Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 96 The Giant's Gaze (Seeking monthly votes and recommendations to continue reading)

“There’s one more thing, Mr. Chen.” Ling Peiyi handed over the documents in her hand. “This is the release schedule for the final version of ‘Drunken Master,’ starring Jackie Chan. It will be shown in all Golden Harvest theaters this Friday.”

Mr. Ng See-yuen asked, "Will you attend the premiere?"

Chen Bingwen took the document and quickly glanced at it.

finally come.

This film is not only related to his return on investment of HK$200,000, but also to his carefully designed cultural integration and brand output.

The phrase "After the fight, go to Chan Kee for dessert" will be repeatedly heard in cinemas throughout Hong Kong and even in Southeast Asia and Japan in the future.

“Tell Director Wu that I will be there on time.” Chen Bingwen handed the document back. “In addition, in the name of Chenji Foods, book several movie screenings and invite all our employees, channel partners and media friends to watch them.”

After the premiere, a "Drunken Fist Set Meal" will be offered at all Chen Kee standard stores: buy any dessert and add a can of Jinba (a popular Chinese herbal tea brand) for a 20% discount.

"Brilliant!" Ling Peiyi's eyes lit up. "The movie's popularity directly translates into store traffic and product experience, killing two birds with one stone!"
I'll arrange it right away!

Atlanta, USA, Coca-Cola's global headquarters.

An internal evaluation meeting about "Jinba" is being conducted from a completely different perspective.

Ten cases of ice-blue "Jinba" energy drinks, which John Thompson airlifted from Hong Kong Island a few days ago, are now neatly displayed on the sample table in the headquarters conference room.

The two powerful Chinese characters "劲霸" and the lightning bolt pattern on the bottle look somewhat out of place under the cool white light.

Dr. David Hopkins, head of the headquarters' product development center, was presenting the latest analysis report to several key members of the product strategy committee.

"Gentlemen, based on the comprehensive physical, chemical and sensory analysis of the 'Jinba' samples conducted by our R&D center..."

As he spoke, he brought up a slideshow, on which a complex chromatogram and a list of ingredients were displayed.

"The core functional ingredients of this energy drink called 'Jinba' are a combination of taurine and caffeine."

The taurine content is approximately 125 mg per 100 ml, and the caffeine content is approximately 32 mg per 100 ml.

This combination is considered in existing scientific literature to have a synergistic effect of relieving fatigue and improving attention, but its long-term effects and safety still require more clinical data to support.

The overall taste and flavor are on the sweeter side, which differs significantly from the flavor profiles of mainstream products like Coca-Cola and Fanta.

After introducing the ingredients of Jinba, Dr. Hopkins concluded: "From a technical point of view, Jinba is a well-defined functional sugary beverage."

Its core selling point lies in the instant energizing and refreshing experience brought by the combination of taurine, caffeine, and menthol.

The formula itself wasn't groundbreaking or innovative, and it was somewhat similar to a niche beverage in Thailand, but Chen Ji Foods was a pioneer in mass-marketing it as a ready-to-drink beverage.

Robert Ellis, Chairman of the Product Strategy Committee and Senior Vice President, nodded slightly and turned to Sarah Miller, head of the Market Analysis Department: "Sarah, what about the market potential assessment?"

Sarah Miller continued, "Based on our long-term tracking and model forecasting of the global beverage market, and combined with the product positioning of 'Jinba', we have made a preliminary estimate of the market size of the 'functional beverage' sub-category."

Currently, the global market for ready-to-drink beverages that explicitly focus on 'energy replenishment' and 'anti-fatigue' is almost entirely blank.

The few similar products, such as caffeinated mate tea drinks in some European countries or regional energy drinks in Japan, have very limited annual sales and are highly localized.

Based on existing data, consumer health trends, and the competitive landscape of alternatives, we conservatively estimate that the global functional beverage market will have a ceiling of approximately $1.5 million to $2 million over the next five years.

This represents less than 0.07% of the massive global soft drink market, which exceeds $3000 billion, making it an extremely small niche market.

She paused for a moment and added, "Moreover, cultivating this market requires huge consumer education costs. The challenge lies in how to get ordinary consumers to accept and get used to choosing a beverage with a clear 'functional' label and a unique flavor in their daily drinking scenarios, rather than the cola, juice or bottled water they are familiar with."

There was a brief silence in the conference room.

The committee members exchanged glances, their expressions varied, but they generally conveyed a sense of "it's nothing special."

Mark Jensen, Senior Vice President in charge of global bottling plant coordination, spoke first, "So, all that fuss John Thompson went through in Hong Kong, even opening up our core channels in North America and Europe, was to pave the way for this... um... 'niche specialty beverage'?"
A market with a potential annual size of only $2 million, or even less?

He picked up a bottle of "Jinba" (a popular Chinese energy drink), shook it, and the icy blue liquid swirled inside.

"Unique flavor? Forgive me for speaking frankly, but it's hard to imagine that this kind of sweet and cloying taste could become popular among mainstream consumers in North America or Europe."

What will our bottling plant partners think?
"Why should we waste their precious shelf space on this 'energy water' from some small Asian workshop? It's a complete waste of our distribution channels!"

Another committee member, the CFO in charge of finance, said: "From a financial point of view, this is even more puzzling."

We just paid $80 in patent licensing fees, and will continue to pay commission per bottle in the future, and have committed to opening up distribution channels.

The other party's product targets a tiny market with high cultivation costs.

Even if 'Jinba' succeeds in its target markets, its contribution to sales and profits within the Coca-Cola system will be negligible compared to our core business. Not to mention the 3% channel commission, which might not even cover the increased channel management costs.

She changed the slides on the projector to another set of slides, "Gentlemen, please see our latest earnings report:
To date, Coca-Cola's global sales have exceeded 26 billion standard cases (approximately 312 billion bottles), representing a year-on-year increase of 12%; gross profit margin has remained stable at a high level of 55%.

Our core businesses—Cola, Sprite, Fanta, and the ever-growing Diet Coke line—are like a never-ending money-printing machine, generating astonishing profits in every corner of the world.

Our resources, whether in R&D, marketing, or channel management, should be 100% focused on how to make this money-printing machine run faster and more efficiently, to consolidate our absolute dominance in the carbonated beverage market, and to explore new categories with larger scale, such as juice and water.

Instead of diverting our energy to chasing a vague and insignificant concept of 'energy drinks'.

Her words resonated widely.

In 1978, when Coca-Cola was at its peak, an unparalleled sense of confidence permeated the company.

They have just further consolidated their dominant position in the global market, and their stock price is soaring.

In their view, Chen Ji Foods, a small company from the Far East, may have succeeded in a clever trick (bottle cap patent), but its core product, "Jinba," is merely an attempt to play the role of a self-proclaimed "pioneer" in a "large market" that does not exist at all.

This attempt appears naive and laughable in the eyes of the giants.

Robert Ellis looked around at everyone, finally fixing his gaze on Hopkins, the R&D director who had been listening to everyone's remarks: "David, from a technological reserve perspective, if we decide in the future that it is necessary to enter this so-called 'functional beverage' field, how difficult would it be to replicate or even surpass 'Jinba'?"

Dr. Hopkins adjusted his glasses and said confidently, "Mr. Ellis, technically speaking, it's not difficult at all."

Taurine, caffeine, and B vitamins are all mature and inexpensive food additives.

Flavor blending is our strength, and it's a piece of cake for us to create a product with a taste that's more easily accepted by the mainstream market than 'Jinba'.

If we decide to enter the market, leveraging Coca-Cola's R&D capabilities, brand influence, and unparalleled distribution network, we can launch more competitive products in a very short time and quickly crush any existing smaller players.

The key question is, is it necessary for us to create a dedicated product line for an "energy drink" that could potentially be classified as a medicine at any time?

"Classified as medicine?" A committee member frowned.

“Yes,” Hopkins nodded. “Currently, the U.S. Food and Drug Administration lacks clear regulatory classifications for beverages containing active ingredients such as taurine and high doses of caffeine.”

It operates in the gray area of ​​food and medicine.

Once classified as a drug, its sales channels and marketing methods will be severely restricted, turning it into a niche product category.

I believe it would be extremely unwise to invest resources in a small market with an uncertain future and numerous regulatory risks.

These words drew nods of agreement from the executives present.

Regulatory uncertainty is one of the risks that these giants fear most.

Robert Ellis nodded and concluded, "Thank you all for your analysis."

The conclusion is clear.

Chenji Foods' "Jinba" energy drink is a niche product with extremely limited market potential.

It may gain some attention in its home or specific regional markets, but it has no chance of growing into a category with global influence.

It poses no substantial threat or opportunity to our core business and future strategy at Coca-Cola.

He paused, then said with a hint of disdain, "The core value of the agreement John Thompson reached in Hong Kong Island lies in the fact that we obtained bottle cap patents that are crucial to improving the user experience of our bottling plant system at a reasonable cost, and thereby successfully blocked Pepsi."

As for the bundled access to the Jinba channel, consider it a small incentive for this partner, an insignificant additional clause.

John was informed that the agreement would be signed and implemented as planned, but no special resources would be allocated to the distribution of Jinba products in North America and Europe; everything would be handled according to the standard new product access process.

"Meeting dismissed."

The meeting concluded, and the committee members left one after another.

The few boxes of ice-blue "Jinba" samples were carelessly piled up in a corner by the assistant and would soon be forgotten.

At the heart of the Coca-Cola empire, an assessment of an emerging category ended with utter disdain and rejection.

They firmly believed they had seen through the essence of the matter: Chen Ji's grand gestures were ultimately nothing more than a way to promote an insignificant, niche beverage.

Compared to Coca-Cola's impressive annual sales of 26 billion cases and a gross profit margin of 55%, "Jinba" and its backer Chenji appear as insignificant as dust.

(End of this chapter)