Meal replacement has been a hot topic in recent years. According to Euromonitor International, the global meal replacement market reached $66.16 billion in 2017, with China contributing 5.711 billion RMB. It is estimated that by 2022, China's meal replacement market will reach 12 billion RMB. A vast meal replacement market is expanding robustly and rapidly in China.

Meal replacement foods actually appeared quite early, but in the Chinese market, the category mainly exploded in 2019. Well-known foreign brands like Smeal and Huel entered the market, traditional food giants such as Mengniu, Want Want, and Master Kong innovated with meal replacement products to join the fray, and a batch of new internet-native meal replacement brands quickly rose to fame.

In the past few years, within this wildly growing existing track, some innovative brands have delivered impressive results.

Recently, at the FBIC2020 Global Food & Beverage Innovation Conference hosted by Foodaily, New Distribution interviewed Mr. Cheng Peng, founder of the low-carb health management brand Beast Life, discussing Beast Life's strategic approach, how to quickly stand out in this vast and innovative track, and the deeper logic behind it.

Beast Life was founded in 2016, starting as a content platform. In its early days, it produced a large amount of high-quality content on low-carb healthy eating management online, gathering a group of highly loyal users.

Currently, it has over 700,000 followers across the internet, more than 160,000 paying users, a monthly repurchase order rate of about 40%, and monthly sales of nearly 10 million RMB. Among its products, "Bulletproof Coffee" was the best-selling item in its category on Taobao last year.

Moreover, on August 14, 2019, Beast Life announced that it had received a multi-million RMB angel round financing from Zhonghai Investment.

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Depth + Breadth: Forming a Closed Loop

In China, the earliest adopters of meal replacement were fitness enthusiasts, but limiting meal replacement foods to the sports nutrition field means a small target group and limited market size. Therefore, the characteristics of the meal replacement category allow for expanding consumers from sports nutrition to weight management, from niche to mass market.

It can be seen that energy bars, solid beverages, shakes, cereals, meal replacement biscuits, and other different types of meal replacement products have frequently appeared in influencer live streams.

Mr. Cheng Peng told New Distribution that Beast Life is actually just a company name, mainly creating two product lines under it: "Ideal Fuel" and "Drop Sugar."

"Ideal Fuel" targets professional weight loss and fitness audiences, focusing on functional products such as bulletproof coffee, energy bars, and dietary fiber supplements;

"Drop Sugar" products focus more on weight management and the low-carb daily consumer market, transforming high-starch, high-sugar staples and snacks into sugar-free versions, such as deep-sea fish noodles, light-calorie cauliflower rice, and nut snack packs.

The Ideal Fuel audience is more professional, relying heavily on Beast Life's content for traffic, with very high loyalty and sustained brand commitment. However, this group is relatively limited and requires continuous content dissemination, making it difficult to acquire customers through rapid advertising like other brands.

The Drop Sugar brand, on the other hand, does not involve complex nutritional concepts or deep services; it simply focuses on the idea of being delicious without gaining weight, upgrading everyday foods. It's like a simple switch from wanting to drink regular cola to choosing Diet Coke.

Because users follow a dietary approach long-term, they need not only functional products but also everyday foods. This creates a complementary relationship between depth and breadth, extending the overall product lifecycle and improving repurchase and retention.

From a purely user perspective, such a product line builds a funnel model: Drop Sugar can be used for broader user education, pulling traffic from outside the pool into the funnel. The more top-level seed users accumulated, the more deep-level users will emerge at the bottom.

Conversely, users directly attracted by content are generally more professional and have more urgent needs, coming with clear weight loss goals, thus requiring deep services or packaged meal plans.

Once this stage's goals are achieved and weight loss requirements decrease, users shift from purchasing deep services or products to preferring upgraded everyday foods, thereby avoiding direct user churn.

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Customers Want a Hole, Merchants Sell a Drill

Philip Kotler famously said: "Customers don't buy drills; they buy holes in the wall." But 99% of people focus on the drill, repeatedly emphasizing how good their drill is and how many sizes it comes in, while ignoring the customer's real need.

The conventional approach is to make a good product, then distribute it, advertise, drive traffic, and convert. Beast Life is not a brand positioned by product or category; it builds its brand around a dietary or lifestyle approach, centered on a specific group of people.

Beast Life believes that, first, in the entire FMCG industry, whether in product development or supply chain services, China has become mature. The consumer goods industry does not lack good products; it lacks deeper solutions behind the products. As mentioned earlier, customers don't lack a drill of good quality and right size; they need a suitable hole.

Second, why are solutions lacking? Beast Life's target audience and core users have an underlying need for weight loss and health. They are not truly seeking a product that can help them lose weight. Otherwise, wouldn't they simply choose long-existing diet teas or diet pills, which are more straightforward than meal replacements?

Finally, the biggest challenge in weight loss is the "sustainability" issue. Products are given to users, but users want the result of slimming down. This requires a complete weight loss solution, including a series of weight loss services, such as tools for weight management and diet planning, and online guidance services like nutrition coaches.

Therefore, Beast Life provides a complete solution of "content + tools + products + services," which is more sustainable and better achieves the user's ultimate weight loss goal.

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The Underlying Logic

In recent years, not only meal replacement foods but the entire new consumption track has been extremely hot. Beast Life founder Cheng Peng noted that a large part of the reason is that the barriers to entry in FMCG have lowered.

In terms of products, most new brands adopt an OEM production model. Many brands don't even have their own R&D teams; as long as they find a mature supply chain, all backend issues like R&D, procurement, and production are solved, leaving only front-end branding and sales. In the traditional industrial era, small enterprises without R&D capabilities faced insufficient production capacity. Thus, only large companies could afford to do FMCG.

Moreover, the supply chain now generally has excess capacity. Unlike the past when supply chains only served big brands, many factories now see the potential in new brands and are willing to cooperate.

In terms of marketing, in the past, doing FMCG meant advertising on CCTV, with investments often in the tens of millions, which directly kept most companies out.

But now, marketing investment has become a standard part of a brand. Additionally, with the opening of domestic capital markets, getting money for marketing is not difficult; everyone can do it, the difference is just how much to invest, and the result may only be a few points difference in ROI.

This has directly transformed marketing investment from a question of "whether or not" in the past to "how much" now.

In terms of channels, it's no exaggeration to say that the rise of e-commerce has sparked a wave of entrepreneurship. In the past, selling goods meant covering offline channels like supermarkets and snack shops; offline shelves are limited, and if someone gets in, someone else is inevitably left out, which was always a high barrier. But now, as long as you can open a store on Tmall or JD.com, you can start selling.

Given this, Beast Life has not followed the conventional consumer goods route. Instead, it adopts a marketing model that requires significant time and resources: continuously outputting high-quality content online to acquire users and operating the community through diversified products, in order to better build barriers in a homogenized competitive landscape.

Final Thoughts:

When the barrier to entry for a profitable business becomes low enough, it means many players will enter the track, but no one will be able to grow big because everyone is doing things that others can easily replicate.

Therefore, even if it's hard to have true "black technology" in the product end of the food industry, you must find some core competitive elements to build barriers. This barrier could be technological, temporal, or spatial, but it must be something others cannot quickly buy with money.

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