launched a 335ml "pocket pack" to allow it to be placed in a warm cabinet.
 
A staff member at a convenience store at Costco told YiMagazine that only small bottles of Oriental leaves can be put into the hot pot machine. The shelf life of small bottles of Oriental leaves at room temperature is 9 months. After being heated in a hot can machine, the shelf life will be shortened to two weeks. Therefore, the bottle should be labeled with an activation code to distinguish it from room temperature beverages. Once it is placed in a hot can machine for more than two weeks without being sold, the product will be prohibited from sale and recycled to the warehouse.
 
Competing for freezer shelves
 
According to the information disclosed in the prospectus, as of 2019, Nongfu Spring has covered over 2.37 million terminal retail outlets nationwide through 4280 distributors, of which approximately 1.87 million are located in third tier and below cities. The beverage giant Coca Cola currently has approximately 4 million terminal retail outlets in China.
 
However, the evaluation of channel strength is not only based on the number of branches, but more important indicators are "weighted sales distribution rate" and "layout distribution rate". The former refers to the proportion of sales of a brand's products within the same category in the store. For example, natural water sold for a total of 100 yuan, while Nongfu Spring sold for 70 yuan. The weighted sales and distribution rate determines the product's status in the store owner's mind.
 
The distribution rate of noodles refers to the proportion of noodles that a brand occupies in a store. "You will find that in a store, there are 10 noodles in water, and 6 to 7 noodles in Nongfu Spring." Liu Feng said that after 10 years of channel construction, Nongfu Spring's channel power has surpassed that of Kangshifu and Coca Cola.
 
Initially, Dongfang Ye started to distribute its products from the urban areas of first - and second tier cities, concentrated within 20 meters of commercial districts, schools, office buildings, high-end communities, and hospitals, and was limited to customers who purchased over 400 yuan per month in the first two months. Nongfu Spring has provided detailed operation guidelines for the sales methods of Oriental leaves and has launched a nationwide distribution competition. If one person cannot open the store, two people will team up to sell to retail stores. In addition, salespeople must ensure that a poster of Oriental leaves is posted in the store.
 
Ten years later, Dongfang Ye has already occupied a prominent position in the freezer of 24-hour convenience stores. Several convenience store staff told YiMagazine that the middle layer of the refrigerator, as the best display space, has always been a battleground for brands, so display fees are also the most expensive. In the past two years, the most fierce competition in this area has been among various sugar free tea and sugar substitute carbonated water brands, while Coca Cola is still trying its best to reserve a place for itself. Since 2021, Nongfu Spring has started a freezer battle with its competitors, placing its own brand exclusive refrigerators in retail terminals first. In 2022 alone, Nongfu Spring has laid out 75000 three door refrigerators. Except for a few competitors, Nongfu Spring also agrees to allow the store to place other brands of beverages in unimportant locations on the freezer.
 
At 8:30 every day, salesperson Zhang Dacheng arrives at the company and starts visiting stores after holding morning meetings. He is responsible for sales areas with 200 to 300 customers, and on average, he visits 40 to 50 terminal stores every day. Every time he visits a store, Zhang Dacheng needs to check in and record on the salesperson management app inside Nongfu Spring. The duration of stay in each store should not be less than 5 minutes, and the longest stay should be about half an hour. During this period, he needs to organize the products on the shelves according to Nongfu's extremely detailed display regulations.
 
"Just like a high-speed spinning gyroscope," Zhang Dacheng has repeatedly used this metaphor. He told YiMagazine of First Financial News that in each independent freezer provided by Nongfu Spring, natural water is the core product, and various specifications of natural water usually have to fill two full layers. Next is Dongfang Ye, the company's main product that needs to be filled with a full layer, usually placed in the middle and upper layers. "Customers can see it at a glance, without the need to tiptoe or bend down to find it."
 
Natural water, oriental leaves, and tea π are the main products required by the company, and Zhang Dacheng will prioritize promoting these three products when visiting stores. If the inventory of water and tea drinks is insufficient, remind the boss to restock.
 
In the summer of 2023, the company proposed the sales target of "100 Barrel Store" - requiring each salesperson to find a store in their responsible sales area and complete the task of releasing 100 barrels of 6 liters or 12 liters of Nongfu Spring natural water. This put a lot of pressure on Zhang Dacheng, as most of the areas he was responsible for were small and medium-sized couple stores. In contrast, Zhang Dacheng doesn't need to put in too much effort to promote Dongfang Ye. "The boss also knows what sells well and will actively request to purchase," he said
 
According to the monthly sales data of the stores, stores that have placed Nongfu Spring refrigerators and ground stacks will be refunded display fees at a rate of 5% of the sales amount. "The display fee will not be paid in cash, but will be returned directly to the store through the goods, which can increase the shipment volume of the products," said Zhang Dacheng.
 
How to change "bad" to "good"
 
According to the 2023 YiMagazine "New National Product Role Models" survey, Dongfang Ye has become the number one bottled pure tea category through online voting. From being "unpleasant" to being the first, Dongfang Ye walked for 12 years.
 
When promoting the first batch of products, Dongfang Ye did not provide a very clear market positioning. When sales personnel were actually promoting, the first target consumers they thought of were those with high blood sugar and high blood lipids who needed anti sugar, but it was a relatively narrow market circle. Afterwards, the official led marketing strategy was to link Dongfang Ye with traditional Chinese tea culture, but these guidelines have little to do with the brand reputation that Dongfang Ye has actually gained today.
 
The most direct decision-making factor for consumers when choosing a beverage is its taste. The fundamental reason for the significant shift in market acceptance of Oriental leaves is the evolution of consumers in terms of taste. The 2023 Tetra Pak Index report mentioned that global consumers have the highest attention to "sugar free juice" among various new food concepts, reaching 61%. Another survey by the Tetra Pak Index showed that one-third of people are willing to pay more for sugar free juice. The report also specifically mentions that the concept of sugar free has gained widespread recognition in India and China.

Returning to the marketing aspect, whether it was getting stuck in the "hardest to drink" list at the beginning, or dramatically playing the "basic ingredient" of various healthy DIY drinks in the past two years - every round of discussion around Dongfang Ye actually arises from the traffic world composed of social media and online hot searches. This is indeed a reminder for traditional fast-moving consumer goods enterprises - it is simple to advertise brand hard advertising, but it is also necessary to adapt to the situation and learn how to explore and support suitable internet celebrity bloggers to represent the brand and guide public opinion.
 
The blogger "Empty Diary" under the Peach Planet Culture of MCN has 5.22 million fans of Tiktok, of which more than 85% are women aged 18 to 23 years old. It ranks in the top 0.5% of all indicators of star map commercialization, and the average number of video likes is about 117000. The advertising agent of Nongfu Spring noticed the data performance of Empty Diary through data filtering and sent an advertising cooperation invitation. The two sides have been cooperating for nearly 3 years now, and have published evaluation advertisements for multiple products under the brand.
 
In May 2023, Peach Planet received another advertisement request from Dongfang Ye. This time point is usually used as a warm-up for the 6.18 e-commerce shopping festival, but Dongfang Ye's advertising placement did not include a purchase link, and the purpose was only to complete brand exposure.
 
Based on previous collaboration experience, Nongfu Spring's advertising agency sent information about Dongfang Ye, requesting that the advertisement cover basic product information, but did not interfere specifically with content creation, focusing on the blogger's creativity. In every stage of communication such as the creative outline, script, and filming and editing, the brand successfully passed without raising any objections.
 
The previous content creation of Kongkong Diary was mainly humorous jokes, with an early accumulation of 800000 fans. After transitioning to the evaluation track, the content production continued the humorous style, and this short video made for Dongfang Ye received 306000 likes. The comment section set up an interactive participation lottery to give away 12 bottles of Oriental leaves, which ultimately attracted over 100000 comments and posts - fans shared photos of Oriental leaves and discussed which flavor was the best. Among them, jasmine tea was widely loved, while the reputation of Qinggan Pu'er was polarized.
 
"Not every fast-moving consumer goods advertisement has such an active comment section, and dense comments with images are relatively rare," a business representative from Peach Planet told YiMagazine. After the release of the video by Dongfang Ye, Peach Planet purchased a video heating tool called "Dou+" on the basis of natural traffic to help increase video playback and interaction. "However, it is only an icing on the cake effect. If the content itself is not of high quality, it cannot provide timely assistance."
 
Another blogger of Tiktok, "Alpaca Run", created a short video with the theme of fat reduction. The content is about various new drinking methods of using oriental leaves to match coffee or other drinks. The number of likes reached 80000, which is already a popular item for this account with only 3800 fans.
 
This video is exactly what Dongfang Ye is most fond of mentioning to the public about "tap water" dissemination - there is no cost cooperation between the two parties. "Alpaca Run" represents an increasing number of personal short video accounts, purely from the perspective of "making it easier to earn click traffic through topic content", actively creating short videos related to Oriental Leaves. The most popular themes nowadays - "New Drinking Method for Losing Weight with Oriental Leaves", "Using Oriental Leaves to Copy the Overlord Tea Lady", and "Drawing Traditional Chinese Painting on the Body of Oriental Leaf Bottle" - are all created spontaneously by netizens. Whenever a video becomes popular, it further promotes the topic and soon more people will reproduce it in its original form.
 
In the end, they jointly created a brand impression that "the leaves of the East have become delicious". At this point, the East Leaf, which had always insisted on sugar free from the beginning, finally arrived at its own time.