In the past two years, the food and beverage track has started a “battle for funds” – not only new consumer brands are actively financing, but old consumer brands have also changed their previous conservative attitude, opened their arms to external capital, and accelerated the listing. Whether we can hoard enough funds has become the key chip to determine the survival probability of the brand（ For details, please refer to “the battle for funds of food and beverage”
With the competition of new and old consumer brands, a big change in the industry follows: entrepreneurs go to the subdivided circuit one after another to dig for gold, such as bubble water, plant milk, low alcohol wine, new tea and so on; The traditional consumer giants who are not willing to lag behind have launched a counter offensive war, strengthened the construction of sales channels and the innovation of products and categories, and fought hand in hand with emerging brands.
As a result, consumer brands, surrounded by the capital market and tested by diversified consumer groups, ushered in an “awakening era”. With the development of many segments, how many opportunities are there for food and beverage track to be all in? In the current competitive situation, there are many followers. What kind of projects are worth investing in? What factors determine the survival of a brand in the fierce competition?
Can the consumer track still be cast?
Food is the essence of the people. China’s new consumer market is undergoing drastic changes, with many popular categories and brands emerging one after another, especially the development of food industry.
Recently, cbndata, the business data center of China first finance and economics, released the white paper on the growth of China’s new consumer brands in 2021. According to the introduction, cbndata has demolished more than 1600 most popular brands in the whole network and selected 50 new consumer brands with the most growth power through the track potential.
Among them, the food enterprises and beauty track are still the most extensive, especially the food channel accounts for nearly one third of the growth 50, and the comprehensive strength of brands with 5-10 years and more than 10 years still has the upper hand.
Although there are many giants in the field of consumption, especially in the field of food and beverage, the latecomers are still pouring in one after another and trying to replace them.
In order to avoid the giant’s edge and carry out differentiated competition, emerging brands have opened up segmented tracks, found the unmet needs of consumers and explored new opportunities. Bubble water, plant milk, plant meat, protein bar, cereal, low alcohol wine, new tea, fine coffee and other sub consumer categories showed explosive growth.
New consumer brands are fast moving to the forefront of segmentation. According to the sales statistics of tmall 618 from June 1 to 15, 2021, a total of 459 new brands won the top 1 category. In the food and beverage segment, yuxintang, Meijian, missberry, Wang Xiaolu and Airmeter won the first place in rose tea, plum wine, fruit wine, chicken snacks and spaghetti.
Behind the explosive growth, capital is indispensable.
It orange statistics show that in 2020, the number of domestic food and beverage investment events (excluding dinner, fast food and other catering formats) increased by 51% year-on-year, and the total amount of financing reached 7.9 billion yuan, an increase of 137% year-on-year. From January to May this year, the amount of financing in this field has exceeded 10 billion yuan.
In a wide range of categories and brands, how to select projects tests investors’ vision.
According to Yu Jianwei, President of Chaoshang financial holding capital market department, companies with real advantages in consumer goods are still like Maotai, which has accumulated for many years and really has core competitiveness, “companies with geographical advantages, uniqueness, exclusivity and uniqueness can come to the end”.
Yu Jianwei’s investment in consumption also follows this logic. In recent years, he has successively invested in some upstream agricultural products and downstream consumer projects, such as snail powder, plateau treasure yak milk, etc.
In addition, Yu Jianwei is also the investor of Horqin cattle restructuring“ Domestic beef cattle are mainly Simmental cattle, and the main breeding place is Tongliao in Inner Mongolia. Horqin cattle industry is the largest enterprise in Tongliao for beef cattle breeding, slaughtering, processing and sales Yu Jianwei told “bullet finance”.
He further pointed out that the cost of beef cattle breeding is high and the scale is small, but because beef protein is the healthiest of animal protein, the market demand is rising very fast. However, at present, both domestic and imported beef are in short supply. So although the price of pig has fallen in a mess, the price of cattle is still rising, and there are still many consumer brands about cattle.
Graph / photographing network, based on VRF protocol
The influx of capital into the consumer circuit has also pushed up project valuations. According to AI Xiao, vice president of Qingshan capital, around 2016, the valuation of early consumer projects was almost 10-30 million yuan, but the valuation of projects of similar teams in 2020 may have been 100 million yuan.
With entrepreneurs and capital pouring in, how many tracks are there in the field of food and beverage? How many other projects are worth investing in? Under the high valuation, will the current investment “catch up”?
“No bubble, no economy, no economy, no bubble.” Yang Ge, founding partner of Xinghan capital, told “bullet finance” that the overall consumer market, consumer side reform and consumer side are still tending to a benign growth trend. The purchasing power of China’s market is still rising. Many new brands follow the wave of domestic products, and many excellent enterprises will come out.
However, Yang Ge also pointed out that “the economy is a cycle, and the” growth period overheating period recession stagflation period “is cyclical. Now it is obviously between the growth period and the overheating period, so there are opportunities and risks, so we must look at the problem dialectically.”
According to Wang Sheng, the consumption partner of innoangel fund, in a relatively long period of time, there are still many investment opportunities in the consumption field with a large amount of products.
“The total retail sales of consumer goods in the whole society has a base of 39.2 trillion yuan. The underlying driving force lies in the increase of disposable income of consumers, the need for brands and the willingness to pay more premium for brands. In the past, only the first tier cities and new first tier cities had strong demands for brands. Now the demands of second tier, third tier and fourth tier cities for brands are increasing. That is to say, a large number of fields with similar products and no products in the past may produce brands. “
Wang Sheng further pointed out that in the past, there were brands in some fields, such as golden dragon fish, Dongpeng special drink, Nongfu Shanquan and some foreign brands. However, with the change of consumer groups, young people are willing to taste new products and need new brands. This is the opportunity for new brands. With the growth of China’s GDP and disposable income, the sense of national and cultural self-confidence comes naturally, and consumers also need domestic brands to replace foreign brands.
“But now the bubble is really serious. Now is not the era of investment everywhere. Most projects must conform to the law of entrepreneurship and investment. Wang Sheng told bullet finance.
It is not difficult to see that the hot phenomenon in the market has also aroused the attention of the investment side to the consumer track. The changing industry competition has also refreshed the investors’ views and judgments on the consumer track.
Accelerating industry change
Behind the booming consumer investment, the food and beverage industry is ushering in a fierce change. With the capital blessing, a new era of consumption is accelerating.
When the argument that “all consumer goods are worth doing again in China” is raised more and more, and verified again and again, the battle between new and old consumer brands has begun.
On the one hand, the discourse power of consumption is gradually transferred to young people. After the demand changes, old brands are no longer the first choice. The old brands are difficult to keep up with the changes of consumption cycle, and also make themselves gradually out of date.
It can be seen that not all old brands can survive in the market for a long time like Nongfu Shanquan and golden dragon fish. In recent years, many old consumer brands such as Quanjude, Goubuli, Chengde Lulu, and six walnuts have gradually declined.
Although the concept of plant-based drinks is now on fire, and six walnuts, Lulu almond syrup and Weiwei soymilk were also shining stars in this field, now the spotlight has shifted to oatmeal products, coconut products and other categories, and a number of new players such as wheat Ouye and cocoa full score have emerged, which have attracted the attention of capital.
On the other hand, new brands such as Yuanqi forest, three and a half meals, Naixue’s tea, and subdivided food and beverage categories such as bubble water and protein bars are emerging. With the help of capital, the market share of old brands is also being eroded.
Even industry giants such as Nongfu Shanquan and uni president should be alert to the threat of latecomers“ Although Nongfu mountain spring is drinking water, drinks such as Yuanqi forest and water are actually occupying its market share. ” Yu Jianwei pointed out.
At the same time, the old consumer brands have launched a counterattack war. While innovating on the original products and introducing more new tastes, they also continue to cut into the segments of emerging brands.
Take bubble water as an example. In March 2020, Coca Cola launched its new drink “Ahha” series bubble water, which contains eight flavors. In August 2020, Kelly one, a beverage brand created by Zong Fuli, the daughter of Zong Qinghou, the founder of Wahaha, launched “angry Bobo” soda bubble water. In terms of naming method and packaging design, angry Bobo is regarded by the outside world as a direct benchmark of Yuanqi forest, and is regarded by the outside world as Wahaha’s “experimental field”.
In 2021, there are still old players marching into the bubble water circuit. After the introduction of TOT bubble water in 2020, Nongfu mountain spring launched sugar free soda bubble water in April this year, including white peach, mogito and rixiaju. On June 6, PepsiCo’s bubble water brand “bubble smile fun bubble” entered the Chinese market, including three flavors. This is the first time PepsiCo launched bubble water in China
According to Zhu danpeng, an analyst of China’s food industry, after the consumption upgrade, China’s FMCG industry has entered a period of reshuffle. At this node where the consumer side constantly forces the innovation and upgrading iteration of the industrial side, the whole system of old brands, from products to channels and brands, should be further upgraded.
“If we don’t recognize, research, layout, close to the new generation and meet the needs of the new generation, we will be eliminated by the new generation.” Zhu danpeng further told “bullet finance”.
In addition to new product research and development, the channel competition between new and old consumer brands is becoming more and more fierce.
For example, the rise of new brands such as Yuanqi forest cannot do without the help of new channels such as online and offline convenience stores. Nowadays, emerging brands have gradually entered the advantage channel of traditional brands – traditional supermarkets.
Bullet finance has seen in some traditional supermarkets in Chaoyang District of Beijing that new brands such as Yuanqi forest and xixiaocha occupy many display spaces on the shelves, competing with traditional brands such as Nongfu Shanquan and Coca Cola.
At the same time, the old brands are accelerating into the advantage channel of new brands.
According to the previous report of “kuaixiao”, under the leadership of Founder Zhong Qiong, Nongfu mountain spring launched a sniping war against Yuanqi forest. The specific measures include: in all stores with Yuanqi forest freezers, each bottle of Nongfu mountain spring bubble water displayed into Yuanqi forest freezer will be given a bottle of Changbai snow with terminal price of 3 yuan, 48 bottles with top sealing, and so on.
In addition, traditional brands also increase the construction of online channels by establishing professional online teams and official flagship stores on e-commerce platforms such as tmall and Jingdong, although it is not easy to do so.
“As an investment bank, when we do many traditional enterprise projects, we find that traditional enterprises have problems such as brand aging and channel aging. In fact, we pay a lot of tuition fees in innovation channels. For example, a few years ago, many traditional big brands wanted to do Internet transformation, do their own small programs, introduce teams, and do private domain traffic, but all failed in the end. Their advantage is offline. ” Yu Jianwei told “bullet finance”.
However, from the current point of view, traditional food giants have been deeply cultivated in the industry for many years, and their advantages in production, channel, capital and consumer trust are still unmatched by many emerging brands.
When the competition becomes more and more fierce, traditional food giants will invest more and more capital and energy, turn around and cut into the market segments of emerging food, and “crush” emerging brands?
Wang Sheng said frankly to “bullet finance” that this is totally impossible“ The success of old brands is achieved under the condition of strong demand but insufficient supply. But today it’s completely reversed. It used to be people looking for goods, but now it’s all people looking for goods, because the supply has been in excess, which means that consumers have the decision-making power, pricing power, and consumers decide everything.
Why do consumers choose a product? The essence is that the product is good. Whether the brand has invested enough money in product innovation, whether there are enough technology and R & D personnel, and enough barriers. “
In Wang Sheng’s view, the absolute amount of investment in product and technology research and development of new consumer brands in the head may not be as much as that of old brands, but their relative investment ratio is far higher than that of these old brands. The genes of the new generation of consumer brand entrepreneurs are technology, Internet and higher aesthetics, which directly reflect the innovation and differentiation of products, brands and sales.
“So, I don’t think the old brands will crush the new ones, because they don’t have the advantages of products and technology. At most, they have the residual value of the brand, the advantages of traditional channels and warehouse logistics formed in the past, but these are not the core.” Wang Sheng said.
Yang Ge holds the same view.
“Emerging brand is a new production organization, with a new generation of business management capabilities, brand management methods and sales channels.” Yang Ge gives an example, such as sales channels. The sales channels of traditional brands are mainly offline, including direct sales, distribution, agent marketing, etc. The new generation of sales channels can be divided into several generations, with a wide range of choices: first, the flow of e-commerce based on Web sites, such as Taobao, tmall, Jingdong, Toutiao, and new e-commerce; The two is Kwai Chung video business, such as jitter, tiktok and Xiaohong book. In addition, there are private domain traffic e-commerce. “
Yang Ge told “bullet finance” that in the past two years, online sales channels have dominated the new channels of emerging consumer brands. Their flow promotion, sales promotion methods, investment experience and capital driven flow development process are very different from traditional market operation.
“Therefore, I don’t think traditional industries will have overwhelming and crushing advantages in competition. On the contrary, new industries have the upper hand, and new generation consumer brands still have great advantages.” Yang Ge said.
The new entrant’s winning strategy
In the face of tuyere industry, entrepreneurs often rush to grab the market. For example, the low alcohol liquor on the air outlet has attracted many entrepreneurs in the e-cigarette industry.
Looking at the extension of the time line, the old brands of Weilong and Dongpeng teyin actually came out of the tuyere industry at that time. But success is destined to belong to a small number of people. In the end, few enterprises can survive and develop.
In the fierce competition, what is the decisive way for entrepreneurs?
Yang Ge told “bullet finance” that only when we can achieve a certain degree of emerging brands in the three aspects of “product quality, operation ability and brand operation”, can we do a good job. He believes that to start a business in the field of modern consumption, we should first cross the “four mountains”:
The first big mountain is whether it has policy and license advantages in the industry, and whether the brand has full license and IP ownership;
The second mountain, that is, real estate, depends on whether the offline channels are available, and whether the rent and operation can be accounted for in the process of offline operation and local promotion;
The third big mountain, namely the flow, depends on whether the flow management is effective enough and whether the cost reduction and efficiency increase are good enough;
The fourth mountain, the supply chain, is to see if there is a more favorable supply chain system.
“We must have enough ability to cover these, so as to build a brand.” Yang Ge pointed out that after that, whether the brand operation can take shape still needs to consider three factors:
First, quality is brand. The enterprise can occupy a place in the industry, which is ultimately determined by the product quality. It needs the product quality to be hard enough, the user experience to be good enough, and some pain points to be solved.
Second, the ability of operation and management is the brand. Whether the enterprise has enough effective production organization, whether it has the ability to call the Internet and big data, so that cost reduction and efficiency has been very effectively improved.
“China’s catering industry is a high-end equipment manufacturing, sophisticated and refined industrial management industry. It is by no means a brain beating industry that can succeed by feeling. We must use the method of industrial production to think about the management of the catering industry, because the supply chain, personnel management and store operation are all very detailed. If we don’t pay attention to cost reduction and efficiency improvement, we can’t do it. The same is true of the consumer industry. ” Yang Ge said.
Third, brand is brand. That is, whether the enterprise can operate the brand, and whether it can help to operate the brand through capital, media and market operation, so that everyone can quickly recognize the brand, quickly occupy the user’s mind, and quickly like the brand.
“This requires that the brand should be storytelling, content oriented, have certain positive significance, be related to Guochao, be related to the return of state-owned brands and old brands, be related to certain events, and have certain energy.” Yang Ge said.
When entrepreneurs swarmed in and capital poured in, the consumer track undoubtedly ushered in the best time.
Today, in some segments of the track, the old and new brand competition has been a stalemate. The old brand cuts into the track where the new brand gathers, so it can’t kill the new brand easily; It is also not easy for a new brand to make achievements under the influence of an old brand and live to the end.
In the final analysis, in today’s society with repeated consumption waves, both new and old brands should “really wake up” in consciousness, recognize the consumer demand and the direction of industry change, and quickly occupy the market highland and consumer mind in action, so as to not be eliminated in the wave after wave of competition.
*In this paper, the title is from: photographing network, based on VRF protocol; The photo is from the library of bullet finance.