Landbase has established a firm foothold in the Chinese chocolate market by selling low-sugar and sugar-free, low-sugar and sugar-free foods sweetened with inulin, mainly targeting health-conscious consumers.
China hopes to expand its presence in China in 2021, because the country hopes that the launch of the Covid-19 vaccination program can tackle the virus.
Landbase, established in 2018, sells products under the Chocday brand. The Dark Milk and Dark Premium product lines have been conceived in China, but they are made in Switzerland for the Chinese market, which is the first time in China.
Landbase co-founder and CEO Ethan Zhou said: “We have seen the latest trend of Chinese consumers pursuing a healthier, low-sugar diet, so we decided to create a product that meets the demand.”
Landbase launched the Dark Premium dark chocolate series in July 2019, followed by the sweeter Dark Milk in August 2020.
Zhou You has experience selling expensive and little-known European and Japanese confectionery brands in China. One example is Monty Bojangles in the United Kingdom.
Landbase’s first product, Dark Premium, is a chocolate series for consumers who have developed a dark chocolate flavor and want to further reduce their sugar intake.
However, Zhou said his researchers have found that the suffering Chinese chocolate consumers are willing to endure is limited. He explained: “Sweet-free dark chocolate means 100% dark chocolate, which may be a bit too much even for consumers who like a bit of bitterness.” He pointed out that currently, most Chinese consumers prefer about 40%. % Of cocoa is bitter, which is one of the reasons for the introduction of “black milk”.
In contrast, the dark high-grade cocoa content is 98%. They contain five flavors: sugar-free dark original flavor (original flavor); almond; quinoa; caramel sea salt option with 7% sugar (7% of product ingredients); and rice with 0.5% sugar.
However, because some consumers don’t like dark chocolate at all, Landbase responded quickly to expand its product portfolio.
Zhou said that Chinese consumers “usually view dark chocolate as a healthy diet choice”. “However, we found that many consumers are afraid of the bitterness of dark chocolate. This discovery inspired us.”
The result was the birth of black milk. Available in four flavors-original flavor; sea salt and chestnut; quinoa; and blueberry-Landbase’s Dark Milk bar contains no sugar. The cocoa content in the bar exceeds 48% of the ingredient volume. Zhou explained why Landbase uses inulin instead of other sweeteners.
He said: “The sweetness of inulin is not as good as ace-K (acesulfame potassium) and xylitol.” Zhou said: “It has a milder taste than sugar, without the lingering sweetness of sugar. For us, it is Perfect, because it can neutralize bitterness to cater to the mass market, but it will not offend customers who have both bitterness and lingering sweetness.”. He also added inulin, which is a polysaccharide extracted from fruits and vegetables. It is synthesized from nature rather than artificially, so it is in line with Landbase’s healthy image of its brand.
Although Covid-19 has stifled China’s economy, the sales of “black milk” that Landbase hopes to use as a mass market product are still growing, with 6 million (30g/bar) sold by mid-December.
Consumers can get “black milk” through the online store of Chocday, a shopping mall on Tmall, or buy it at convenience stores in big cities, common grocery delivery services such as Dingdong, and even stadiums.
“Daily visits are the top priority in retail store decision-making. We really want to make sure that our chocolate can become a daily snack in people’s daily lives. This also reflects the brand definition,” Zhou said.
Landbase’s chocolate has been sold in 80,000 retail stores in China, but mainly in convenience stores (such as FamilyMart chain stores) and major cities. As it hopes that China can control Covid-19 by launching a vaccine, Landbase aims to accelerate its expansion and sell it in more than 300,000 stores nationwide by the end of this year. Zhou said that smaller cities will be the focus of these new sales, while the company will focus on smaller independent local retailers.
“Our online sales data shows that there is no significant difference between consumers in big cities and small cities,” Zhou said in an interview with Food, which reflects the demand for sugar-free chocolate. “Our brand and brand strategy are aimed at young people across the country, not young people in specific cities.
In 2020, most categories will be affected by Covid-19, and chocolate is no exception. Zhou revealed that before the early May of the pandemic, Landbase sales were suppressed due to the prohibition of indoor activities during the Valentine’s Day chocolate sales holiday. He said the company tried to adapt to this situation by promoting online sales. For example, it managed to promote its chocolate to a real-time shopping program led by the famous blogger Luo Yonghao, the CEO of the smartphone company Smartisan.
Landbase has also purchased advertising space in national entertainment TV shows such as “China Rap”. It also hired a popular female rapper and dancer Liu Yuxin as a brand ambassador (https://detail.tmall.com/item.htm?spm=a220o.1000855.1998025129.3.192e10d5nEcHNC&pvid=3faf608d-d45c-45bb-a0eb- d529d15a128a&pos=2&acm=03054.1003.1.2768562&id=627740618586&scm=1007.16862.95220.23864_0_0&utparam=%7B%22x_hestia_source%22:%2223864%22,%22x_object_type%22:%22item%_22,%22item%_22,%22%_22x_hes %2223864%22,%22x_pos%22:2,%22wh_pid%22:-1,%22x_pvid%22:%223faf608d-d45c-45bb-a0eb-d529d15a128a%22,%22scm%22:%221007.12144.95220.23864_0_0%22 ,%22x_object_id%22: 627740618586%7D). Zhou said these measures helped offset some of the sales losses caused by the pandemic.
Since August 2019, the company’s ability to obtain these investments has come from various rounds of investment. For example, in April last year, Landbase received $4.5 million in investment from several investors.
More capital inflows. The B round of investment was completed in early December. Zhou will not disclose the total amount of this financing, but said that the new investment will be mainly used for research and development, brand building, team building and business development, especially the sales growth of physical stores.
Landbase is the first chocolate company in China to produce products in Switzerland. Zhou said the move is bold and vital to the company’s growth.
He emphasized that when Chinese consumers respect the quality of certain foods (such as chocolate), they often have a strong sense of origin, just as wine gains respect from its origins. “People think of France when they talk about wine, while chocolate is Belgium or Switzerland. It’s a question of trust,” Zhou insisted.
The CEO declined to disclose the name of the Basel manufacturer that supplies chocolate, but said he is interested in highly automated manufacturing processes and extensive experience in supplying chocolate products to other larger companies.
“Automation means lower labor costs, higher productivity and easy capacity changes to meet increasing demand,” Zhou believes.
In the Western market, sugar-free low-sugar chocolate is certainly not a new idea, but mass market consumers still lack enthusiasm for such products.
Zhou suggested that one reason may be that chocolate is a Western-style snack, and most Western consumers grew up in traditional sugary chocolate. He asserted: “There is almost no room for change in emotional bonds.” “But in Asia, companies have more room for experimentation.”
This may attract professionals to the niche market of China. Nestlé launched the first sugar-free KitKat in Japan in November 2019. The product is called cocoa fruit, and it contains dry powdery white cocoa syrup that can replace sugar.
It is not clear whether Nestlé will bring its products to China, but Zhou Enlai is fully prepared for future competition-although for now, his company is very beneficial to him.
“We may soon see some competitors, and the market can only get better through competition. We are confident that we will remain competitive with our advantages in retail resources and R&D capabilities.”