Kingdomway has recently
announced its plan of acquiring the US company Zipfizz. The move is in
accordance with the booming popularity of functional and healthy drinks in
Kingdomway announced in the middle of May that its US-based subsidiary KUC is
planning to purchase 100% shares in the US-based company, ZIPFIZZ. This
enterprise is a producer of sports powder and drinks. The acquisition will be
made at a price of USD80 million. In the announcement, Kingdomway mentioned
that in the selection of functional beverages, people now favour healthy
options, which are of a new generation, natural, containing vitamins and
mineral substances. Zipfizz produces exactly this kind of sports drinks.
According to market intelligence firm CCM, this significant transaction will
facilitate the realisation of Kingdomway’s development in China’s big
2014, Kingdomway started the shift in businesses from animal nutrition and food
nutrition enhancers to health-care products and functional food, and its steps
in the field of Big Health have been accelerated. As of May 2018, it has spent
over USD235.59 million on the acquisition of overseas health and functional
their choice of drinks, people now value health more highly rather than just
considering the flavour, and functional drinks are becoming increasingly
popular in China. Actually, the functional drinks market has a large market
potential. According to surveys, an annual growth rate of about 10% is
estimated to occur in this market in China, which is expected to reach a value
of USD9.70 billion by 2021.
more enterprises have been attracted by this potential and started the
development of functional drinks. Since the beginning of 2018, several new
products have been introduced on the market. Guangdong Yetai Biotechnology
launched its Quickrover Power intensified vitamin drinks, which
contain taurine, inositol, and vitamin B6. Later, China’s dairy giant Inner
Mongolia Yili announced its plan of entering the functional drinks market and
introducing a new product, Huanxingyuan, onto the market. After the competition
of Kingdomway’s acquisition of Zipfizz, the foreign brand may also be
introduced in China.
busier lifestyle of China’s growing urban middle class is driving the market
for functional beverages because a rising number of workers don’t have the time
anymore for a healthy and balanced meal every day. The lacking energy and
nutrients are guaranteed nowadays by consuming functional beverages including
taurine and vitamins.
an increasing number of enterprises discover China as a promising market for
functional beverages, launching new products into the large market.
to market intelligence firm CCM, China is ranked second behind the USA in the
number of energy beverage sales in the global market. Recent growth number of
up to 25% have caused high attention by international enterprises to penetrate
into this promising market. It is expected that the domestic retail sales
volume of functional beverages will hit 15.04 billion litres by 2020, with a
corresponding sales value of USD23.78 billion.
manufacturers are launching new products into the market to gain some market
share. One example is the Mi-PRD of the Mizone brand by Danone. Even this
product is not being able to buy in retail yet, the company has already
announced new beverages with exotic flavours like pineapple, litchi, orange,
mango, peach, and cucumber.
also China’s domestic manufacturers are launching new products in China’s
functional beverage market. Hangzhou Wahaha has introduced the new functional
drink Burnlaxy. Special ingredients, besides taurine and vitamins, are ginseng,
maca, and fresh ginger. The company has lost its market share of 4.9% in 2012
to 0.9% in 2015. It needs to be awaited if the company can get market share
again with launching new functional drinks. Other successful products by this
company are Wahaha Get C and Hai Jing Lemon.
beverages are becoming popular among people who want specific health benefits
from their food and drink. To date, China has become the largest energy drink
market, and now has the highest growth rate in the world. In 2015, sales stood
at over 1.30 billion litres, up 25.00% YoY, and sales increased by 15.16% YoY
to USD9.04 billion, according to CCM’s research.
consumption of functional beverages in China still remains low. The annual
consumption averages less than 2 litres per capita, not even a tenth of the
figure in developed countries. This huge market has attracted a number of
domestic and overseas producers. Yet it may be hard for the foreign ventures to
break into the Chinese market.
is no secret, that healthy products are the big driver for sales in the future
in China, as Chinese awareness is surging. Companies, that are doing business
in China’s beverage market, are doing good in considering this trend and being
orientated to adjust their products and labelling according to the new needs.
to Mintel, the worldwide consumption of energy drinks has reached 8.8 billion
litres in 2015. The countries with the largest consumption are hereby the USA
with 3.3 billion litres, China with 1.4 billion litres, Great Britain with 561
million litres, and Germany with 328 million litres.
most famous energy drink is arguably Red Bull, sold in the typical red and
silver can with the red bull icon. This energy drink made its way to China at
the end of 2013, but still, is facing several problems like a trademark issue.
demand for taurine is growing worldwide. China has established itself as one of
the major players in the amino acid market, and therefore also for nutrient
additions like taurine. Many manufacturers are outsourcing their taurine
production to China and search cheap suppliers in this country.
key manufacturers in China’s taurine business are Taisho Pharmaceutical, Honjo
Chemical, and Yongnan Pharmaceutical. Especially the latter company has finished
the fiscal year 2016 with a remarkable boost in net profit, thanks to the
booming taurine market.
About the article
information for this article comes from CCM, China’s leading market
intelligence provider for the fields of agriculture, chemicals, food and feed.
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