China Feature Genki Forest brand (cans by ORG)


A steady growth of canned beverages


Wang Lao Ji converted from three- piece to two-piece cans in 2013, and there’ve been no other conversions since then. Three-piece volumes have actually increased to reach 29 billion cans, driven by the impressive growth of Red Bull, which is the leading brand in the three-piece segment with a share of about 20%. The other major users of three-piece cans are protein-based drinks, which have a healthy image and are easier to digest than milk products: peanut milk (Linyu) walnut milk (Yangyuan), and almond milk (Lolo). The latter is often found on the table in banquets next to cans of Wang Lao Ji, as alternatives or antidotes to the copious supply of alcoholic drinks. Canned beverages in China have


Embracing high- automation manufacturing


Easy open end specialists are another striking and unique feature of the Chinese market. Nothing like it exists on the same scale outside China. Conventionally can makers sold the end with the can as a package, and cans and ends were often manufactured on the same site. This model was disrupted first in Europe by Mivisa on ends for food cans. Unlike the can itself, the reasoning went, easy open ends can travel anywhere in the globe at a very low transport cost, creating the potential for focused manufacturing at high volumes no longer tied to the sale of the can. Interestingly the challenge in


China came from entrepreneurs outside the industry. In 2012, Xiamen Baofeng Group was the first to invest massively in highly efficient, focused manufacturing of beverage can ends on one site near Xiamen, Fujian province, using high-speed equipment from Suzhou SLAC Precision Equipment and Stolle Machinery. Shenzhen- listed Guangdong Enpack Packaging followed with a massive investment in highly automated lines also from SLAC, initially for food ends and then for beverage ends and peel-off lids. The combined capacity of these two entrepreneurial companies, both new to the industry, now amounts to about two-thirds of the Chinese market for two-piece beverage cans.


The rising star in soft drinks


The most popular canned beverage in China is not Coca-Cola, but a still herbal tea, Wang Lao Ji (original red can) and Jia Duo Bao (new golden can, same product), following a long court battle for the ownership of the brand. They both sell in broadly similar quantities, but Jia Duo Bao has a slight edge. Canned energy drinks are growing fast, as is the case in North America and Europe, boosted by a number of competitive launches: East’Roc, Hi-Tiger, & Warhorse. Red Bull remains the leader with about half the market, but in a different recipe and a radically different can size and shape compared to the European product: a triple-necked bronze coloured three-piece can is the main seller, backed up by a three-piece ‘slim’ can in silver colours. The rising star in soft drinks is a fruit-flavoured soda called Genki Forest, a brand launched only in 2016, which is now in the top five (see chart below on brand shares).


Leading Canned Soft Drinks China 1 Jia Duo Bao 2 Wang Lao Ji 3 Genki Forest 4 Red Bull


Herbal Tea Herbal Tea


5 Eastroc Super Drink Energy Drink 6 Coca-Cola 7 Pepsi 8 Sprite 9 Hi-tiger 10 Nescafé


Carbonated Carbonated Carbonated Energy Drink RTD Coffee


35 metalpackager.com


popular canned beverage in China is not Coca-Cola, but a still herbal tea


The most


enjoyed a steady growth in volume, at a rate of 3% per annum over the last 10 years. The pandemic caused a dip in volumes in 2020, but 2022 consumer sales had recovered to above the 2019 level and 2023 to date is back on the previous growth trend. In addition to soft drinks growth of 4%, conversion from glass to cans in the beer market is also a factor. Returnable glass is still the most common presentation for beer, but cans are favoured by retail and preferred by consumers for in- home consumption. As a result, cans now account for 26% of the total beer market, up from 20% a decade ago, and continue to grow at a rate of 3% per annum. With this background of steady


Volume % Share 19% 18%


Flavoured Carbonated Water 12% Energy Drink


12% 7% 5% 5% 5% 4% 2%


growth in China, equivalent to two new beverage can lines every 15 months, can makers have continued to invest in new capacity, while seeking to avoid the chronic overcapacity of previous years. New lines are often justified by the introduction of new sizes, especially slim cans and metal bottles (now a 2 billion market in China), and by transport savings by moving closer to the customer.


Richard Moore is a board director of Suzhou SLAC Precision Equipment Co. Ltd. and managing director of Hong Kong-based RMRM Consultancy Ltd. he set up in 2014.


For more information, visit https:// rmrmconsultancy.com.


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