China Food

Who can dominate the 600 billion snack market?

“  

a year later, if we look at the differentiation and trend of the snack track in the domestic secondary market, we will be surprised by the replacement and upgrading of China’s leisure snack industry, as well as the ups and downs of snack enterprises due to changes in products and channels.
 ”

In late April, snack enterprises ushered in the first financial reporting season of 2021.

 
From April 21 to 26, liangpin store, Wangsheng Tongmen “three squirrels” and old snack company Qiaoxian food, known as “the first share of high-end retail”, Yanjin store and Ganyuan food successively released the Q1 report of 2021. So far, domestic A-share snack enterprises have basically handed over their first performance answer sheet in 2021.

I still remember that at this time a year ago, the listing of liangpin shop made the Internet snack head, which had been greatly concerned and questioned, compete with the large-scale traditional snack enterprises, which had already become famous.  

A year later, when we look at the differentiation and trend of the snack track in the domestic secondary market, we will be surprised by the replacement and upgrading of China’s leisure snack industry, as well as the ups and downs of snack enterprises due to changes in products and channels.

Especially after the baptism of an epidemic, it has a unique flavor.

Net red climbing

 
In the past two years, the Internet snack track has flourished in the capital circle.

IDG station team three squirrels, highland capital into the Bureau of good shop“ Well known investment institutions, differentiated brand positioning, channel remodeling “three carriages in parallel, successfully pushed three squirrels and liangpin shop into the A-share market.

In July 2019, three squirrels rang the bell on the Shenzhen Stock Exchange, allowing the founder Zhang Liaoyuan, who directly held more than 40% of the shares, to earn more than 2.5 billion yuan only according to the issue price; In February last year, as soon as liangpin shop was listed on the stock market, it walked out of the 15 continuous board. So far, it is amazing. According to the market value at the time of listing, it has brought 45 times of the book floating profit for the capital of the backers today.

Compared with traditional snack enterprises like Wangwang and Qiaqia, is the Internet snack with light asset operation a flashy capital narrative? A preliminary conclusion has been reached on this issue today.

According to the 2020 annual report, the three squirrels ranked first in the A-share snack brand sector with an operating revenue of 9.794 billion yuan, followed by liangpin store with an operating revenue of 7.894 billion yuan. Only from the revenue point of view, the Internet snacks on behalf of the players seem to prove their strength.

The revenue of aoshijingdui is attributed to the original traffic accumulation of the two brands.

In 2012, the three squirrels of the “pure online + high-end nuts + cute IP” brand, once online, won the favor of the capital obsessed with catching tuyeres.

Li Feng, who was also working for IDG at that time, and Xu Xin, who had invested in liangpin shop, approached Zhang Liaoyuan successively and offered more than $21 million in financing.   Capital darling three squirrels also live up to expectations, in one fell swoop in that year’s double 11 in the sales of 7.66 million yuan.

In 2014, the revenue of the three squirrels, which were established less than two years ago, has approached 1 billion yuan. By 2015, the figure had doubled to 2 billion, up 121% year on year.

The three squirrels, born on the Internet and still 90% of channels rely on e-commerce, are undoubtedly the biggest winners of online traffic dividends.

From 2015 to 2019, the three squirrels achieved a compound annual growth rate of 32.8% with online business. During this period, the revenue of the three squirrels increased from 2.04 billion yuan to 10.2 billion yuan.

In contrast, liangpin shop, as a “chain snack collection store” originated from offline, although it was the first time to hit the net in 2012 when e-commerce rose, when it comes to model subversion and capital craze, liangpin shop with powerful offline genes has always been in the disadvantage of three squirrels.

Fortunately, the channel distribution of liangpin stores is relatively balanced, which enables them to maintain a decent profit in the withdrawal period of e-commerce dividends.

According to the data, the revenue of the three squirrels reached a high of 10 billion yuan in 2019, but the marketing expenses of the three squirrels reached a peak of 2.3 billion yuan in the same year, which was nearly ten times higher than that of five years ago. The high online customer acquisition cost directly reduced the net profit of the three squirrels by 21.43% in that year, and this situation of increasing revenue but not increasing profit will continue to 2020.

At present, the sales expenses of liangpin shops, which contribute almost half of the revenue online and offline, are only half of those of the three squirrels. Due to the introverted publicity, liangpin shops can still make the same net profit as the three squirrels when their revenue is 24% behind.

More than that, in terms of channels, a bowl of good shops are constantly expanding their brands and categories.

In order to create a more differentiated competitive barrier, liangpin shop has made a comprehensive upgrade from logo to scene in recent years. The iteration of its spokesperson from Huang Xiaoming to Wu Yifan shows its brand positioning of embracing youth and moving towards high end.

At the same time is the “multi brand” strategy of liangpin store. In 2020, liangpin shop officially announced “liangpin snack Fairy” and “liangpin Feiyang” in May and August respectively. The former focuses on children’s snack track, while the latter focuses on healthy meal substitute track.

By the end of Q1 2021, liangpin store has achieved a certain growth in children’s snacks and fitness snacks. Among them, children’s snack terminal sales exceeded 80 million yuan, a year-on-year increase of 60%, and the sales revenue of fitness snacks initially reached 30 million yuan.

In addition, in March this year, liangpin store launched two probiotics daily nut 0 added sucrose type and high calcium type products for sugar control groups such as white-collar workers, pregnant mothers, diabetic patients and students aged 6-18.

Deep cultivation of the needs of subdivided groups undoubtedly adds more growth narratives to liangpin shops.

Facing the two-way efforts of liangpin shop in the channel product level, the three squirrels obviously feel the pressure. So from the end of 2018, three squirrels, who have always walked on one leg, began to study switching to offline.

After two and a half years of efforts, the total number of offline stores of the three squirrels now exceeds 1000, and the proportion of offline revenue has gradually increased to 33.37%. This is one of the reasons why the net profit of the three squirrels in Q1 in 2021 increased by 67.57% to 315 million yuan year on year, almost exceeding that of last year. In 2021, the alliance store of three squirrels is expected to open 800-1000 new stores.

In terms of brand, the three squirrels also focus on new products. In April last year, the three squirrels announced that they planned to invest 42.2562 million yuan of their own funds to set up four subsidiaries, which are mainly engaged in baby food, instant food, pet food and custom wedding.

According to the annual report of 2020, the above four companies were officially launched in September of that year. Among them, “Xiaolu blue”, which is mainly engaged in baby food, achieved revenue of 54.9493 million yuan in 2020, and the other three brands achieved revenue of 21.1624 million yuan in total.

And as of the first quarter of this year, Xiaolu Lanlan’s Omni channel revenue has reached 79.13 million yuan, almost equal to the children’s snack terminal of liangpin store.

As of press release, the market value of the three squirrels is 22.7 billion yuan, and the market value of liangpin store is 21.2 billion yuan, ranking in the forefront of A-share snack circuit.

The two brands participate in each other’s writing and follow each other’s steps, which makes the Internet snack track still climbing in the upward channel today.

Traditional differentiation

Add weight offline, category expansion let net red snacks continue to win the attention of capital, but they are not all the good medicine of snack enterprises, such as laiyifen.

Lai Yifen, which originated in 2001, can be regarded as the originator of physical leisure food chain brand. Its production is entrusted to the OEM, and its products are more and more complete. Its sales rely on self built channels, and most of them are small and medium-sized street stores, which has become a template for many subsequent online snack brands.

The problem is that it’s trampling on the beat of the times.

As early as 2011, laiyifen has smelled the arrival of the era of e-commerce, successively developed the sales channels of PC and mobile terminals, and launched the CMS system. However, laiyifen with complete hardware does not attach importance to the “soft power” of online marketing and after-sales.

Poor reviews, such as untimely delivery, poor delivery and no after-sales, have dominated the front row of the review area all the year round. The poor purchase experience has made the fans of laiyifen e-commerce flagship store only have three squirrels and a fraction of liangpin store so far.

The neglect of the online service has made laiyifen miss the epoch-making upward channel, and correspondingly brought unbearable cost pressure, which is particularly severe in the epidemic year of 2020.

According to the financial report, the sales expense rate of Yifen in 2019 is as high as 33.1%, while that of the three squirrels and liangpin shop in the same period is only about 20%. Most of the sales expenses of laiyifen are salary, social security and rental property expenses. The operating expenses of online system only account for about 2%, which is closely related to the company’s offline sales mode.

The laziness of channel construction makes laiyifen’s performance tepid. From 2017 to 2019, laiyifen achieved revenue of 3.64 billion yuan, 3.89 billion yuan and 4 billion yuan respectively, and the growth rate of revenue decreased from 12.35% to 2.86%; The net profit was 101 million yuan, 10.109 million yuan and 10.3707 million yuan respectively, which was zero in three years.

It is worth mentioning that a considerable part of the profits come from government subsidies.

In 2018 and 2019, laiyifen’s government subsidies included in the current period were 24.82 million yuan and 21.5656 million yuan respectively, and in 2020, this figure has approached 30 million yuan.

Since last year, Lai Yifen, who is eager to save himself, has begun to choose to add brands.

In 2020, laiyifen launched the “fresh snacks” strategy, which mainly interprets the “fresh snacks” through the five standards of fresh raw materials, fresh technology, fresh packaging, fresh distribution, and fresh production and marketing. At the same time, laiyifen also uses top class Wang Yibo as its image spokesperson to further expand its brand voice.

Unfortunately, it seems that the heavy investment in sales expenses has not been converted into real sales.

As of press release, laiefen still has not released its 2020 annual report. However, according to the performance forecast disclosed by the company, laiyifen is expected to lose as much as 78.49 million yuan in 2020.

Laiyifen is complacent, but it does not mean that the traditional snack enterprises are in the dark. The best example is Qiaqia food, a snack giant in the 1.0 era.

In 1998, Chen Xianbao, the father of “bangbangbing”, aimed at the melon seed business prevailing in his hometown of Anhui Province. Through a new process of spice and herbal medicine boiling, “Qiaqia melon seed” was born. Put on a red kraft paper packaging, Qiaqia stands out from the bulk industry. Soon after entering the new millennium, Qiaqia, the main business of melon seeds, staged a high-speed growth curve with sales exceeding 1.5 billion yuan.

Since 2010, Qiaqia melon seeds has gone through the baptism of “Internet thinking” and the fierce impact of e-commerce. Even the big single product strategy of main melon seeds has not changed. Today, however, this old traditional enterprise still ranks first in offline sales scale, market value scale, and maintains strong profitability.

According to the financial report, in 2020, the business income of Qiaqia food recorded 5.289 billion yuan, ranking third in the A-share snack market. The net profit of Guimu was as high as 805 million yuan, nearly a quarter higher than the total revenue of liangpin shop and three squirrels. In Q1 2021, the net profit of Qiaqia food was 198 million yuan, lower than 315 million yuan of three squirrels, but still higher than 102 million yuan of liangpinpu.

Tianfeng Securities Research Report believes that the excellent profit margin of Qiaqia food benefits from the reduction of marketing expenses. In other words, it is the “money saving” strategy that enables Qiaqia to release its profit elasticity even though its revenue is under pressure.

But the roots may need to return to the essence of the snack industry.

Data show that in 2019, online sales account for only 12.8% of the sales channels of the whole leisure snack industry in China. Although in the past decade, it seems that it is easier for online channels to successfully build popular models and new brands, the sense of experience and buying habits provided by stores are incomparable to those provided by online stores.

And different from laiyifen’s relying on OEM and wantonly layout of independent stores, Qiaqia food, with deep accumulation, is more capable of product R & D and operation, and its online and offline channel bets are more accurate.

According to the public information, Qiaqia food is committed to carrying out the “nut shop in shop” plan at the present stage. At present, it has laid out more than 200 stores, and is expected to increase by 200-300 in 2021.

More than that, with the advantages of raw materials and industrial chain supply, Qiaqia food has laid down its third and fourth tier and county and township markets, strengthened and promoted new channels such as to B channel, catering channel and community group buying, and actively expanded overseas markets.

According to the financial data, as of last year, the revenue share of overseas market of Qiaqia food increased from 6.65% in 2019 to 8.9%, which increased by about 150 million yuan last year.

The traditional snack enterprises in the still waters set off the net red snack peers, which shows that the real king has always been a person with few cruel words.

“Running water does not strive to be the first, what we fight for is endless flow.”. Perhaps “calling online, making money offline” is closer to the essence of snack business.

the bright younger generation

The fierce battle of wanghong snacks intensifies, and traditional snacks can still be eaten. In addition to a shares, there are countless latecomers roaming in the 600 billion blue ocean market of leisure snacks.

For example, the vertical upstarts growing in the flow cracks.

In recent years, with the change of traffic distribution weight of Alibaba platform, the concentration of Shanggu wanghong brands represented by three squirrels and liangpinpu has decreased, and the market share has been continuously diluted.

Among them, the market share of the three giants of squirrel, baicaowei and liangpinpu decreased from 35% in Q1 in 2020 to 23% in Q1 in 2020q. The redistribution of large platform traffic has brought many emerging brands to the fore.

Many Kwai tiktok is good at live short live video broadcast with vibrato, fast hand and so on. Through micro-blog, Xiaohong and other social platforms, we can grow grass and drain, and use a large number of KOL and KOC to spread. The new net red snacks brand in these vertical fields can rise rapidly.

Typical, such as “xuanma” who focuses on yolk souffle. Xuanma launched Taobao store in 2017, which is committed to the innovation of egg yolk pastry category and deeply binds Li Jiaqi’s brand. On tmall platform, it has set a record of half a year’s sales of 120 million yuan, and the single product repurchase rate once reached 57.6%.

During the “double 11” period in 2020, xuanma online delivered 5.3 million yolk souffles through all channels, with sales exceeding 32.55 million yuan.

Capital is always the first to smell the smell of opportunity. On July 23, 2020, xuanma announced the completion of round a financing of RMB 55 million, with Jinding capital leading the investment. Recently, xuanma got the latest round of financing.

Another example is akoko, which is mainly engaged in biscuits and snacks. It was founded in June 2016 and completed round a financing of RMB 50 million in January 2018. From March to August last year, akoko’s total sales reached 56.85 million yuan, a year-on-year increase of 306%.

I have to mention Wang Xiaolu of “all in chicken feet”. Since the opening of tmall flagship store in 2019, Wang Xiaolu tiger skin chicken feet, which mainly focuses on artificial De-a, will soon stand out in the highly competitive Luzhou flavor track. The data shows that in the first month of entering tmall, Wang Xiaolu’s sales of tiger skin and chicken feet exceeded one million, and the monthly repurchase rate was close to 30%.   

In October 2020, Wang Xiaolu obtained financing from Jinding capital and Challenger capital. It is worth noting that the legal person of Challenger capital is Tang Binsen, the founder of Yuanqi forest. Both companies seize the historical opportunity of the outbreak of new local brands.

 
Also in the vertical category are “single food” which mainly promotes single potato chips, “mushroom Zizi” which mainly focuses on mushroom crispness, “yungeng Wuzuo” which focuses on brown sugar snacks, and “daily Heiqiao” which is a new net red product of chocolate track. With the exchange of eyes on the platform, the brand sequence of snack segment circuit will change the world.

In addition to the vertical rookies irrigated by platform traffic, there are also new snack brands emerging with the iteration of Z generation consumers. The most representative is the “functional snacks” that have been swiping the screen frequently since this year.

According to the “2020 innovation trend of functional snacks” released by tmall, at present, functional foods are in the stage of transformation from “pan function” to “burden reduction” and “benefit enhancement”. With the deepening of consumer demand, “no burden” and “fitness meal” are the main demands at present. In addition, the growth rate of demand for sleep aid, immunity enhancement and skin care is in the forefront.

In terms of substitute snacks, wonderlab, fit8 and other substitute brands launched low calorie snacks one after another. Fit8 launched snack protein bars including cheese flavor, chocolate flavor, cookie flavor, coconut flavor, beef flavor, banana flavor, salted egg yolk flavor and so on, which successfully set off the market.

In addition, there is the main snack cereal star brand Wang satin. The brand officially launched its products in August 2018, and the monthly sales of tmall increased from 2 million to 40 million. Since the second half of 2019, Wang Satin has become the first in the category of Amoy cereal, and has driven the sales growth of Amoy cereal by more than 50% year on year in 2019.

Wang Satin’s success is obviously inseparable from the combination of healthy and delicious products. This integration of delicious, trendy and guilt free positioning has enabled Wang satin to get rid of foreign brands such as Quaker and kalobi and become the champion of Chongdiao cereal category during the promotion of tmall 618 in 2020, and also gain a place in the catering and snack track.

It is worth mentioning that since the beginning of this year, health care products have been on the cutting edge of the trend.

Buffx, a functional brand of wanghong, tries to solve a series of problems such as helping young people sleep and protecting their eyes with a soft candy. Less than one year after its establishment, it has obtained three rounds of financing, including Sequoia Capital China, GGV Jiyuan capital, black ant capital, Meihua venture capital, etc.

Not long ago, wonderlab, a food substitute brand, also launched a new type of sleep sandwich candy, which also uses food grade raw material GABA. It also proposes that the calorie of one candy is about 13.6kcal, 0 sucrose and 0 burden.

Sleeping snacks are showing more and more sense of existence among 300 million Chinese people who can’t sleep.

Another popular snack of health products is hyaluronic acid candy.

 
On January 7 this year, the National Health Commission officially approved the application of sodium hyaluronate declared by Huaxi biological, a hyaluronic acid R & D, production and sales enterprise, as a new food raw material, allowing it to be added to ordinary food. The application scope includes milk and dairy products, beverages, alcoholic drinks, cocoa products, chocolate and chocolate products, candy, frozen drinks, etc.

 
Not long after that, on January 22, Huaxi bio officially announced the launch of the first hyaluronic acid food brand “black zero” in China.

 
Then on February 3, wonderlab, a well-known catering agent, launched its first oral “hyaluronic acid sandwich candy”. It is reported that the core raw material of the product also comes from haplex, the patented raw material of Huaxi biology ® Plus sodium hyaluronate.

At the same time, a number of enterprises have launched or are launching oral hyaluronic acid products. It seems that a new outlet in the oral beauty industry is about to emerge, and the enthusiasm of capital also comes.

 
“ 2021 is definitely the year of functional food and health products. ” Liu Saige, investment manager of panda capital, said in an interview. In addition to Panda capital, Sequoia Capital China, GGV Jiyuan capital, Bai capital, IDG capital, black ant capital, Meihua venture capital, Jiayu fund, etc. have all identified the bet targets.

Each generation has its own brand. In the contemporary era of focusing on health, function, fashion and consumer differentiation, more and more brands have entered the snack track as category subverters and cross-border innovators. They carry not only the use value of leisure, but also the emotional value of social decompression.

With the remodeling of new players, the word snack may be given a new definition.

reference material:

Who will be the first share of A-share snacks, Interface news

Only long distance running champion in snack track

Is Internet red snacks falsified, Alpha workshop Institute

“Three squirrels’ hidden worries”, chinanews.com

Author: Perilla frutescens L; Source: ID: tigesight, reprint authorized. Joining the community: Cherry (wechat: 15240428449); Business cooperation: Amy (wechat: 13701559246). Recommended reading sugar crisis   |  100 billion light food|   2021 the most innovative company in the world   | | |  |  |  Collagen Peptide  |  Daily new walnut stew: Isee trend  |  Editor’s  |  Reader’s   Foodaily daily food works with global business and industry partners to plan foodaily   Fbic2021 global food and beverage Innovation Conference, with the theme of “new food era – digital reconstruction, open incubation and new brand wave”, deeply discusses the “crisis” and “opportunity” of new consumer brand market through three dimensions of “stage of innovative products”, “food Developers Conference” and “top product social circle”, and interprets the innovation opportunities and paths in the next five years, May 19-21, 2021 in Shanghai, we invite you to witness together( Click on the picture to see the details.     
Read the original

Who can dominate the 600 billion snack market?

在新玩家的重塑下,零食一词或将被赋予新的定义。

参考资料:

《谁将会是A股小零食第一股?》,界面新闻

《零食赛道只有长跑冠军》,财经无忌

《网红零食被证伪?》,阿尔法工场研究院

《三只松鼠的“隐忧”》,中访网财经

作者:紫苏;来源:观潮新消费(ID:TideSight),转载已获得授权。
加入社群:Cherry(微信:15240428449);
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