The challenge for the snack giants remains grim. In the afternoon, the first report sheet of high-end food (SH) was released on the afternoon of Oct.
According to the third quarter report of liangpin store, from January to September this year, the company’s operating revenue continued to grow to 5.529 billion yuan, up 1.29% year-on-year; the net profit attributable to shareholders of listed companies was 264 million yuan, which declined year-on-year due to the impact of the epidemic situation. In the third quarter, the net profit of liangpin shop was 102 million, which was at a high level in the industry.
From the data point of view, the profit level of liangpin store has gradually recovered, the operation situation has been continuously improved, and the revenue scale and net profit have shown the trend of leading the peers.
Recovery of offline stores
The proportion of “two legged” high-quality shops is the most balanced, accounting for almost half of the total. The financial report data prove that the omni channel model of liangpin stores has a good ability to resist risks.
The narrowing of net profit decline is one of the indicators. Compared with the data in the semi annual report, the decline in net profit of liangpin stores has decreased from nearly 20% to 13.83%, and the downward trend has slowed down. From the perspective of the industry, this year’s special situation has led to a decline in the net profit of the whole snack industry. At present, the net profit of the good products shop is 1.3 times of that of the same industry.
Another reassuring situation for investors is that sales in the offline market have gradually recovered to the same level of last year in the third quarter of liangpin store. According to the calculation, the overall offline revenue in the third quarter decreased slightly year-on-year. Except for central China, the revenue increased by 18% year-on-year. With the resumption of work and production in Central China after the epidemic, central China also reduced its decline from 25.13% in the first quarter to 14.80%.
These data show that the offline operation of liangpin shop has gradually recovered, and the adverse effects of the epidemic are gradually digested.
It can be said that “consumption recovery” is becoming a key word in the economic field of this country. According to the latest data of the National Bureau of statistics, the total retail sales of consumer goods in September totaled 35295 billion yuan, a year-on-year increase of 3.3%. The growth rate was 2.8 percentage points higher than that of last month, and the growth rate gradually accelerated.
Liu Aihua, spokesman of the National Bureau of statistics, gave an interpretation on behalf of the official: “judging from the trend, the current retail sales have gone out of the deep impact of the epidemic and are in the process of recovery.”
Among them, the recovery of offline consumption is particularly concerned. According to the data, the sales volume of the traditional supermarket increased by 2.9% in the first three quarters, which also shows that with the effective control of the epidemic situation, more people are willing to go out of the room and spend in the physical stores.
Obviously, this is the best news for nearly 10000 people who manage nearly 2500 offline stores.
With two months to go before 2021, who can lead the way out of the circle and win the first prize also means that who can get a piece of the cake alone. With the release of the third quarter reports, the challenges and future trends of the whole snack industry are also hidden in this report, which is a connecting link between the preceding and the following.
Giant crowding into red sea
At present, the consumer market of snack industry is changing from red ocean to blue ocean, but so far, no enterprise has carried all the expectations of the market.
From the three squirrels who first published the third quarterly report, we can see that this company originated from the Internet is dying. According to the report, in the first three quarters, the revenue of the three squirrels reached 7.231 billion yuan, a year-on-year increase of 7.7%; the net profit was 264 million yuan, a year-on-year decrease of 10.62%.
Due to the external environment, such as the decentralization of online traffic, the change of platform traffic policy, the emerging channels and the rise of brands brought by the mode of live delivery with goods, the three squirrels relying on online channels are facing full pressure this year.
On October 19, before the release of the financial report, Zhang Liaoyuan, founder and CEO of three squirrels, said that 300 SKUs would be cut off by the end of this year, which was the first time that SKUs had been reduced by half in eight years since its establishment. At the same time, it overturned the original idea of category development and redefined it as “dried nuts + selected snacks”.
As a matter of fact, the three squirrels are facing the problem of increasing income but not increasing profit: in the first half of this year, with the revenue increased by 16.42% compared with the same period of last year, the net profit attributable to shareholders of listed companies was 188 million yuan, a decrease of 29.51% compared with the same period of last year. The intention behind breaking one’s arm is obvious.
Finished online, offline snack business is also difficult. Both laiyifen (about 90% offline) and three squirrels (more than 90% online) showed obvious “one leg walking” sequelae.
In the first half of 2020, the net profit of laiyifen, the first share of snacks, declined significantly. In addition to the weak online channels, Yifen also relied heavily on Shanghai in terms of income. In the first half of 2020, Yifen lost 9.9867 million yuan in non net profit deduction. Yu Ruifen, the founder of the company, faced with the current crisis, walked into the live room many times to bring goods in person.
In the context of the rise of new consumption, racetrack players have obtained the shortest growth path in the outbreak of market dividends, and leisure food has become the hottest market in recent years.
However, the blind expansion based on hot money in the middle of the game also accelerated the pain of players who made development strategies relying on market dividends excessively. Especially under the epidemic situation, these players were pulled into a dead end.
Fast turnover of good shops
Leaving aside the conventional financial data such as revenue, net profit and cash flow, there is an indicator in the third quarter’s operation data of liangpin store, which can better represent the company’s style – inventory turnover rate.
According to liangpin store, the inventory turnover days of the company in the third quarter was 41 days, 20% faster than that of peers, and it performed best in the leisure snack industry. Inventory turnover days refers to the time required for an enterprise to purchase its products from the factory to the consumers in the store.
The shorter inventory turnover days, on the one hand, ensures the freshness of the products in the good stores, and also ensures that the hot-selling products in the stores will not be out of stock.
And in order to achieve this figure of 41 days, the quality stores continuously optimize the logistics and distribution efficiency. Before that, most of the products were distributed from the factory to the general warehouse of the good shop, and then sent to all parts of the country from the general warehouse. Now, the good products shop has 13 sub warehouses in China. Suppliers can deliver goods to each sub warehouse nearby and distribute them in different areas, which greatly saves the efficiency of distribution. At present, the proportion of regional distribution has reached more than 60%.
Don’t underestimate the adjustment of distribution mode. As a food enterprise with many SKUs and annual sales of nearly 10 billion yuan, every small change of basic logistics will involve the adjustment of product acceptance, quarantine, storage, transportation and other links. It is no exaggeration to say that almost tens of thousands of people need to change their working methods for this.
In recent years, liangpin shop has optimized the supplier’s production process with digitalization as the core, which has greatly improved the operation efficiency of the whole process. Its “factory + efficiency” mode based on digitalization, on the one hand, has insight into the needs of users through big data to improve the efficiency of product development and production process; on the other hand, it improves the production process through user feedback data To improve the efficiency of product upgrading.
It is in this efficient mode that the classic “7-day fresh” comprehensive nuts of liangpin shop can make the slogan of “no more than 7 days from production to delivery”, while many brands of similar products in the market are trying to use their brains on the outer packaging to extend the shelf life of nuts.
“Slow” out of high standard
If we say that the efficiency is fast, but the quality shop also has “slow” time.
In May this year, liangpin shop, together with China non-staple food circulation association, food and Nutrition Development Institute of the Ministry of agriculture and rural areas, and tmall food, jointly released a white paper on market survey of children’s snacks, which is the first white paper customized according to children’s snack standards in China.
Three days later, liangpin shop industry initiated the sub brand “liangpin snack Fairy” for children’s snack market.
However, in fact, it has been two or three years since liangpin shop planned to subdivide the children’s market. Before that, there has been no movement. The reason is that the company believes that it is irresponsible to launch commercial products rashly without mature standards, which is also against the consistent high-quality management style of liangpin store.
Although there is a super market in front of liangpin store – the global snack sales in 2019 are as high as US $605 billion, of which children’s snacks are the main consumption source. Data shows that from 2018 to 2023, the children’s snack market is expected to grow steadily at a compound annual growth rate of 10% to 15%.
To some extent, good quality shop is an enterprise that knows how to “delay gratification”, and often such an enterprise can always win first.
“First class enterprises set standards, second rate enterprises make brands, third rate enterprises sell technology, and fourth rate enterprises make products”, which reveals the true meaning of enterprise competition.
It was not until this year’s “white paper” that the “good little food Fairy” came out. It is said that in the process of issuing the white paper, the product managers of good quality shops were also puzzled by the standards of many products, because the standards were too high.
There is a product called “cuddling bear biscuit (cashew nut)” in the “good food Fairy”. The developers should bake the cashew nut first, and then bake it with the biscuit for a second time. In the process of the second baking, in order to ensure that the cashew nut does not bake paste and the peroxide value does not exceed the standard, the good product shop tests the open hearth furnace, rotary furnace, tunnel furnace, electric furnace, gas furnace, etc. that can be found on the market A variety of ovens, after hundreds of tests, found the solution.
In addition to word-of-mouth and heart, the market has also given good products shop a good response. In the first half of this year, the revenue of children’s snacks in liangpin shop increased by 34% year-on-year, which was ahead of other categories. Because of its unique creativity and rich nutrition, the above-mentioned “cuddle bear biscuit” was nominated for the “best snack Innovation Award” of the World Food Innovation Award in 2020.
In the third quarter of this year, liangpin shop also launched the fitness light snack sub brand — “liangpin Feiyang”. It is reported that after listing in July, it quickly opened the market. In September, the revenue reached 10.99 million, and the monthly compound growth rate of three months was 256.73%.
“Running water doesn’t compete for the first, but it’s endless.”
What we can see behind these enterprises’ operation actions of liangpin shop is its firm determination to adhere to “high quality management mode”.
Cheng Hong, President of the Institute of quality development strategy of Wuhan University, said that in an era of overcapacity in the manufacturing industry and enterprises generally feel weak in transformation, the high-quality development mode of liangpin shop can be called “timely rain”, providing development reference for China’s growth and entrepreneurial enterprises.
Obviously, the good shops are doing a hard and right thing, not what everyone else does. They are ready to be a long-distance champion.
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