Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 90 Suntory (Dear readers, I've made up for yesterday's and today's installments. Please vote with monthly tickets and recommendations to continue reading!)
It's three o'clock in the afternoon.

The door to the conference room on the top floor of the Fengye Building was pushed open.

Hans Müller entered, led by Ling Peiyi.

He was about fifty years old, tall, and had the typical air of a European elite.

Behind him was a middle-aged white man with a serious expression and carrying a briefcase, who was clearly either a legal representative or a technical consultant.

"Mr. Muller, welcome to Chen's Food." Chen Bingwen stepped forward with a smile and extended his hand.

"Mr. Chen, it's a pleasure to meet you." Muller shook Chen Bingwen's hand firmly, and then took the opportunity to look at his young opponent. "Chen's Foods has recently gained a great reputation in the beverage industry in Hong Kong and even internationally."

“Mr. Muller, you flatter me. It’s just a small matter.” Chen Bingwen smiled modestly and gestured for him to sit down. “Please sit down.”

This is Mr. Vincent Fang, a partner at Dexin Accounting Firm, who is in charge of our patent matters.

Both parties took their seats.

After a few pleasantries, Muller got straight to the point, "Mr. Chen, our Nestlé Group is very interested in the diamond-shaped anti-slip bottle cap technology developed by your company."

We are willing to acquire a global, non-exclusive license to this patent at a reasonable price.

Nestlé has a vast product portfolio and sales network worldwide. Our partnership will bring your company significant brand exposure and stable cash flow.

They're all ancient foxes, so there's no need to play any more ghost stories.

Müller got straight to the point and stated the purpose of his trip.

"A reasonable price?" Chen Bingwen smiled slightly, neither confirming nor denying. "Mr. Muller, thank you for Nestlé's recognition."

However, before discussing the price, I'd like to clarify one point.
Chen Ji's bottle cap patent is valuable for more than just improving the opening experience.

It solves a pain point that has plagued the industry for decades, bringing about a substantial improvement in consumer satisfaction and brand loyalty, and it can even influence the competitive landscape of a regional market.

Muller frowned almost imperceptibly: "What does Mr. Chen mean?"

“What I mean is,” Chen Bingwen looked directly at Muller, “this patent will bring a consistent, high-quality opening experience to all of Nestlé’s glass-bottled beverages, whether it’s mineral water or juice.”

Therefore, the reasonable price we expect should fully reflect the role this patent plays in enhancing Nestlé's brand value and market competitiveness, and not just be a technology licensing fee.

Müller remained silent for a moment.

Chen Bingwen's remarks avoided specific figures, but elevated the value of the patent to the level of Nestlé's brand strategy, which made him feel a little uneasy.

This young man's understanding of commercial value far exceeded expectations.

“Mr. Chen’s explanation of the value of patents is very insightful,” Mueller said slowly. “Nestlé is willing to pay for valuable innovations.”

Based on our initial assessment, we are willing to pay a one-time fee of $40 for a global non-exclusive license.

$40!
Approximately HK$200 million!
This figure is significantly lower than Coca-Cola's 450 million, but it is still a huge sum of money.

Chen Bingwen's smile remained unchanged, but he quickly calculated in his mind: Nestlé is indeed rich and powerful, but its asking price is relatively conservative, which shows that it does not recognize the "strategic value" of the patent as much as Coca-Cola.

Of course, this is related to Nestlé's product strategy. After all, Nestlé had not yet produced ready-to-drink coffee at that time, and instant coffee and milk powder were the main sources of profit growth.

Moreover, Muller only mentioned non-exclusive licensing, without mentioning anything else, indicating that his interests were relatively simple.

“$40.” Chen Bingwen pondered for a moment, then shook his head. “Mr. Muller, this price probably does not fully reflect the ‘strategic value’ we just discussed.”

Especially given Nestlé's vast product portfolio and global influence, the marginal benefits this patent can create go far beyond this.

Instead of directly refusing, he tentatively asked, "I wonder if Nestlé is interested in exploring deeper cooperation possibilities based on patent licensing?"
For example, could we experiment with product development or channel sharing in specific regional markets?
Chen's also has some promising new products that could potentially complement Nestlé's offerings.

This is both a test and a bait.

He wanted to see how interested Nestlé was in Chen Ji's other products.

Muller shook his head and said calmly, "Mr. Chen, Nestlé is always open to valuable collaborations."

However, during this meeting, we focused more on the licensing of the bottle cap patent.

As for other collaborations, we can discuss them later.

Regarding the licensing fee, $40 is our sincere offer. If Mr. Chen has more specific expectations, we can discuss it further.

Upon hearing Müller's answer, Chen Bingwen understood.

Nestlé, a large and powerful company, places even greater emphasis on the practical value of patents themselves.

“Mr. Muller is a man of few words,” Chen Bingwen said with a smile. “How about this, based on our shared understanding of the value of patents and Nestlé’s global influence, we believe that a one-time global non-exclusive licensing fee of $80 is a figure that better reflects the sincerity of both parties.”

Muller whispered a few words to the advisor beside him, and after a moment, he looked up: "$50."

This is the final offer Nestlé can accept.

Mr. Chen, we value efficiency and respect innovation. This price is already extremely competitive in the non-exclusive licensing field.

US$50! That's equivalent to HK$250 million!
Chen Bingwen quickly weighed the options in his mind: this price was already quite good for a deal that only involved patent licensing.

Receiving this cash would be a huge boost for Chen's business.

Moreover, not being an exclusive product does not affect Chen Ji's own use; they can still sell it to other companies.

“Okay!” Chen Bingwen readily extended his hand. “Mr. Muller, we appreciate Nestlé’s sincerity.”

$50, worldwide non-exclusive license!
The specific details of the agreement will be discussed between Mr. Fang and your team.

Muller finally smiled and shook Chen Bingwen's hand: "It's a pleasure to cooperate with you, Mr. Chen!"
We look forward to more opportunities for cooperation in the future.

After seeing Muller and his entourage off, the clock had already struck four in the afternoon.

Ichiro Tanaka, General Manager of Suntory's International Business Division, appeared at the conference room door on time.

Unlike Müller's European elite demeanor, Tanaka Ichiro was around forty years old, with a lean physique and a smile that was uniquely Japanese—humble yet shrewd. He bowed politely as he entered the room.

"Mr. Chen, it's a pleasure to meet you! I am Tanaka Ichiro, General Manager of Suntory International Business Division." His Chinese was quite fluent, though it had a distinct Japanese accent.

"Mr. Tanaka, I have long admired your name. Welcome!" Chen Bingwen treated him with the same courtesy and led him to a seat.

After exchanging pleasantries, Tanaka Ichiro's attitude was even more enthusiastic and direct than Muller's: "Mr. Chen, Suntory is extremely interested in your company's diamond-shaped anti-slip bottle cap patent!"
This design perfectly aligns with Suntory's brand philosophy of "people-oriented, striving for excellence!"

He leaned forward slightly and earnestly requested, "We very much hope to obtain exclusive authorization for this patent in East Asia and Southeast Asia!"

Suntory is willing to pay a licensing fee that satisfies your company and promises to invest resources to vigorously promote this technology within the authorized territory, making it a standard feature of our premium beverage line!

exclusive!

Regional authorization!

The focus is on East Asia and Southeast Asia!
Ichiro Tanaka's goal was very clear: to secure a monopoly in the local market and enhance Suntory's competitiveness in core regions!
“Mr. Tanaka, thank you for Suntory’s high regard for us,” Chen Bingwen said with a smile. “We also attach great importance to the Southeast Asian market.”

This patent could indeed be maximized if it could be developed in collaboration with an excellent partner like Suntory, focusing on specific regions.

Then, Chen Bingwen changed the subject: "Mr. Tanaka, based on the assessment of the potential impact of this patent and the consideration of maintaining fair competition in the market..."

Chenji has always adhered to one principle: we will not grant any company exclusive regional licensing rights for our diamond-shaped anti-slip bottle cap patent.

Tanaka Ichiro's smile froze, replaced by an undisguised disappointment.

“Mr. Chen, we at Suntory are seeking an exclusive license because an exclusive position can ensure the maximum return on our investment and also make it easier for us to create a consistent premium brand experience in the region.”

Non-exclusive licensing. This fundamentally conflicts with our strategic vision.

Chen Bingwen nodded and said gently:
"Mr. Tanaka, since we have both seen the enormous value of cultivating the region, instead of limiting our focus to the form of patent licensing, we should explore a deeper level of strategic synergy that better reflects the complementary advantages of both parties."

As is well known, Suntory possesses a powerful and unshakeable distribution network in its home market of Japan, a resource that any international brand would dream of.

Tanaka Ichiro looked at Chen Bingwen with a serious expression, as if he had a premonition of what Chen Bingwen was about to say.

Sure enough, Chen Bingwen then proposed a condition for the exchange: "Chen's company is very optimistic about Japan, an important and mature market in Asia."

If Suntory is willing to open up its core channel resources in Japan and grant Chen Ji's products certain access qualifications and support.

Therefore, although it is a non-exclusive license, we can offer Suntory priority and preferential treatment in the licensing terms, and lay the foundation for deeper cooperation between the two parties in technology and marketing.

Tanaka Ichiro fell into a long silence.

The core of this proposal is no longer simply the buying and selling of patents, but rather the exchange of resources.

Suntory used its most valuable competitive advantage—its domestic distribution channels in Japan—to secure priority access to a key technology.

Although Chen Ji's products are mainly sweet soups, which do not conflict with Suntory's products, what about the future?

After a long internal struggle, Tanaka Ichiro took a deep breath and made up his mind: "Mr. Chen, Suntory understands your company's expectations for expanding into the Japanese market."

However, opening up Suntory's core channels directly to third-party brands is a very significant business decision.

However, as a demonstration of its commitment to non-exclusive licensing of Chen Kee and future deepening cooperation, Suntory can promise to provide priority access support for one or two designated core products of Chen Kee in the Japanese market.

Following this, Ichiro Tanaka emphasized: "Please note that this is not an exclusive agreement or a deep channel binding, but rather a priority assistance based on a partnership of mutual trust."

The level of support that can be obtained will depend heavily on the market acceptance of the product itself.

Under this premise, Suntory expects the base fee for the non-exclusive licensing of its bottle cap patent to be adjusted to $20.
At the same time, a commission will be paid based on the actual sales volume of bottle caps, with a standard rate of 0.01 cents per diamond-shaped anti-slip bottle cap used.

Furthermore, if Chen Ji products enter designated channels in Japan with Suntory's assistance, Suntory will demand a 3% commission based on the actual sales volume of Chen Ji products in the Japanese market.

(End of this chapter)