Permeability, high-frequency rigid demand, high customer unit price, is the golden triangle of the cutting-edge brand.

Text | Wang ou

Editor | Wang Fengzhi

When Hero Zero, the brand of healthy living solutions, entered the sugar-free food track, the industry was already hot. The heat comes partly from changes in consumer demand and partly from the popularity of sugar-free drinks represented by Yuanqi Forest.

After the concept of "zero sugar" became popular, the whole industry related to it was rapidly connected to the Internet. Sell concept or sell ingredients, sell function or sell stories, entrepreneurs who pour into this market have their own choices, so the subdivision of the track has its own popularity. As a brand that is not too early to enter the game, Hero Zero chose to spread the product matrix around functional sugar alcohol "erythritol" and abandoned some hot Internet inertia games at the same time.

"I don't really like the concept of short-term fashion and explosive products in the market. It's too impatient." Zhu Xinli, founder of Hero Zero, said, "We want to be a sustainable brand, a D2C brand, to serve specific people."

For her, who has been working in the pan-consumer industry for many years, this is from "zero" after 18 years of employment, in order to make solid products. Before that, Zhu Xinli's work experience was mostly rooted in the consumer industry giants, with Nestl é, LVMH, Interbrand and Gao Xin retail as her career keywords. Now, add a zero hero to these keywords.

The brand was founded in July and was strategically invested by Baolingbao, a sugar raw material company, in August. The product was launched in mid-September. Tmall sold more than 31000 bags of zero-carb sugar in October, and completed the third new product on the shelves before Singles Day. In Zhu Xinli's words, "in the four months since its inception, the product iteration and sales results of Hero Zero are very much in line with expectations."

Zero Hero Zero Sugar (sweetness at 1:1, can replace granulated sugar)

Although it is not strong in terms of volume, for this start-up brand, tamping the product foundation and product innovation are carried out steadily during the cold start-up period, and the market feedback is also relatively positive.

"judging from the sales data of Singles' Day and the market feedback over the past two months since its launch, consumers are approved of zero-calorie sugar in all-natural formula." Zhu Xinli believes that "pure plant extraction, pure natural food formula will be the main trend of market development in the future."

Targeting the market trend of formulations means focusing more on the product. Zhu Xinli believes that at a time when traffic is becoming more and more expensive, Internet thinking is not the only magic weapon to build a brand. The three elements that really build barriers are quality control, performance-to-price ratio and supply chain. After entering the market with zero sugar, Hero Zero's high-cost investment is basically on the product side, subtracting in packaging and other aspects, while introducing the strategic investment of Baolingbao, a substitute sugar raw material merchant on the supply chain side, the aim is to enlarge the performance-to-price ratio, quality and R & D barriers of the products.

Magnifying the performance-to-price ratio and quality of products means high cost investment, and there is some pressure on start-up brands. Another point of contention between the team and Zhu Xinli is the speed at which the product goes to market, is it fast or good enough? This actually represents two different product paths. Hero Zero often has to go through dozens of iterations in the R & D stage before it can be put into production. In this increasingly competitive industry, it can be regarded as a "slow down" brand.

Hero Zero wants to face consumers directly with Direct To Consumer (also known as DTC), which determines that it is essential for consumers to co-create in pre-research and development, product demands, and even packaging design, so enterprises are required to efficiently control the production chain, strengthen control over distribution and provide rapid feedback on consumer demand.

Objectively speaking, the continuous growth of the demand side of the zero sugar market has stimulated the re-reform of the supply side of the whole industry, but relatively, the competition of each subdivision track will become more and more fierce.

How to balance ROI and improve the repurchase rate of users to be a D2C company that slows down and polishes its products in the food consumption industry? How to ensure the sustainable development of brands and products? How to survive in the highly competitive sugar-free track? How to treat the development of the industry after overheating? The brand manager of 36Kr Holdings had a dialogue with Zhu Xinli, founder of Hero Zero. The following content was sorted out by the dialogue (edited):

01. Target people with rigid demand for two kinds of zero sugar products

36Kr Holdings: as a brand just launched, what is the initial user positioning? Have you observed any changes before and after Singles Day holiday?

Zhu Xinli: in the cold start of the market research stage, we positioned the "two-seed hero" strategy. As a D2C brand, we divide the target users into two groups, both of whom have a rigid demand for sugar control, which are called "achievement heroes" and "growth heroes" respectively.

"Achievement Heroes" are older elites who have a need to control sugar because of increased attention to their health. The "growing Heroes" are mainly young people between the ages of 20 and 35 who are concerned about fitness and health. This kind of consumers are concerned about reducing sugar and fat, and controlling sugar is also a rigid demand. We tore a gap between these two extreme groups of people.

36Kr Holdings: which is the main target group?

Zhu Xinli: young consumers. It is expected that in the future 70% of users will be young and 30% will be older elites. Let young users cultivate sugar control habits from now on and get a healthier lifestyle, which is also the brand layout and brand positioning of Hero Zero in marketing.

36Kr Holdings: you attach great importance to the D2C model. What kind of feedback did you get from this Singles Day holiday?

Zhu Xinli: young consumers are more interested in small packaging, and even our current package of 250g zero-calorie sugar (sweetness can replace white granulated sugar at 1:1) is a little big for them. We will do some improvement and iteration later.

From the perspective of market feedback, users are approved of zero-calorie sugar in pure natural formula, and consumers are more concerned about pure plant extraction and pure natural food formula, which will also be the main trend of market development in the future. But at present, there are a lot of zero-calorie sugars in the market and the quality is uneven. A large part of consumers' worries come from raw materials, and they are afraid of chemical products, and we can fill this gap. Will insist on recommending more natural, plant-extracted zero-calorie sugars to young people instead of sugar.

02. Don't like the concept of "short-term fashion"

36Kr Holdings: after three zero-sugar products are on the shelves, what's the next step?

Zhu Xinli: still focus on R & D and push back product R & D and upgrading from the current feedback from the market.

After getting the investment from Baolingbao, we want to expand the production, application, research and development of sugar substitute and sugar reduction products, and gradually cover more salt reduction, oil reduction and other healthy burden reduction products. The new lifestyle we want to pass on to young users is "subtractive life".

36Kr Holdings: should we focus on creating popular products to achieve? Or spread out the product matrix, cut in from different products, and try it all?

Zhu Xinli: focus on products and do deep work. We cut it in with zero caramel, polish a product, and then spread out the product matrix.

But this product is not the concept of a short-term fashion on the market. I don't like the market talking about us making popular styles and explosive products. I think this is very impatient. Now to be a new domestic brand, the most important thing is to be a sustainable brand, not a popular style.

36Kr Holdings: how to realize the sustainable development of the brand?

Zhu Xinli: starting from three aspects: quality control, cost-effective and extreme supply chain.

From the point of view of Hero Zero, the formula of the first zero-carb product is pure plant extraction, so the cost will naturally go up. But if we want to be the first brand to cut into the market with pure natural compounded zero-calorie sugar, high cost is necessary. In order to improve the performance and price ratio, we reduce expenses by means of simplified packaging and so on.

36Kr Holdings: if the cost is high, how to control the input-output ratio? How to make up for the lost natural price advantage?

Zhu Xinli: in the products of the same quality, Hero Zero will have a higher performance-to-price ratio. We are very simple in product packaging and marketing, and there is no big marketing investment such as star endorsements. At present, the main cost is on the raw materials and formula of zero caramel. We hope to have a more competitive advantage on the premise of goods of the same quality.

36Kr Holdings: how much is the high R & D cost?

Zhu Xinli: the specific figures are not convenient to disclose, but before the launch of a product, the product manager may have to update the formula 20 or 50 times before it will be introduced to the market.

36Kr Holdings: do you have any impressive points?

Zhu Xinli: I had a lot of disputes with our product team and marketing team in this process.

The dispute focused on two points. One is to go to market quickly, and the other is to ensure that good taste satisfies consumers (but it also means a longer product development cycle), so we need to find a balance in the market and keep investing in recipe iterations. the product manager keeps trying the taste. The people on the team will also tell me, is this cost too much? In fact, this is necessary before the product is launched to consumers.

36Kr Holdings: there is no great investment in marketing. How do you do it in the cold start phase?

Zhu Xinli: To C Hero Zero made a "Family and Friends Award Program" to mobilize the first batch of seed users to help us spread the brand, including the concept of health. There is also a certain amount of investment on KOC to create some short videos to be distributed on platforms such as Douyin, which is of great help to the brand in opening up the market in the first place. Our own WeChat Mini Programs has also spread the seed user incentive program, including user participation in community group buying, which has accelerated our entry into the market.

36Kr Holdings: what are the short-term and long-term goals?

Zhu Xinli: at this stage, we should continue to develop products and build brands with good products as the core. In the long run, Hero Zero wants to be a brand that provides healthy living solutions.

03. Face consumers directly in D2C mode

36Kr Holdings: at present, the zero sugar track is actually very hot, and many enterprises continue to enter the industry. What are the considerations for Hero Zero to choose Zero caramel to cut into the market?

Zhu Xinli: White granulated sugar has a market scale of 158 billion a year in China, but at present, zero sugar / substitute sugar accounts for only 3% of the market. Horizontal comparison, the proportion of zero sugar / substitute sugar in the Japanese market can account for 30%. The domestic zero sugar market has huge room for growth, and there is double-digit growth every year.

The industry is developing rapidly, and the category is growing very fast, but there are no leading enterprises yet, and everyone has the opportunity. Most importantly, the investment of Baolingbao, a leading enterprise in the sugar industry, actually ensures the advantage of our supply chain.

So no matter from the market development space, industry pattern or supply chain point of view, zero sugar track is our best choice. In the future, many foods can be remade with zero-calorie sugar.

36Kr Holdings: there are many kinds of sugar substitutes on the market now, how to highlight your brand advantage?

Zhu Xinli: whether in the catering industry or baking industry, there are more and more application scenarios of zero-calorie sugar, which shows that the market attaches great importance to reducing sugar and controlling sugar. When consumers continue to mature, more and more enterprises will join in the product market of sugar substitute industry. The more enterprises join, the more proof that the market is good, the easier it is to educate and popularize a healthy lifestyle, and at the same time to feed the industry to continue to move forward.

36Kr Holdings: how can I become a pioneer player in this industry?

Zhu Xinli: at present, the consumer goods market is really crowded, so it is necessary to do product innovation. Secondly, we cut into the urban striver as a market segment and enter different scenes to find different entrances, such as kitchen scenes, such as midnight snacks.

In addition, combined with public domain and private domain traffic to understand the specific needs of different users. When we take users as the core and can quickly understand the needs of users, we can force the supply chain, complete product upgrades, improve digital capabilities in an all-round way, and form a C2D growth model.

36Kr Holdings: how to understand the D2C model that Hero Zero has been emphasizing?

Zhu Xinli: Channel model, e-commerce model and D2C model are the troika of Hero Zero. Of course, the D2C of the whole Chinese market has just started, and everyone is groping for their own way.

First of all, the D2C model should answer the question of how to achieve sustained high-speed growth. Early D2C was an explosive strategy, but it was not Hero Zero's strategy. The short-term surge in sales is not what we want. We want long-term, powerful and sustainable products. This requires Hero Zero to understand the real rigid high-frequency needs of consumers, rather than creating products that are easy to imitate.

Permeability, high-frequency rigid demand, high customer unit price, is the golden triangle of the cutting-edge brand. Low-frequency advertising efficiency is too low, after-investment education market for a long time, to endure and adhere to; high permeability, high frequency are generally the Red Sea category; low-frequency, high-price giant monopoly. We need to find our own "Golden Triangle" password through the data.

In addition, if D2C wants to grow at a high speed, it is necessary to break through the ceiling of consumer niche. Because of facing consumers directly, Hero Zero also invited consumers to participate in the design.In essence, consumer participation can increase brand loyalty, but the resulting products are likely to touch the ceiling of niche. This also requires enterprises to have a strong supply chain control, which can make the supply chain respond faster to the market and increase the ability of product diversification.When the enterprise can have high control over the industrial chain, distribution, upstream production, raw materials, procurement and so on, the problem can be easily solved. For Hero Zero, this is achieved through the financing of Bao Lingbao, which reduces the hidden danger of driving down the rate of return on asset investment.

The last thing to think about is profitability, that is, to improve the repurchase rate. The repurchase power comes from the product power, and finally it has to return to the product.

Source: 36kr