Introduction:The long-established beverage company Lizhiyuan experienced a cooldown in performance in the first half of 2024, with its second-quarter net profit plunging 49.3% year-on-year, as the halo of its flagship sweet milk product faded. From changes in the market environment to underlying issues in its product structure, this article deeply analyzes the multiple factors behind its dual decline in revenue and profits, and explores how traditional beverage brands can seek new growth points amid the trend toward healthy consumption.
The latest 2024 semi-annual financial data released by Zhejiang Lizhiyuan Food shows that this beverage company, known for its sweet milk, is facing serious challenges. In the first half of the year, overall operating revenue was 679 million yuan, down 3.08% year-on-year; net profit was 95.1205 million yuan, a drop of 29.29%. Notably, the second quarter performance was particularly weak—although quarterly revenue of 350 million yuan was only down 3% year-on-year, net profit amounted to just around 40 million yuan, falling off a cliff year-on-year.49.3%.
The company attributed the decline in performance to the macroeconomic environment and slow consumption recovery, while also admitting that increased marketing investment has intensified profit pressures. The semi-annual report disclosed that sales expenses during the period soared to 100 million yuan, a sharp increase year-on-year.47.16%, mainly used for signing actor Cheng Yi as the brand ambassador and for market promotion. This is yet another celebrity endorser for Lizhiyuan in recent years following Fan Bingbing, Zhou Xun, and Lin Xinru, but it clearly failed to reverse the declining sales trend.
Looking at regional market performance, except for the southwest region, Lizhiyuan saw revenue declines in most areas, with the northeast region experiencing a drop as high as45.13%. The topic #LizhiyuanNotSelling on social platforms sparked heated discussion, with consumers generally reporting that the product is too sweet and contains many additives, which goes against the current trend of pursuing low-sugar and healthy diets. One netizen bluntly stated: “After seeing the ingredient list, I never want to buy it again—it tastes like sugar water mixed with milk powder.”
As a brand established for nearly 30 years, Lizhiyuan’s product line covers six major categories including dairy-containing beverages and plant protein beverages, but over95%of its revenue still relies on the dairy-containing beverage business, within which the single product “sweet milk beverage” dominates absolutely. This 450ml product, commonly found in breakfast shops and convenience stores and priced at 5–6 yuan, lists its main ingredients as water, whole milk powder, white granulated sugar, and various food additives. Compared to pure milk, its nutritional value is significantly lower.
Industry insiders pointed out that the sweet milk beverage is actually a dairy-containing drink rather than real milk, with its protein content and calcium supplementation effect far below that of pure milk. Consumer test feedback often includes comments such as “the milk powder tastes as weak as water,” “the sweetness masks everything,” and “not worth it compared to just buying pure milk.” Lizhiyuan’s own annual report also admits that over-reliance on a single star product poses significant market risks, and previously launched new products such as fruit and vegetable juices and plant proteins have not gained market recognition.
The current beverage industry is becoming increasingly competitive, with consumers’ attention to health attributes continuing to rise. The challenges Lizhiyuan faces—such as brand aging, insufficient product innovation, and lagging channel strategies—are typical of the transitional period faced by many traditional food enterprises. How to maintain the market share of classic products while developing product lines that meet new consumer needs will be key to determining its future direction.
The above content is compiled by CoffeeHunters, a coffee news website.
