Yizi, a snack giant acquired on a large scale in recent years, has shot in the Chinese market this time. Recently, Yizi China and Enxi village industry, a baker, signed and reached a strategic cooperation and investment agreement in Shanghai. The two sides signed a series of product strategic cooperation and equity investment agreements, and Yizi China will make minority equity investment in Enxi village industry.
snack generation learned from Yizi China today that this is the company’s first investment in a local food enterprise. The cooperation will help it expand its product category portfolio in the Chinese market and develop low-temperature and short shelf-life baking products of Yizi’s brands. “We believe that this strategic partnership is a powerful supplement to our existing business and will help us accelerate the realization of the growth goal of the Chinese market.”. So, what is the origin of Yizi’s first stake in China? What is the logic behind the transition from snacks to baking? Next, let’s have a look.
Cut in low-temperature short-term baking
Let’s take a look at the details of this cooperation. According to Enxi village industrial news, after reaching strategic cooperation, the two sides will complement each other in products, production, supply chain and market distribution, and jointly open a new chapter in the field of baked food. Specifically, Yizi will enter the field of healthy fresh food with the help of the background and technology of low-temperature fresh manufacturing and high-end healthy baking in Enxi village. Meanwhile, Enxi village will further expand its R & D and production scale through cooperation with Yizi; At the same time, with the help of Yizi’s brand building ability, we will develop joint brands and national private brands, and broaden products and channels.
Statistics show that Enxi village mainly produces mousse cakes, thousand layer cakes, Dafu, ice moon cakes, cookies and other types of cakes. It has its own factories in Shanghai, Shenzhen and Dongguan that can cover the national business, and the product sales network has spread all over the country. The company has become a long-term strategic partner of many enterprises, including China Resources Group and Sam’s club.
“Enxi village is a leading enterprise in the field of low-temperature baking in China, with strong product innovation and production capacity. This important strategic partnership will enable Yizi China to expand its business to the baking field and promote the company to enter the fast-growing low-temperature baking market. At the same time, as a strategic investor, we look forward to deepening cooperation with Enxi village team to provide us with Rich experience in the snack field, “said fan Ruisi, President of Yizi Greater China, in a document obtained by the snack generation. In the post epidemic era, the short-term baking that Yizi China intends to cut into is developing rapidly, and it has won more favor with cognitive labels such as “fresh” and “less preservatives”. The 2021 China packaged baked goods report that xiaoshidai got from yingminte today shows that short-term insurance products have become the focus. Ying min points out that the longer the shelf life is, the lower the consumers’ willingness to eat. It means that consumers tend to eat baked products with shorter shelf life after COVID-19 breaks out, especially those with children.
Dali, the leader of packaging and baking, also continues to increase the scale of this track and expand its brand meibaochen in the country. “China’s baking market is very large. The whole scale should be 200 billion, while the short-term insurance products are only 10 billion at present, and can maintain rapid growth in the future.” Zhuang Weiqiang, vice president of Dali food, said at the semi annual report meeting in August this year that meibaochen will continue to expand across the country based on the production capacity and network foundation laid in the early stage.
Cross border logic
At present, Yizi has not disclosed the specific plan for low-temperature short-term baking, but from its view, it does not rule out the possibility of considering leveraging its biscuit brand. Yizi leader once pointed out that the boundary between biscuits and baking products is actually very vague, and he is also optimistic about the opportunities of the latter. At present, Yizi has Oreo, interesting, Taiping and other brands in China. At the 37th annual strategic decision-making meeting of Bernstein alliance held in June this year, Dirk Van de put, CEO of Yizi international, said that baking products such as high-end cakes and desserts are very close to biscuits. They not only have similar production technologies, but also it is difficult for consumers to see the difference. Therefore, he pointed out that these adjacent categories are great opportunities for Yizi, because its biscuit brands can naturally extend to these categories.
Dirk Van de put, CEO of Yizi International (information picture)
In fact, Yizi has invested heavily in the baking field and has taken over a number of bakers in recent years, including the acquisition of Greek company chipita for us $2 billion. Dirk Van de put once described the transaction as a “win-win” in this year’s interview, and pointed out that Yizi can use the company’s distribution system to establish its own network and bring Yizi brand to chipita products. In China, Yizi is not a piece of white paper in the baking industry. For example, its Oreo biscuits are often used as baking materials. Its wide application and net red degree even make Oreo a taste “pronoun”. In addition, Yizi China has also listed a small package of Oreo biscuits, baking as one of the consumption scenes.
although Yizi brand has certain “inherent advantages” in the baking industry, it is difficult to break through the field of low-temperature short-term protection alone. A senior person in the snack industry once told the snack generation that many problems need to be solved if they want to use the biscuit brand to cross the border to low-temperature short-term baking products, including product development, whether there is a sense of conflict between brand cognition and baking, how to build a perfect cold chain from scratch, etc. From this point of view, it is not difficult to understand that Yizi China chooses Enxi village with sufficient b-end cooperation experience and national sales network. Fan Ruisi also expressed his belief that the product innovation capability, supply chain system and resources of the two sides in their respective fields will complement each other, and work together to open a new chapter for the development of the two companies in this key market.