Young people “eat” another hundreds of billions? I’m afraid it’s a misunderstanding | 36 氪 Xinfeng direction

Text | Editor Yao Lan | Qiao Yan

Since the second half of last year, the news of “no longer seeing consumer cases” in the interior of a super -first -line fund was almost overnight. Under the nest, it is difficult for some investors to be regarded as a functional food that “the last one hundreds of billions of tracks of the new consumption”.

According to 36 氪, a dietary supplement brand that shouted “selling 100 billion” in the first half of the year will only complete 60%of the sales target in December last year, and because the valuation is too high, the new one will not be obtained. Rotation financing; in order to cope with the decline in sales, a function fudge brand issued 40%of the commission sharing to Taoists during the Double Eleven period, and at the same time presented a customer’s 30 yuan voucher, which means that a box of price is tens of yuan. The fact that the fudge is only about 5 yuan.

“It is equivalent to drinking thirst”, a FA in the field of consumer goods told 36 氪, “In the future, this brand will only be worth 5 yuan in consumer minds, and it is difficult for investors to invest.”

According to incomplete statistics from public information, there are 12 financing incidents that occur in the track in 2021. Behind the back of Sequoia, GGV Jiyuan Capital, IDG Capital and other head institutions blessings. According to the data provided by Bai Guan Technology, in the TOP10 of Tmall Functional Food Brands from January to October last year, there was no new brand figure from online.

Source/Baiguan Technology

The new brands have been supporting it, and the upstream supply chain is temporarily affected by the cold wave.

20 kilometers north of West Lake, Liangcheng in the ancient city. This is the location of Hangzhou Hengmei Food -whether it is Tomson Beijian or many new consumer health products, about 70%of the meal replacement and protein sticks in China today are from here. OEM loaded and sent to all parts of the country.

Beginning in 2019, Hangzhou Hengmei, who has perceived the changes in consumer air outlets, began to adjust the business route, and changed from OEM to ODM (help customers design+production), providing product planning, sample development, pilot production, market testing, batches Production, logistics cloud warehouse, nutritional support for full process services.

From 2019 to 2020, Hengmei Food’s revenue increased by 3 times and twice, respectively to hundreds of millions, and received financing of 100 million yuan.

Yang Peng, the founder of Hengmei, also said in an interview with a media that it was not a big customer in the traditional sense to bring high -speed growth to the company, but the emerging brand customers who later lived.

To some extent, the highly developed supply chain upstream often means the height of the lower reaches of homogeneity.

“After the functional snacks were hot this year, everyone rushed up, and soon formed a vicious competition,” a founder lamented 36 氪. ” Just look for the manufacturer, the life cycle is very short, and you need to keep the placement. Consumers have no repurchase, have a lonely, and the brand itself is very painful. “

Also educated include institutional investors,

“It turned out that VC felt that ‘monthly sales of 10 million’ are a threshold. After crossing, it means that it has obtained repurchase and brand potential energy, but after half a year of market education, everyone gradually realizes this.”

An investor who invested in multiple functional food brands admitted to 36.

“The gold content after 10 million yuan in monthly sales is not high. It can be rushed to rely on the live broadcast+distribution+discounts of experts, but if there is no repurchase, it is difficult to support the next 20 million or 30 million. The new brand can only stop here to stop. “

However, on the other hand,

The demand for health care seems to be objectively existing:

From group jumping to holding the group health, the post -80s and post -90s of the high -intensity work rhythm have been deeply distressed by lumbar spine, cervical spine, hair loss, insomnia.

According to the “Internet Merchants World” report, among users who purchase quality Chinese medicine online, 25-40 years old is the main population, and users aged 25-30 accounted for more than 50-59 years old.

In 2021, Jingdong’s “6 18” opened only 5 minutes. The transaction turnover of sports nutrition and health products increased by 65 times year -on -year, enhanced the turnover of immune health care products by 42 times year -on -year, and the transaction turnover of liver and liver care products increased by 39 times year -on -year. The turnover of cross -border import health products increased by 240%year -on -year. In 2021, Tmall’s “Double 11” was on sale in the first hour, and the turnover of traditional Chinese medicine -related products increased by 6 times year -on -year …

From the perspective of the timeline, despite carrying a series of historical issues such as public opinion and supervision, health care products still develop a large market in China, with a compound annual growth rate of more than 10%; At least three richest mans (Zhong Yan, Zong Qinghou and Shi Yuzhu) have been collected in health products “the first bucket of gold in life”.

So,

What are the gap between the incomparable consumption demand and the market that fails to erupt? Where will the functional food brand go?

36 氪 will try to answer these questions in this article.

The 100 billion incremental market is true and false

This is an industry that has “eaten” a lot of Internet celebrities.

One example is that without capital blessing, only a single SKU -a casual candy made by a white kidney bean extract, the functional diet brand is unlimited. The show realizes 50 million yuan in a single month, ranking first in Douyin food.

In addition to the emerging brand, the industry giants also “eat” from it to sweetness.

In 2018, Tomson, a health product giant Tomson, founded a market value, founded the sub -brand “YEP”. For young female consumers, it launched collagen oral liquid, mildew wellite tablets, probiotic beverages and other products. It is understood that from January to August 2021, Tomson’s functional food categories increased by 17%year-on-year.

The “2020 Function Snack Innovation Trends” from Tmall shows that functional foods are expected to reach 500 billion yuan in market scale in the next few years, of which functional snacks are expected to account for 150 billion yuan.

So what exactly is “functional food”?

From the concept itself, functional foods have not given official definition so far. In the Food Safety Law, Chinese food categories can be divided into two categories: ordinary food and special food. Special foods include health foods, but there is no “functional food” in food classification.

Wang Yingyao, deputy secretary -general of the Chinese Nutrition Society, and Liang Xiaoqing, deputy secretary -general of the Health Products Market Work Committee of the China Health Care Association, told 36 氪 that in most cases, it refers to foods with specific nutritional health functions, which is suitable for specific groups. , Foods that are not the purpose of treatment.

At present, functional foods launched on the market are mainly fudge, protein rods, meals, granctions, drinks, frozen dried and other forms, focusing on weight management, improving sleep, whitening, and intestinal regulation.

The functional ingredients of adding health products also have the taste of snacks, which are functional foods in the middle position that are both “useful” and “delicious”. Excessive consumption of your body, healthy anxiety but too lazy to exercise, or because of fast -paced life, you can’t spend too much time for health.

To seize consumers’ anxiety about “uncertainty”, from this perspective, this is also an “heart -to -heart” industry. BUFFX founder Kangle admits that comprehensive considerations of some factors, some new brands and upstream foundries are unwilling to say that they are making functional foods, but they call themselves healthy foods in the big health track.

The founder of a brand that emphasizes product emotional value told 36 氪 that it is very common to add Chia seeds to food in food, but many Chinese consumers have not yet recognized it. “In fact Some of the ingredients that are very mature and can be recognized by consumers are used in domestic food, but we think it is the category of healthy foods and can be regarded as the grading of food, not a new track. “

“Because there is the concept of ‘health’, when young people choose the same type of product, they will choose a” health “product as much as possible to reduce their psychological burden.” The above -mentioned founders said that health food brands are the positioning of their own brand’s positioning Essence

An important reason for the rise of functional foods may be able to answer with a sentence that GGV Jiyuan Capital Partner Li Haojun has said:

It is a good starting point while not being killed.

Northern Light Innovation Partners Lin Lu is firmly optimistic about the general trend of “lifestyle health”. He believes that the consumption demand for health food and leisure food health has been verified in developed countries such as the United States and Japan. The rapid rise of the demand side will be accelerated in an orderly manner.

In Japanese drugstores, functional cosmetics, food and medicines are sold together. Among them, functional food has become an important pillar product. According to reports, sales have continued to rise since the epidemic. Some founders and investors believe that China will also develop similar formats to alleviate the government’s medical insurance pressure and promote the commercial development of health products and functional foods.

The Foresight Industry Research Institute has done a survey. The penetration rate of functional foods in the United States exceeds 50%, and Japan’s penetration rate is about 40%, and only 20%in China.

This is a market that looks full of opportunities and great.

The “stigma” that is difficult to wash off

However, why are the functional foods that hit people’s underlying demand for “healthy”, why are they always facing the controversy of “IQ tax”?

The lack of core technology is the first crime.

Domestic functional foods are still in the early stage of development. New players generally do not have their own R & D team. The cognition of this track has not yet risen to raw material production, extraction technology, and more detailed composition ratio. It is to find the factories for OEM processing, and most of the foundries that shoulder the burden of R & D do not have the ability to develop users in depth, and more are the adjustment ratio or raw materials to re -combine, which leads to the homogeneity of the product.

Several new brand founders told 36 氪 that the company would sign his sex agreement with the foundry, but he was only within a limited range of this row, because the startup was limited. In addition, the factory was also OEM (the formula was basically public. “It is nothing more than sweetness and lower”), and it is impossible to complete him completely.

Chinese foundries are still in the stage of OEM capabilities than ODM capabilities. If capital does not burn this track, it will naturally die many brands.

According to 36 氪, the domestic functional food industry is relatively weak at basic research and application research.

To solve your founder Wang Xiaoxia for example, do probiotic products, many foundries do not understand the “water activity”, and they cannot accurately monitor the “water activity”. This is a key control indicator for probiotic product activity. In addition, there are more important interactions between probiotic products, and different substances have more important interactions. Nestlé’s experts and teams spend a lot of investment to screen and control the glass -based temperature of controlling materials. Talents will study. “If you just use the idea of ​​snacks, there is no barriers. Can I spend money, do you still do it for me?”

The person in charge of the product research and development of a upstream factory bluntly said: “We dare not buy domestic plant extracts because the extraction process is not standard and the extraction cost is not clear.” If you buy it, many foreign ingredients suppliers are willing to invest in in -depth basic research for decades, form relevant clinical verification data and papers, and finally promote it to the world to commercialize the commercialization of products. “This is a long cycle. No patience is not possible.”

Even if you do not start from 0 to make product innovation, it is just fine -tuned, and the cost is expensive.

The person in charge of the research and development of BEAR KOKO (a functional food brand) product research and development of the product told 36 氪 that the white kidney beans blocked the sample of the sample of more than 70 times. The first version of the proofing continued for nearly half a year. The team did not change the ingredients of the raw materials. Instead, it was based on the Chinese dietary nutritional supplementary standards to make targeted formula to block the ratio. At the same time, it was balanced in several dimensions such as taste and effective ingredients. The solution, then do the user trial experience, so repeatedly polish, each sample will cost high time and labor cost.

The domestic research on functional raw materials is not so deep, and it is more processing. “A startup brand has taken a little financing to invest in research and development.

New brands are generally afraid of innovation in products, and if the team lacks R & D professionals, it is even more likely to enter the regulatory red line of health food laws and regulations.

While product innovation is difficult, the “function” of functional foods is often suspicious. There is a distance between the amount that allows the addition and the actual effect to achieve. In addition, due to the influence of personal constitution, the sample effect of the product has “uncertainty”, it is difficult to be quickly perceived, and it is difficult for consumers to continue to take it.

What’s worse is that it is more expensive.

Take the first domestic hyaluronic acid drinking water “Water Spring” launched by Huaxi Bio, a leading hyaluronic acid company, as an example. 420ml Hyaluronic acid drinking water is priced at 8.9 yuan on the Tmall flagship store. Hyaluronic acid 83mg. Based on the average price of 1258.36 yuan/kg of the 2018 Huaxi Food Class Hyaluronic acid in 2018, the cost of hyaluronic acid in the drinking water per bottle is only about 0.1 yuan.

A investor is quite puzzled: “The function of functional drinking water claims to add very expensive raw materials and can sell more than 8 yuan. How many people can always afford it. The Chinese consumption upgrade has not yet arrived. High stage. “

Looking at the more popular functional sleeping sugar at the moment, the GABA raw materials in the BUFFX, WONDERLAB, NELO products are purchased from biotechnology companies Huaxi Biological. The financial report of Huaxi Biological in the first half of 2021 shows that other biological activated raw materials (including income of hyaluronic acid derivatives, GABA, Ecotoin, wheat sulfurin) increased significantly by about 106.10%compared with the same period of the previous year, gross profit margin, gross profit margin As high as 73.03%.

The effect is difficult to verify, the price is not “rational”, and the profit of the industrial chain is so high from top to bottom. It is difficult to be criticized in this industry.

When products are not innovative and differentiated, marketing is often important, but this road is difficult to go.

“The front -end innovation is difficult, and we still need to make breakthroughs on the marketing side.” This is the voice of a brand founder.

Beginning in 2016, health food supervision has changed from the registration system to a dual-track system for registration and filing. The approval process has been shortened from 2-3 years to a few months. The document requirements are also streamlined. Efficacy attribute food production, sales and publicity channels are still strictly controlled by all parties.

The founder of a brand told 36 氪 that the concept of “enzyme” was exaggerated by many adverse vendors as the concept of weight loss, misleading consumers, which caused e -commerce platforms Merchants of related products cannot operate normally.

According to industry insiders, some dietary nutritional companies on Douyin do have the problem of “high advertising consumption, but not quantity”, because the platform has not found an intermediate position that meets both regulatory standards and meets the demands of the brand’s demands. Therefore, it is difficult to provide very detailed unified advertising standards, so that the brand side clarifies which materials are votted.

Li Zhongmin, a partner of Yuankun Venture Capital, told 36 氪 that when you emphasize the category of “functionality”, not the category of “food”, you need to invest large money into the acquisition of traffic and education market. “And the attention of young consumers to new things is particularly decentralized. Once it is stopped, or the product power does not feel the feeling of TA, this brand will be abandoned immediately.”

Return of common sense

It is not as useful as health products, nor is it delicious as ordinary food. Where is the next stop of functional food?

Li Zhongmin shared one of his own views: there is a progressive relationship between health products, functional foods, and ordinary food: if there is a problem with the body, the first consideration is the drug; when you do not need such a strong effect, you do not need such a strong effect It ’s time for health products; a little“ light ”down is the functional food with some functional ingredients to add some functional ingredients. Regarding functional food, there is no effect that it is not fully affirmed. Western countries may stay at this step. However, due to the influence of traditional Chinese medicine ideas, functional foods will evolve from the perspective of medicine and food, and develop the corresponding products.

“For the functional food industry, from now to the next few years, we may see only a transitional stage.” Li Zhongmin said. Being a Japanese market, user demand is real, but it is difficult to cooked capital in the short term.

At the moment when capital becomes cold, everyone needs to return to common sense.

For example, understanding the “repurchase rate”. If the repurchase rate is high, it means that this product has achieved user expectations and solves its real needs.

But the “repurchase rate” may also be contaminated.

“Find Lao Luo’s live broadcast twice a month. The repurchase rate must be more than 50%, but that is Lao Luo’s repurchase rate, not the brand’s repurchase rate.” The founder of a brand said to 36 氪. His approach is to think about the actions at the live broadcast level after all related models are stable.

Another brand founder also has the same view: large live broadcast and private domain will lead to higher repurchase rates of the product, but this is actually a false repurchase rate. In contrast, the “initial conversion rate” is a relatively easy to be ignored but also critical.

“Initial conversion rate” refers to whether consumers recognize the concept of products. If a certain product is exposed among 100 users and 17 users buy it, it shows that the 17 users agree with the concept of the product.

“Taking the Shili frame as an example, it does not evaluate its taste, but its advertisement has deep scene thinking, and it has really been in the hearts of many users.” Weng Bin, the founder of Lemonbox, believes that the new brand is more than 25 ~ 35 -year -olds, this group emphasizes the form of the brand. Therefore, only “make your own Concept” and then appear on reasonable channels at a reasonable price, can you capture the minds of young consumers.

Where to find traffic, it has obviously become the core proposition that new brands that need to break from online.

The founder of a oral beauty brand told 36 氪 that the new brand still has a large growth space on the Douyin platform, and the requirements of Douyin’s quality of the material are getting higher and higher. Only truly valuable materials can run on publicity. It is pretty good, so we can pay attention to the construction of a high -quality content team in order to eat the dividend of the Douyin platform.

A change that may not be obvious is,

This new brand of brands began to pursue “formal correctness” and moving to the stage of thinking about the real needs of users. Regardless of whether this demand is physical or psychological.

Minayo founder Hu Ran shared his observation: When searching for nutrition products taken by children on the e -commerce platform in the early years, they may search and grow happily, and adult -related will search for good survival; but now consumers tend to tend to Search for concrete ingredients such as vitamin B, vitamin C. The signal released by this transformation is that the consumer’s composition cognition is increasing. Whoever can let the component and the brand correspond to the opportunity in the current market.

Compared to the fierce fighting of functional food tracks, new consumer health products that are strictly strict are not so crowded.

“China’s health care products have existed for more than 20 years, and the health needs behind this have always been there, so what we do is also very simple, that is, the youth of traditional health products.” UNOMI founder Xu Yuanheng said to 36 氪 that 36 氪 told 36 氪Essence As a oral beauty brand positioning in generations, UNOMI has sold nearly 1,000W monthly, and its net profit has been positive.

“It is often related to the intuition for consumption. The first day you think this category is not too big. This category seems to be not too big in the end. Only with one meal replacement powder, you must make a company of $ 10 billion. It feels strange to listen to it. In many cases, investors should feel it subjectively from the perspective of ordinary consumers. “A investor said to 36 氪.

Do a good job of functional food, perhaps it should start with accepting it as a “not that big business”.

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