Broader horizons: China’s EastRoc on shift from energy drink specialisation to multi-beverage portfolio
EastRoc is the only domestic beverage-focused company in China that is valued at over CNY100tn (US$14bn), and for a large part of its existence the firm has been focused on only energy drinks.
However, EastRoc is now making a major change to its business development strategy based on local beverage industry trends in recent years, believing that its one-product model is not the best way forward.
“We all know of beverage brands that have found success with either going deep into just one core product like Monster; or with going broad into multiple product development such as Coca-Cola and Nongfu Spring,” EastRoc Beverage Group Director and Vice President Vivi Jiang told FoodNavigator-Asia at the Food and Beverage Innovation Forum (FBIF) 2024 event in Shanghai.
“EastRoc has in fact tried going deep via the one core product strategy – we tried making fizzy products with bubbles, reduced and zero sugar energy drinks, even women-focused products – but the fact is that none of these were really successful.
“Our takeaway learnings from these attempts has been that Chinese consumers really don’t have very mature requirements from energy drinks yet, and the priority for them is variety and choice at a product level – which is why we have now opted to go down the broader multi-product route.”
The firm has been gradually developing its different categories since 2022, with a focus on hydration and teas.
“After confirming this strategy change, the dilemma was then whether to use the very well-recognised EastRoc name as a unilateral branding for all the new products,” she added.
“We quickly realised however that with a multi-product portfolio, we have to be even more conscious of differentiations and ensuring consumers are not confused between those that have functional uses and those which do not.
“As such, the decision was to continue to use EastRoc for all our functional products such as the energy drink, our new coconut coffee latte and the new hydration range; and to use new names for the non-functional products like coconut milk and water and teas.”
Cocktails in China
Jiang also revealed upcoming plans for the company to enter another major beverage category in China, which is ready-to-drink (RTD cocktails).
“We are already seeing a lot of well-established brands entering the RTD cocktails scene which is very dynamic, and even Rio which is a specialist in this area and has about 95% of market share has been making adjustments to its products to stay relevant,” she said.
“This is definitely a major beverage opportunity market in China, as it is at a stage where the industry actually really needs more players to enter it in order to grow and flourish further.
“The other angle is the consumer side as many RTD cocktail consumers see this as a drink as opposed to an alcoholic beverage that is only meant for occasions – this is very clear in Gen Z consumers who have really grown up with RTD drinks and once they hit the age for alcohol consumption, they find RTD cocktails very easy to accept as the next natural transition.
“So in the future we really see that for the youth it is going to be cocktails as a first choice of alcoholic drink, and no longer beer.”
