Company

What is Genki Forest ?

A Chinese beverage company specializing in sugar-free drinks has risen flat within four years.

As we described in A brief History of Modern Beverages in China, Genki Forest is a new beverage company that originats in China and is famous for producing sugar-free, low-calorie drinks. In 2019, China’s Singles Day Shopping Festival (11·11), its sales beat Coca-Cola and Pepsi to become the third-largest brand in the shopping festival.

After gaining a foothold in China, Genki Forest is now selling its products overseas. As a beverage company, apart from the products, what else contributes to its success?

Unfortunately, unlike many other unicorn companies in China, Genki Forest has kept a low profile in the four years since it was founded, rarely giving interviews and never promoting its brand. Therefore, even in the Chinese media, there are few detailed reports about Genki Forest.

This article will describe to you the current public information of the company, and we will update this article continuously after obtaining the follow-up information.

The Developing History of Genki Forest

Genki Forest, founded in April 2016, is founded by well-known Chinese venture capitalist Tang Binsen, who owns more than 60 per cent of the company, according to equity analysis.

Mr Tang founded a game company called ELEX in his early years and launched Happy Farm, which was popular all over the world in 2009. A few years later, the company launched popular games such as Clash of Kings, Age of Warring Empire, Battle Alert and so on.

By selling the ELEX, Mr Tang got financial freedom and transformed into an investor. Before 2015, Tang began to invest in consumer goods companies in China. It has invested in a textile brand, “a Cloud of Cotton”(一朵棉花), a craft beer brand, “Panda Brew”, and a hot pot delivery brand, “Tao Tai lang”.

But unlike these companies, Genki Forest was founded directly by Mr Tang, who owns more than 60 per cent of the company.

According to public data, it is estimated that, Genki Forest’s sales for the whole of 2019 have exceeded 1 billion yuan. According to analysis, although affected by the epidemic, the company’s sales would be more than 2 billion yuan in 2020, which meant that the company’s performance was growing in an exponential curve.

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In addition to sales, the company’s valuation has also risen sharply because of its founder’s rich connections in the venture capital field. Genki Forest completed round B financing in October 2019, and as a result, the company’s valuation raised to 4 billion yuan. Genki Fores completed its latest round of financing in July 2020, in which the company was valued at $2 billion. That means the company’s valuation has grown 3.5-fold in nine months.

Unlike many emerging consumer goods brands in China, Genki Forest has tried to sell offline products from the beginning.

Soon after the company was founded in 2016, it began to sell Genki Forest Burning Tea in Lawson convenience stores in Beijing and Shanghai. By mid-2017, almost all the well-known convenience store brands in China began to sell all kinds of Genki Forest drinks.

This shows the courage of the company to develop its business. Because a new brand has to pay a high promoting fees to the convenience store for sales, it means that, Genki Forest will lose a lot of money if it doesn’t sell well.

Genki Forest became very popular in China in 2018, when popular Chinese actor Wei Daxun exposed his refrigerator on a variety show “Please Refrigerator” with Genki Forest Burning Tea accounting for most of it. This has led to the rapid popularity of Genki Forest in China’s first-and second-tier cities.

On July 5, 2020, the company held its first media conference. In addition to the release of two new Sparkling Water models, some information and future development plans of the company were also announced at the meeting.

According to the information at the press conference, the company has set up its first self-owned factory in Chuzhou, Anhui province, which can produce 450 million bottles of drinks a year. Construction of the second phase of the plant will begin in August 2020. In addition, the company plans to build new factories in Dongguan, Guangdong province, and in northern China. This shows the huge demand for it in the market.

At the same time, in terms of sales channels, it has been sold in 30 provinces in China. It is sold in 53286 convenience stores and 131375 traditional stores. At the same time, it has also begun to sell overseas, and Genki Forest products have been exported to 11 countries, including the United States, Canada, Australia and New Zealand.

Genki Forest’s product line

Genki Forest is actually the name of the company, and many of its products have completely different brand names.

Genki Forest Burning Tea (Oolong Tea)

Burning Tea is the first product launched by Genki Forest and went on sale in 2016. It is basically a bottle of oolong tea with a little sugar substitute.

At first, there are only two versions, the black version is just sweet oolong tea, while the white version adds white peach flavour.

The white version is more popular because it provides a richer taste experience. It has stronge peach smell, but when the liquid enters your mouth, you can hardly feel the peach taste. It makes you want to drink one mouthful after another.

In 2020, it launched a strawberry version.

And of course, the drink has zero calories.

Genki Forest Sparkling Water (Genki Water)

Sparkling Water is Genki Forest’s second series of sales explosions, which began selling on August 2018. This product uses soda water and sugar as substrate to create many different flavors.

At the very beginning, there were only two flavors which were White Peach and Carmen orange in this series. The white peach tastes were already proven popular in Burning Tea series. During the summer of the following year it also introduced cranberry soup, cucumber, and grape flavors. This summer, the series has added versions of lactobacillus and lime ginger.

This series features crisp flavors focus on cool flavors which can better match the mouthfeel of the carbonated bubbles, making them more suitable for drinking in summer than conventional carbonated beverages.

This drink also has zero calories.

Genki Forest Milktea

Genki Forest launched its sugar-free milk tea in 2019. They are the blue version of the original flavor and the green version of jasmine tea.

The product uses Assam black tea and jasmine green tea as substrates respectively, and adds skim milk powder substitute, sugar substitute and other edible essences. Compared with the previous two series, the sales volume of this product has not been verified yet.

Generally speaking, it is a good milk tea, but due to the lack of real sugar and fat, it is not as tasty as ordinary milk tea.

Although the drink does not contain sugar, this series of drinks have about 160 kilojoules per 100ml.

Genki Forest Liquid Collagen Drink

This is not the official English translation of this series. Its Chinese name is “pet muscle”, which means to take care of your skin.

This series is more like seasoned health products than drinks. Each bottle of this drink contains small molecular collagen peptides of 2550mg, which is good for skin health.

It contains two flavors of green apple and white peach, both are zero-calorie.

Hokkai Pastures

This wholly owned subsidiary was founded in May 2020 and is an independent brand of Genki Forest in the yogurt market. The brand focuses on sugar-free and high-protein yogurt.

The main product of the brand is “Hokkaido 3.1 sugar-free yogurt”. The yogurt is in line with Genki Forest’s consistent health product positioning, using erythritol instead of sucrose to reduce calories. The number “3.1” in the name refers to the protein content, which means 3.1 times higher than the Chinese yogurt’s relevant national standards (7.2g protein per 100g).

Alenergy

This new sub-brand, founded in May 2020, is Genki Forest’s independent brand in the field of energy drinks.

The brand is trying to creatively sell energy drinks that contain almost no calories, designed for consumers who need energy drinks (such as overtime or the eve of exams) but do not want sugar. The brand has four flavors, which are classic, yogurt, argentine tea and ginger.

It is worth noting that they differ not only in taste, but also in function. For example, yogurt taste not only tastes like yogurt, but also adds lactic acid bacteria to promote the health of the digestive tract.
In addition, another feature of the series is that the caffeine in its drinks comes not from coffee but from argentine tea.

Genki Forest Bodybuilding Light Tea ( Corn Whisker water )

This is a product that has been on sale since April 2019, focusing on the concept of health preservation.

It is based on Xuanmi tea and has a strong grain aroma. In addition, in the producing process, it also added corn whisker, brown rice and barley extract. These foods are considered to be beneficial to the health of the digestive tract in traditional Chinese medicine.

Genki Forest Daily Fruit Tea

Daily Fruit Tea is a tea drink launched by Genki Forest in 2017. The biggest difference between this beverage and Burning Tea is that it uses real fruit juice as seasoning. This makes the series more natural in taste.

At present, it has three flavors, namely passion fruit green tea, pomegranate green tea and lemon green tea.

Due to the fruit juice, it is no longer zero calorie. But its calories are still low, about 60-80 kilojoules per 100ml.

The reasons for the success of Genki Forest

There are many different analyses of why Genki Forest is popular in China, but since its official business story has never been told, most of it is based on guesses from an external perspective.

First of all, Genki Forest finds a balance between “healthy” and “delicious”.

In the past, sugar-free drinks have been regarded as a secondary market for traditional drinks. It’s easy to understand that if a person doesn’t like Coke, he certainly doesn’t like Diet Coke either. And if a Coke lover has no health problems, he has no reason to drink diet cola with poor taste.

Genki Forest’s main products Burning Tea and Sparkling Water are based on “sugar-free” version of original drinks, which means they do not imitate a sugary drink. This allows Genki Forest to work better on the taste and design flavors that are suitable for sugar substitutes. It means that the company has significantly expanded the market for sugar-free drinks rather than competing with existing brands.

Second, the above strategy has been successful because of the changing health concept of young Chinese consumers. The definition of health among China’s young consumers (under the age of 30) has changed significantly from that of the previous generation.

Chinese consumers also used to use “pure natural” as the standard of health of beverages. At that time, pure fruit juice was a very popular “healthy drink” for Chinese consumers. But with the improvement of scientific literacy, a new generation of consumers think that proper edible essences is healthier than huge amounts of sugar.

The third, Genki Forest was the first beverage company for Chinese mainland to use erythritol. Erythritol is a kind of sugar substitute made from glucose fermentation. It has significant taste advantages over xylitol and maltol. It is sweeter and tastes more like the white granulated sugar added to traditional drinks. This makes the sugar-free drinks created by Genki Forest taste better than the traditional sugar-free products.

These analyses are reasonable, but they are not officially recognized by the company.

The controversy of Genki Forest in China

If you have a little knowledge of Chinese and Japanese culture, you will immediately realize that Genki is the Roman sound of Japanese word “元気”, which does not exist in modern Chinese.

In fact, almost all of Genki Forest’s products are packaged with very strong Japanese elements, although it is a pure Chinese company. Genki Forest Sparkling Water’s packaging is printed with the words “日本国 株式会社元気森林 兼制”(This product is produced under the supervision of Genki Forest Company of Japan), but the company’s Japanese branch recruitment information shows that the company currently has only three employees in Japan (the number of Chinese company is more than 1000).

In addition, in terms of equity, China’s Genki Forest Ltd also has no foreign shareholders.

This marketing strategy of disguising itself as a Japanese brand has been very successful in the field of consumer goods in China, but it is less efficient as the preferences of Chinese consumers have changed in recent years. The negative effect of it is that once exposed, it may be boycotted by consumers.

Many Chinese media have questioned Genki Forest’s camouflage strategy, but Genki Forest has not responded so far. More and more consumers know that the company is fully established in China, but due to the excellence of its products, this has not affected consumers to buy the brand of beverages for now.

In addition, “plagiarism” is also one of the accusations against the company. If you know anything about Japanese food, you will realize that Genki Forest Milktea is very similar to the logo of Japanese brands “Fujiya Peko” in appearance.

But at present, none of these seems to be a big problem for the development of Genki Forest. The company’s sales are still growing rapidly, and most consumers who are aware of the disputes think the company is simply not confident enough.

As mentioned earlier, Genki Forest has not been interviewed since its inception. Maybe when its sales reach a new stage, the company will find the right time to respond to everything and tell its own business story.

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