China Food

Is the Functional Food Bureau of Huaxi biology an adventure for the brave or a game for the confident?


“ 
has been laying out functional food for one and a half years. What is the answer given by Huaxi biology?
 ”

Text: Josephine

Source: foodily daily food (ID: foodily)

 
On August 30, Huaxi biology announced its financial results for the first half of 2022. According to the data, in the first half of 2022, the revenue reached 2.935 billion yuan (RMB, the same below), an increase of 51.58% over the same period of 1.937 billion yuan in the first half of last year, but functional skin care products are still the main force.
 
Source: semi annual report of Huaxi biology in 2022
 
Foodaily daily food noted that the functional food business of Huaxi biology had a revenue of about 44.3658 million in the first half of this year, accounting for 1.5% of the company’s total operating revenue.
 
Huaxi financial report said in the financial report that the functional food business has achieved substantial growth under a low base. The revenue of this business was 23 million yuan last year, and nearly doubled in the first half of this year.
 
In this way, the growth rate is indeed good. When Huaxi biological laid out its functional food business line in 2021, it said that “functional food will be the ‘fourth round’ driving the growth of Huaxi biological’s revenue.”
 
But now, with the silence of the new consumption wave, the consumer doubts faced by functional foods and the uncertainty of the environment, is this food Bureau under Huaxi biology an adventure for the brave, an adventure for the reckless, or a game for the confident?
 
Source: Huaxi biological official website
 

The growth rate is fast and money is spent

 
As mentioned at the beginning, Huaxi biological functional food had a revenue of more than 40 million yuan in the first half of the year, almost twice that of last year.
 
However, compared with functional skin care products, the growth rate and revenue are far from each other. In the first half of the year, the revenue of functional skin care products business was 2.172 billion, accounting for 74% of the company’s revenue, and the year-on-year growth rate was as high as 77.17%.
 
Since January last year, the National Health Commission approved that sodium hyaluronate (hyaluronic acid) can be used as food raw materials in dairy products, beverages, alcohol, cocoa products, candy and frozen drinks. Huaxi biological has launched three functional food brands, namely, the hyaluronic acid water brand “shuijiquan”, the hyaluronic acid food brand “black zero” and the hyaluronic acid fruit drink brand “Xiejiao”, to enter the functional food industry.
 
Source: Huaxi biological official website
 
Huaxi biological financial report shows that in the first half of the year, the business line of functional food is gradually improving its product line. Shuijiquan launched hyaluronic acid soda bubble water; Black zero launched four products including berry vinegar plant drink, Yuyou citrus high dietary plant drink, iron rich soft candy and fat burning coffee according to the market popularity; Five products of “night hat and essence drink” of 2.0 series will be launched in the corner, and more new products of 3.0 series will be launched in the second half of the year.
 
At the same time, the business line has strengthened the layout of offline channels, but the financial report only mentions that shuijiquan has settled in offline supermarkets, intelligent retail terminals, enterprise offline group purchases, etc.
 
It is worth noting that the financial report also points out that the sales expenses of Huaxi biology in the first half of the year increased by 54.68% year-on-year
And from the perspective of market penetration, the penetration rate of functional food in China is still low. According to the data of China industry information network, the per capita consumption of functional food in the United States in 2018 reached 924 yuan, Japan 662 yuan, Hong Kong 767 yuan, while the penetration rate in Chinese Mainland was only 117 yuan, which was only about 20%, far from the United States (60%) and Japan (40%).
 
It can be seen that the gap in China’s functional food market is huge, the demand is not saturated, and the space is still huge.
 
However, the biggest problems faced by domestic brands lie in two aspects: 1. Word of mouth; 2. Repurchase. Mainly reflected in:
 
Publicity effect, many taboos
 
According to the 2022 China health food and functional food industry research report of iResearch consulting and Research Institute, functional food is healthier than ordinary snack food in terms of food formula, often with 0 sucrose, 0 pigment, 0 preservative, etc. In terms of publicity, it mainly focuses on the promotion of high-quality raw materials, good manufacturer qualifications, endorsement of large manufacturers and product function test reports.
 
Source: iResearch consulting and Research Institute
 
At present, health products need to have blue hat certification, but functional foods are not subject to too strict market supervision, and are mainly used as ordinary foods. However, the state has strict restrictions on the publicity of the health care functions and disease treatment functions of ordinary foods.
 
This year, a new brand of functional food said in its promotion that “lutein can effectively protect children’s eyes”, “regulate the intestinal tract”, “improve sleep and enhance metabolism” and other health functions; It can “reduce the activity of the virus” and “have an effect on the inflammation of women’s private parts” and other disease treatment functions. Therefore, he violated the advertising law and was punished administratively.
 
In fact, this leads to higher communication costs between functional foods and consumers in terms of efficacy publicity.
 
Slow effect / non intuitive effect, “IQ tax” is synonymous
 
In the past two years, a large number of new functional food brands have been born, such as buffx and minayo. At this time, functional food is different from health care products such as Tomson Beijian and Swisse, but appears in the market in the form of snack products such as sleep Gummies, enzyme jelly bars and white kidney bean chewable tablets.

 

“It is mainly to distinguish from traditional health care products, so that consumers can meet specific efficacy needs while enjoying delicious snacks. This will be more fun, not like taking medicine. Consumers will have a good impression,” an industry insider told foodaily daily food.
 
However, consumers have different perceptions. Many brands will shout slogans such as “iron supplement”, “sleep aid” and “balanced probiotics”, but the problem is that the effect is often slow or can not be seen intuitively. Some young consumers who are eager to see the results often lack patience, which will directly affect the re purchase rate of products.
 
At the same time, many consumers who buy food for its efficacy can easily question the “intelligence tax” because they can not see the immediate effect in the short term.
 
Trust is fragile, and it is difficult to repurchase
 
In fact, there is no obvious difference between functional food and other food segments, and it is difficult to go from innovation to repurchase.

 

While the repurchase rate of other tracks is low, mainly for
From the transformation into skin care products in 2012 to now, the revenue of skin care products has accounted for most of the revenue, which shows that the transformation of TOC is successful. Therefore, as a functional food, Huaxi bio can still take advantage of its raw material advantages and independent scientific and technological research and development capabilities. The whole supply chain system is relatively mature, whether in terms of raw materials, formula innovation or raw material costs. This is the advantage of Huaxi bio.
 
However, as mentioned above, unlike functional skin care products, functional foods face weak trust in the whole industry.
 
At present, in response to consumers’ anxiety about health and whitening, functional foods mainly focus on “anti fatigue, refreshing”, “decompression and sleep support”, “skin management” and “weight management”. Under the situation of similar functional ingredients of functional foods and serious product homogeneity, how to develop more effective ingredients, tap more market segments, develop more consumption scenarios, and meet more specific needs is Huaxi biology, And the only way for all functional food enterprises to break through the industry.
 
Functional food should not only compete with similar products, but also with other replaceable foods, highlighting its taste advantages over health products and efficacy advantages over snack foods.
 
At the same time, consumer education is also an important focus of the functional food industry, allowing consumers to adjust their expectations of products, avoiding consumers from using functional food as medicine, refusing to bear the unbearable weight of functional food, and alleviating consumers’ purchasing anxiety.
 

In brief, as Zhao Yan, the former chairman and general manager of Huaxi Biology (688363. SH), said at the 2020 annual performance media communication meeting, “the food grade hyaluronic acid market will grow considerably, but 2021 is only the beginning, and it will take some time for consumers to understand hyaluronic acid. I believe there will be a substantial growth in the next few years.”

 
This is not only applicable to hyaluronic acid food, but also to the whole functional food. The road of this industry is just beginning.
 
When this industry is emerging, the market should also give these innovative products more tolerance and room for improvement, so that more innovative enterprises can grow through trial and error.
 
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Food people are “watching”
Read the original text
Is the Functional Food Bureau of Huaxi biology an adventure for the brave or a game for the confident?
“在消费者沟通上,我们更希望陪伴用户一起打卡,告诉他们在多长时间内可以看见明显效果,这样的消费者教育是最好的”,某品牌曾这样说道。
 
但这样的消费者教育路径导致的品牌成本,无疑会很高,这个效果可能是无法保证的。
 
但品牌简单粗暴地将产品功效直接告诉消费者,让消费者自己去尝试,显然这一路径也被验证行不通。毕竟消费者自己是否能坚持使用、消费者免疫力不一致等等都无法保证,这也就是为何功能性食品的消费者信任度会很低,复购随之也会差。
 
总之,当下作为普通食品去添加功能原料,功能性食品行业进入门槛低,有研发能力的的厂商不多,产品功效成分同质化严重。
 
一方面这是好事,可以让品牌“卷”起来,提高研发能力,研发出真正有功效的产品;但另一方面也要注意,鱼龙混杂之下,无论是产品或营销,不要让消费者对功能性食品的信任度更低。
 
来源:华熙生物官网
 

华熙入局,究竟是游乐还是冒险?

 
再说回华熙生物,财报中指出,2022上半年,除了产品矩阵的进一步完善,同时,无锡功能食品基础研究中心和上海食品研发中心也已经成立,研发团队还在扩建,目前华熙生物在食品版块的投资已经初见成效。
 
那么对于玻尿酸龙头华熙,又是从ToB切到ToC的企业来说,入局功能性食品,究竟是勇敢者的探险,还是鲁莽者的冒险,又或者自信者的游戏?
 
华熙生物是国内老牌玻尿酸厂商,同时也是玻尿酸全产业链龙头企业,2007年就已成为全球规模最大的透明质酸生产商,是多个国际美妆大品牌们的供应商。
 
从2012年转型做护肤品,到现在护肤品营收已占大多营收,可见其ToC的转型是成功的。所以做功能性食品,华熙生物依旧可以利用原料端优势和自主科技研发能力,整个供应链体系相对成熟,无论是从原料、配方创新上,还是原料成本上,这就是华熙生物的优势所在。
 
但正如上文所说,与功能性护肤品不同的是,功能性食品面临着的是整个行业的薄弱信任度。
 
目前,应对消费者对于健康和美白的焦虑,功能性食品主要集中于“抗疲劳、提神”、“解压助眠”、“皮肤管理”和“体重管理”等功效,在功能性食品功效性成分相似、产品同质化严重的局面下,如何开发更多有效成分、挖掘更多细分市场、开发更多消费场景、满足更多具体需求,这是华熙生物,以及所有功能性食品企业实现行业突围的必由之路。
 
功能性食品不仅要和同类产品竞争,还要和其他可替代食品竞争,突出自己胜于保健品的口感优势,胜于休闲食品的功效优势。
 
与此同时,消费者教育也是功能性食品行业的重要着力点,让消费者调整对产品的预期,避免消费者拿功能性食品当药使,拒绝承受功能性食品的不可承受之重,缓解消费者的购买焦虑。
 
简单来说,如此前华熙生物(688363.SH)董事长兼总经理赵燕于2020年度业绩媒体沟通会上所说,“食品级玻尿酸市场会有较大增长,但2021年只是起步,消费者对玻尿酸这一物质的认识还需要一定的时间。相信后续几年应该会有一个大幅增长。”
 
这不仅适用于玻尿酸食品,更适用于整个功能性食品,这个行业的路其实才刚刚开始。
 
而这个产业崭露头角之时,市场也应该给予这些创新产品更多包容之心和改进空间,让更多创新企业在试错中成长。
 
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