Convenience-Store Coolers Are Filling Up With Juice That Costs More Than 10 Yuan. How Did It Catch On?

Most of them tout the letters "NFC." What does that mean?

Walk into a convenience store for a bottle of juice these days and you probably can't make a quick decision anymore.

Wei Chuan's Daily Body Management, FSJUICE, Lingdu Guofang, 17.5°, Jiziran, Unifresh, Xianzhafang and Weishike now take up three or four rows of shelf space in the coolers at FamilyMart, Lawson and 7-Eleven.

Unless you read the brand names closely, they are hard to tell apart. All of them come in slim, cylindrical, clear bottles with caps in almost uniform white; the color of the juice announces the flavor, and the packaging looks clean and cool. Prices cluster between 11 and 19 yuan, and several land on exactly the same number — 17.8 yuan, for instance.

Most conspicuous of all is the "100% freshly squeezed" or "100% no additives" on the label. Put more technically, they all call themselves NFC juice — not from concentrate.

Set against juice from concentrate (FC), the real difference isn't the "100%" but the processing. NFC juice is pasteurized at low temperature right after pressing, frozen into blocks, then thawed and bottled. FC juice has its water removed after pressing, is pasteurized at high temperature, and has water added back when the juice is made — which strips out much of the nutrition and the fruit's original aroma.

The two processes also mean the two juices get treated very differently. NFC juice has to stay in cold storage the whole way, and its shelf life runs no longer than 28 days. Many FC juices keep at room temperature for as long as a year.

A few years ago NFC juice was a rare sight on convenience-store shelves. This year it is suddenly everywhere. Wang Yiwen, spokesperson for FamilyMart China, told QDaily: "The shelf space NFC juice takes up at FamilyMart this year is more than six times what it was last year."

As food and drink makers pay more attention to the convenience-store channel, convenience stores have become the place where new-product trends show up first. From Wang's observations and FamilyMart's sales data: last year the big trend was lightly flavored water, led by Suntory's Qinning Water and Uni-President's Haizhiyan; this spring it was tea drinks; and once summer came, NFC juice turned into the hot drink fast, with the number of brands in the market roughly doubling.

Wei Chuan's Daily Body Management series reached the shelves of convenience stores across Shanghai on June 1. Nongfu Spring marked its entry into the market with 17.5°, which launched exclusively on JD.com at the end of January this year. Uni-President put out its Weishike series last June. Startups are in here too: FSJUICE, founded in 2014, makes nothing but NFC fruit and vegetable juice.

"To some extent [these new juices] really have become a key way to pull customers in," a Lawson representative told QDaily. Mornings and midday are the buying peaks, and most customers pair the juice with bread, bento boxes and other food. Figures from Wu Meng, head of the administrative division at 7-Eleven Beijing, show juice sales climbing year after year, up more than 120 percent this year over the same period. "They all carry fairly high unit prices, and I think that suits what young office workers want now: eating less, but better."

Popular only this year, NFC juice is not actually new. In the United States it already holds about 40 percent of the juice market.

That figure comes from Xu Xianming, operations director at Jiziran. Jiziran is an NFC juice brand that went on sale last year, but the parent company behind it is Taiwan's Jiamei Group, which set up Shanghai Yangya International Trading Co. in 2003 and so became the first manufacturer and supplier of NFC fresh-pressed juice in China, selling to five-star hotels, restaurants, Starbucks, 85°C and other companies.

Back then you could hardly find NFC juice in the retail market. "At that time people's spending power and health awareness weren't high yet. Generally speaking, the mainstream option was probably Huiyuan's 100% juice," Xu Xianming told QDaily.

Wei Chuan's Daily C series, launched in 2001, went a long stretch with almost no strong competitor. It isn't NFC, but it still became one of the names consumers think of for refrigerated juice.

Not until 2013 did the NFC juice market get its first pioneer: Lingdu Guofang, priced at around 18 yuan a bottle. Its investor and product developer was Jiamei Group, which already had the production technology in hand. At its peak Lingdu Guofang sold more than ten million bottles a year, but the swings in its sales over the past three years left later arrivals torn between following it in and waiting on the sidelines.

Wei Chuan was one of them. "Since the Daily C series is arguably the market leader in refrigerated juice, we had the idea of a premium juice quite early," Jiang Hongyi, beverage brand manager for Wei Chuan's refrigerated business in mainland China, told QDaily. "But we always felt the market wasn't mature. After Lingdu Guofang appeared, we thought the time was about right."

Then it tracked Lingdu Guofang's sales and changed its mind. "We were tracking the market data at the time, and Lingdu Guofang [sales] came to about 5 percent of the pure juice market. Its actual volume wasn't that big, because one of their bottles is worth three of ours" (Wei Chuan's Daily C sells for 7.6 yuan). The buy-one-get-one promotions Lingdu Guofang ran now and then in convenience stores afterwards made Wei Chuan more cautious still. "A promotion can mean the product isn't turning over fast enough, and for a product with such a short shelf life that matters enormously."

But with more and more brands arriving, Wei Chuan could not settle the question either way. Last June the restaurant chain Element Fresh launched a 19.9-yuan NFC juice with some fanfare and hired Kevin Tsai to endorse it, drawing a good deal of attention in the industry. New brands such as FSJUICE and Jiziran were pushing into the market too.

You can hardly find Element Fresh's NFC juice in retail channels today, and Lingdu Guofang, held back by internal upheaval and other problems, never showed the competitive edge you would expect of a first mover. Both still built up a body of consumers.

And as with the health food that caught on recently, which we wrote about not long ago, this market is heating up because consumers are more health-conscious and want a better quality of life. At bottom it is still consumers trading up. Every NFC juice brand we interviewed for this story sees it as the same shift as the move from shelf-stable milk to fresh milk.

Young women have become their shared target. And since consumers know very little about what NFC juice is, all of these brands market on feel: healthy and fashionable.

"Our market research shows they want healthier juice — antioxidants, detox, beauty, stronger immunity are what consumers are asking for," Jiang Hongyi said. Hence the name Wei Chuan settled on: Daily Body Management. And to avoid competing with its own Daily C series, Wei Chuan split the two audiences from the start: Daily C aims at white-collar workers aged 20 to 30 earning about 5,000 yuan a month, while the more premium juice aims at white-collar workers aged 25 to 35 earning 8,000 to 10,000 yuan a month.

Ingredients and logistics keep NFC juice from being cheap. "The most expensive part is the raw material — more than half the cost," Fang Jiaqing, brand manager at FSJUICE, told QDaily. They have to source from around the world: oranges from Brazil, Alphonso mangoes from India, beets from Europe. Jiang Hongyi also said some of the fruit in the Daily Body Management series is expensive in itself — acerola cherries, for one — while Jiziran was the first to turn white peaches into NFC juice.

To hold quality, NFC juice has to sit between 0 and 7°C from the factory to the shelf. And because the shelf life is short, convenience stores, supermarkets and every other channel want the product as early as they can get it. "Roughly, no more than ten days of the shelf life can have gone by, or they [the convenience store] won't take delivery. Otherwise it gets shipped out to the store and the store finds the goods expire after only a few days on sale, which it doesn't want either," Jiang Hongyi said.

That puts heavy demands on logistics. Big companies that already sold similar products have their own cold-chain fleets; companies without that may need a third party — FSJUICE, for one, went with SF Express.

That is also why NFC juice seldom has a national brand. They usually start out selling near their factories: FSJUICE sells mainly in Jiangsu, Zhejiang and Shanghai, with its plant in Wuxi; Wei Chuan has plants in both Hangzhou and Langfang, but East China is still its strongest region.

Jiziran is the exception. It is in fact the new company Jiamei Group set up in 2015 after management disagreements ended its partnership with Lingdu Guofang. Its plant is in Neijiang, Sichuan, but because it runs both a B2B and a retail channel and moves a lot of product, Jiziran sends dedicated trucks carrying roughly 50,000 bottles of juice to Beijing, Shanghai and Guangzhou twice a week, arriving the next day. "If you haven't reached that volume, you simply can't afford a truck," Xu Xianming said.

But to widen its audience as far as possible, Wei Chuan finally priced Daily Body Management at 11.9 yuan, rather than the 17.8 yuan Jiziran and FSJUICE charge. "Wei Chuan is a mass-market brand, and we don't want the price to shut too many people out," Jiang Hongyi told QDaily. "Because we wanted to hold it in that price band, the Daily Body Management series isn't 100% NFC — a small proportion of concentrate is blended in to bring the cost down. The packaging says so."

FSJUICE wants to hold its price at the top of the pyramid on brand value instead. "We want the people who notice our brand to find it playful, interesting, a bit unlike other brands," Fang Jiaqing said. So it has tried all sorts of crossovers: an enzyme drink called Rose Beast Tea with The Beast, say, or cocktails mixed from FSJUICE's fruit and vegetable juice for the opening of an Adidas concept store.

"So you can see that the audience for refrigerated juice is still small, yet the competition is already fierce, everyone trying something unusual," Xu Xianming said. All of them want to build a juice-drinking habit in consumers. FSJUICE has designed four drinking occasions for each of its juices — afternoon tea, exercise, light meals, a night out — while Nongfu Spring's 17.5° "calls for" "juice in the morning, milk at night." And to give consumers variety, nearly all of them have rolled out several flavors; to get around a single fruit being too sour or too sweet on its own, most have gone with blends.

On the longer term, though, none of these companies is especially optimistic.

"A lot of people see Daily C doing well and think there must be an opening here, but the pure-juice market isn't actually that big. What does that mean? Roughly, the ratio of diluted juice (5% to 99% juice content) to pure juice is 94 to 6." Unless the cost of domestic raw materials, which keeps NFC juice prices high, comes down, Jiang Hongyi believes NFC juice is unlikely to become a mainstream trend any time soon.

Fang Jiaqing said companies making NFC juice today face three challenges: "The product itself costs relatively more, but the competition is already pretty fierce, and consumers' awareness of the product is still fairly limited." Six to eight brands already make NFC juice in mainstream retail channels; count the ones that sell only online and there are more.

And although they all reach for the milk analogy, juice, unlike milk, remains optional rather than a source of nutrition people need. Which means the competitors juice faces include soda, tea, coffee and other drinks.

For now, though, what matters more to them is getting their products onto the shelves of more convenience stores — and then fighting to stay there.

Whichever convenience store you ask, they pick what to stock by weighing brand, flavor, current trends and more, then let sales decide: poor sellers come off the shelf to make room for something new. Wang Yiwen told QDaily: "At a convenience store, roughly more than half the products get swapped out every year. That's completely normal — products come and go very fast."

Wei Chuan wouldn't give sales figures for the Daily Body Management series, two months on the market, saying only that it now accounts for 10 percent of Wei Chuan's juice sales in convenience stores. FSJUICE said its sales this July were about six times January's, though that owes a lot to how low January was.

The moment market demand is created, the competition has already begun.

Cover image: pipingrock, tassedamour and kaboompics

In-story images: FSJUICE, Jiziran, Wei Chuan and yimishiji.com