{"id":1550,"date":"2023-01-05T04:23:19","date_gmt":"2023-01-05T04:23:19","guid":{"rendered":"http:\/\/wanginnovation.com\/?post_type=portfolio&p=1550"},"modified":"2023-03-31T08:19:23","modified_gmt":"2023-03-31T08:19:23","slug":"jinmailang-2","status":"publish","type":"portfolio","link":"https:\/\/wanginnovation.com\/en\/portfolio\/jinmailang-2\/","title":{"rendered":"Jinmailang Beverage"},"content":{"rendered":"
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Three<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Design growth plan<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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Jinmailang Beverage<\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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conquering the packaged water market with the strategy \nof creating multiple growth curves<\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\u201cThe origin and development of anything in the world comes together with a life cycle \nand forms into a curve. In this curve, there are different phases \u2013 beginning, growing, \nachieving, highly achieving, declining and falling. Before reaching the highly achieving \nphase or disappearing, any company desiring sustainable growth and to be built to last \nneeds to create a new curve, namely the second curve.\u201d<\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\u2e3aCharles Handy<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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<\/div>The methodology of seizing the trend is normally based on the research and study in \nindustry development over the past dozens of years or even over one century. \nChoosing the right timing is normally based on three-to-five-year PEST (politics, \neconomy, society and technology) analysis. Besides, company needs to have future \nblueprint and design growth plan for short-term, mid-term and long-term results.<\/p>\n

       

<\/div>Mr. Ren Zhengfei (CEO of Huawei) once said \u201cIf a technology is still two billion light \nyears away, we may invest just a little money, like a sesame seed. If a technology is \n20,000 kilometers away, we can invest a little more, like an apple. If a technology is just \nseveral thousand kilometers away, we will invest a lot more, like a watermelon. If a \ntechnology is just five kilometers away, we will invest heavily (a business version of a \nVan Fleet Load). We will rush towards and focus all of our efforts on this technology. \nWe will expand it, and dive deeper into it. This way, we will be able to make world-leading products.\u201d (Van Fleet Load, a term in the Korean War, meaning applying \nrelentlessly powerful artillery fire to have extremely destructive impacts on the enemy, \nin order to defeat them quickly and productively, preventing any constructive defenses \nand reduce manpower loss as much as possible.) From five, several thousand, to \n20,000 kilometers, eventually to two billion light years away; from Van Fleet Load, \nwatermelon to apple, eventually to sesame seed, this is how to design growth plan.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.1 Three Growth Curve Framework of Wang & Partners Innovation<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Illustration 3.2 Multiple Growth Curves of Nestl\u00e9
Note: Consolidation based on Nestl\u00e9 official websites and annual reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Illustration 3.3 Multiple Growth Curves of PepsiCo
Note: Consolidation based on PepsiCo official websites and annual reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Illustration 3.4 Multiple Growth Curves of Mars
Note: Consolidation based on Mars official websites and annual reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Illustration 3.5 Multiple Growth Curves of General Mills
Note: Consolidation based on General Mills official websites and annual reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Bottled Water at 1 yuan \u2013 Promoting Trading Up in Drinking Water for Citizens<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>Among the trillion-value size (yuan) total beverages in China, the size of bottled water is \nover 200 billion yuan. Taking the United States as a reference, 100 billion yuan market \nsize of bottled water consumed by 300 million population, which means that 1.4 billion \npopulation in China potentially can double the current size into over 400 billion yuan of \nbottled water.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.6 Bottled Water Market Evolution over 40 Years in the United States
Source: United States Bottled Water Market Reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Illustration 3.7 Bottled Water Penetration across Countries
Source: World Bank, Euromonitor, Ashima K Kant (2009), Joan Gandy (2012), CHNS, \nGuoyuan Securities<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/div>Niagara Bottling was founded in 1963. Currently, it is the largest bottled water \nmanufacturer in the United States with a national volume market share of 25%. Niagara \nBottling focuses on bottled water business since the very beginning. From 1963-1988, \nit was in the five-gallon jug water transportation business. In 1988, Niagara started its \nbottling business with one-gallon bottled water. Niagara began producing private label \nbottled water in the 1990s for grocery stores, clubs and supermarkets. In 1998, \nNiagara produced the lightest PET bottle in the United States with only 7 grams. Now \nNiagara owns over 20 bottling plants across the country and provides private label \nbottled water for retail giants such as Walmart and Costco. From 2000 till now, the \naverage price per unit of bottled water in the United States has dropped 30%, Niagara \nis the main contributor.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.8 Bottled Water Price Evolution in the United States
Source: Beverage Marketing Corp.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Illustration 3.9 Private Label Bottled Water Market Share in the United States
Source: United States Bottled Water Market Reports<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/div>The mainstream price of bottled water in China is 2 yuan per bottle. Two \nmanufacturers, Nongfu Spring and C\u2019estbon, are leading mainstream segment with \nover 10 billion yuan revenues respectively. Nevertheless, under the trading up context \nof water consumption in China, the 1 yuan bottled water is still promising.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.10 Declining Cost of Packaged Water Causing Pricing Competition
Source: National Bureau of Statistics of China, Wind, Tianfeng Securities \nEvolution of Unit Cost of Packaged Water Industry<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Illustration 3.11 Low Price of Jug Water Trading Up into Bottled Water at 1 yuan\/Bottle
Source: Public sources<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/div>With those insights, we advised Jinmailang Beverage increase investment in 1 yuan \nbottled water segment. Over recent years, Jinmailang has deployed multiple Krones \nhigh speed and automation filling lines. The productivity keeps increasing, from 70,000 \nbottles per hour to 90,000 bottles per hour, eventually to 100,000 bottles per hour with \nthe latest generation facility. Meanwhile, Jinmailang created the unique water delivery \nmodel \u2013 water directly delivering to consumers, which significantly reduces the logistic \ncost. Providing good quality water at economy price has become the mission of \nJinmailang Beverage.<\/p>\n

       

<\/div>In 2019, besides existing bottled water business, Jinmailang launched its business of \nprivate label bottled water for retailers. Within only three years, Jinmailang now has \nbecome the largest manufacturer of private label bottled water, which helps the rising \nand growing of Chinese retailers\u2019 bottled water business. It ultimately reduces the cost \nof drinking water for consumers national wide.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.12 Jinmailang Soft Purified Water<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Illustration 3.13 Hema Natural Water Manufactured by Jinmailang<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Liangbaikai (Cooled Boiled Water), Pioneering and Leading in 2 yuan Cooled \nBoiled Water Segment<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>Bottled water selling at 2 yuan generates proper volume sales and decent profit \nmargin. It is the must-win battle filed for almost all the bottled water manufacturers. \nWith over twenty years persistence in natural water and public advocating, Nongfu \nSpring is leading this segment with almost 20 billion yuan revenues. C\u2019estbon purified \nwater is the No.2 player, with almost 15 billion yuan revenues.<\/p>\n

       

<\/div>Chinese people have the habit of drinking hot water since long time ago. In 1639, an \nItalian Jesuit priest Matteo Ricci wrote in his book On the Christian Mission among the \nChinese by the Society of Jesus that \u201cChinese people like drinking boiled water. The \nhabit is driven by the fact that boiled water is good for gut health. Generally speaking, \nChinese has longer lifespan than European. They have high level of vitality even until \n70-80 years old.\u201d Apparently, this paragraph well describes the habit and perception of drinking water in China. Li Shizhen of Ming Dynasty noted something in his book Great \nPharmacopoeia (Bencao Gangmu) called Taihe Soup, which is actually the boiled water, \nwhich has subtle taste, is good for recovery, helps blood flow, help to stay hydrated \nand quench the thirsty.<\/p>\n

       

<\/div>Inspired by the above learnings, Jinmailang introduced a new brand Liangbaikai \n(Cooled Boiled Water) to cater to the habit of drinking water of Chinese. The product is \npriced at 2 yuan per bottle (500ml), sitting in the category of boiled water to compete \nagainst the regular natural water and purified water represented by Nongfu Spring and \nC\u2019estbon respectively. Within 6 years, the annual sales value of Liangbaikai has already \nreached two billion yuan. The success of Liangbaikai has drawn many leading national \nbeverage manufacturers and local players follow suit, which help to increase the size of \ncooled boiled bottled water category to over 10 billion yuan. In a nutshell, Jinmailang \nstarted from scratch and created a 10-billion-yuan category.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.14 Jinmailang Liangbaikai<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Illustration 3.15 Uni-President Liangbaikai<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Illustration 3.16 Master Kong Hekaishui<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Illustration 3.17 Nongfu Spring Baikaishui<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Jinmailang Investing in Natural Mineral Water Selling at 3 yuan<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>From the evolution of worldwide bottled water market, we can find out that the \ncontribution of natural mineral water will get higher and higher as the economic \nsituation getting better and better.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 3.18 Three Key Segments Contribution of Bottled Water Market Worldwide<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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<\/div>Jinmailang launched its own new brand of natural mineral water in early 2022, serving as the third growth curve to get prepared for the future.<\/span>
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Illustration 3.19 Three Growth Curves of Jinmailang Bottled Water<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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INNOVATION CASES<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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