4 signs of crisis in jasmine yogurt

This article deeply analyzes the crisis faced by the Mo Yogurt brand, from food safety issues to the decline of its brand image, and reveals its hidden dangers in product development, franchise model and marketing strategy. The article reviews several major controversial events of Mo Yogurt in detail, and explores the contradiction between its business model and brand positioning. After reading this article, you will understand how Mo Yogurt fell into crisis step by step, and I hope it will help you assess brand risks and formulate strategies.

Will "Jasmine Yogurt", which has a high price and product failure, become the next "Zhong Xue Gao"?

On May 27, the Beijing News published a 6,000-word article titled "Undercover at Mo Yogurt: Raw materials were still used more than 40 days after the expiration date, and the clerk said "at most it would cause diarrhea", which deeply revealed the food safety issues that the reporter saw during his three-month undercover visit to a Mo Yogurt franchise store.

The article summarized several major crimes of the Mo Yogurt franchise stores, including but not limited to: using expired ingredients, cutting corners, and not requiring staff to provide the mandatory health certificate for catering staff required by the state. Once the article was published, public opinion was in an uproar. Mo Yogurt issued an apology statement, stating that it would immediately close the franchise stores involved and permanently terminate the contracts. The next day, the Beijing market supervision department conducted on-site law enforcement inspections. At present, many Mo Yogurt stores involved have been filed for investigation and suspended for rectification.

In the entire food and beverage industry, food safety is the bottom line , and marketing and pricing are relatively secondary. However, Jasmine yogurt has been repeatedly criticized, with three major scandals in the past two years, including new products causing sky-high price controversy, raw materials containing non-dairy creamer, and suspected formulas containing unknown raw materials. This year's 315, Jasmine yogurt has become one of the focuses of condemnation on the Internet.

There must be something wrong when things are abnormal. After sorting out these seemingly independent explosions, Daofa found that behind these incidents, there are problems that need to be optimized in product research and development, franchise model and marketing strategy of Jasmine Yogurt, and we must learn from them.

1. Frequent failures, the more you fail, the worse it gets.

There are traces of the decline in the brand image of Jasmine Yogurt.

At first, consumers just complained about the high price. Later, people began to question the raw materials of the product. Now, the brand positioning of Mo Yogurt as a high-end freshly made yogurt is in jeopardy.

Having said that, we still need to review these key events in detail.

In July 2023, Mo Yogurt published a questionnaire on the pricing of its new Musang King Durian Milkshake, giving consumers four options: 68 yuan, 88 yuan, 108 yuan, and I don't buy it . The sky-high price of yogurt was unacceptable to netizens, and even Mo Yogurt's claim that the questionnaire price was not the actual price could not calm the anger.

That month, following the controversy over the sky-high price of new products, some netizens dug deep into the Jasmine Yogurt product, and in the process, they questioned whether the raw materials of Jasmine Yogurt contained non-dairy creamer. However, the relevant person in charge told the media that the raw materials currently did not contain non-dairy creamer. However, a doctor interviewed by Jiemian News refuted this view, believing that the milk-based raw materials of Jasmine Yogurt contained hydrogenated vegetable oil, which is the main component of non-dairy creamer.

At this point, the self-defense of Mo Yogurt was refuted. In the brand's public statement on the non-dairy creamer incident, it only stated that all yogurt shake products in Mo Yogurt stores nationwide will be upgraded to use a new version of milk base, but did not deny the previous statement that the raw materials contained non-dairy creamer.

Since then, consumers' favorability towards the brand has dropped significantly. "Spending 30 yuan to buy a cup of non-dairy creamer, I don't know who is being cheated," and store sales have continued to decline.

On March 13, 2024, the Shanghai Consumer Protection Committee publicly issued a statement questioning the ingredients of the mango yogurt smoothie made by Mo Yogurt. The test data of the Shanghai Consumer Protection Committee found that the amount of yogurt used in the mango yogurt smoothie made by Mo Yogurt was not much, but the fat content was strangely high. At the same time, the drink marked "no additional sugar" was found to contain sucrose and maltose.

This content released by the Shanghai Consumer Council before the 315 Gala caught Mo Yogurt off guard.

Amid the uproar, the franchisees of Mo Yogurt could no longer sit still, and many users claiming to be franchisees of Mo Yogurt on social platforms "crying out for justice" for the brand.

Jasmine Yogurt also resolved the problem very quickly, with a statement and the initiative to make the product formula public and transparent, eliminating hidden dangers for consumers.

But the announcement of Mo Yogurt has never solved the fundamental problem, which is:

In these incidents, consumers' attitude is not simply to "criticize" non-dairy creamer or the high fat content, but that Jasmine Yogurt is creating a brand positioning of high-end freshly made yogurt and emphasizing the healthy brand image of its products, while at the same time selling certain products that do not live up to the publicity and are suspected of being accompanied by the problem of excessive premium.

It took less than half a year for Mo Yogurt to go from being a popular yogurt brand to a disenchanted and defeated brand. In addition to being affected by several scandals, the brand itself undoubtedly also needs to bear the main responsibility.

2. Knowledge and action are inconsistent? The franchise model is inconsistent with the brand positioning

Let’s start with the core issue of food safety.

On the surface, the management and control capabilities of Mo Yogurt cannot match the speed of franchise, and the high production costs drive franchisees to pursue profits, covering up food safety issues. But thinking deeper, the fundamental problem of Mo Yogurt is that the franchise model is contrary to the brand positioning.

01Production control is inconsistent with brand positioning

Compared with other tea brands, the product cost of jasmine yogurt, which wants to take the high-end route, is obviously higher.

First of all, the raw materials for making a cup of Jasmine Yogurt are generally yogurt and fruit. In addition, Jasmine Yogurt emphasizes product quality, and the avocados and durians used are all produced abroad. According to public reports, franchisees can choose to order fruits from the brand or find supply channels on their own. However, the price of fruits provided by the headquarters is often higher than that of ordinary fruit stores, and the quality of fruits may even be unstable.

It goes without saying that fruit is perishable. At the same time, freshly made yogurt is more difficult to preserve than room temperature dairy products. Brands mainly use frozen transportation to transport yogurt.

From the perspective of transportation, it can be seen that the brand has been trying to reduce costs as much as possible and has not adopted more expensive cold chain transportation. However, relying on cost reduction in individual links is not enough to directly improve the profitability of franchise stores.

Take the procurement of fruit raw materials as an example, a management vacuum has been created. Business is always profit-seeking, and in order to reduce costs, some franchisees often cannot ignore the inherent loopholes in the brand's product control and make some shady operations.

For example, Mo Yogurt requires stores to take inventory every week, discard expired raw materials in a timely manner, and arrange supervisors to inspect and impose fines if abnormalities are found in the stores. Stores post raw material expiration dates and let the equipment that prints the expiration dates announce it, reminding store staff to discard expired ingredients on time. The brand also provides after-sales service based on a certain percentage of bad fruit damage, and arranges supervisors to communicate with franchisees.

However, according to reports from multiple media outlets, even though Mo Yogurt has these safeguards in place, it still cannot prevent fruit from rotting and expiring. Some franchisees even learned in advance the inspection schedule of the headquarters supervisors and easily avoided the brand's inspections by simply making the products look "safe and sound."

This means that the unstable product output of the store may not be due to the employees’ unskilled operation, but rather to fundamental differences in materials and processing methods.

02The cooperation model is inconsistent with the brand positioning

In addition to the aforementioned product raw materials and quality control issues, in its business operation model, Jasmine Yogurt is more like a business partner of franchisees, and is not sufficient to form an effective constraint on franchisees.

In the chain business model, the brand has the greatest control over the direct stores, followed by joint ventures, and finally franchises. Mo Yogurt hopes to create a successful single-store model + brand potential + systematic franchise model to leverage franchisees. In actual operations, Mo Yogurt cooperates with franchisees in the role of "material supplier + back-end operation service provider".

In a nutshell, Mo Yogurt provides franchisees with preparation for opening stores, but as for the store’s revenue, it mainly depends on the franchisees’ abilities.

A Xiaohongshu user @我什么不知, who claimed to be a franchisee of Mo Yogurt, posted a message expressing the frustration he had faced since joining Mo Yogurt: disorderly expansion of franchised stores; lack of a professional management and operation team; too arbitrary selection of franchisees and store site selection; headquarters not listening to franchisees' opinions, insufficient supervisors, and disconnected communication; and supply chain and public relations issues that were hard to describe in a few words .

You can't have your cake and eat it too. In theory, high-premium products need to be matched with strong franchise management measures and strict commercial logic.

In terms of franchise management and commercialization logic, Gongmo Yogurt has many people to learn from, such as the recent popular tea brand "Bawang Cha Ji".

Take Bawang Chaji, whose expansion speed is increasing exponentially, as an example. At present, Bawang Chaji has more than 4,500 stores worldwide, of which franchise stores account for the largest proportion. However, Bawang Chaji's regional expansion is relatively cautious, following the "1+1+9+N" model of direct franchise and strong control.

• The first “1” represents a fully-established local subsidiary or office, making preparations for direct operation.
• The second “1” is that the brand should first open 1 or more directly-operated stores, run the single-store model, and build the brand image.
• "9" refers to joint-venture stores, franchisee investment, and unified management by the headquarters. After building all these organizational strengths, further franchises will be opened.

In this way, the brand image and product quality can be guaranteed, the difficulty of opening stores for franchisees is reduced, and it is also conducive to multi-store expansion.

The business model chosen by Mo Yogurt is similar to that of Mixue Ice City. It is a supplier of raw materials and makes money from franchisees, but it retreats behind the scenes and lets franchisees run freely. The control has plummeted, and the uncontrollability of brand image and product quality has increased. Once problems arise, it will be difficult for Mo Yogurt to get consumers to pay for its high-premium products. From this perspective, the "Misue Ice City" model is not the most suitable expansion plan for Mo Yogurt.

3. Jasmine yogurt is still spinning in the vortex of traffic

In the above text, Daofa explained that the franchise model of Mo Yogurt is contrary to its brand positioning. This inconsistency between knowledge and action is also reflected in the marketing strategy.

In the early days of Mo Yogurt, the brand rarely worked hard on marketing because the founder Zhao Bohua focused on product research and development. CEO Gu Hao, who joined the company in 2020, changed this situation. From a dentist to a professional franchisee in the catering industry, Gu Hao is very familiar with business operations. Under his leadership, Mo Yogurt began to learn to "make friends with traffic" and more marketing actions were taken.

Previously, DaoFa had interviewed Mo Yogurt CEO Gu Hao, and in the article "Exclusive Interview with Mo Yogurt: Single cup sells for 30+, why is it the first freshly made yogurt brand in 1,000 stores?" he summarized the brand development path of Mo Yogurt in detail.

Back to the marketing level, in Daofa's opinion, there are also certain contradictions between the marketing strategy of Jasmine Yogurt and its high-potential brand positioning.

01High-end freshly made yogurt, but relying on low-price coupons to drive consumption

The online marketing of Mo Yogurt is mainly based on issuing coupons to cooperating influencers. Coupons are used to attract consumers to shop in stores, thereby creating customer traffic for franchisees. At the beginning, Mo Yogurt relied on cooperating with Li Jiaqi's live broadcast to sell low-priced coupon packages to gain fame.

According to DaoFa statistics, Mo Yogurt cooperated with Li Jiaqi for a total of 5 live broadcasts in 2022. In 2023, Mo Yogurt only cooperated with celebrity Calvin Chen for 1 live broadcast, and the rest of the live broadcasts were conducted in the official live broadcast room. According to Chan Mama data, in 2023, Mo Yogurt's official live broadcast room launched a total of 35 live broadcasts.

As a high-end ready-made yogurt brand, Mo Yogurt needs to rely on its high gross profit to distance itself from its peers. However, the higher the frequency of low-price coupon package marketing, the smaller the gap will be.

Mo Yogurt has internal regulations that, except for celebrity endorsements or explosive nodes, low prices are not allowed in regular online marketing activities. In order to balance the customer traffic and revenue generated by coupon package marketing, Mo Yogurt tried to gradually raise the price of coupon packages.

Take the original avocado yogurt smoothie of Mo Yogurt as an example. In the official live broadcast in February last year, the price of the original avocado yogurt smoothie was as low as 19.9 yuan. Two months later, the price of the original avocado yogurt smoothie was 20.9 yuan. Later, Mo Yogurt cooperated with Calvin Chen in a live broadcast, and the same product was priced at 22.9 yuan per cup.

Originally, the low-price coupon package marketing attracted many price-sensitive consumers who would not drink Jasmine Yogurt without buying coupons. This is not the core user group that Jasmine Yogurt hopes to penetrate. At the same time, once consumers develop a path dependence on low-price coupon packages, they will abandon Jasmine Yogurt because of subsequent price increases.

02Pleasing circle users, but not understanding user needs

In fact, apart from the above-mentioned coupon marketing, Mo Yogurt rarely engages in other types of marketing cooperation, especially in the tea beverage industry where joint ventures are commonplace. The recent highly profitable two-dimensional marketing has made Mo Yogurt eager to make a move, and the brand has found the well-known Chinese comic IP "Under One Person" for cooperation.

On December 15, 2023, Mo Yogurt officially announced its collaboration with Yuewen Haowu and Tencent Animation on "Under One Person", launching jointly customized insulation bags, paper bags, straw covers, stickers, calendars, Liuma standees and other special peripherals around milkshake drinks.

However, this collaboration has caused consumers to "explode", complaining that the celebrity collaboration does not meet the needs of fans, touches the bottom line of two-dimensional marketing, secretly changes the number of peripheral products, the pricing of peripheral packages is expensive, the collaboration mechanism is complicated, or involves false advertising, etc.

The company originally wanted to rely on the powerful appeal of IP to create new business growth in the winter, but judging from consumer feedback, Mo Yogurt did not treat the IP as attentively as fans imagined. The complexity of the joint venture mechanism made consumers complain, "Mo Yogurt not only wants to make money through joint ventures, but also wants users to bear the extra expenses for brand development."

It has long been an indisputable fact that the two-dimensional world can make money, and brands should also know that respecting and understanding the culture of circles such as the two-dimensional world and making friends with users in the circle are the prerequisites. Once the brand is labeled as "flattering", its actions will also be distorted.

Going back to the research on the brand user group portrait, Mo Yogurt may be a general traffic marketing player, but it has not yet found the switch to turn on precise traffic and aggregate loyal users.

4. Analyst Comments

There are still contradictions in the business logic of Jasmine Yogurt, and it is striving to seek self-consistency in its internal operations.

To date, the public relations efforts of Jasmine Yogurt have been just as effective as in previous incidents; they have made some progress but have not been able to turn the tide.

Objectively speaking, the food safety issue of Mo Yogurt is a typical case of "one bad apple spoils the whole barrel". Daofa has seen many people claiming to be Mo Yogurt franchisees "crying out for injustice" on Xiaohongshu, believing that these individual cases have damaged the brand and the business of all conscientious franchisees.

However, when we look back at the development history, franchise model and marketing strategy of Mo Yogurt, the reason why Mo Yogurt can become rich is because of its simple business logic. After the product has been certified by the market, it uses marketing to expand the brand's voice, and then opens up franchising to achieve rapid development.

But at the same time, it is also because of the business logic of Jasmine Yogurt - wanting high returns but not wanting to pay too much, that the original appearance of Jasmine Yogurt was abandoned.

The current situation of Jasmine Yogurt reminds people of Zhong Xue Gao, which also has a high premium and low cost. Zhong Xue Gao has been sentenced to "death" by consumers. Even if its founder Lin Sheng sells sweet potatoes, it cannot cover up the past of the brand using consumption upgrades to deceive consumers.

So, will Mo Yogurt also enter the same situation? It is not certain. The only thing that is certain is that no one wants to see the next "Zhong Xue Gao".

References:

• 2024.06.03, Daily People, "Why is jasmine yogurt so expensive and not clean?"
• 2024.05.27, Beijing News, "Undercover on Jasmine Yogurt: Raw materials were used more than 40 days after the expiration date, and the clerk said "at most it would cause diarrhea""
• 2023.07.13, Knife Skills Research Institute, "Interview with Mo Yogurt: Single cup sells for over 30, why is it the first brand of freshly made yogurt with 1,000 stores?"

Author: Lao Xie; Editor: Hua Dao

WeChat public account: Knife Skills Research Institute