Click 'Read Original' for details Source: Zinc Scale (ID: znkedu) Author: Xing Wan Recently, sectors related to "food" have continued to maintain an upward trend. Both capital markets and consumers have shown consistently high enthusiasm for food. Meanwhile, major internet-famous food brands have been making frequent moves. When their main businesses hit development bottlenecks, switching tracks and reusing proven marketing templates for new products has become a shortcut. On August 17, Bestore released its 2021 semi-annual report. The report showed that in the first half of the year, Bestore's R&D spending increased by 64.25% year-on-year, reaching 1.898 billion yuan. Areas of increased investment include children's snack "Xiaoshixian," fitness snack "Liangpin Feiyang," and tea break products "Tbreak." On August 18, Genki Forest, which had just been reported to be entering the snail noodle and hot and sour noodle industry, teamed up with collectible toy brand 52TOYS to launch the "Yuanqi Gun Gun Lai" gift box, containing its flagship sparkling water and 52TOYS' "PandaRoll" blind box and stickers. These days, cross-industry moves and creating sub-brands seem to have become a good deal with increasingly lower costs and faster returns. But when the market gets used to "fast food," will anyone still make food with craftsmanship? The Unstoppable "Buy, Buy, Buy" and Genki Forest's Marketing Storm More than ten months ago, Genki Forest was a "fake Japanese" brand with Japanese characters like "気" and "の" on its bottles. At that time, Genki Forest was labeled as a "foreign brand" and "zero-sugar drink." By capitalizing on Gen Z's love for sweetness but fear of gaining weight, it beat Coca-Cola and Pepsi in the 2019 Double 11 shopping festival to top the beverage category. However, as skepticism grew, Genki Forest gradually shed the labels that had brought it glory. It switched to all-Chinese names, changed its ingredient lists, and removed advertising slogans like "0 sucrose milk tea, no fear of fat" from its stores... Reshaping itself became the first step in its transformation. But to some extent, skepticism also means traffic. For a "marketing master" like Genki Forest, traffic means conversions. After its "face change," Genki Forest began to move toward a VC-style approach. Although it still maintains sparkling water as its core product, its tentacles have extended into coffee, milk tea, beer, instant food, and other cross-industry sectors. According to incomplete statistics, Genki Forest currently holds 100% of Beijing Xiari Yewang E-commerce Co., Ltd., 25% of Shanghai Bishan Beer Co., Ltd., 51% of Aiwo Kafei Technology Co., Ltd., 100% of Laomengle (Beijing) Beverage Co., Ltd., and 100% of Beihai Ranch (Beijing) Dairy Co., Ltd., among other food companies. As it continues to recruit, the frequency of new product launches has gradually increased, but the myth of sparkling water has not been replicated. Zinc Scale found from Genki Forest's official flagship store that the best-selling product remains the sparkling water series promoted as "0 sugar, 0 fat, 0 calories," with monthly sales exceeding 100,000 orders across flavors and sizes. However, new products like corn silk drink, Manfen juice micro-bubbles, Dui Ce lactic acid bacteria drink, and Yuanqi breakfast soy milk have monthly sales that struggle to reach 10,000. This may not dampen Genki Forest's confidence in launching new products. At its 2020 distributor conference, founder Tang Binsen revealed that "2021 will be a big year for products; Genki Forest still has 95% of products not yet launched." So far, the new products launched are far from reaching 95%, meaning that for a long time to come, Genki Forest will continue to introduce new moves. But such results reflect a problem: in launching new products, Genki Forest repeatedly applies its previous marketing tactics—eye-catching packaging and continuous promotion of "0 sugar, 0 fat." Coupled with products like milk tea, coconut juice, and lactic acid bacteria drinks that already have high market heat, it seems new products are endless, but they are mostly old wine in new bottles. "I used to buy Genki Forest sparkling water because it was sugar-free, which is friendly for people who love carbonated drinks but worry about gaining weight. Also, the product looked fresh in the market at the time. But now most new products make me feel unnecessary—I can take them or leave them. After the false advertising controversy, I naturally feel a sense of disgust," a consumer who used to buy cases of Genki Forest sparkling water and Rancha tea series told Zinc Scale. Now, frequent news of Genki Forest entering the liquor, coffee, and snail noodle industries has led many to question: Can this repeated packaging-plus-marketing approach really play in any industry without restraint? Tang Binsen, the man behind Genki Forest, may indeed be testing where this methodology ends. Known as "the investor with the most consumer insight," Tang Binsen founded Challenger Capital before Genki Forest. Media reports have counted that Challenger Capital has invested in many companies across consumer, enterprise services, entertainment, gaming, and other sectors. (Image source: Investment World) Among them, besides the famous Genki Forest, are Laman Shuo, Panda Brewing, Wang Xiaolu, and Wang Lala Hot and Sour Noodles, among other new consumer brands. We must admit that even though consumers are beginning to lose trust in formulaic marketing strategies and brands lacking depth, and even feel resistance, in Tang Binsen's business blueprint, new brands represented by Genki Forest have gradually guided a marketing-oriented trend in food development. R&D Cycles Five Times Shorter: Craftsmanship Leaves, Marketing Takes Over Internet consumer brands have been endowed with strong internet thinking and vitality from birth. Speed seems to be the foundation for survival and breakout. According to Financial Breakfast, Tang Binsen applied his experience and philosophy from game products to Genki Forest's product testing, using a data-driven approach to control the entire product development cycle to 3-6 months, sometimes even launching products within 3 months. Such a development cycle is considered "unusual" in the traditional food industry. Ligao Food, established over 20 years ago, answered an investor's question about its product development cycle in May this year: "Different products have different development cycles. The cycle includes formula R&D, process R&D, and equipment R&D (if involving multiple foreign equipment suppliers, equipment operation matching is also needed). In addition, the product development process needs to consider alignment with management and market operations. For example, the donut series we developed earlier took nearly 1.5 years from project initiation to market launch." Traditional food manufacturers seem to share this standard and tacit understanding. A century-old French cheese company can spend a lot of time searching globally for suitable raw materials to develop new products, and repeatedly test for a year or more before launching the best product. But such a meticulous attitude is starting to seem out of place in the current market. The China marketing staff of the above-mentioned French cheese company told Zinc Scale: "Given the current market situation, the traditional food manufacturers' process has been greatly impacted by internet consumer brands. In the future, we may have to consider segmenting our product lines." The staff member believes that creating a separate product line for the new consumer market is a passive measure influenced by the market atmosphere. In fact, this has already happened. For example, Wahaha simultaneously launched four e-commerce projects with 10 billion yuan in cash backing, aggressively entering the online track, but the results can be described as "much ado about nothing." At the same time, Zong Fuli's successive launches of Christmas Dream, Yicha, Haha Yogurt, Qilin Matcha, and AD Calcium Milk Chocolate also failed in Wahaha's marketing campaigns. There is also Xiangpiaopiao, the once-popular instant milk tea pioneer, which launched products like meal replacement cereal "Joyko," milk tea hot pot, and greedy milkshake online to adapt to the market, but monthly sales of 100+ online are hardly a success for such an established brand. (Internet-famous food and beverage brands springing up like mushrooms) "For traditional food manufacturers, laying out an online + offline omni-channel is a necessary path. Especially for established brands, offline channels are already saturated, so online channels become increasingly important. Even if online product sales are not high, they help maintain brand exposure and influence consumer purchase decisions, which in turn benefits offline channels," Nicole, who works in food ingredient supply, told Zinc Scale. But Nicole also mentioned that under the marketing bombardment of internet brands like Genki Forest, Zhong Xue Gao, and Wang Bao Bao, both capital markets and consumers are subtly changing. The era of heavy marketing and packaging has created a large number of 'food stars.' What is worth pondering is: when internet brands lead traditional food manufacturers to create a "new food era" where marketing reigns supreme, is this progress or regression? In the "Age of Plenty," Can Anyone Do Food and Beverage Well? Entering the "age of plenty," people's pursuit of food has long passed the stage of mere survival. Now they demand beauty, taste, and safety—a stage of diversified needs. To adapt to these changes, it is understandable for traditional food manufacturers to accelerate and board the new consumption express train. It is also commendable for internet food brands to use reasonable marketing to convey healthier, more scientific dietary concepts. But what is somewhat awkward is that the fast-paced market development has evolved into a strange phenomenon: "Anyone can do food and beverage; with marketing, anything can sell." Looking at the current food industry, due to the rise of the OEM model, simply changing to packaging that appeals to Gen Z, giving it a fun name, and placing it on popular variety shows, dramas, and short video platforms gives birth to internet-famous food and beverage brands. At several food industry exhibitions that Zinc Scale was invited to, packaging manufacturers' share and importance have significantly increased compared to the past. These packaging design and production companies display their star product designs in the most prominent positions. These "business cards" attract more manufacturers hoping to become famous through packaging. Products are handed to OEM factories, packaging to design companies. It seems each task is given to more professional hands, but somehow, the craftsmanship and original intention that the food industry should uphold seem lost. From another perspective, Genki Forest's failure to produce another phenomenon-level hit after sparkling water reflects an eternal market rule: the relevance between a brand's new products and its core value directly determines the final success rate. (The food industry needs both craftsmanship and sincerity) If the expansion into coffee, coconut juice, soy milk, beer, and other beverages is acceptable to consumers even with minimal results, then Genki Forest's cross-industry move into snail noodles and hot and sour noodles has many consumers skeptical. The reasons are complex, not only because it relates to Genki Forest's original product categories but also to the gradual failure of its marketing tactics. Genki Forest's professionalism and product quality have begun to be questioned. As Zhu Danpeng, a Chinese food industry analyst, publicly stated: "In the future, competition among food companies will be more about supply chains. To adapt to the 'dual circulation' pattern of domestic and international cycles, companies need to further consolidate and improve the completeness of their industrial chains. Only then can they dig their 'moats' wider and deeper." Perhaps Genki Forest has begun to realize this itself. Since last year, it has been building self-owned factories in five cities: Chuzhou (Anhui), Zhaoqing (Guangdong), Xiqing (Tianjin), Xianning (Hubei), and Dujiangyan (Sichuan). For most internet food and beverage brands using the OEM model, shifting production from "light" to "heavy" is a step toward building a brand moat. If Genki Forest is the model that internet food brands scramble to imitate, then after the marketing storm, consumers also hope that the food industry, through the joint efforts of leading internet food brands and traditional established manufacturers, can return to an era of craftsmanship. PS: From September 23-25, 2021, the 2021 (4th) China FMCG Conference, hosted by New Distribution, will be held in Shanghai. Confirmed heavyweight guests include: 1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; ... A grand gathering for FMCG professionals—you must be there! Are you "watching" me?