PepsiCo cooperates with a traditional Chinese medicine company to focus on health food in the Chinese market

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On September 3, 2020, PepsiCo signed an agreement with China General Pharmaceutical Group, under which subsidiaries of the two groups would carry out a series of cooperation and launch health food for the Chinese market.

Specifically, Quaker, the oat brand owned by PepsiCo, will work with Pangaoshou, a time-honored brand under Guangzhou Pharmaceutical Group, to launch two cereals with traditional Chinese medicine flavor.

Pan Gaoshou is a traditional Chinese medicine brand founded in 1890, which means “hope to live a long life” in Chinese. The brand is famous for manufacturing and selling Chinese cough syrup (川贝枇杷露) with unique flavor.

The two new products launched in this partnership are hericium Erinaceus oatmeal and Ejiao oatmeal.

Hericium Erinaceus and Ejiao are two traditional Chinese medicines, which are considered to have the effects of nourishing the stomach and replenishing iron respectively. But none of them are prescription drugs nor taste good, so they are often made into different kinds of food.

Healthy food has been popular in China’s consumer market in the past two years, but unlike in Europe and the United States, Chinese consumers do not recognize the concept of “organic”. In the health food market, there are two types of dominating consumers. One is “people who are extremely concerned about the composition table”, who are usually more concerned about whether the food contains carbohydrates and too much energy. The other is “people who believe in traditional Chinese medicine”, who usually like products that combine modern food with traditional Chinese medicine.

According to the report on the consumption trend of Young people’s Health Preservation released by CBNDATA, nearly 90% of young people already have a sense of health preservation, and as an important way in the three major health care laws, young people have begun to buy ready-to-eat nourishing products. Different from the traditional concept of health preservation, young people pay more attention to the scientific, convenient and nourishing characteristics of health products.

Many brands of traditional Chinese medicine have also joined the manufacture of daily food. Earlier, Tongrentang, China’s most famous traditional Chinese medicine brand, announced its own coffee chain business, which surprised many Chinese consumers.

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