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Related tags China plant-based retail channels
Entry into mainstream retail in China is known to be notoriously competitive and challenging, and the challenge is even more substantial for fledgling novel categories such as plant-based.
“Almost every food-brand wants to be listed at mainstream supermarkets in China, so negotiations tend to be more challenging – and big successful supermarket chains are amongst the most challenging,” Chins plant-based yoghurt brand Jooma’s Managing Director Ran Guo told FoodNavigator-Asia.
“In addition, due to their huge portfolios big chains have very standardised procedures when it comes to delivery, service and so on, and even as a smaller brand, these are compulsory to be adhered to which can be challenging, especially when you add several large chains at the same time, all of which have slightly different requirements.”
Jooma CEO and Founder Stefan Schmale added that the difference between western and China supermarkets is even more conspicuous when it comes to plant-based products because of the newness of the category, and consumer awareness and demand.
“In the Chinese market for plant-based foods, things are still more push than pull right now,” he told us.
“In the west plant-based products are well-established and a strong trend so purchasing departments are actively looking for a good portfolio with these - In China, this trend is just starting, so often you still have to explain the category and the reasoning behind it such as health, sustainability, animal health welfare and so on.”
The brand was recently successfully ranged in multiple mainstream national supermarkets and convenience stores.
“Jooma is now in supermarkets nationwide such as Ole and BLT across over 110 stores located in frequently visited shopping malls; as well as over 140 7eleven stores across the southern regions of Yunnan and Chengdu,” said Ran.
“7eleven is undoubtedly a major player among grocery stores in China with mainstream presence, and I would say that the process to enter these is actually even harder than to enter the supermarkets.
“This is because convenience stores typically have less space, so are looking even more for fast-turning products compared to normal supermarkets. Because of their business model, they also typically sell in smaller quantities and hardly do promotion activities.”
Jooma is not the first plant-based yoghurt brand to enter the market in China – China’s Yeyo lays claim to that title – but it does claim to be the first and only plant-based yoghurt in Chinese mainstream premium supermarkets and convenience stores nationwide today.
“Yeyo is very big online and is also listed at Aldi, which we also appreciate very much as this shows the impact of plant-based products here,” Jooma Head of Business Development Kamil Gajewski said.
“According to our information, their cooperation with Aldi is still quite limited with a smaller number of stores, about 20, at a more regional level in Shanghai [although] it is certainly a high-end collaboration with great potential.
“Our listing with the mainstream supermarkets is nationwide across hundreds of outlets, so it does come down to what the definition of mainstream is when it comes to size or market penetration.
To ensure retail penetration, some adaptations including packaging and supply chain strategies likely also need to be taken into consideration.
“Distribution must be well prepared to meet demand without disappointing expectations on the side of consumers, customers/retailers, distributors and ourselves as a brand,” said Schmale.
“Some supermarkets require a different package size, which we are in the process of developing, and we are also working on our extension of our product range by defining the final packaging design and the commercialisation strategy of products to be launched soon.
“Product prices [for plant-based items] will still tend to be higher due to the valuable ingredients used, which are often more expensive than regular dairy, but our strategy of targeting consumers looking for high quality products passionate about food [has] led us to a sales increase of nearly 285% in the past several months.”
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Related topics Markets Asian tastes Supply chain Industry growth Bakery Beverages Confectionery Convenience foods and snacks China East Asia Healthy living Alternative proteins Plant-based development Protein
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