Beverage behemoth Hangzhou Wahaha Group Co’s sales revenue is likely to fall another 10 percent in 2015, as the company struggles to maintain growth amid a slowing economy and changing consumer tastes, the China Business Journal reported on Saturday. If the newspaper’s report turns out to be correct, it will be the second straight year that Wahaha’s sales revenue has fallen. In 2014, the company’s sales dropped 7 percent from the previous year to 72.8 billion yuan ($11.42 billion)…Full Article: The Global Times Nov 2015

Key Points

  • From January to June 2015, Hong Kong’s Tingyi Holding recorded a year-on-year (i.e. Jan to June 2014) 14.7% drop in profits, as well as an 11.5% decline in sales revenue.
  • In 2014, Wahaha’s fruit yogurt drink, Nutri-Express, suffered from food safety allegations that stated the product had quality issues and overstated its health benefits.
  • In 2014, Uni-President China Holdings and Want Want China Holdings both reported declining profits.
  • From 2012 to 2013, according to Wahaha, the company’s annual sales revenue increased 23% to CNY 78.3 billion (~US$12.6 billion). The 2013 figure would be the beverage company’s high watermark.
  • From 2000 to 2013, China’s carbonated beverage sales share of the country’s total beverage market declined from 36% to 25%.

ChinaAg Comments

  • In March 2015, Tingyi signed an agreement with Starbucks to produce and distribute the Seattle-based company’s RTD products in mainland China.
  • In 2014, Nestle had a ~55% share of China’s ready-to-drink (RTD) market followed by Suntory Holdings Ltd with ~14%, Uni-President Enterprises Corp with ~6%, and Starbucks (ranked 7th overall) with just a 1% share.
  • From 2013 to 2014, Wahaha’s reported revenue fell from CNY 78.3 billion (US$12.5 billion) to CNY 72 billion yuan (US$11.5 billion).
  • Founded in 1992 and headquartered in Tianjin, Tingyi is a major Chinese producer and distributer of instant noodles, beverages and other prepackaged meals. In March 2012, Tingyi and PepsiCo established a strategic beverage alliance. As a result of the partnership, a beverage subsidiary of Tingyi (Asahi Beverages) became the franchise bottler for PepsiCo in China.
  • Founded in 1987 in Zhejiang province, Wahaha (the sound of laughter in Chinese) is China’s largest beverage company. The company has over 150 subsidiaries in 29 provinces, with total assets of 30 billion yuan [US$4.83 billion] and 30,000 employees (as of early 2013). The company produces milk drinks, carbonated soft drinks, juice drinks, tea drinks, health-care foods, canned foods and bottled drinking water. Zong Qinghou is the founder, Chairman and CEO of the company.

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