China Food

300 stores, annual revenue of hundreds of millions of yuan, selling toast so easy to earn?


“  
the secret of little toast.
 ”

Text: Yue Lili   

Source: fast carp (ID: akuailiyu)

 
Recently, Dad sugar, a toast brand, has performed very well. Since its first store was opened in July 2016, the number of stores in China has exceeded 300, covering more than 60 provinces and cities such as Beijing, Shanghai, Zhejiang, Chengdu, Shenyang and Guangzhou, with an annual revenue of hundreds of millions of yuan. Recently, it has received the first round of financing of hundreds of millions of yuan from IDG capital.
 
Open up the toast track,
Explore more possibilities for toast
 
Baked food was introduced into mainland China from Taiwan, Hongkong in 1980s. With the growth of Chinese mainland economy, the baking industry in China has been developing rapidly since the end of twentieth Century. According to the statistics of the National Bureau of statistics, the total profit of the baking industry increased from RMB 13.83 billion in 2011 to RMB 20.272 billion in 2014.
At that time, the founder of dad sugar clearly realized that behind the continuous growth of the overall market, the whole category baking brands were already in the red sea of competition, various new channels such as private baking workshops and new retail brands were emerging, and consumers’ choices became more and more diversified. Moreover, the whole category baking is not a sexy direction for start-ups. There are 150-200 SKUs in the whole category baking shop, which is extremely dependent on the scale and supply chain capacity, which is why there is no national baking brand until today. In this context, if you want to gain a foothold in the baking track, you need to innovate and find the difference.
As a big item in the baking track, toast has the characteristics of just demand and high frequency. Its position in the baking system is like steamed bread and steamed stuffed bun in Chinese food. Most millennials grow up eating bread. Toast as breakfast and afternoon tea will be the general trend. Cutting toast products into the baking system is undoubtedly a good direction.
 
Father sugar’s founder is good at setting a new direction. He is not an entrepreneurial Xiaobai. As early as 2008, he has led the tea 1.0 era with pearl milk tea as the representative product before Xi tea and Naixue tea. By 2011, he opened 1000 milk tea stores. But on the other hand, what follows is the brand development barrier, and dad sugar also focuses on a single category. The same problem is how to continuously inject new things into the brand and make the growth bottleneck come later? In terms of products alone, how many kinds of toast can be made is the key“ The staple food nature of toast determines its strong ductility. There are many possibilities from the processing of secondary eating method, the application of cuisine to the combination of taste. “
 
It is reported that Dad sugar’s product line is divided into Signature Series and popular series, including original toast, crispy toast, red bean toast, cranberry toast, chocolate toast, lemon cheese toast, yogurt toast and meat floss toast; Taro cheese cheese egg yolk toast, sea salt cheese toast, black sugar thick potato toast, awatian thick milk crisp toast, sesame snow cheese toast, Yunfu toast and other flavors.
Each store focuses on the strategy of large single products, only 30 SKUs are reserved, and the R & D team of more than 30 people will be updated and eliminated according to the new market demand every month. Not only to ensure the continuous updating of taste, Dad sugar will also choose the brand with the right concept or the golden CP in the breakfast scene for some cross-border joint names, such as launching milk flavored toast snow ice with Haagen Dazs and sesame snow toast with missing food.
 
Next, father sugar will also develop differentiated products for different segments of people. After the first round of financing, dad and sugar jointly established a health baking joint research and development center with Jiangnan University to take the lead in launching low sugar toast products for the diabetic population. In addition, Dad sugar is also constantly educating users, regularly pushing the “10000 kinds of eating methods” related content in official account, constantly letting users feel the fresh feeling of eating toast.
 
Regardless of the age span of the user population, the innovative combination of taste and taste, and the consumption scenarios that may be extended to, Dad sugar will play a combination innovation of new experience. In the future, Dad sugar may even launch semi-finished products for family users and hand over the last work sequence to parents.
 
“In fact, we think 300 stores are just the starting point of a brand”. In the view of the founder, Dad sugar is far from meeting the growth bottleneck. With the birth and growth of more and more generation Z people, the potential consumer population of dad sugar will continue to increase.
 
Recently, youzan and Weiyi released the report on the development trend of baking industry in 2020. The report shows that the market scale of China’s baking industry will be 235.8 billion yuan in 2020. From 2015 to 2019, the growth rate of industry market scale exceeded 9%. It is expected that China’s baking market will also maintain a growth rate of about 7% in the next five years. With such a large market space, the penetration rate of toast in the whole baked toast is far from enough, and there is still 10-20 times of growth space in the future.
The founder said that at present, most of dad’s sugar stores are franchises, almost all of them are profitable, and the revenue is growing every year. It is expected that the brand will open thousands of stores in the next three years to build the largest toast brand in China.
 
Adopt the “front store and back factory” mode,
Innovative product
from upstream
 
Tea and baking desserts are naturally CP. dad sugar’s founder once wanted to let his milk tea brand enter baking, but the result was not ideal. “Making bread is much more difficult than making tea, because tea is a standardized process. As long as you know how to control the temperature and proportion, you can make a cup of delicious milk tea and train a master in about a week, However, the bread baking operation is complex and requires the master’s exquisite and skilled skills. “
 
After registering dad sugar, the founder set up a team to contact and learn baking knowledge on the one hand, and began to visit all over the world to select raw materials, build a quality foundation for product R & D, and establish a material supply chain system and operation management system on the other hand.
 
In the view of the founder, baking is a process of life breeding. Only by strictly grasping each level can the product have a real temperature. After market research, Dad sugar was finally adjusted based on Japanese Hokkaido toast and Chinese taste to make its taste softer.
 
The production mode of frozen dough and semi-finished products baked on the spot adopted by most brands in the market has been abandoned. All toast of dad sugar has passed strict raw material screening, and the production process is completed by the baker fresh hand in the store on the same day. The first thing a baker does every day is to go into the kitchen and turn on hot water for high-temperature disinfection. After one hour of high-temperature disinfection and material preparation, he began to make it formally.
Each piece of toast comes from a dough and manual kneading and beating. After the dough is repeatedly folded and cooled, it is divided into groups, and then beat more than 300 times to improve the surface texture of toast. For fermentation, Dad sugar also adheres to the tradition and changes slowly under the precipitation of time until the fermentation is completed. Finally, it takes 4 hours to send it to the oven.
 
Hand made toast is now sold. Dad sugar chose to sacrifice and give up the central factory and adopted the “front store and back factory” mode. At the same time, the pain point that is difficult to copy was solved by using the ready mixed powder. The ready mixed powder used by Dad sugar is custom-made special toast wheat powder, which was jointly developed with the flour making industry in Japan.
 
In the view of the founders, product R & D innovation includes three levels: the first is the innovation of appearance and physical shape; The second level is to adjust the proportion of products and optimize the taste. Dad sugar’s innovation is more thorough – R & D and innovation from the upstream.
During the research and development of durian toast, through team research, Dad sugar finally adopted the Malaysian Sultan D24 durian and abandoned the Thai durian commonly used in the industry. In addition to the considerations of light, soil and latitude, the main reason is that the former is ripe, while the Thai durian is directly cut and ripened to give consumers a better taste, Dad sugar reached a cooperation with a Durian R & D supplier to jointly explore how to better integrate durian stuffing and toast.
Not only durian, the raw material of rattan pepper is to cooperate with Indonesia, cranberry, Padan wood and the United States. Dad sugar is looking for the most suitable ingredients to make stuffing all over the world. “It is also a barrier for competitors, and the cost of their challenge and imitation will be relatively large.”
 
Inject stories and content into the brand
 
When Dad sugar was founded, his son little candy was about to be born. It was natural to instill father’s love into the brand and become a brand gene. Toast is very inclusive and can be matched with a lot of materials, just like father’s love. The founder hopes to remind fathers not to ignore and miss their children’s growth. And carefully created a three member IP image of sugar father, sugar mother and little candy. Both the product packaging design and the element presentation in the store convey the brand concept with the image of brand IP. The brand designs and adds internal and external beauty elements to each bag of toast. Combined with different seasons, it extends brand image stories with different meanings.
At the same time, in some movies about father’s love, Dad sugar will be implanted or jointly marketed, such as Galaxy tutorial, Dad 102, etc.
 
Founded in 2015, this year is the sixth year of the development of dad sugar. In 2016, Dad sugar ushered in the incubation period, and the first store opened in Wuxi. 2017-2018 is the growth period of the brand, with more than 100 stores across the country, expanding to 200 stores in 2019, entering the outbreak growth period. In 2020, because the epidemic remained dormant, Dad sugar started again this year and entered the iterative growth period of the brand again.
 
After the first round of financing, daddy sugar has been actively promoting brand upgrading. As one of the channels to show the brand image, the store is the focus of daddy sugar’s building and upgrading. After financing, the new store will be launched in early September. The new store will be more relaxed and more family atmosphere. The hall is like a family living room, and the baking space is semi open like a kitchen, The baking process is also more transparent.
 
In the future, through the penetration of brand IP Culture and content, let everyone pay attention to the parent-child relationship of the family and create a new scene of family breakfast is the vision of dad sugar’s future brand upgrading.
 
The founder mentioned that in the baking industry, the brand with efficiency first has stronger supply chain ability, higher product cost performance and occupies a large share of the Chinese market, while dad sugar belongs to the company with extreme product innovation. “China has a population of 1.4 billion, and dad sugar only needs to serve 200 million people, which is a big market”. This year, Dad sugar will continue to polish its core competence and is expected to reach a revenue of 3 billion yuan in 3-5 years.
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