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Recently, L Catterton, a top private equity investment firm under the LVMH Group, announced the completion of its strategic investment in Sichuan Weiyi Beverage Food Co., Ltd. (hereinafter referred to as "Weiyi Beverage").

LVMH is the world's largest consumer fund, with assets under management of US$35 billion. It focuses on multiple sub-sectors including food and beverage, beauty and personal care, consumer technology, and pets. The company has a total of 9 investment platforms worldwide and has a wide influence in the global consumer industry.

Public data shows that this is the first time that Weiyi Beverage has raised funds externally. Why did Weiyi, a brand with more than 30 years of history, change its previous business style and start its first round of financing? In retrospect, it is related to the fact that Guo Yawen, the "second generation of founders born in the 1990s", officially "took over". Unlike his fathers' strategy of focusing on Sichuan and Chongqing, Guo Yawen has a greater ambition: to go nationwide.

Financing purpose: Weiyi wants to step out of the "Sichuan and Chongqing comfort zone"

For this investment, both LVMH and Veeam Beverages have a common goal: to promote the regional brand Veeam nationwide.

LVMH said: LVMH will work closely with Wei Yi to consolidate its brand position in the southwest region and expand its influence in China.

Wei Yi said: "Luwei Ke Teng has a keen insight into the industry in which the company operates and a high level of understanding of the company's business. We are deeply impressed by the comprehensive value creation plan designed by Luwei Ke Teng for Wei Yi, and we are very happy to work with Luwei Ke Teng to promote the implementation of relevant plans. By consolidating our leading position in the southwest market and moving towards the national market, we believe that Wei Yi will be able to better enrich the lives of consumers and provide consumers with delicious, nutritious and healthy drinks."

The reason why LV chose Vieille is because of the influence of the Vieille brand in Sichuan and Chongqing. Chen Yue, managing partner of LVMH Asia Fund, said: "In the vast and resilient consumer market in Sichuan and Chongqing, Vieille has a large and growing loyal consumer group. Vieille has not only developed beverages that are well-known in Sichuan and Chongqing, but also established a vertically integrated supply chain and a wide network of distributors, and established long-term cooperative relationships with them. The company's profits have been showing a clear upward trend and hit a record high in 2023."

It is reported that Weiyi Beverage was founded in 1992, and it has been established for more than 30 years. It is a plant protein beverage. Currently, Weiyi's products are sold in more than 550,000 sales terminals. Weiyi Beverage's sales in 2022 exceeded 4 billion yuan, with Sichuan and Chongqing accounting for more than 70%, of which more than 90% of sales came from catering channels. Among plant protein beverages, Weiyi Beverage ranks third in the country and first in the southwest region.

At the same time, LVMH is optimistic about the potential of Veeam Beverages in the plant-based beverage market, and estimates that by 2028, the beverage market size of the domestic catering channel will reach approximately US$60 billion.

Some brands under Blue Sword Group, from the company's official website

It is worth mentioning that Weiyi Beverage is a sub-brand of Sichuan Lanjian Beverage Group Co., Ltd. In addition to Weiyi plant protein beverages, Lanjian Group also has brands such as "Ice Age" natural mineral water, "Tianxiaxiu" peanut milk, "Lanjian Water Chain" bottled water, "Baiweixuan" condiments and "Chen Tongren" health wine. According to official website information, Lanjian Group was founded in 1985. The group's production scale has exceeded 4 million tons. Its direct and affiliated companies have more than 10,000 employees. In 2021, the group's annual output value will be 6.585 billion yuan, and the total profit will be 654 million yuan.

The second generation of founder Guo YawenTaking over”, can old brands be reborn?

From the above data, it can be seen that Wei Yi Beverage has been doing quite well in the Sichuan and Chongqing regions for many years. Why did it suddenly change its previous business style, start its first external financing and plan to expand nationwide?

Overall, this is not unrelated to the change in management style after the second-generation entrepreneur Guo Yawen officially "took over". Public information shows that in December 2021, Blue Sword Holding Group completed the change of senior positions, Guo Yimin withdrew from the list of senior management, Guo Yawen became the legal representative and served as chairman; in May 2022, Guo Yimin withdrew from Sichuan Blue Sword Beverage Group, Guo Yawen became the legal representative and served as chairman; this means that this "second-generation entrepreneur" born in the 1990s officially "took over" from his father.

"I am on the road of taking over and inheriting the business, and communicating and learning with my father. I need to inherit his business wisdom and integrate personal experience and understanding to give the company new vitality. So, my father and I are more like partners, starting the second entrepreneurial journey together." Guo Yawen said at an event of the Sichuan Chamber of Commerce in March this year.

Now, with the support of external funds, can the old brand Weiyi be reborn? "Weiyi is the leading brand in the Sichuan and Chongqing beverage market, and beverages for meals have been very popular in recent years. Based on brand effect and scale effect, Weiyi's moat has been initially established. Therefore, with the support of capital, as the beverage market for meals develops, this brand still has a lot of room for imagination." Zhu Danpeng, a food industry analyst, told a reporter from Nanduwan Finance.

Looking at the plant protein beverage market, according to data from the Forward-looking Industry Research Institute, the scale of China's plant protein beverage market continues to expand, maintaining an overall positive growth trend; combined with the penetration rate of plant protein beverages in the beverage industry, it is predicted that by 2026, my country's plant protein beverage market size will exceed 140 billion yuan.

However, if Weiyi wants to go nationwide, it will have to face fierce competition in the plant protein beverage market. It is reported that many companies have been listed, including Weiwei Shares (600300.SH), Yangyuan Beverage (603156.SH), Chengde Lulu (000848.SZ), and Huanlejia (300997.SZ). Judging from the financial data of related listed companies, many companies are in a downward trend under fierce competition. Take Huanlejia as an example. In the first quarter of this year, the company achieved revenue of 551 million yuan, a year-on-year increase of 6.61%, and net profit of 80.27 million yuan, a year-on-year decrease of 3.74%.

It is worth mentioning that in recent years, LVMH has made many investments in the beverage sector, including Yuanqi Forest, American functional bottled beverage brand Glaceau Vitaminwater, Heytea, Scottish craft beer brewery Innis & Gunn, American high-end juice and smoothie brand Odwalla, Australian kombucha brand Remedy and American organic ready-to-drink tea brand Sweet Leaf Tea, etc. Judging from LVMH's investment in Yuanqi Forest and Heytea in China, the relevant brands once had a fierce offensive in market expansion, but in recent years they have also faced greater market pressure.

Zhang Haixia, trainee reporter at Nandu Wancaishe