Article | Sina Finance Yuan Yiming

“If you use your brain a lot, just drink six walnuts”.

Once upon a time, the advertising slogan of Six Walnuts rang through the streets and alleys, becoming a childhood memory for Gen Z, and even a “powerful tool” for a generation to prepare for the college entrance examination.

However, many experts previously pointed out that the “six walnuts” advertisement was accused of false advertising: the protein content in a 240 ml can of the “six walnuts” drink is 1.44 grams. Based on the protein content, the number of walnuts contained in the drink was 1.87, less than 2 walnuts.

During the Spring Festival this year, six walnuts introduced a new packaging strategy, named “66 Dasun Lunar New Year Cans,” which harmonizes six with “66 Dasun,” and then harmonizes “nuclear” with “harmony,” meaning harmony, harmony, and harmony. “Peach” has the homonym “escape,” meaning escape, and evade evil. The intention is to awaken cultural identity in the Chinese blood.

The marketing idea is good, but how far can it go when an already controversial drink is labeled as Xuanxue?

Yangyuan Drinks has been going downhill

Not only during the Spring Festival, but on the occasion of this year's college entrance examination, Six Walnuts also launched the “Confucius Temple Blessing Jar”, which fits the advertising slogan “Kids Drink Six More Walnuts in the College Entrance Examination”. The person in charge said that it symbolizes the combination of “walnut wisdom” and “Confucius wisdom,” hoping to bring good blessings to candidates from all over the country.

It is worth noting that these six walnuts, once well-known and once known as the “hard currency” in supermarkets, have now fallen into the corner of supermarkets and have become childhood memories that Gen Z “remembers, but they don't necessarily buy”.

According to a poll initiated by Weibo, 37% of people have drank it before but don't drink it now, which indicates that the six walnuts have lost at least one-third of the customer base. Only 14% of consumers drink when visiting during the New Year holidays, more than 8% of consumers who really like to drink and have been drinking, while 41% of people said they have never drank six walnuts and have no plans to drink them in the future.

You need to know that between 2008 and 2011, Yangyuan Drinks, the main company of Six Walnuts, saw a barbaric increase of nearly 100% every year, and it was almost impossible to find rivals after Six Walnuts came out of nowhere.

In 2015, Yangyuan Drink's revenue reached 9.117 billion yuan, becoming a leading enterprise in China's walnut milk industry, which once attracted the attention of the industry. However, its revenue has been weak since 2017. From 2016 to 2017, the revenue of Yangyuan Drinks was 8.9 billion yuan and 7.74 billion yuan respectively, up -2.38% and -13.03% year-on-year respectively, and the performance growth rate slowed significantly.

By 2019, Yangyuan Drinks directly began a model of both revenue and profit reduction. In 2022, Yangyuan Drinks's revenue was 5.9 billion yuan, a one-third contraction from the peak period, while net profit was 1.4 billion yuan, directly half of 2018.

In the financial report, Yangyuan Drinks also frankly acknowledged that sales of the six walnuts are highly correlated with Spring Festival gifts. In its financial report, it said that due to the impact of the novel coronavirus epidemic, consumers have reduced or even canceled dinners and visits to family and friends, leading to a decline in demand for the company's products in the market.

Although in the first three quarters of this year, the total revenue of Yangyuan Drinks was 4.587 billion yuan, up 9.6% year on year; net profit attributable to shareholders of listed companies was 1,289 billion yuan, up 27.98% year on year.

However, the comparison between the data on the recovery of consumption levels after the epidemic and the data during the epidemic period seems to be of little significance. Judging from the overall development, Yangyuan Drinks is still going downhill.

Marketing research and development were to no avail. Experts say it has formed a negative spiral

In the 14 years since the advertising slogan “use your brain often, drink six more walnuts” went viral in 2009, the communication matrix has not been expanded or updated. In 2022, the frustrated Yangyuan Drink began appearing on emerging channels such as e-commerce, live streaming, community, and O2O. It also collaborated with popular anchors such as Oriental Selection, Luo Yonghao, and Xin Xuan.

But in fact, there are still no broken marketing moves from Six Walnuts to this day.

In terms of launching new products, apart from six walnuts, Yangyuan Drinks has no broken products. In 2018, Yangyuan Drinks launched the goji berry drink “Yangyuanhong”, saying that each can of this product specially added 35 high-quality premium goji berries from the “Wolfberry Gold Producing Area” in northwest China, and then introduced walnut coffee milk and plant-based yogurt “fermented walnut milk”.

However, at present, e-commerce platforms and offline supermarkets cannot search for new products such as goji berry drinks or coffee milk.

Furthermore, Yangyuan drinks have always been questioned by too little research and development. According to financial data, the R&D expenses for Yangyuan Drinks fell from 59.2 million yuan in 2020 to 28.92 million yuan in 2022. The R&D expenses for the first three quarters of this year were 22.85 million yuan, and the R&D cost rate was less than 1%.

In comparison, from 2020 to 2022 and the first three quarters of 2023, the sales expenses for each phase of Yangyuan Drinks were $604 million, $964 million, $840 million, and $525 million. Obviously, this is a company that focuses on marketing over research and development.

According to Shen Meng, executive director of Chanson Capital, the six walnuts are nothing more than a plant-based protein drink. They have no technical content or innovative elements, yet they are the only products in Hebei Yangyuan.

As a result, six walnuts are part of the traditional manufacturing industry, which requires traditional food distribution and supermarket festival channels, so there is no sales guarantee. “The six walnuts are not unique in the competition, but the Spring Festival shelf channel can guarantee a fixed consumer base.” Shen Meng said.

It further explained that similar to the six walnuts, Chengde Lulu and Hainan Yedao are also plant-based protein drinks. The similarity is extremely high. There is no differentiation for consumers, and there is substitutability, so there is a lot of pressure for each to survive. “For consumers, they can buy any of the six walnuts or Chengde Lulu; for stores, they can buy whichever brand makes more money.”

In the comments mentioned above, some consumers also said that the six walnuts couldn't beat Wangzai Milk and Silver Heron; the taste couldn't beat all kinds of milk tea, fruit tea, coffee, and the cost performance ratio couldn't beat the coconut palm, coconut juice, and orange.

As a result, according to Shen Meng, due to lack of innovation, the six walnuts were unable to attract young people in terms of marketing or products, which ultimately led to poor performance. Poor performance and inertia led to weak innovation, which eventually formed a negative spiral, with less and less presence.

Are “six walnuts” less than two real walnuts?

Today, Gen Z has become the main consumer force, and chasing a healthy trend has taken the consumer industry by storm. Previously, six walnuts could also attract consumers because they “can supplement the brain,” but as consumers' ability to recognize is getting higher and higher, the claim that “six walnuts are good for the body” can no longer gain the trust of consumers.

Earlier, some experts analyzed that according to the protein content, the number of walnuts contained in one can of “six walnuts” is 1.87, and the estimated fat content is only 1.58, which is less than 2 walnuts. Also, walnuts in the “six walnuts” lose some nutrients during processing, such as antioxidants and dietary fiber, and leave behind some impurities. Therefore, drinking walnut drinks is not as good as eating walnuts directly.

In contrast, the nutritional value of six walnuts is far lower than milk, but the retail price at the terminal is much higher than milk. According to previous financial data, walnuts account for only 23.3% of the production cost of the six walnuts, while the production cost of cans is as high as 52.18%, ranking first. In other words, more than 50% of the production cost of the six walnuts comes from cans.

As of today, six walnuts are no longer the same six walnuts that were worth 10 billion dollars back then, making the industry obsessed.

Faced with under-youthful marketing, outdated products have yet to be updated. Today, when new tea brands are flying all over the sky and new products are being released every season, six walnuts seem to have become “childhood memories” that only come to mind when visiting family and friends during the New Year holidays.

However, the six walnuts also seem to be lying flat during the New Year holidays, and only linking the four characters “six walnuts” to metaphysics can support the six walnuts?