Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 216 Domestic Sales (Seeking monthly votes, recommendations, and subscriptions!)
"Mr. Chen, good news!" As soon as the call connected, Li Guowei's excited voice came through the receiver, "That thing you mentioned last time, there's progress!"

Chen Bingwen's mind raced: "Is it about bottled sugar water being imported into the mainland?"

“Yes!” Li Guowei affirmed. “Following your suggested approach and referencing the Coca-Cola model, we submitted a report to our superiors, explaining the situation in detail.”

After a period of research and discussion, the higher authorities have agreed in principle!

Chen Ji's bottled sugar water is permitted for pilot sale in designated locations catering to foreigners, such as major tourist hotels and Friendship Stores.

Upon hearing this news, Chen Bingwen was extremely excited.

The door to the mainland beverage market has finally opened for him!
Although it is currently only a pilot program with a limited scope, it is of great significance.

This is not only the first step for Chen Ji's products to enter the vast mainland market, but also a strong policy signal, meaning that his company and products have gained a certain degree of recognition.

This will lay a solid foundation for large-scale entry in the future.

"That's great! Manager Li, we owe you a lot for your strong support this time!" Chen Bingwen said sincerely.

"Mr. Chen, you're too kind. This is part of our job," Li Guowei said with a smile. "Next, we need you to provide detailed product information and hygiene inspection reports as soon as possible so that we can proceed with the specific approval and import procedures."

“No problem! I’ll arrange for someone to prepare it right away and send it to you as quickly as possible.” Chen Bingwen immediately agreed.

After hanging up the phone, Chen Bingwen was in a good mood.

The door to the mainland market has already opened a crack, and he must seize this opportunity.

Bottled sugar water has a popular flavor and a moderate price, making it a very suitable product for exploring new avenues of innovation.

We need to assemble a lean and efficient team immediately to handle this matter.

His first thought was of Gao Zhenhai, who had been in charge of technical support and production coordination at the Dongguan soda factory.

Since taking over the Dongguan soft drink factory, Gao Zhenhai has been based in Dongguan.

During this period, the bottled sugar water production capacity of Dongguan Soft Drink Factory has become an indispensable and important part of Chenji Food.

This alone is enough to demonstrate the effectiveness of Gao Zhenhai's efforts at the Dongguan factory.

Thinking of this, he immediately instructed his secretary to summon Gao Zhenhai back to Hong Kong Island.

At the same time, Li Ming, the marketing manager who had performed well in the Korean market, was transferred to North America to take over Ling Peiyi's work, so that Ling Peiyi could return to focus on the development of the mainland market.

He needs a capable person who is familiar with the situation on the mainland to implement this crucial first step.

Gao Zhenhai has been in Dongguan for a long time and has a better understanding of the situation in the mainland, making him a good candidate.

Ling Peiyi, on the other hand, needs to return to oversee the overall situation.

After the notice was issued, Gao Zhenhai rushed back to Hong Kong Island from Dongguan the next afternoon.

Ling Pei-yee arrived at Kai Tak Airport on the morning of the third day and went directly from Kowloon back to the Wai Yip Building in Central.

The two arrived at Chen Bingwen's office one after the other.

"Chen Sheng!"

"Brother Sheng!"

Chen Bingwen gestured for them to sit down: "Thank you for coming back so quickly."

Significant progress has been made in the mainland market, and we need your immediate involvement.

He briefly explained the news that bottled sugar water had been approved for trial sale in mainland foreign-related venues.

Upon hearing this, Gao Zhenhai's face lit up with excitement: "This is great news!"
The Dongguan factory's production capacity is more than enough; the recipe for the syrup and the packaging line are readily available.

The key is the transportation and customs clearance process.

"This is exactly where you need to focus your attention."

Chen Bingwen looked at Gao Zhenhai and said, "We must seize this opportunity in the mainland."

Pilot sales are just the beginning; we want to make it a fulcrum to leverage the entire market.

"Ahai, you've been in Dongguan for a long time and are familiar with its operating model and interpersonal relationships. Are you sure there won't be any problems leading the implementation of this project in the mainland market?"

"Understood! Don't worry, Brother Sheng, I will definitely make this road a success!"

Gao Zhenhai solemnly agreed.

Chen Bingwen nodded. "I'll give you the authority to form a special team. You can choose the members yourself; you can bring them from the Dongguan factory or send them from Hong Kong Island."

The first priority is to ensure the products are delivered smoothly and on time to the designated Friendship Stores and tourist hotels. The packaging needs to be redesigned to be simple, elegant, and highlight the 'Chen Ji' brand, while also conforming to their aesthetic standards.

After saying that, he turned to Ling Peiyi and asked, "Director Ling, please give a brief report on the North American situation first. After that, we will temporarily shift our focus back to the mainland and take charge of coordinating the development of the mainland market."

Ling Peiyi nodded, took out several documents that she had prepared in advance from her briefcase, and reported, "Okay, Mr. Chen."

There are three main issues regarding North America.

"First, regarding the acquisition of local factories. Following your instructions, I focused my investigation on the transportation hubs of the American Midwest and have initially shortlisted two targets."

A small to medium-sized beverage bottling plant in Illinois, near Chicago, has decent equipment and its capacity can meet our initial needs. The other party is interested in selling and is asking for around two million US dollars.

The other one is in Ohio, smaller in size but in a good location, and is asking for 1.5 million.

Both companies are in dire need of working capital, leaving considerable room for negotiation.

As Chen Bingwen listened, he quickly glanced at the documents she handed him: "Hmm, the location and price are both acceptable."

Has the equipment condition been assessed?

“A preliminary assessment has been conducted,” Ling Peiyi replied. “The production line in Illinois is more modern and has a lower failure rate, but the prices are firm.”

The price at the Ohio facility is attractive, but some equipment needs replacement or major repairs, which could lead to significant ongoing costs. A detailed technical assessment report will be required after an on-site inspection by our engineering team before a final decision can be made.

"Tell Li Ming to arrange for a technical team to go there as soon as possible."

Chen Bingwen instructed, "The focus of the evaluation is not how low the price is, but whether it can operate quickly and stably after production starts. Cost control is the key."

"Identify the objectives as soon as possible and move into substantive negotiations."

"Understood." After making a note, Ling Peiyi continued to report the second matter, "Secondly, regarding high fructose corn syrup."

I have contacted several major manufacturers, including ADM and Cargill.

They confirmed that this syrup has indeed begun to be used on a large scale in the North American food and beverage industry, especially in carbonated beverages, where it is increasingly replacing sucrose.

She turned to another page of data: "This is the current market price and the discounts on long-term contracts."

According to them, large-scale procurement could indeed reduce costs by 30% to 40% compared to the sugarcane raw materials we currently use.

Moreover, the supply is very stable and unaffected by fluctuations in international sugar prices.

Chen Bingwen looked at the numbers on the report and quickly calculated in his mind.

The cost difference was larger than he had anticipated.

This is no longer a multiple-choice question, but a mandatory one.

No, there will be absolutely no cost advantage in the North American market in the future.

"Did they provide samples and technical information?" he asked.

“I provided them.” Ling Peiyi took out a few small bottles and a stack of documents from her briefcase. “The samples arrived on the same plane as me and have already been sent to the R&D center.”

The technical documentation is quite detailed, including a comparison of different fructose content grades and their characteristics.

She briefly explained: "There are two common models: HFCS-42 and HFCS-55."

HFCS-42 contains 42% fructose, with a sweetness approximately equal to sucrose. It has good thermal stability and is suitable for use in common beverages and baked goods.

HFCS-55 contains 55% fructose, making it slightly sweeter than sucrose. It has a pronounced cold-sweet characteristic, making it more suitable for carbonated beverages and frozen drinks, resulting in a clearer taste.

Chen Bingwen picked up a small bottle and looked at it. The clear liquid looked no different from ordinary syrup.

What initial feedback has been received from the R&D center?

"The samples have just arrived, and Professor Zhou and his team haven't had time to conduct comprehensive testing yet."

However, according to information provided by the supplier, replacing sucrose is technically feasible, mainly by adjusting the formula ratio and process parameters to suit the sweetness profile and solubility characteristics of different types of high-fructose corn syrup.

Ling Peiyi answered.

Chen Bingwen knew that using high-fructose corn syrup could significantly reduce costs and enhance the product's price competitiveness.

However, this also means that the formula has been changed, which may result in subtle changes in taste.

While North American consumers enjoy high-sugar products, "Pulse" is a new brand that has just become a bestseller in the North American market. Replacing some of the sucrose with high-fructose corn syrup still requires careful consideration.

With that in mind, he decided: "Prioritize testing alternatives to HFCS-55 in the pulsed prototype formulation."

Replace sucrose as much as possible while maintaining the existing taste and functionality.

Professor Zhou, please provide the test data and samples as soon as possible. Small-scale consumer testing should also be arranged simultaneously.

“Okay, Mr. Chen.” Ling Peiyi quickly took notes.

“What is the third thing?” Chen Bingwen asked.

“Thirdly, there is feedback from the channels,” Ling Peiyi said. “Based on recent sales data and our own market visits, Pulse has a high repurchase rate in bars and university areas.”

Many bar owners have reported that using it as a base for mixing drinks is well-received by customers and can extend their stay.

However, some distributors through traditional channels have suggested that the packaging design is too youthful and they would like a more sophisticated version for sale on other occasions.

"Note down the packaging issue and have the marketing department conduct follow-up research." Chen Bingwen waved his hand. "The feedback from the bars and the university area is very important; it proves that our product positioning is accurate."

Keep this momentum going.

He concluded, "The North American business is progressing as planned. The key tasks are acquiring the factory and replacing high-fructose corn syrup. I told Li Ming to get on board."

Director Ling, your work focus is now shifting back to the mainland.

Manager Gao is responsible for streamlining the supply chain and sales channels, while you are responsible for the overall market strategy, brand building, and subsequent expansion planning.

The mainland market differs from other places; special attention must be paid to the policy environment and consumer habits.

He looked at Gao Zhenhai: "Ah Hai, return to Dongguan as soon as possible and assemble a team. Complete the coordination with relevant departments as soon as possible, and report any problems to me and Director Ling in a timely manner."

“Understood! Brother Sheng, I’ll go back tomorrow,” Gao Zhenhai replied without hesitation.

"Yes, I know you've had a tough time lately. Hang in there, expand the market further, and things will get easier later."

Gao Zhenhai stayed in Dongguan for more than two months, and was sent back as soon as he returned.

He felt really bad about it.

However, there was no other way. Communication between many parts of the mainland and Hong Kong Island was inconvenient. Apart from a few cities where telephone and telegram communication was possible, other cities could only contact Hong Kong Island by letter, which was extremely inefficient.

We used China Resources' channels to notify Gao Zhenhai to return; otherwise, it would have taken forever to get him back by letter.

Only by having Gao Zhenhai stationed in the mainland can we respond to reactions from all sides as quickly as possible.

(End of this chapter)