“Orders are 60% less, and it is difficult to find alternative customers in the short term.” Che Ming, an oat milk entrepreneur, told Hu olfactory that his oat milk business was experiencing a cold winter because coffee shops and tea shops in Shanghai and Beijing were “closed” due to the epidemic.
After two years of crazy running from 2020 to 2021, oatmeal milk has become the standard in China’s coffee circle: you can find coffee drinks containing Oatmeal Milk in Starbucks, Ruixing, manner coffee and Costa. Even in the past two years, these head coffee brands have vigorously promoted the new products of “Oatmeal Milk series”. However, Oatmeal Milk is also encountering the dilemma of “success” and “failure”: when the coffee shops in Shanghai and Beijing are closed, the growth engine of Oatmeal Milk track also suddenly stalled.
Like most entrepreneurs in the circle, Cheming’s oat milk business is highly dependent on coffee shops: 26 coffee shops in Shanghai contributed about 35% of Cheming’s sales in the 24 months from 2020 to 2021. Unlike international oat milk giants such as oatly, Cheming company is small, so it is difficult for him to get orders from Starbucks and Naixue. Most of his customers are independent cafes.
Lisa, who has operated a boutique coffee shop in Shanghai for six years, is one of Che Ming’s customers. Before the epidemic, her store could sell an average of 35-45 cups of coffee a day, of which about 8-12 cups of ingredients would use oat milk. “Sometimes I think, coffee or oatmeal milk is a humble business for our small stores and brands.”
What makes Lisa feel humble is not only that “business is difficult to do”. She felt that she and Che Ming were “tied” by an invisible huge chain. “When the Oatmeal Milk suddenly catches fire, the guests will point out the coffee containing Oatmeal Milk when they enter the store; when the ice bock fire, people will look down on you if there is no ice bock in your store; when the coconut milk is on fire, you can’t wait for the coconut smell in the store to be authentic… What is the boundary between meeting the demand and blindly catering? I don’t know.”
It is not just these “little people” in the oat milk Jianghu who are anxious about the epidemic. Oatly’s latest financial report shows that affected by the epidemic, the oat milk star company is experiencing “China trouble”. At the earnings conference, Toni Petersson, chief executive of oatly, said: “our team is going through a very difficult environment in China. We have a large part of our business in Shanghai. Among the retail and catering service stores in China, oatly closed more than 17000 stores due to closure in the first quarter of this year.”
Oatly is the key “benchmark” of China’s oat milk venture capital circle: since oatly entered the Chinese market in 2018, a number of brands imitating oatly have emerged rapidly (highly imitated in product design and positioning, and even brand names; and, in terms of development model, also refer to its path of “paying attention to marketing + heavy betting on coffee and other channels”). The listing of oatly in 2021 continued to heat up this wave of imitation fever.
“Oatly imitation show” did not make the track healthier.
An investor who “once invested in oat milk in 2020, but did not invest in the track later” told huolf that before oatly was listed in May 2021, the investment fever of oat milk in the capital market had been cooling down, because homogeneous products made “the limited market rapidly saturated”. The investor believes that the hottest investment wave of oat milk is 2020, which is global. After the recovery of the epidemic, plant-based drinks have ushered in a strong recovery. The story of oatly has greatly boosted the confidence of domestic investors. However, the subsequent situation is that oatly holds the orders of domestic mainstream coffee brands, and dairy giants such as Yili and Mengniu quickly bring their plant-based products into the existing retail channels. As a result, Oat Milk entrepreneurial brands are difficult to fight oatly in the b-end market and dairy giants in the C-end retail market. “But in the final analysis, it is the problem of product power. This circle pays too much attention to marketing and gimmicks, lacks polished products and benchmarking products.”
Shen Meng, director of Xiangsong capital, told huolf that oat milk is similar to the conceptual marketing model that has appeared many times before. “In the short-term valuation inflation cycle, which is quickly ignited by the topic, with the intensification of market competition and the foam of capital investment, the risk of exiting later is higher. Oat milk itself is growing rapidly under the influence of the concept of plant protein health, and is promoted by the concept of net red. The product itself does not see any difference. I am afraid it will soon be able to determine whether it is sustainable or whether it belongs to another product meteor created by capital The truth comes out. “
Oatmeal Milk trapped in the channel
Worry about oat milk in the local channel.
“The challenge of oat milk is a single channel and single scene.” Chinese food industry analyst Zhu danpeng told husniff.
At the end of 2021, both meituan and pinduoduo community group buying business stakeholders found a phenomenon: more oat milk brands began to find them and hoped to “sink” the world through community group buying channels. Earlier, the oat milk circle just fought around the “instant retail channel” from the end of 2020 to the first quarter of 2021.
At that time, some brands did not hesitate to “make profits” for the channel. Some oat milk brands strive for channels at the price of “losing about 2 yuan per bottle sold”, while another brand tries to obtain channel resources by transferring equity.
Since oatly entered the Chinese market in 2018, the coffee channel has become a battleground for oat milk, which has fallen into the Red Sea: most of the head coffee chains are customers of oatly and other brands; The middle waist chain coffee brand has become the “cornerstone” of the life of the local head oat milk company; Small brands of oat milk can only fight for some independent cafes.
The core reason why the cafe has become an indispensable channel for oat milk is that it is one of the few scenes that can bring certainty to oat milk.
In the coffee circle, in order to solve the “milk coffee” needs of lactose intolerant users, baristas have long chosen “soy milk”. However, the peculiar beany smell of soybean milk will affect the taste of some coffee. After the rise of high-quality hand washing in 2018, the disadvantage of soybean milk has been further amplified.
Coffee maker Sika told huolf that in the era of high-quality hand washing, what consumers experience is the “flavor” of coffee beans. In the past two years, some light baked coffee beans have become very popular, which further makes soybean milk in a “replaced” state. “Compared with soybean milk, oatmeal milk has less miscellaneous flavor. Coupled with the delivery effectiveness of international famous baristas after 2014, oatmeal milk has become the standard in the coffee circle.” Sika said that Starbucks has a special demonstration effect in the Chinese market, and since Starbucks adopted oat milk for its vegetable milk, Chinese coffee circles almost regarded oat milk as a “standard answer”.
However, besides coffee, oat milk has not found such a strong “certainty” in other channels of the Chinese market.
Take hot-pot/" 22375 rel="nofollow" target="_self">hot pot as an example, there are Oatmeal Milk brands trying to “enter” the hot-pot/" 22375 rel="nofollow" target="_self">hot pot “soy milk” track. A person in charge of the operation of Sichuan Chongqing head hot-pot/" 22375 rel="nofollow" target="_self">hot pot brand told huolf that they were more cautious about replacing traditional soybean milk. “Because soy milk has become a part of hot-pot/" 22375 rel="nofollow" target="_self">hot pot culture, we can try oat milk, but we dare not push it to consumers – when a drink becomes an element of food culture, it is difficult for you to make structural adjustment.”
Even in the “learning test scenario”, oat milk is not as “deterministic” as walnuts and almonds.
The market leader of an old dairy enterprise told huolf that walnut milk and almond milk had the highest sales of vegetable milk products in supermarket channels from 2020 to 2021. “In the traditional perception of Chinese consumers, walnuts and almonds have a stronger inherent impression.” The above person in charge said that in the consumption decision-making of household drinking milk, the hostess of the general family has the decision-making power, while the most deterministic consumption scenario of vegetable milk is that the family (especially children) are lactose intolerant but need to supplement protein, as well as the demand for “brain tonifying” during the examination cycle.
“This is why China’s native vegetable milk has not embarked on the route of strengthening oat milk in the past three decades, but on the route of walnut milk and almond milk.” The person in charge said that cultural cognition led to this result: in the context of Chinese food culture, eating walnuts has a stronger intuitive connection with “brain tonic”, while oat brain tonic is not the common sense of most consumers.
“Oat milk is not a necessary consumer demand, but a superposition of marketing concepts such as high-end and health. Therefore, there is enough marketing space at the B end, while the C end is relatively weak.” Tell Shen Menghu sniff.
But like coffee shops, the b-end channel suitable for oat milk is limited.
It is reported that Starbucks, Ruixing and manner, the largest local coffee chain brands, are clients or partners of oatly. Oatly will provide some “free samples” in Barista Training Institutions in Shanghai, Yunnan and other places – which means that local baristas have long been influenced by oatly in the mental level.
What makes the market more intense is that after 2018, Yili Mengniu and other traditional dairy enterprises began to speed up the development of Oatmeal Milk, and these dairy enterprises have great advantages in supermarkets, small shops and other channels – their new Oatmeal Milk products can be “distributed” to the “capillary” sales network at the first time.
One result is that local oat milk brands can only fight for the blank areas of Giants: small independent cafes, retail platforms that have not been powered by giants, and sinking the market. “The local oat milk brands rising in 2020 are trying to find a way to survive in the C-end world.”
But the C-end market is not easy to do.
“At present, the positioning of oat milk in the C-end is not very clear. Whether it will replace milk as a necessity or an emerging beverage is relatively vague in consumers’ cognition.” Zhang Wen, executive general manager of Qingtong capital, told huolf that Oatmeal Milk faced many challenges, “If we want to replace milk, there are still many difficulties to overcome, because domestic consumers have drunk milk for decades, and it is difficult to change their consumption habits in a short time; if we are positioned as a beverage, we need to further improve the taste, and the upgrading iteration of products is also very important. In addition, the market launch and marketing have not achieved large-scale coverage, and a new category needs a short-term bombing exposure to quickly occupy consumers’ cognition If the brand can do so, it can also quickly establish the great advantages of the brand, that is, the category, such as coconut coconut juice and Wanglaoji herbal tea. At present, all brands are still more cautious in marketing. “
Unable to copy the oatly Road
Che Ming nervously opens the video. This is the late night of May 10. He connects with his customers remotely.
Three days ago, Che Ming’s new Oatmeal Milk products were finally sent to customers, and this night was a critical moment for the two to “conduct remote inspection”.
The customer Che Ming is looking forward to is an entrepreneur who was born in 1994 and has three small coffee shops outside the Fifth Ring Road of Beijing. Che Ming met him in a wechat group of coffee owners and was allowed to “send goods and try” after two months of communication.
Che Ming knows that even if the business is concluded, the “purchase volume” brought by the owner in 1994 will not be very high, but Che Ming values the circle behind it: the small circle of baristas will quickly spread a product in the way of “one to ten” by virtue of “social fission” – this kind of “red” is sometimes only regional, and baristas with good relations in a region are often willing to try the same raw materials, And based on this, increase conversation and real-world friendship.
This night’s test began with making milk bubbles and ended with a cup of Cappuccino – in 1994, the store manager specially tried to pull flowers with Oatmeal Milk. In the whole process, Che Ming avoids “selling”, which is a hidden rule in the coffee circle: for many young and personalized baristas, noisy selling is often despised or means “defective products”. Che Ming was pleased with the final result. The store manager in 1994 agreed to test the goods in the store after the epidemic: Che Ming would provide his store with oat milk for three days free. “It’s lucky to have stores willing to try your products. Small losses are better than death.”
“The market is not mature, but it is a little red sea. Everyone is imitating the model of oatly, but it is difficult to copy. Local oat milk should explore its own way.” An oat milk entrepreneur told Hu olfactory that the circle likes to talk about oatly’s marketing, but ignores the strength of the company. “In more than 20 years, oatly has accumulated a large number of technologies and patents in the field of oat milk.”
A little-known detail is that before oatly became a “Royal oat milk” provider of Starbucks in the European and American markets in the early days, oatly was well-known in the circle of barists: at that time, in the European and American coffee circles, some consumers would order lattes with vegetable milk as raw materials, while many vegetable milk could not make milk bubbles like milk (due to the lack of oil and other substances). The barista series under oatly gradually broke the circle by virtue of “being able to make milk bubbles”.
“In 2020, some domestic brands have also bid.” The above entrepreneurs said that at that time, some major coffee and catering brands had public bidding, but some local oat milk companies that participated in the bidding did not laugh to the end. “Oat milk actually has high technical barriers.” But such statements and stories are not loved by many people in the circle. People prefer another story: oatly’s rapid rise with ingenious marketing.
In 2014, Toni Petersson became CEO of oatly and began to promote the coffee shop channel – due to the rise of “Mediterranean diet”, “natural therapy” and “plant-based diet” in the world at that time, Starbucks and McDonald’s tried to “cater” to this trend.
The key details worth pondering are that Toni Petersson began to lead oatly to become a “strong marketing company”: in the European and American markets, oatly’s publicity and launch from 2014 to 2020 were mainly based on the concepts of “environmental protection” and “vegetarian”. For chain catering and coffee brands, when oatly oat milk is placed in the store, its attitude of “standing in line and environmental protection” is self-evident. (an insider said that in the European and American markets, there are a large number of people who pay attention to “environmental protection” and “vegetarian” and are willing to consume for it. This is also the core reason why beyond meat and oatly focus on “environmental protection, vegetarian and other concepts” in foreign markets, but the situation is different in the Chinese market.)
The impact of “marketing” and “positioning” on oatly is obvious. In 2012, oatly was just a “niche category” company with sales maintained at $20 ~ 30 million. After entering Starbucks and other channels and successfully shaping the concepts of “environmental protection” and “vegetarian” in public opinion, the company gained explosive attention and doubled sales, and finally went public in 2021.
“But marketing costs money.” An unnamed investor said that after getting the financing in 2020, some oat milk companies did try to influence users’ minds by burning money, but it turned out to be a very difficult thing: new yogurt, fresh milk, other vegetable milk and milk coffee drinks in the new consumption field are also burning money – oat milk companies get relatively less financing than other tracks with “more yuan consumption scenarios”, This is destined to be difficult to burn a Chinese oatly in the short term.
Moreover, money burning marketing cannot solve the deeper problems of Oat Milk track.
In 2021, the head oat milk company began to receive “personalized orders” from b-end customers. Due to the extremely fierce “new product war” in the coffee circle, the coffee brand is trying its best to “take the lead” in the raw material end. For oat milk companies, this means restructuring from the R & D and production capacity side: eventually, this evolved into a factory building trend starting in 2021. In the C-end user market, more oat milk brands began to realize that marketing could not solve the lifeline problem of “repurchase rate”. What ultimately affected consumers was not the exquisite pictures in the advertising video, but the instant feeling of Oat Milk entrance.
This is also a key issue for local oat milk entrepreneurs. The epidemic has deeply affected the coffee markets in Shanghai and Beijing, and also affected the overall situation of Oat Milk: will oat milk enter the reshuffle cycle under the influence of more “fierce competition” and “weaker” coffee consumption in 2022?
(at the request of the interviewee, Che Ming is a pseudonym)
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