Introduction

Löfbergs a major Coffee house in the Nordic and European market, they started their China planning during late 2020 and had their first import during 2021 as experiment. After showing good results a full launch started in mid-2022 in JD and other major shopping channels.

The first container for the launch was send during Q3 2022 and the ROI projection on initial investment is break even by Q2 2023 and sales to cover operations cost during Q4 2022. However, the brand had further their investment into the market due to good prospects.

It’s worth the mention that Löfbergs decided to keep going with the expansion during Covid-19 which slowed business and expansions.

Being the first strong launch of a Nordic Coffee brand on the market gives Löfbergs a strong position to succeed in the market with good position for negotiating with distribution and sales channels. The strong brand further boosts this and with the coffee market on growth it’s our clear judgement that the prospects for this succeeding are very good.

COFFE SINCE 1906

Background

After having grown to strong position in the Nordic market, Lofberg have started their international expansion to multiple markets. This primarily within Europe to maintain focus on close to home markets. As Lofbergs have a strong sustainability profile with rich historical background, it’s a good fit for many European markets. We first got in contact with Lofbergs and to talk about China during late 2019, with the result that we would look into the market to se if there was potential for the brand. The result of this was that there was a good potential for the brand in the market, this was based on the following points:

MOVING ON

Planning

As Lofbergs have a strong brand identity, a key point during planning of the brand launch and operations was to maintain this identify while adapting the content and appeal for the local market. With Lofbergs having such high brand appeal, long history and strong platform in the Nordic, the challenge was not what material need to be created but what to bring over. Compared to most other brands, the amount of content based on over 100 years of work is overwhelming and the selection was curial to build a strong foundation to work from.

THE BEGINNING

Start phase

The plan was strongly based around establishing a strong flagship store in collaboration with the distributor and having this act as a base platform, building further presence with social medias that is focusing on the consumer group. The goal being that this would result in a strong established present that would help further open sales channels and access to more shelf placements. A major point for the planning was product selection and presentation, with such large portfolio of product deciding a strong foundation with more edge product to drive interest have been a key point. We decided to go with a similar assortment for the base line as in home markets, with some adjustment for local variations and adding on two product lines of more speciality opening to show uniqueness and drive interest.

GETTING DOWN TO IT

Operation prospects

As the brand just launched and operations have been starting, we do not see and major challenges for operating the brand in the market. Although it’s a very comparative field, we strongly believe in the brands strength to help a lot. However, this will require lot of attention towards the market and trying to avoid difficult situation before they start.

This could include:

  • Price war or goods dumping by major distributors or retails
  • Brand message being diluted or distorted by retail or sales
  • In correct representation of the brands, creating mixed messages
HANGING IN THERE

Covid-19

Although Covid 19 have slowed down the project, we do not see it as a major threat once the brand is launched. It would create challenges for marketing, but with people moving their focused from out of home coffee consumption to in home consumption we believe this would counter the reduction in exposure from live event.

MOVING ON

Why Launch

It’s easy to see why such a major brand why they would consider the Chinese market, and when the possibilities are showed to be positive the launch went from being a positivity to a must. For our side we are very happy and lucky to work with such a brand and be entrusted with this responsibility.

Brook Gou – Sales and Market Manager Bugge Group

Team Feedback

Why do you think this Brand will work in China?

Highly increasing coffee demand and coffee market. There is no dominant high quality coffee bean brand, customers are at a stage being educated to have brand loyalty.

Lofbergs is already a successful international brand which has an appropriate brand image that can easily start in China. (High quality products, enough SKUs, stable supply, stronger determination)

What do you think could have been done better?

A proper marketing plan and entering strategy should have done even earlier, testing time could be shorter. We could have joined more expos earlier to expore the brand more.

What is the biggest challenge for success in China?

The largest challenge so far would be branding, branding in China will be a huge money-time consuming period, but ultimate challenge inthe future would be competition with all other brands, they may see us as future threat even if we just entered market because of our awareness in the world.

WRAPPING UP

Conclusion

It’s our clear view that Lofbergs have all the possibilities to be the next success story in the Chinese market, with both consumers, market and brand pointing towards this.The challenge will all be in execution of the brand and handling, this both for us, distributor and the brand. We have strong confidence in individual parts of the project, but as there is most part and components added up in a fast speed there will be challenges in keeping this on a common goal and view. This being said, we hold all confidence that the project should be able to be profitable within a short time, however as the brand continues to see potential the investment from both brand and distributor have continued. Meaning both we, the brand and the distributor see this as a long term high potential project.