Seltzer strategy: China’s ZEYA pivots to supermarkets, on-trade channels and rolls out new packaging
The firm was founded in June 2020, and about 70% of sales came from ZEYA’s WeChat store. The hard seltzers are also sold on Tmall and Little Red Book. On e-commerce, the firm sells 80,000 to 100,000 gross merchandise volume (GMV) monthly.
This year, it anticipates modern and on-trade channels to take up majority of sales, and e-commerce to contribute 7 to 10% of total sales.
Co-founder Eric Hoang told FoodNavigator-Asia alcohol e-commerce sales has not taken off as much in China as elsewhere.
“Over the last few years, China has handled COVID-19 pretty well, with little disruption to on-trade. So people are still going to bars, restaurants, whereas in a lot of other markets, there's been a need to shift to online, that's not so apparent here.
“In China, most alcohol consumption (about 95%) is offline in bars, restaurants, and nightclubs, so we are shifting to focus on these offline channels, which has also impacted our product development.”
One of these product developments is packaging.
At the moment, ZEYA’s hard seltzers are packaged in cans for the e-commerce and modern trade such as supermarket and convenience stores.
But with the shift to on-trade, ZEYA is in the process of rolling out the same hard seltzers but in a glass bottle format.
Hoang said Chinese consumers associated glass bottles with more premium products, and would better help keep the products carbonated.
The volume of the glass bottles will be reduced to 230mL from 330mL (cans), which the firms hopes will better appeal to female drinkers.
“Females generally tend to drink less than men, and look for products that are lower in ABV,” Hoang said. ZEYA’s hard seltzers are 4.8% ABV.
The company is also in the process signing a contract with a ‘modern trade’ supermarket chain. This refers to stores that offer delivery services, as well as traditional retail.
ZEYA is now in the middle of a fundraising round, and hopes to raise RMB 7 million (US$1.1 million) by end-February. The round is led by an undisclosed global spirit brand.
“The funds will go towards marketing to raise awareness for the brand, distribution, as well as product development,” Hoang added.
ZEYA is also looking to expand its product portfolio beyond hard seltzer, with Hoang claiming that the lines are blurring between soft drinks and alcoholic drinks: “More innovation is expected around the merging of these two product categories, and I think the next stage is in creating functional ready-to-drink products.
“In the past, you may not have considered adding function or any sort of health benefits to an alcoholic beverage, but now we’re seeing brands add antioxidants, electrolytes, and vitamins.”
ZEYA is moving in this direction, developing natural energy drink products, fermented teas, and beverages with functional health benefits for the gut, for example.
“ZEYA is not an alcohol brand, we are a better-for-you beverage brand and offering better-for-you alternatives to existing beverage products.”