Yuanqi Forest once again "increased in value."

Just now, this local start-up beverage brand, which has risen fiercely in recent years, announced that it has completed a new round of strategic financing, with a post-investment valuation of US$6 billion (approximately RMB 39.3 billion).In this round of financing, Yuanqi Forest's old shareholder Sequoia China and new shareholders Warburg Pincus, L catterton participated in the lead investment, and Temasek and several old shareholders Gao Rong and Longfor continued to participate in the investment.

This means that compared with the last round of financing of approximately US$2 billion, Yuanqi Forest’s valuation has increased by nearly three times in less than a year, and this is less than 5 years after the establishment of Yuanqi Forest.

Let's take a look at it together.

"Product New Year"

The person in charge of Yuanqi Forest stated to Xiaoshidai today that the amount of Yuanqi Forest’s current round of financing will be mainly used in four aspects: 1) Carrying out overseas mergers and acquisitions to introduce more overseas high-quality products; 2) Building a higher-quality and more environmentally-friendly beauty in China Factory; 3) Increase investment in scientific and technological research and development; 4) Continue to internationalize.

This also shows the follow-up development path and competitive strategy of Yuanqi Forest.

First of all, it can be expected that this local beverage company will further expand its "new product lineup." Xiaoshidai introduced that Tang Binsen, the founder of Yuanqi Forest, once said that 2021 will be the "product year" of Yuanqi Forest. There are still 95% of Yuanqi Forest's products that have not been launched, and R&D expenses and R&D personnel investment will reach three times that of 2020. .

"We will devote more energy and expenses to product formulation upgrades and new product research and development." Yuanqi Forest said today that it will conduct product research and development based on current consumer trends and young people's insights, and continue to strengthen category innovation and supply. The construction of chain production bases will seize the subdivision opportunities of the food and beverage track.

Building a stronger product "moat" is indeed the key to the continued growth of the vitality forest that has become popular with sugar-free soda sparkling water in the future.

Xiaoshidai introduced that the vitality forest sprang up in a wave of "0 sugar, 0 calorie, 0 fat" beverage craze. Previously, many beverage companies have also introduced sugar-free tea and carbonated beverages that use sugar substitutes, but some of the most common sugar substitutes have a bit of taste, such as a bitter aftertaste. The success of Yuanqi Forest Sugar-Free Sparkling Water is inseparable from erythritol. It is also one of the earliest domestic brands to use this sugar substitute to produce beverages on a large scale. The latter is advertised as having better taste and tolerance. But the price of raw materials is also relatively higher.

However, since erythritol is not a patent of Yuanqi Forest itself, this also means that its success is not "uncopyable". In fact, there have been more opponents of Yuanqi Forest, and more and more sugar-free soda sparkling water with similar product positioning and formula has appeared on the market. For example, the new tea chain Xicha last year launched the "0 sugar, 0 calorie, 0 fat" flavored sparkling water that also uses erythritol.

If the raw materials are only a small angle, then the larger proposition for the development of the vitality forest also includes how to create more large single products and how to achieve sustainable growth. Under the eye of a group of competitors and the "spur" of capital, the vitality forest is running wildly all the way.

"On the scale of the entire business, our plan for 2021 is to reach 7.5 billion yuan in sales." Yuanqi Forest told Xiaoshidai today. This means that the growth target of Yuanqi Forest this year has more than doubled. According to official sources, in 2020, the sales of Yuanqi Forest will be close to 3 billion yuan.

In fact, the vitality forest, which relies on sugar-free sparkling water and burning tea to conquer the market in the beverage market, has been gradually expanding its layout in the main categories of beverages. For example, last year, Yuanqi Forest launched its first fruit juice drink sub-brand "Full Score", and its first energy drink sub-brand "Alien".

Up to now, Yuanqi Forest has more categories of beverage products, including sugar-free low-fat milk tea, sugar-free yogurt, sugar-free energy drinks, juice sparkling water, etc.

Self-built capacity and overseas layout

Secondly, after this financing, it is expected that Yuanqi Forest will further increase its self-built production capacity.

Xiaoshidai introduced that after the completion of the first self-built factory in Chuzhou, Anhui last year, the second phase of the Yuanqi Forest Chuzhou factory and the new factories in Zhaoqing, Guangdong and Xiqing, Tianjin will also be completed and officially put into production in April this year. Among them, the Guangdong Zhaoqing factory will also be the first "transparent factory" without walls in China's beverage industry. The factory is integrated with the surrounding communities and is open to all consumers to visit.

"After the new plant is put into operation, the total production capacity of Yuanqi Forest will reach 110 million boxes this year." The company said today that by then, Yuanqi Forest will achieve coverage of Beijing-Tianjin-Hebei, Yangtze River Delta, Pearl River Delta and Guangdong-Hong Kong-Macao University. The layout of the base in the Bay Area will not only improve delivery efficiency, but also greatly shorten the time it takes for users to obtain beverages and enterprises to obtain market feedback, "and thus continue to expand market share."

It is reported that Yuanqi Forest will also start the construction of production bases in Southwest and Central China this year, and the production capacity of the factory is expected to exceed 10 billion after it is put into operation.

Finally, in terms of speeding up internationalization, according to the relevant person in charge of Yuanqi Forest, the company's brand positioning is to "serve the world globally", on the one hand it must "bring in" and on the other hand it must "go out".

Regarding overseas mergers and acquisitions to "bring in", the relevant person in charge of Yuanqi Forest stated that the approach is to explore the possibility of "forming consumption upgrades or filling gaps in consumer demand" for existing products in the Chinese market from raw materials, production areas to technology , The specific direction will follow the needs of consumers and the market. Prior to this, Yuanqi Forest had introduced the flavor of "Mate Tea" from South America and launched a new product of energy drinks.

In addition, Yuanqi Forest stated that it plans to further acquire its own factories overseas through investment or self-built methods in the next 2-3 years, and promote the research and development of more global products.

Regarding "going out", according to Yuanqi Forest, it has entered more than 40 countries around the world, including the United States, Canada, Britain, France, Germany, Australia, Singapore, Japan, South Korea, etc.

Yuanqi Forest stated today that it has taken the United States, Europe and Southeast Asia as "important markets for development", focusing on existing products going overseas and capturing new market opportunities from 0 to 1 overseas. In terms of channel expansion, it will focus on emerging channels and direct marketing. DTC channels for consumers.

Valuation of $6 billion

In the fierce fighting in the Chinese beverage market, why do investors bet on this local emerging beverage brand?

Guo Zhenwei, Managing Director of Sequoia China and Director of Vitality Forest, said today that food and beverage are the key areas of Sequoia China’s layout. “We are well aware that the beverage industry has high barriers and strong barriers. But the young Vitality Forest has brought this big industry. Changes are not only the product innovations and marketing methods that can be seen from the outside, but also the company's internal organizational ecology and operating processes that can not be seen from the outside."

"The reason why we are determined to lead two consecutive rounds of investment is that we believe that Yuanqi Forest is a team that has dreams, courage, and can continue to challenge themselves and break through boundaries. We continue to be optimistic about the rapid iteration ability and rapid iteration of the Yuanqi Forest team. Execution ability, we are optimistic that Yuanqi Forest will grow into a comprehensive group centering on the healthy life of young consumers." He continued.

As a new shareholder of Yuanqi Forest, Wei Zhen, the co-president of Warburg Pincus Investment Group China, said today that he is optimistic about the "domestic brand" of Yuanqi Forest. "With the rapid rise of the Chinese middle class in the past 10 years and the restructuring of needs, scenarios and links brought about by the awakening of the'Gen Z'self-awareness, we judge that the next ten years will be the golden decade for the rise of Chinese brands." He says.

"We are very optimistic about the possibility of Yuanqi Forest reaching the top of the track, so we choose to bet and accompany continuously." Old shareholder Gaorong Capital partner Han Rui told Xiaoshidai today. First of all, Yuanqi Forest has "very visionary" The team is extremely determined" and has a deep insight into the needs of consumers.

Secondly, he said that from the first day of its establishment, Yuanqi Forest has integrated data into the product development process. Product testing and iteration are fast, which is also the key to creating a series of flagship products in the fierce competition.

Han Rui told Xiaoshidai that today's Yuanqi Forest is undergoing a process of "from quantitative change to qualitative change". From the past, it has achieved a breakthrough with the "super long board" of significant product advantages, and today it has become a leading company with "no shortcomings". Step forward.

According to the data, among the other two new shareholders in this round of financing, L catterton is the world's largest consumer goods investment company, with an investment scope spanning multiple areas of fashion consumer goods, focusing on medium-sized growth companies in Asia. The co-investing Temasek is an international investment company established by Singapore, focusing on the four major investment themes of a transforming economy, a growing middle class, a significant comparative advantage, and emerging leading companies for long-term investment.

At present, China is one of the largest soft drink markets in the world, and there is still a good growth rate. According to data from the National Bureau of Statistics, the total retail sales of consumer goods in 2020 will be 391981 trillion yuan, of which beverages will increase by 14%.

At present, the growth rate of the vitality forest makes many traditional beverage giants not to be underestimated. It is reported that during the "618" period in 2019 and 2020, Yuanqi Forest ranked first in sales of Tmall beverages; during the "Double 11" period in 2020, Yuanqi Forest ranked first in the water and beverage category on both Tmall and JD.com.