(Yicai Global) July 20 -- China Resources C'estbon Beverage (China) Co., a leader in China's bottled water market, has launched another incursion into the wider beverage market.
After warming up for over a month, the company formally unveiled its first amino-acid fortified energy drink product on July 16.
Its management used to think that producing drinking water is the same as making other beverages, but eventually realized they were quite different after learning a few bitter lessons, marketing general manager Chen Yue told Yicai Global on July 16.
The company has gained experience in the past several years, and the time is now ripe to diversify its beverage line, Chen added.
"Market research shows us that there is huge demand for sports drinks, and there is a gap for these products in the market today, so we developed the new product," he continued.
China's performance beverage market has exploded this year, opined Zhu Denpeng, food industry commentator at China Brand Research Institute. With radical changes in lifestyle and consumption patterns among young Chinese consumers, social networking and entertainment have become an integral part of their everyday lives, and they have a very strong demand for these drinks.
"The well-known Red Bull brand is now facing some uncertainties, and it may lead to a reshuffle of the major players in the energy drink market," Zhu said. "Chinese energy drink companies have scented opportunities here."
C'estbon has been trailing in the beverage business because of ineffective product positioning, Chen admitted. "Also, just because we're very experienced in producing drinking water, we automatically assumed that producing water is the same as making beverages."
The new energy drink will be marketed mostly to places where people sweat a lot, and C'estbon's existing sales channels will also be used, he disclosed. Young consumers are the priority target.
The strategy will not work if the company sells the new product relying entirely on its existing bottled water marketing system, Zhu Denpeng told our reporter. "We must provide the beverage business with strong human resources and organizational support, otherwise its chances of success will be slim."
China Resources C'estbon Beverage is a subsidiary of China Resources Beer Holdings Co. [HK:00291] under China Resources group. It was the first dedicated producer of bottled water in the country.