Austria Red Bull signed Budweiser China, Red Bull beverage sales in China

Chinese mainland China Daily (reporter Qian Yu Baiyang) reported in April 19th that Budweiser China and Red Bull Austria Red Bull officially signed its exclusive distribution agreement in mainland China. In this regard, a reporter from Beijing business daily contacted Red Bull of Austria and Budweiser China, but as of press, the other side did not reply.

It is worth mentioning that it was previously reported that Thai Tencel might hand over the market operation rights of Red Bull anagee in “Fujian, Zhejiang and Guangdong” to Budweiser China, and Budweiser China might sell red bull anagee. However, Budweiser China later issued a statement saying that it “does not operate Red Bull anagee”.

According to Zhu danpeng, an analyst of China’s food industry, the product positioning of Budweiser China and Austria Red Bull are both high-end, and Budweiser China has a certain say in domestic channels. In addition, there are certain connections between the two sides, it is expected that Austria Red Bull will choose Budweiser.

It is reported that in the 1980s, matthitz and Red Bull inventor Xu Shubiao set up a joint venture. In 1987, Austrian red bull was put on the market. In 2018, Austrian Red Bull sold 7 billion cans worldwide, covering Asia, Europe, Africa and the United States. In 2014, Austrian Red Bull entered China and applied for the “blue hat” logo of health products. Austrian Red Bull has been sold offline in Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing and other cities. The selling price is about 15 yuan. They are all imported products, mainly through the dealer mode. In the domestic online channel, red bull of Austria has opened its own flagship stores in tmall and Jingdong. In 2019, Red Bull Austria is expected to grow by 82% in the Chinese market. At that time, Red Bull Austria plans to fully expose itself in 40 first and second tier cities in China in the next 2-3 years.

At present, in the Chinese market, Red Bull is divided into four brands, which are Red Bull Vitamin functional beverage, Red Bull Vitamin flavor beverage, red bull annagi and Austria Red Bull. The operators of these four brands are also different. If the contract between Budweiser China and Austria Red Bull is signed successfully, it will mean that the sales of Red Bull beverage in China will form a market pattern of “Yangyuan distributes Red Bull annagi in the north, purson operates Red Bull Vitamin flavor beverage, Budweiser China operates Austria Red Bull, and Huabin group controls China Red Bull”.

In terms of retail sales, China’s functional beverage market will reach 111.9 billion yuan in 2019. Energy drinks mainly include energy drinks, sports drinks and nutrient drinks. Among them, the market scale of energy drinks is the largest. In 2019, the retail sales of energy drinks account for 70.2% of the total retail sales of energy drinks. According to the prediction of China Business Industry Research Institute, the overall market scale of functional drinks will reach 133.9 billion yuan in 2021.

At present, the main functional beverage products on the market are Red Bull Vitamin, Dongpeng special drink, Lehu, zhanma, physical energy, etc. Among them, hongniu vitamin, controlled by Huabin group, has a revenue of 22.3 billion yuan in 2019, accounting for 57% of the market share. Dongpeng teyin and Lehu ranked second and third. Data show that in 2019, Dongpeng special drink’s revenue will reach 4.2 billion yuan, and Lehu’s revenue will exceed 3 billion yuan. In addition, new beverage brands such as Yuanqi forest have also joined the competition in the functional beverage market.

With the increase of entrants, the competition in the functional beverage market is becoming more and more fierce. In May 2020, Thailand Tencel group announced that it will make a series of investments in its business in China in the next three years, with a total amount of 1.06 billion yuan. Specifically, it includes deepening the strategic partnership in China, setting up a new representative office in China, establishing a domestic team, expanding new production bases and launching more new products of the group, so as to expand the brand influence in China. This investment plan will support the long-term sustainable development of Red Bull business in China. In addition, Dongpeng teyin has formally submitted its prospectus and plans to raise 1.49 billion yuan for listing.

Zhu danpeng said that many enterprises are optimistic about the functional beverage market and hope to further share in the market. However, although the entry threshold of energy drink market is not high, it is not easy to do well.

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