Chapter 343 Improvement of the Beverage Industry Chain

Chapter 343 Improvement of the Beverage Industry Chain

Chapter 343 Improvement of the Beverage Industry Chain
Yang Wendong continued, "Although this money is not small, there is no need to earn it. So, you should discuss with the Changxing Charity Foundation and calculate their investment in water supply stations in various places. Then you can give them the appropriate amount of profit to achieve a profit-loss balance.
This is equivalent to us using the money of rich people to help the squatters. When the time is right in the future, this matter and related data may be made public. We do not make money from natural disasters. "

Although it seems that more than one million Hong Kong dollars a month is a lot in a year, earning this money may become a drawback to your reputation in the future. Even if there is no problem from a legal and business perspective, it can be easily misinterpreted by people with malicious intent.

It would be better to be more open and use the profit to buy or deliver water. If that doesn't work, he could do other charities in the future. Anyway, he would do various charities in the future. This is what large groups and super-rich people must do. He also hopes to help some poor Chinese, such as children, the elderly, etc.

Not to mention, he doesn't lack these few million. If he buys two more pieces of land in 66, he can make much more money than this.

Zhou Haoran agreed and said, "Okay, I'll communicate with them."

"Well, OK, let's do this for now." Yang Wendong nodded and said, "Our short-term goal is to make good herbal tea beverages and take the opportunity to establish good overseas channels for the beverages. This will make it much easier for us to make other beverages and even food in the future."

Herbal tea is just the first beverage product launched based on the demand of Hong Kong and the surrounding subtropical areas, as well as the company's own conditions. In the future, when the time is right and all preparations are complete, other beverages will certainly be launched. This market is too big to be given up, especially since Hong Kong no longer has water shortages after 65 years, and many things will be much simpler.

Of course, if you want to become an international brand, you need to invest a lot of resources, which means you need to have more funds than you have now.

"Okay." Zhou Haoran nodded and asked, "Will we also make food in the future?"

Yang Wendong said: "Yes, but it depends on the channel demand. If the channel is not good, it will be difficult to do well whether it is beverages or food."

In the field of beverages and food, his future prophet's golden finger is really of little use. For example, milk and fruit drinks cannot be developed globally without Lelai's new packaging and sterilization technology, and Hong Kong does not have enough raw materials for these industries.

Even the most well-known Red Bull in the past was not successful because of its taste or refreshing effect. Its success was actually the result of large-scale advertising investment. Of course, it was also the first company to succeed in this way, so if we copy it, it is possible to achieve it, but this requires too much money, which is not suitable at present.

Therefore, our own beverage and food industries still need to develop step by step in the early stage. Once all parties' technologies, quality control, and channels are mature, we can consider the next step of development.

"Indeed, the beverage channel is the most important." Zhou Haoran said: "The smooth development of Taikoo's beverages is actually due to its partnership with Coca-Cola. It is a great advantage to be able to use Coca-Cola's channels."

"We also have a cola business. Do you think we need to spend money to promote it?" Yang Wendong asked again.

Many people don’t know that Watsons actually had a cola business in the early days, called Cola soda.

You can tell it's a flop just by hearing the name. The cola market in Hong Kong has long been occupied by Coca-Cola. Watsons' Cola can only go the very cheap route and has been making losses.

When acquiring Watsons, Yang Wendong knew this and also understood that it would be difficult for the cola business to turn around. Although it is a local brand, its costs are actually lower than Coca-Cola. Therefore, his early goal was to first do a good job in herbal tea, a product with no competition, and then worry about other things later.

Zhou Haoran paused and said, "Mr. Yang, this is difficult. Coca-Cola has already been deeply rooted in people's hearts. However, if we have Carrefour and media channels, and you will have a TV station in the future, it is possible to save Coca-Cola.

But I feel that the future is limited, because the Hong Kong market, with Coca-Cola, is not big in itself, and if it wants to go overseas, it will be even more difficult to compete with Coca-Cola or Pepsi.”

"It's a bit difficult indeed." Yang Wendong nodded and said, "How far behind Coca-Cola is our cost control?"

Competing with Coca-Cola and Pepsi? There should be no successful cases in human history. Maybe these cola brands can survive, but they basically cannot become big.

However, there are still many markets that have not been developed by Coca-Cola, so there may still be some opportunities.

Zhou Haoran replied: "There are three points. The first is popularity. The long-term advertising investment makes their advertising costs seem high, but if newcomers want to achieve the same effect, they will need several times the advertising investment, and even more may not achieve the same effect;
The second is the scale effect. The more any industrial product is produced, the lower the cost. You are also aware of this, Mr. Yang. So even though Coca-Cola and Swire have a joint venture and the two companies share the profits, their costs are still much lower than those of others.

The third reason why Coca-Cola chose Swire is that the Swire Group started out by making sugar a hundred years ago, and the cost of making sugar is the lowest, while one of the biggest costs of Coca-Cola is sugar. "

"Sugar?" Yang Wendong asked, "I remember that the sugar in our drinks was also bought from Taikoo, right?"

"Yes, making beverages in Hong Kong is inseparable from Swire, no matter which one it is." Zhou Haoran replied: "Swire Group has done a very complete job in the sugar industry chain. It has sugarcane plantations in Southeast Asia, local processing plants, its own shipping company on the ocean, and sugar factories in Hong Kong."

"With the complete industrial chain under control, there is really no rival." Yang Wendong also nodded in agreement. His Changxing Industry has also been working towards this goal. The core raw materials such as glue, plastic, and paper are all being produced by themselves or invested in suppliers. When they have stronger strength in the future, they will expand to the front end of the industrial chain.

The same will be true for Honor Electronics or other industries, but it may be more difficult.

Zhou Haoran added: "But Mr. Yang, our group actually has the possibility of replicating Taikoo's sugar industry chain."

"In theory, we can copy some of them. We have our own ships." Yang Wendong thought for a moment and said, "But the terminal demand is insufficient, and it is not cost-effective to invest too much. Sugar factories are easy to build, but the cost of overseas plantations is not low."

Zhou Haoran agreed and said, "That's right, but there is a possibility that can quickly increase our terminal demand. Mr. Yang, the Hong Kong branch of Pepsi-Cola has contacted me and wants our can factory to produce Pepsi-Cola for them. I haven't given them an accurate reply yet, but I have thought of a greater possibility for cooperation."

"Pepsi?" Yang Wendong immediately understood and asked, "Do you want to imitate the cooperation model between Swire and Coca-Cola and cooperate with Pepsi in the same way?"

The only one that can compete with Coca-Cola is Pepsi, at least they have the US government behind them. In this way, the resources on the ZZ side are almost the same, and the rest depends on strength.

In the 21st century, Pepsi was far inferior to Coca-Cola in the cola field. But in the s and s, there was a period of time when Pepsi rose and almost brought Coca-Cola down from the altar.

"Yes." Zhou Haoran added: "If we operate this way, the cooperation and investment involved will be very large, so I also need to be very cautious."

Yang Wendong nodded and asked again: "It works in theory, but there are still many problems. Coca-Cola has a monopoly on cola in Hong Kong now. It's not easy for Pepsi to get in."

"Pepsi entered the Hong Kong market too late. Coca-Cola had already succeeded at that time, and it was also cooperating with giants like Swire, so it basically had no chance." Zhou Haoran added: "But the opportunity I'm talking about is not the Hong Kong market, but the Southeast Asian market.

PepsiCo is now preparing to enter the Southeast Asian market on a large scale, so it also needs a local partner, similar to Swire, which can produce for the American beverage giant. "

"If we can supply Pepsi-Cola to some countries in Southeast Asia, then this OEM business will indeed be worthwhile," Yang Wendong said after careful consideration.

As for beverages, ever since they came out of containers, the cost of shipping them by sea was very high, so they had no choice but to produce them nearby. Coca-Cola chose Swire Group.

In this era, investing in and building factories overseas is very complicated. You need to consider overseas management, local laws, exchange rate fluctuations, local bosses, different cultural customs, and even political and military risks.
In fact, even in the 21st century, the investment environment in most countries in the world is biased towards India, and there are very few places in the mainland that can give foreign investment security.

If there are only a few overseas factories, the head office can still handle it, but beverage giants need to build too many factories around the world, how can they manage so many? Therefore, except for a few countries with similar cultures such as Europe, beverage giants in other places basically form joint ventures with local companies or directly find OEMs.

Zhou Haoran added: "In this way, with the huge demand for Pepsi-Cola, we can also penetrate into the front-end beverage industry. The simplest way is to build our own sugar factory. Once successful, the cost of our own beverages will also drop sharply.

More importantly, we may have the opportunity to tap into PepsiCo’s channels.”

"That's unlikely. If I want Pepsi, how can I find a OEM and give it to the channel?" Yang Wendong shook his head and said, "However, it is enough to use Pepsi to develop our own beverage industry chain.

Sugar is something we will need when making any other beverages, and even food.”

Humans like drinks, and they essentially like sweetness. The same is true for half of snacks. It can be said that sugar is half of the food industry. Even from a biological perspective, refined carbohydrates such as rice and flour are also sugar.
"Yes, we can discuss OEM cooperation first." Zhou Haoran continued, "But before they approached me, they just wanted us to produce some of our cans for them. Now we want to discuss full-scale cooperation."

Yang Wendong said: "Yes, but as long as they can give us enough orders, we are confident that we can reduce the cost to the same level as Taikoo. Watsons is mine, and they should also be aware of my achievements in the industry.

So this matter is still beneficial to both of us, and it should be something to discuss.”

The cooperation between foreign giants and local giants has always been an eternal win-win model. Even if Yang Wendong wants to invest in Southeast Asia one day, it will be the same.

"Okay, I'll talk about this with the person in charge of PepsiCo in Hong Kong in a couple of days." Zhou Haoran said with a smile.

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(End of this chapter)