Functional Yoghurt: Not only Tasty, but more Inspiration "Chinese consumers are paying more and more attention to the intake of dairy products, be their quality or quantity. Reports from Mintel indicate that health claims with “added” and “reduced” are the decision-making factors that make consumers most willing to pay for a premium. However, our domestic market of health functional food is still flawed and imperfect, while functional yoghurt products in other countries (such as Japan) have a relatively complete system and the craze for these products continues.
·What do these functional food development strategies bring to us？
·How do we achieve accurate positioning by segmenting and in-depth research on consumer groups?
·What exactly is product innovation?
Satoru Ozaki, Chief Clerk, Basic Microbiology Reserch Department, R&D Division, Meiji Co. Ltd.
Dr. Zhang Shaohui，Shanghai JiaoTong University College of Agriculture and Biology Professor， Bor S. Luh Food Safety Research Center Associate Director; GO PEPTIDES General Manager
It is universally recognized that China's yoghurt market has a great development potential. According to data from Euromonitor, China's milk sales in 2017 have increased 4% compared with the same period of last year and the yogurt sales are estimated to increase 18%, reaching 122 billion yuan. Meanwhile, the problems such as insufficient innovation, homogenization and diverse category lacking have become obvious. Under this circumstance, drinkable yogurt gradually attracts consumers' attention. Data from Innova Market Insights indicate that drinkable yogurt in China, with refreshing taste and convenient package as its bonus, has rapidly developed and increased its market value by 25% from 2016 to 2017. The drinkable yogurt, as the third force of yogurt, is rising right now. What's its market environment? How about its consumer acceptance? Where is the breakout for new product development?
“Protein” plus “fitness and bodybuilding” is a good combination, and “fitness and bodybuilding” plus “water” is a good combination. As exercise and fitness market is prosperous nowadays, will the new combination of protein and water become popular?
Bo Zhang, Founder and general manager, Healstec Innovative Formulation
People have been drinking plant-based milk for a long time and this year witnesses its compelling outburst. Innova Market Insights reports that in the past 11-15 years, the newly-launched beverages among dairy substitutes have increased six times, with its 2018 market value expected to reach 16.3 billion dollars, and that China’s soybean milk has increased sales by 42%. As consumers express stronger preference for natural, simple and healthy lifestyle and more interests in vegan substitutes for animal products, consumers have more favorable impression on plant-based milk. Perceptive enterprisers have earlier sensed this new trend and entered or invested more into this segment market.
Craft beer, a symbol of petty bourgeoisie. Compared to industrial beer, these artisanal beers go through a rigorous selection of raw materials with earnest attitudes and brilliant ideas. Craft Beer advocates free creation and unlimited taste experience, just similar to the spirit of craftsmanship. It is perfect for savoring slowly. In recent years, Chinese consumption of craft beer has maintained an increase rate of over 40%. Craft Beer, with an innate minority characteristic, has quickly become a symbol of middle-class consumer culture. The logic of its minority base makes consumers have a more tenacious attachment to it.
·How does craft beer appeal to consumers?
·How does the market go through the taste transition period smoothly?
·How do microbreweries upgrade consumption?
Jerome Pellaud, VP Global Craft & Specialties, ZX Ventures
Nicolas Morelli, Craft and Specialties VP APAC North, ZX Ventures
China’s local governments have invested heavily in green industries, but their lack of awareness of the water industry causes policies and marketing directions to be vague. Things happened in the areas such as Changbai Mountain, Wudalianchi and Tongren, Guizhou are very typical. Apart from that, domestic bottled water companies are confronted with the challenge to build consumer awareness when developing the above-mentioned three types of water. In conclusion, local governments need policy-making guidance, and companies need successful cases to refer to , which Europe offer the best model.
Jean-Pierre Deffis, President of the European Bottled Water Federation(EFBW); Former General Manager for Danone Waters; Former President of theFrench Bottled Water Association
Concerning Chinese water brands, Kunlun Mountains features viral marketing and sports marketing; Master Kong focuses on cultural marketing, partnering with Tmall to build a China Day and create a trans-boundary cooperation pattern based on brand communication and channel expansion; ALKAQUA, a Uni-President brand, positioned “fashionable”, lays emphasis on contents; and Nongfu Spring strides ahead from internal training to external trans-boundary cooperation, step by step practicing digital marketing.
Topic Value: It has been urgently needed for the traditional mineral water brands, like Wahaha, Yake, Nongfu Spring and Coca-Cola, to make transformation and produce middle to high end products. But, do they clearly understand consumers’ expectation for these products? The large and medium-sized mineral water brands usually spend huge monry on marketing but the effects are hard to be evaluated. In contrast, new media can be a very efficient tool. But the key is how the brands use this tool to save money and increase efficiency. Would the power of community-centric marketing and a fan economy also apply to the mineral water industry? The answer is yes. However, as different types of mineral water has different properties and consumption scenarios, they respectively have different marketing tricks.
Cathy Gu, Founder, Koala Marketing
-Extending freshness and optimizing supply-chain efficiencies using HPP technology in the Juice sector
-Introducing the process differences between HPP and NFC Juice production
-Comparison of Vitamin C retention in HPP and NFC Orange Juice
-The advantages of extended shelf life of 90-120 days for planning, warehousing, production and logistics function
-Ability of HPP process to use globally sourced ingredients & raw materials harvested at their peak for premium quality consistency
-Ability of HPP process to give ‘global reach’ – able to export fresh beverages globally due to extended shelf life
-Ability of HPP process to open up e-commerce channel due to extended shelf-life
-The cost advantages of HPP as relates to minimizing shelf life write-offs
-The advantages of HPP processing versus on-premise fresh squeezing
-Simplify preparation and presentation
Bin Xue, VP of R&D, Chic Grounp
-How HPP ‘locks away’ and protects the authenticity of the raw ingredients and why this is a key differentiating factor & competitive advantage for our strategic partners
-Food safety advantages of HPP
-Consumer satisfaction with taste and quality of HPP Juices and repeat purchase
-Chic Group’s 10 years+ of investment into HPP technology
-How China’s leading juice brands can benefit from strategically partnering with 源自INVO
-How on-premise and QSR chains benefit from strategically partnering with 源自INVO
Bin Xue, VP of R&D, Chic Grounp
-Millennial consumer trends and search for natural & authentic foods & beverages
-Growing consumer awareness of HPP products and their influence on consumer choice
-Innovation showcase - HPP Cold Brewed Coffee
-Innovation showcase - HPP Dutch Milk
-Innovation showcase - HPP Soups
-Innovation showcase - HPP Dips
-Innovation showcase - HPP Sauces
-Innovation showcase - HPP Fruit Teas
-Innovation showcase - HPP Nut Milks
Patrick Mannion, Managing Director, Innova Market Insights
What should the Generation Z's preferred snacks look like? To be good tasting? Yes of course. Good taste is the source of happiness. But remember to be healthy as well, so that they do not need to worry about their health conditions. Snacks shall not only be a feast to the eye and mouth, but also a bonus to health and vigor. Chocolate with yogurt, nuts coated with probiotic chocolate, biscuits with prebiotics... Do you want some more?
Finally, the world welcomes its fourth type in chocolate—“Ruby”, a new variety introduced since the advent of white chocolate in the 1930s. Totally worthy of 80 waiting years, Ruby chocolate has no added color, yet with an innate charming pink; no added seasoning, yet with a natural berry aroma. The unique flavor and color create a romantic fantasy world and the combination of sweet fruity taste and mellow smooth mouth feel presents consumers with unprecedented experience. What trend can we expect from this Ruby chocolate wave?
George Zhang, MD of China, Barry Callebaut
Jingyue Wang, Co-founder, Baicaowei
Jason Yu, General Manager in China, Kantar Worldpanel
This is a strange age. The consumption of luxury goods has grown by leaps and bounds, and that of cheap goods has also been trendy. We see that wealthy bosses would shop online while career rookies without much money would also buy luxury goods. From our traditional concept, different “consumer classes” are connected to different consumer channels. However, nowadays these “consumer classes” don’t exist anymore. Savvy consumers are pursuing both high-quality products and also cost-effective products. According to a consumer trends report from McKinsey, consumers either buy high-end products, or buy the low-end. The products focused on the middle market are becoming less and less popular. Why would the trend “up for luxuries & down for benefits” happen? What’s the future like? How should we respond to it?
In the post e-commerce era when traffic dividends are gradually exhausted, the fission and explosive growth brought about by WeChat-based social commerce seems to be setting off another counterattack. When it comes to social media strategies, brands usually encounter three situations: a. very familiar and proficient; b. totally avoiding; c. stumbling to post some content without highlights. Wherever we are, in the e-commerce area where ""users =traffic=money"", we can occupy the high ground only by capturing users' deep needs and obtaining precise and high-quality traffic. To catch the opportunities and obtain the dividends, brands should first understand the following questions:
Who are the users and what do they need?
Who am I and what value can I provide to users?
How do I do to obtain e-commerce traffic?"
Costco has been ranked 16th on the list of 2017 Fortune top 500 American companies, and 68th on the list of The 2017 BrandZ Top 100 Most Valuable Global Brands. When all bosses are pursuing the continuous growth of gross margin, only Costco is thinking about how to earn less. If the gross margin is 10% this year, could it be 9.5% the next year and 9% the year after next? For all its global chain supermarkets, the gross profit of all goods must not exceed 14%. They shall allow product return or exchange without any reason or limitation on time, prepare enough free food for taste and make every effort to give consumers maximum discounts. Their goods are extremely good, prices extremely low, services better than expected, and even the employee satisfaction is as good as Google. When the rising of e-commerce causes great impact on traditional retail industry, how can Costco achieve so amazing performance?
In the process of digital transformation, consumer goods companies often encounter the following key obstacles:
· China is a vast country with numerous terminals, data collection is time-consuming and laborious, and there is a lack of store data in the first moment
· Manual input by dealers/sales representatives/third-party auditors lacks objectivity in data collection
· There is no comprehensive, accurate data to identify the key drivers of business growth
· Due to low data granularity, it is not possible to accurately evaluate the compliance of shelves and displays
· There is no store-level data to analyze the effectiveness and authenticity of marketing promotions
· Lack of insight on how to delight shoppers, dealers and retailers
Trax helps consumer goods companies establish the First Moment of Market Truth, win in stores, and win in China's new retail!
Trax is the leading provider of computer vision solutions and analytics for retail, recently ranked in the top 25 Fastest Growing Companies on Deloitte’s Technology Fast 500 list. The company enables tighter execution controls in-store and provides clients with the ability to leverage competitive insights through its in-store execution tools, market measurement services and data science to unlock revenue opportunities at all points of sale. More than 175 top brands and retailers leverage Trax globally in more than 50 countries to manage in-store execution and increase revenues at the shelf. Clients include Coca-Cola, Budweiser, Heineken, Diageo, Nestle, Henkel and Tsingtao beer.
Nancy Wang, Managing Director, Greater China, Trax
Although in terms of penetration, history, product type and service function, vending machines in China are far from the level of those in large countries like Japan, new technologies and payment methods are indeed continually driving the Chinese vending machine industry forward. For Chinese companies, they need to consider more about how to help this industry take off.
Mark Dziers, Design Partner, McKinsey Design
With emerging small communities of various interests, selling a lifestyle is no longer exclusive to MUJI. In addition to specialty stores like Starbucks’ coffee workshops, HEATEA "DAY DREAMER PROJECT" and SUNGTEA stores, many items of distinctive character, such as Bulletproof coffee, non-alcoholic cocktail, fruity sparkling water, and protein bars also gradually come into the lives of different groups to shape their new lifestyles. Compared with the traditional single product strategy, most of these emerging products have a complete and consistent design concept. They convey their brand concepts through different application scenes from product packaging, online interaction to pop-up stores. It is said that snacks and drinks are not rigid demand. But when they are designed to be very desirable or indispensable, wouldn't they be eagerly wanted anymore?
During the short time among 2016-2018, the Chinese local design new star L3 Branding has become the only one at APAC being recognized as Coca-Cola’s Global Tier 1 Creative Supplier. The agency has helped many leading foreign and domestic F&B brands such as Coke, Sprite, Fanta, Mead Johnson, COFCO, Mengniu etc to upgrade the image. And it also won two Gold Pentawards consecutively, which offer a good example of balancing business performance and art pursuit. By sharing these cases, L3 will lead us to:
1. How shall world-known brands walk in local markets by visual upgrade?
2. When big local players recognize the importance of design, how to catch up?
3. How does design help brands most?
Grant Li, Founder & Creative Director, L3 Branding
Premise: Smart Labeling provides crucial technical support for food package to be an IoT base station and consumer education platform. But the real sublimation of the role of packaging requires brands to produce a large amount of high-quality contents to match the front-end technology, and to guide consumers in the right way. It poses a huge challenge to the commercial popularity of smart labels. However, why don't we just think of it simply? Sainsbury's, the UK's second-largest supermarket chain, presents us with great hands-on experience.
Case: In late 2017, Sainsbury's launched a color changing label on the packets of its own-brand ham in all 611 stores across the UK. When a consumer opens the pack, the smart label changes color from yellow to purple depending on the freshness of the ham at different time and environments, so as to remind consumers to eat it before it goes bad. Without any cool marketing goals, this move simply aims at reducing food waste. It doesn’t concern any complex management of food supply chain or embedded original contents. Up to now, Sainsbury's is still the only one that uses color changing labels on a large scale. A simple yet fresh idea.
Peng Chong, Founder, Pesign
With consumption upgrade, the consumer market has received unprecedented attention from the capital market. Even funds that once invested in the Internet industry have set up consumer funds, such as Gaorong Capital and Joy Capital. Food and beverage market is massive and large-scaled, and many listed companies valued 100 billion yuan are born on the segmented markets, such as Moutai, Wuliangye, Yanghe, Haitian Flavoring & Food, Yili Group, Mengniu Group and China Resources Beer. Meanwhile, with increasingly mature consumer market and retail environment in China, some changes occur, be it market landscape or consumption habits. And some excellent consumer brands, especially the food ones will emerge from the chaos. How do capital funds find companies that might become great in F&B industry? What categories these companies may appear in? How do capital funds find them at their early stage? What are the characteristics of these companies?
Jeacy Yan, Partner, IDG Capital
Accel Foods and VMG Partners are two well-known American capital funds investing in consumer products, especially those early-stage consumer brands. Although AccelFoods mainly focuses on investment of food and consumer products, they both have invested in some famous American food brands. For example, AccelFoods invested in Harmless Harvest, AloeGloe, and Koia, while VMG Partners invested in Bare, KIND, and Spindrift. Among these brands, Harmless Harvest has been invested by Danone, AleoGleo by Coca-Cola, KIND by Mars and Bare acquired by PepsiCo. How do these early-stage consumer brands funds find the best brands? How do they support these brands after investment?
Kara Cissell-Roell, Founding Partner, VMG Partners
Reese Schroeder, Managing Director, Tyson Ventures
PepsiCo has recently launched an internal incubator and accelerator unit, called The Hive. The unit will foster niche products that already exist within the company, as well as create emerging brands that PepsiCo might incorporate. The success of the company's two new brands, high-end drinking water LIFEWTR and sparkling water ""bubly"", has brought out the advent of the unit. Recently, the unit has also fostered some small brands, such as Maker Oats and Stubborn Soda. In addition to The Hive, PepsiCo has also partnered with The Hatchery, a Chicago-based beverage incubator, to nurture and support new brands. Moreover, PepsiCo has established PepsiCO Nutrition Greenhouse Incubator Program for two phases. In addition to PepsiCo, Chobani, Kraft Heinz and other companies are also supporting early food startups or product innovations through the establishment of incubators or accelerators.
In 2015, cross-border M&As of Chinese companies accounted for 0.9% of GDP, compared with 1.3% in the US and 2.0% in the EU. In addition, the investment amount (in US dollars) of US companies and EU companies is 2.4 times and 3.2 times that of Chinese companies, respectively. Although cross-border investment by Chinese companies is still in its infancy, the amount of overseas investment will increase several-fold in the next decade. Behind the growth, there are also some less eye-catching data, for example, the completion rate of overseas M&As by Chinese companies is only 67%. Even if a transaction is completed successfully, companies often fail to achieve the desired goals. The reason is that Chinese enterprises lack integration ability after mergers and acquisitions. Most Chinese buyers have limited post-investment management ability after the transaction is concluded. Therefore, such kinds of M&As are unlikely to bring synergy gains or real operational integration.
Oreo cookies, Budweiser beer, Burger King, Maxwell House coffee, DQ ice cream, Wrigley, Cadbury, Pacific biscuits, Prince biscuits, Chips Ahoy, and Heinz baby rice cereal, all above foods and beverages and brands you encounter or love much belong to Warren Buffett and his good friend Jorge Paulo Lemann, the richest man in Brazil.
Cristiane Correa, Author of the Book Dream Big, Consultant in Brazil
According to market research and consultancy company CB Insight, investors entering the food and beverage industry have tripled since 2013. Since 2014, more and more investors of startups seemed to be food and beverage giants rather than venture capital and private equity firm. In China, although the business for food and beverage is on the rise, there are still very few successful food companies that have deployed strategic investment in or M&A against startups. What are the concerns behind the phenomenon?Will Coca-Cola’s strategic investment in Lepur bring hope for investors and startups?