China Food

Yuanqi forest first exposed the past of “failure”: new brands should always trust young people

The human world will only reward companies that are good to users.

“Like all startups, we have experienced all kinds of failures.” As the existence of being regarded as a benchmark by countless brands and standing on the “altar”, few people have heard the “failure” story of Yuanqi forest. At the second China new brand wave conference, Li Guoxun, vice president of Yuanqi forest, summarized the pitfalls Yuanqi forest has stepped on in product R & D in the past few years, as well as the brand philosophy followed and deeply practiced today.

Li Guoxun, vice president of Yuanqi forest
This brand, which is full of legend and a little hazy and mysterious to the outside world, also stumbled in the first three or four years. At the most difficult time, there were only five or six young people left in the company. They left all the traditional routines, rules and methodologies behind and made a big splash.
Today, many people think that Yuanqi forest is a troublemaker of traditional industries, but Li Guoxun prefers to define it as “an innovator who respects tradition”. From users first, believing in young people to self built factories, the growth of vitality forest does not seem to have too many profound theories and sophisticated and ingenious business models. Instead, the ultimate achievement of this enterprise is its adherence to the most simple ideas.
As Tang Binsen mentioned some time ago: “the human world will only reward companies that are good to users.” Perhaps after the end of this wave of flow and marketing dividends, we should make heavy investment in the supply chain and R & D due to the fear of tradition, and dare to believe that young people’s brands will become the mainstream of the times due to persistent innovation.

A vigorous forest saved by young people
How did the vitality forest lose and fight again and again?
In fact, Yuanqi forest established the Research Institute as early as 2015 and officially established the company in 2016. At that time, it invited a group of very professional people from the traditional industry to make the products step by step according to the traditional playing method from the product positioning.
These products have two nice names, one is “Mingming is not fat” and the other is “Shifen is beautiful”. We positioned it very clearly, because young people also needed it at that time.
But after spending 5 million to make the product, even the people in the company are unwilling to drink it. After a month or two in the warehouse, it was suggested that the goods should not be sold at a discount through channels, but the company decided to destroy them. Destruction was very responsible and cost another 1 million, so a total of 6 million bought a lesson.
In the next few years, we spent tens of millions more, but we still didn’t make good products, and the company could hardly go on. Our founder, Mr. Tang, decided to let young people have a try.
At that time, there were not many people left in the company, only five or six young people, including college graduates and Internet. Only one product R & D came from traditional industries.
Old Tang made two requirements: the first is whether you young people can make your favorite products. Don’t forget the traditional routines, rules and methodology in the previous way.
Second, after you make the product, can everyone find 10 friends and let them buy a box, whether to buy it or not.
Three years later, the first product “burning tea” developed by these young people was finally popular. It was launched in July 2018 and became the second in the industry in 2019.

Only when young people make decisions can the brand have hope

After three or four years of stumbles, we found a truth that we, like all start-ups, have experienced countless failures, but we did one thing right: we chose the right track.
Six years ago, Lao Tang wrote an internal email. He said that China’s Internet platform has been very developed, and the high-speed rail infrastructure is also very leading in the world, but there is a lack of good products.
With the growth of the national economy, our demand for good products is becoming stronger and stronger, but in the traditional consumer industry, everyone dares not come in. All international giants occupy the dominant position.
Since China’s Internet enterprises can surpass foreign countries, why can’t the traditional consumer industry? So we decided to enter. After years of hard work, we have selected a very subdivided track: health drinks.
Now young people pay more and more attention to health preservation. While enjoying the happiness brought by drinks, they don’t want to have too much burden on their body.
So we did a few things:
First, make the ingredient list simpler and simpler. Now the ingredient list of all domestic beverage products is very clear and simple, which used to be very complex.
Second, we add less and less things, especially high sugar, high salt, high fat, pigment, preservative and so on. We don’t want anything that will burden our bodies.
When we made the first popular product in the market, we formed two relatively simple concepts: “user first” and “trust young people”.
We all know that users are very important, which is to meet users’ pursuit of health and personalization.
In traditional industries, R & D products are like this: first find a group of people, define a market, list the crowd, and then define the price, think that the products with what price in this market may be popular, then take the price to push R & D, and determine how much money should be invested in R & D according to the price.
In the past, drinks were relatively cheap, so the cost of R & D investment was very small. We all say internally that for most domestic drinks, the most expensive is the bottle, not its connotation.
Vitality forest is the opposite. We will first see what users want to drink, then see whether it can achieve the best nutrition and taste with the best materials, then see how much it should set, and then try whether the price can be accepted by the market.
Finally, we have proved through several products that the market is willing to pay for your good products, so we should trust young people and let them make decisions.
The average age of traditional industries may be relatively old, and young people rarely have the right to make decisions, but it is different in Yuanqi forest, because we are young people.
There are many characteristics of the forest, which are products. In fact, every product has many links to make decisions from the project, research and development, to testing and listing. The decision making process is not what our boss said, and the young people has the final say.
We believe that young people’s problems must be solved by young people after all. If young people can make decisions, young companies may have hope.
Most of the inspiration for the R & D of Yuanqi forest products comes from the needs of young people. More than 80% of the employees of Yuanqi forest are post-90s and post-00s.
In the scale of our users, the groups aged 20-30 and 30-40 also account for a very large proportion, which is similar to the membership composition of our company.
Therefore, in our company, employees raise needs and will launch them after internal communication. Yuanqi forest has many products on the market, but there are countless products in various laboratory versions within the company.
The inspiration, formula and birth process of our products are basically the process of internal demand.
For example, “full score” is the first microbubble product of fruit juice in China. At first, the young people of our company said whether to make a nutritional beverage, in addition to taste, they also added a lot of nutritional elements.
After the product was made, the internal partners thought it was very good, but they didn’t dare to take it out because they thought it was too expensive and no one would pay for it.
Later, this product was launched last year, and the market was ok, but we changed two versions this year, because some users said that you had too much juice, could you reduce it.
In fact, we think it’s better to have more nutrition, but users don’t necessarily like it, so we reduce a little juice and mention the taste.
Therefore, it is possible for young people to make their own products. There are many freezers and display cabinets in our company, including the factory, which contain all kinds of drinks.
Product partners will also observe which products are popular and which products are ignored. This data is similar to our external data. Good products must stand the test both inside and outside.
We have digested a large number of failed things within the company. In the laboratory stage, we have a large number of version formulas and experienced various data tests. Therefore, the products we can see on the market today are basically out of the encirclement through our countless data tests.

Invested 5.5 billion,
Self built factory is the most basic sincerity of a food enterprise
Many people asked me what to do next after your products are made? Now all the giants in the sugar free or sugar reducing track have come in. Where is the “moat” of Yuanqi forest as a new enterprise?
In 2018, the revenue of Yuanqi forest was about 200 million. That year, we decided to spend 1 billion to build the first factory in Chuzhou, Anhui Province, which is not much like the practice of online Red enterprises and Internet companies.
At that time, the person in charge of our product production discussed with the company’s management team whether to continue to use the OEM as before, or to build a supply system at a great cost?
It took only five minutes to reach an agreement on this matter. Although the domestic OEM factories did a good job and were relatively advanced, we think that the self built factory is the most basic sincerity of a food enterprise.
We must control the supply chain and all production links in our own hands, which is our foundation.
Since then, we have recruited people in a large area from traditional industries, and asked senior experts to help us study how to make the company better and better.
Up to now, we have five factories. Each factory is an iteration, from 1.0 to 5.0.
The first factory is in Chuzhou, which is relatively traditional and can basically meet our production requirements; The second factory is in Tianjin. It has a beautiful appearance. The factory workers and headquarters employees can enjoy the same environment, such as free drinking and leisure;
The third factory is in Zhaoqing, Guangzhou. It is an open factory without walls, with supporting basketball court and children’s paradise; The fourth factory is located in Xianning, Hubei Province, which is the model of “ecotourism + industrial technology”;
The fifth plant is located in Dujiangyan, Sichuan Province. The environment will be better. It is a real forest plant. Now the plants in Xianning and Dujiangyan are basically put into operation.
The five factories invested a total of 5.5 billion, covering five major urban clusters in North China, South China, central China, West China and southwest China.
At the beginning, it was very difficult for us to build the factory, because once it was built, there was no way back. Later, it was found that it became more and more smooth, mainly because several problems were solved, and product R & D was one of them.
For example, the “full score” mentioned earlier is to find a OEM for production, but they are very reluctant to help you with the upgrading, because the juice and bubbles have high requirements on the production line and need to be upgraded.
Another example is our milk tea. The milk content is relatively high, and the OEM production is particularly easy to be blocked, but our factory is ready at the beginning, so there is no problem in production.
Of course, building factories is also because we have suffered a lot of losses. Why did we reach a consensus so quickly? It is because our OEM model has always been controlled by others.
From 2018 to the first half of this year, we have encountered various “supply interruptions”, some of which are the supply of raw materials, and some of which are not produced by the OEM. There is an enterprise that works for a large international factory and suddenly tells you that it can’t do it for you. There’s no reason.
This leads us to sell no goods in the country. We often have no bullets in our hands for a month or two, and then panic.
As we all know, the domestic carbonated beverage market is basically controlled by international giants. As a domestic carbonated beverage brand, if this thing cannot be controlled in our own hands from supply chain to production, we will never be able to stand upright and compete with others.
In October this year, we announced that sodium benzoate, potassium sorbate and other chemical preservatives would not be added to the whole line of bubble aquatic products, because we believe that carbonated drinks can not only be sugar free, but also have no preservatives.
But in the past few decades, carbonated drinks have not changed much. Enterprises are unwilling to do what is really good for users. The reason why we can do this is that we have adopted the best production line in the industry, and no more than one bottle of every 1 million bottles of beverages is polluted by microorganisms.
This year, many domestic enterprises also have such production lines, which is good news. We also look forward to working together with the industry to provide consumers with more inclusive and high-quality products.
Using the Internet to make spiritual drinks, some people always say that we are troublemakers in traditional industries. But I prefer to define vitality forest as an innovator who reveres tradition.
The world is changing, but some things remain unchanged. The most unchanged is that “the human world will only reward companies that are good to users”. Only by sticking to and creating good products can we be worthy of this era.
Author: Chen Wenxi; Source: Inspur new consumption (ID: lcxinxiaofei), reprint has been authorized.
Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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