Bringing the Plant-Based Manufacturing Chain In-House

A Conversation with Fresh Foods Founder Meijun Qiu

Plant-based milk is an alternative protein drink that can be a substitute for dairy milk and includes a variety of options like soy milk, almond milk, walnut milk, coconut milk, etc. According to Tmall's 2020 Plant Protein Beverage Innovation Trends, the online sales growth rate of plant-based beverages in 2020 was as high as 800%, and the number of buyers increased by 900%. With the public's attention to health and better consumer acceptance, there is still huge room for replacement dairy products in China to rise.

As one of the newer protein categories, plant-based milk can play an important role when it comes to feeding the world’s climbing population of 10 billion people. 35 Dou invited Qiu Meijun, the founder of the Fresh Foods, the maker of the True Plants plant-based yogurt brand, to discuss the business model, her original goals when entering the plant-based industry and why True Plants’ supply chain is a key part of its competitive advantage.

Fresh Food (Shenzhen) Technology Co., Ltd. has been focused on the research and development of fresh, plant-based yogurt for more than four years and has won a number of provincial enterprise awards, setting the bar for the current lack of national standard in China. Fresh Foods’ success with plant-based yogurt has led to their launch of other plant-based products, including coffee, tea drinks, milkshakes, etc. Founded in 2020, the brand was selected for the first cohort of the Dao Foods Incubator.

Why do you make plant-based yogurt? Did you encounter any difficulties when you started doing it?

Qiu Meijun: When it came to creating plant-based yogurt, our main focus was to adjust the impacts of dairy products on the intestinal tract. We found that we experienced the most difficulties with taste and industrialization. The first time I tried plant-based yogurt, it was actually terrible and tasted very similar to bean juice. We came to the realization that since it is plant-based yogurt, it will need to be combined with two or more raw materials. So we began looking for various raw materials and tried almost all beans, grains, nuts, and even fruits with good protein content like coconuts. It was through this process of re-optimizing and reprocessing that we discovered the final formula.

With the research and development that has been done, we found that the yogurt’s combination with coffee, tea, and fruit has achieved good results. We’ve gone from having relatively low consumer acceptance to now having a survey of 70% consumer satisfaction. While this has been a long process, we have overcome many challenges within plant-based yogurt production and are stronger and more confident because of it.

What is your business model?

Qiu Meijun: The biggest feature of our yogurt is its freshness, which is quite different from that of larger beverage and dairy factories. By establishing micro-factories across the country, we hope to achieve local and fresh distribution. A micro-factory emphasizes standardized production: the unified provision of raw materials from True Plants’ own plant-based yogurt milk powder factory is the core element to ensure quality control of yogurt production; the production factory and equipment are replicated 1:1 to meet the requirements of the True Plants brand.

Where does your customer base come from?

Qiu Meijun: The customer base of our franchise factory mainly comes from its own agents or channel distributors, who are already distributors of Hema Fresh and Starbucks brands.

How large do you think the plant-based drink industry can grow in the next five years?

Qiu Meijun: This market is very large and seems to grow no matter how much consumption or technology is upgraded. Since it is a plant-based protein drink, there are a lot of opportunities for growth.

What types of competition do you expect?

Qiu Meijun: It depends on the positioning of each brand. If it is positioned as a mass-market, then there will be requirements for cost performance and output. Our competitiveness lies in the product itself - fresh plant-based yogurt. We have a complete production chain: independently developed formulas and relatively mature channels, so we have our own core advantages from raw materials used to micro-factory productions and strong sales.

Anyone can compete in plant-based drinks and yet no one really is, because compared with the other yogurts on the market, we have the whole industrial chain in our channel. In terms of raw materials, we have our own plant-based yogurt powder research and development center, and the core technology has been patented. The current production capacity of its own production plant is about five tons. In terms of products, we can supply customized finished products to our business partners, which is impossible for super-large comprehensive factories. Our microfactories can provide customized services lightly. In terms of C-end products, we carry out brand publicity and exposure through our own cooperative catering events in physical stores. Also, online brand building is one of the focuses of our work.

Do you have any strategies to share in expanding the market?

Qiu Meijun: We mainly focus on consumer terminals. On the B2B end, we will customize products for categories such as Starbucks and Liangpin Shop. In terms of marketing, in addition to online promotion, we will also make desserts and drinks in offline physical stores.

Perhaps the most sensational thing we’ve done is weigh drinks. Around 2016, when we sold a mini milk bottled drink, we pioneered the way to settle accounts by weighing with partners. We are leaders in that now, and many brands have imitated our approach.

What is the most serious mistake you have made in starting a business?

Qiu Meijun: I missed a lot of good opportunities in operation due to my lack of internet knowledge. When I was cooking for catering in 2012, I considered the idea of making an online takeout at that time, but I didn't develop it further. By 2018, the whole online takeaway system was very developed, so we had to learn about online promotion to catch up with our peers. I have to say that we missed a good opportunity to expand through the internet.

Now the internet has become an important strategy for the development of our business departments. At the same time, because I started as an industrial worker, my team and I attach great importance to the nature of business. Therefore, at the beginning of True Plants’ growth, we positioned it as a physical enterprise with Internet genes.

What is the founding mission and vision of Fresh Foods?

Qiu Meijun: We want to be the world leader in plant-based yogurt, and we really hope that China can have such a category or brand to go global. When I visited Vietnam in 2017, my Vietnamese colleague said that due to the melamine disturbance in China a few years ago, foreign countries thought that China's dairy products were very bad, which made me feel embarrassed and sad. From that moment on, I’ve always had this idea - We hope to let plant-based yogurt go out and leave an impression in the hearts of foreigners that China has good milk.

Second, whether from the perspective of future development needs or our original intention, we all hope to make fresh yogurt.