Tai Wei’s X-Bear is currently one of the top three best-selling energy drinks in Taiwan, with high market penetration and brand recognition.
The agreement outlines a 10-year strategic cooperative partnership between the two companies which, in the first year, Tai Wei will place orders of no less than RMB 162m (about US$25.7m) to the Tianyun Group (including Tianyun’s subsidiary companies) for the production of X-Bear Energy Drinks.
"The strategic cooperation will integrate the Taiyuan Group and Tai Wei's respective resources to jointly develop, manufacture and sell high-quality and market-oriented beverage products in the People’s Republic of China," said chairman and CEO of Taiyuan Group Yang Ziyuan.
Reasons for partnership
The Tai Wei Group said that the cooperation was an important step for them to bring X-Bear into the China market. Likewise, Tianyun International sees this endeavour as a stepping stone to add functional products to its product lines, and it enables the Group to distribute its traditional as well as newly-developed processed fruit products in the Taiwan market through Tai Wei in future.
“We believe the cooperation with Tai Wei will allow us to continue our mission of providing healthy, safe and convenient processed food, and through expansion and extension of our product lines for bringing more diversified and safe food products to the consumers, boosting continuous business growth and creating values for our shareholders," said Yang.
Tianyun International stated that this new strategic cooperation is expected to bring a positive impact to the Group's results in 2018 and the years after.
Collaboration to leverage the future drinks market
Said yang, “According to the ‘7 innovative trends for 2017 Global Soft Drinks market’ issued by Global Data, it is expected that the global soft drinks market will continue to grow between 2016 to 2021, among which China will surpass the US and Europe and become the fastest growing soft drinks market with a CAGR reaching 5.1% in the coming years.”
He added, among all soft drinks, energy drinks have the greatest development potential with CAGR expected to reach 7.9% in “the near future”, higher than bottled water and tea.
“We are confident that the China functional and sport drinks market will continue its rapid growth upon the trend of consumption upgrade and rising health awareness,” he said.
Dual distribution networks
Under the new agreement, the X-Bear Energy Drinks produced will be sold through Tai Wei’s distribution network, including through retail, hotel and catering channels.
At the same time, Tianyun International has been authorised to sell X-Bear Energy Drinks through its traditional distribution channels in over 20 provinces in China, as well as existing online channels, to establish a comprehensive offline and online sales network.
Tai Wei will be responsible for brand promotion and marketing strategy, and will bear the relevant costs.
X-bear energy drink products
X-Bear Energy Drinks comprise a series of functional drinks. There are currently two lines of products — energy drinks and energy fruit tea.
The energy drinks contain guaranine, taurine, Vitamin B3 and Vitamin B6.
“The drinks immediately quench one's thirst, replenish energy and boost power, and are suitable for pre- and post-sports, working class people with high-activity level and students,” claim the companies.