Low-temperature yogurt "players" gathered, LeChun founder: the track is still on the edge of the industry, continuous innovation can run out

Per reporter Rui Xia (pseudonym) per editor Xiao Ruidong

In recent years, driven by the upgrading of local consumption and the improvement of residents' awareness of healthy eating, low-temperature fermented yogurt with health food labels has been favored by consumers and has risen rapidly, becoming the mainstream track of the dairy industry and milk. According to the data of the Prospective Industry Research Institute, in 2017, yogurt products surpassed milk for the first time with sales of 119.2 billion yuan, an increase of 18% year-on-year, and the growth rate was much faster than milk.

At the same time, as low-fat and low-calorie have become the new consumption trend of young people, a low-temperature yogurt subdivision track with a simple formula of "low sugar, less addition" has gradually emerged, and established dairy companies and emerging brands have competed for layout to seize the new blue ocean of the high-end market.

Liu Danny, founder and chairman of Beijing Lechun Youpin Food Technology Co., Ltd. (hereinafter referred to as Lechun), told the "Daily Economic News" reporter that in fact, the simple and pure yogurt of the ingredient list is still in the early stage of industry development, due to the asymmetry of information inside and outside the industry, consumers have less understanding of products, and products are even at the edge of the dairy consumer market.

In addition, he believes that in the context of the increasing number of players on the track and the intensification of competition, the continuous innovation of the brand around the dairy line is the way for the company to "run out" and go on for a long time.

It is understood that LeChun is a main zero-add health food enterprise, founded in 2014, is also the first local start-up to enter the high-end yogurt market, its business has covered 309 cities across the country; since its inception in 2014, it has obtained multiple rounds of investment and financing from IDG Capital, Zhen Fund, Innova Angel Fund, Huachuang Capital and other first-line institutions, and in 2018 obtained hundreds of millions of yuan of investment from Coca-Cola, which is also the only startup company that the latter has strategically invested in the Asia-Pacific region.

<h2>Track players gathered, giants rookies gathered</h2>

According to the data of the China Commercial Industry Research Institute, the sales volume of yogurt products in China will increase from 9.6 million tons in 2018 to 13.6 million tons in 2022, with an average annual compound growth rate of 9%; the sales of yogurt products will increase from 140 billion yuan in 2018 to 220.5 billion yuan in 2022, with a compound annual growth rate of 11.67%. Obviously, the scale of China's yogurt market is expanding rapidly, and the low-temperature yogurt market is growing steadily year by year.

An industry insider analyzed to reporters that low-temperature yogurt profits are higher, so it has become the focus of dairy companies in recent years, especially in the high-price market blue ocean is still wide, "although the market size is the largest in the low-price field, it has been occupied by dairy giants and regional enterprises, and there is still a gap in the high-end market, which also gives the emerging brands room in recent years."

The reporter noted that the current high-priced low-temperature yogurt market has both emerging enterprises such as Lechun, Jian Ai, and Yuanqi Forest, as well as dairy giants such as Guangming and Mengniu, as well as imported brands such as Meiji. From the price point of view, the industry generally takes the product with a unit price of about 8 yuan as the starting point of the high-end market, and the products on the market are mainly divided into two major price ranges: 8 to 15 yuan and 15 to 20 yuan. For example, the truthful unit price launched by Guangming is about 8 to 9 yuan, and emphasizes that it is a pure formula product containing only raw milk and fermented bacteria; the "three-three-three-fold" Greek fermented yogurt launched by Lechun in 2015 is mainly 3 times raw milk input, more nutritious and low-fat, less sugar, and its unit price is in the expensive price range of 15 to 29 yuan.

Throughout the development trajectory of Lechun, with dairy products as the core line, it has been derived from coffee, meal replacement, oatmeal, baking and other products. Liu Danny said that the subsequent products launched by Lechun are highly related to dairy products, "We do not limit ourselves to a category brand, but will take dairy products as the main line to develop and promote new products around user needs."

As an early player in China to enter the high-end low-temperature yogurt market, Liu Danny is both a witness and one of the promoters of the development of the industry. He said that in recent years, with the increase of boutique yogurt brands and the investment of various enterprises in product research and development, there are more and more high-quality products on the market. At the same time, high-quality products also mean relatively high costs and selling prices. In the past two years, the vigorous promotion of high-end brands in the market has also increased consumers' acceptance of prices to a certain extent.

Le Chun revealed that at present, the low-temperature yogurt market of more than 15 yuan has a market share of more than 90%. Since the beginning of this year, the company has successively launched products with a medium price of 8 to 12 yuan, and the formula emphasizes the sucrose-free.

<h2>It is still on the "edge", and the brand has a lot of room for power</h2>

At the same time, Liu Danny also pointed out that although the brand "gets together", in fact, the current track is still in the early stage, and the products at high prices are even at the edge of the industry. Specifically, due to problems such as information asymmetry inside and outside the industry, consumers do not know much about the nutritional value and efficacy of low-temperature yogurt products. "You go to the supermarket and ask some consumers, maybe they don't know the difference between low-temperature yogurt and ambient yogurt or even milk drinks, so it is difficult to accept the price difference, which is also a challenge for all brands."

In addition, the reporter noted that at present, the channel laying of Lechun products has adopted the strategy of mainly online sales and offline entry into boutique supermarkets. Specifically, it has flagship stores on Tmall, JD.com and WeChat malls, and offline boutique supermarkets and convenience stores in some first-tier cities. This is not the same as the traditional low-temperature dairy products under the main line of "play".

In this regard, the above-mentioned industry insiders analyzed that the restrictions on cold chain transportation conditions and shelf life in the past made low-temperature dairy products can only focus on the laying of offline channels. In recent years, with the continuous upgrading of cold chain transportation in China, the scope of long-distance distribution of low-temperature products has continued to expand, and the laying of brand channels has also begun to undergo structural changes.

According to the statistical analysis of the cold chain committee and the chain library of the China Federation of Things, the total capacity of China's cold storage in 2017 reached 47.75 million tons, equivalent to 119.37 million cubic meters, an increase of 13.7% year-on-year. With the acceleration of urbanization, consumption upgrading, and the expansion of fresh e-commerce demand, it is expected that this value will maintain a growth of about 13% in the next five years.

The aforementioned person believes that cold chain transportation and e-commerce platforms provide opportunities for start-ups to develop, "such a model may break the situation dominated by giants in the low-temperature dairy industry, and the development of cold chain transportation has ushered in a window period of development for regional brands and emerging brands, especially the innovative model of emerging brands may be more successful online."

Liu Danny said that the earlier Lechun product layout online and boutique supermarkets are due to its relatively independent price range considerations, this year's new market of 8 ~ 12 yuan price products will expand offline promotion.

It is worth noting that the surge of low-temperature yogurt players, on the one hand, helps to promote the development of the industry; on the other hand, under the fierce competition, the brand is prone to the dilemma of homogenization. In this way, the industry reshuffle will also accelerate.

In this regard, Liu Danny believes that under the incentive of competition, continuous innovation around products is the way for enterprises to "run out" and go on for a long time. According to him, Lechun's yogurt products have maintained a new rhythm of pushing a new month, and are radical and bold in taste research and development to fit the consumption concept of the current young group. In addition, in addition to the launch of oats, meal replacements, coffee, roasting and other products highly related to dairy products, in the future, more functional products such as healthy meal replacements to assist in weight management, as well as better tasting yoghurt drinks will be the company's continuous direction.

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