If you ask what snacks were their favorite childhood in the 1990s.Spicy bar, definitely on the top.While spicy strips are good for children, the attribute of “unhealthy” has also become a nightmare for parents.Compared with the previous mixed situation, the market is now more standardized with the help of various forces.On the one hand, with the help of national policies, on June 15, 2020, the formal implementation of the first children’s snack group standard general requirements for children’s snacks in China made the concept of children’s snacks clearer and clearer.On the other hand, with the enhancement of parents’ health awareness, children’s snacks, in addition to “delicious”, parents prefer to eat “health” and “nutrition”.From the perspective of market scale, the scale of children’s snack market is about 1 / 10 of that of leisure snack market.According to statistics, leisure snacks are expected to exceed 170 billion US dollars in 2023, about 1.2 trillion yuan.According to the estimation of Huaying capital, children’s snacks are expected to reach US $21 billion in 2023, about 150 billion yuan.In terms of growth rate, the CAGR of children’s snacks is expected to remain at 13.7% in the next five years, higher than the CAGR of leisure snacks of 7.8% in the next five years.▲ picture source: Huaying capitalIs the children’s snack under the new pattern and high growth rate a good entry timing for entrepreneurs?This paper will focus on Porter’s five forces model to disassemble the competition pattern of children’s snack track.Competitiveness of existing competitors in the same industry The snack industry has many varieties, low degree of standardization and low threshold of superimposed industry, resulting in the dispersion of the overall industry competition pattern.As far as the children’s snack industry is concerned, there are mainly four forces seizing the market.The four players are: old snack giants, cutting-edge brands, the extension of mother and child brands, and IP driven enterprises.1. Snack giant takes the leadAs the concept of children’s snacks becomes more and more clear, as a giant in the snack industry, liangpin shop, three squirrels and baicaowei are the first to enter the Bureau.From May to June last year, the three snack giants established or launched children’s food one after another:Liangpin shop launched the snack sub brand “liangpin snack Fairy”;Baicao flavor officially launched the children’s food “Tong An’an children” 1.0 series, which is positioned as a “beneficial supplement beyond dinner” for children;Three squirrels launched the baby food sub brand “deer blue”, which provides a one-stop feeding scheme for babies aged 6 months to 14 years.The three giants focus on the concept of “health + nutrition” and launch high nutrition and non additive products.On the marketing side, the three have their own IP images, which can draw the distance between them and children through animal or anthropomorphic images.The advantages of giants’ joining children’s snacks mainly include:First of all, brand endorsement, as a veteran player in the snack industry, has accumulated a certain reputation. To some extent, consumers will transfer their trust in the old brand to the sub brand.Secondly, share the supply chain. For example, liangpin store adopts an integrated supply chain system. The upstream cooperates with food suppliers all over the country to accurately control the sales volume and replenishment volume of each store channel through digitization.Children’s snacks are a kind of snacks. Sub brands can share the advantages of supply chain with the parent company and improve efficiency.Finally, the advantage of Omni channel layout. In addition to online e-commerce channels such as jd.com and Taobao, snacks pay more attention to the layout of offline channels, which is the advantage of giants. By the end of June, liangpin store had 2726 offline stores and 1104 three squirrels.2. New and cutting-edge brands have sprung upIn recent years, we have witnessed the birth of many cutting-edge brands of children’s snacks, such as Jane Eyre, miaofei, baby greedy, etc.Take Jane Eyre yogurt as an example. In just five years, it has made a way in the dairy market in a red sea, with an annual growth rate of 109%, ranking among the top 10 in the low-temperature dairy market.As of May 2021, Jane Eyre yogurt sales channels have covered major online e-commerce platforms and more than 200 offline cities.The advantages of these cutting-edge brands are:On the one hand, it has the ability to innovate and continuously open innovative categories, which can bring taste buds impact to consumers;On the other hand, after creating a new category, carry out saturation attack in the opportunity window.By repeatedly implanting the brand into the subconscious of consumers, when consumers have a sense of familiarity, they will relax their vigilance and buy as long as there is an opportunity.In addition, these cutting-edge brands are also good at creating explosive products through social media marketing.3. Category extension of mother baby brandIn the field of children’s snacks, players also include mother and baby brands such as bainmei and Yingshi.Beinmei entered the market with a strong brand of “menglebao” children’s snacks, and entered the mother and baby market through rice flour and molars.There are two main advantages of mother baby brand as children’s snacks: first, the target customer group is concentrated, mainly Baoma; Second, maternal and infant consumer groups have high loyalty, high customer stickiness and high repurchase rate.Beinmei reused the Safety Traceability Technology of infant milk powder in its children’s snack brand menglebao, and used technology to support the quality of children’s snacks and improve customer trust.In addition to the above three categories of game player, there are also some enterprises that hold IP, especially IP, such as Disney and piggy page. They also distribute children’s snacks through authorization and self-management.Bargaining Power of Buyers Before analyzing the bargaining power of buyers, we should first know who are the buyers of children’s snacks, and what consumption habits and pain points they have.1. Portrait of consumers in children’s snack marketIn recent years, the number of children in China has shown an upward trend.By the end of 2019, the number of children under the age of 14 had reached 235 million, with similar numbers in the three age groups of 0-4, 5-9 and 10-14.With the gradual deepening of the two-child and three child policies, it is expected that the number of children in China will continue to grow.The post-80s and post-90s parents generally have a high level of education, the awareness of “fine raising children” has improved, and the proportion of children’s expenditure in families has also increased. At present, the children’s consumption market has formed a trillion scale.According to the data of the 2020 blue book on healthy meals for Chinese children, more than 40% of parents believe that “children’s snacks are an extra meal demand other than three meals”.In a sense, snacks are a kind of “meal”, which can provide important energy and nutritional supplements and play an important role in children’s physical and mental health.The concept of this group of consumers is changing, from the original “refuse snacks” to today’s “actively choose snacks”.They mainly pay attention to “safety”, “nutrition” and “health” when buying children’s snacks.2. Buyers’ bargaining power — strongWhy do buyers in the children’s snack industry have strong bargaining power?We will elaborate from two aspects:First, consumers have many choices.Since the concept of children’s snacks was put forward, there have been competitors to share the cake.This leads to increasingly fierce market competition, and other competitors will compete with existing brands through price war and imitation.For example, the price band of 0-25 yuan is the core price band of domestic children’s snacks, and most brands price around this price band.Competition gives consumers more choices, so consumers’ bargaining power is rising.Picky consumers will turn to other competitors because their products or services can not meet their expectations.Therefore, in the oversupply market, the bargaining power of buyers is relatively improved.Secondly, the conversion cost of consumers is low.In terms of snack categories, most of them are candy, biscuits, puffed and other public snacks, which are essentially indistinguishable.When the products provided by the children’s market become more and more homogeneous, the cost of consumers’ transformation between different brands becomes lower.In terms of channels, with the rise of e-commerce channels, it is more and more convenient for consumers to buy products and reduce consumers’ conversion costs.According to the research of questmobile, the proportion of children’s parents’ online shopping of food is 57%, and it is simply estimated that the online shopping of children’s snacks accounts for about 34% – 50%.From the online rate, the online rate of children’s snacks is 4 times higher than that of leisure snacks.Bargaining power of suppliersSuppliers mainly affect the profitability and product competitiveness of existing enterprises in the industry by increasing the price of input factors and reducing product quality. The strength of suppliers mainly depends on the importance of input factors they provide to buyers.1. Bargaining power of suppliersAt present, the suppliers of children’s snacks in China are mainly raw material suppliers and snack processing plants.Relevant enterprises in the domestic children’s snack industry have high requirements for raw material suppliers, so they have high bargaining power;The industry standard of general requirements for children’s snacks jointly issued by China non-staple food circulation association was officially implemented, which systematically standardized the nutrition, health and safety of children’s snacks.It has made clear provisions on the raw material requirements, nutritional components, microbial indicators and food additives of children’s snacks.For example, preservatives, artificial colors, sweeteners, hardness and tooth damage cannot be used. These Provisions comprehensively consider children’s physical tolerance, digestion ability and the need to cultivate healthy eating habits.In terms of snack processing plants, most domestic children’s snack production enterprises do not have their own processing plants, and most brands adopt OEM mode, so the bargaining power of snack processing plants is weak.On the one hand, the OEM mode increases the hidden dangers of food safety to a certain extent.For example, many OEM factories of Xiaolu blue were fined for producing substandard food, affecting a variety of products such as baby puree, molar bar biscuits and so on.On the other hand, OEM mode compresses profits. For example, according to the financial data of liangpin shop, by the end of 2020, the sales revenue of “liangpin snack Fairy” for children’s snacks was 223 million yuan, and the net sales profit was 25.4098 million yuan, accounting for about 11.39%, which was far lower than the average profit level of leisure snacks.Therefore, it is urgent for children’s snack brands to improve the control ability of the upstream supply chain.2. How to improve the bargaining power of suppliers?First, give play to the advantages of scale, such as annual orders and delivery in batches.Bargaining power is essentially a matter of quantity. No supplier is willing to give up a large number of purchase orders.Children’s brands with economic strength can place orders according to the annual consumption, which is far more scale effect than quarterly and monthly batch orders.At the same time, batch arrival does not occupy capital and storage capacity, which should be the way to improve its beauty.It is better to place an order when the price is low or the fluctuation is minimal, and take into account the long-term trend prediction, which can also reduce the risk of price fluctuation. This method can be used especially for major raw materials and packaging or bulk procurement.Second, joint procurement. No matter how fierce the competition in the industry is, the purpose is for the interests of the enterprise. In the face of the complex external supply environment, it is very possible for the industry to make consistent external and joint procurement.The key lies in communication and coordination. Small trials can be started. When the cooperation is mature, the order quantity can be increased.Third, introduce competitors. In order to cope with the volatile market, it is necessary to select more suppliers of important raw materials. First, to prevent changes in suppliers, some changes are not human factors; Second, we can increase public transparency, appropriately introduce competition, and pay attention to new suppliers or new substitutes while ensuring old suppliers. The ability of potential competitors to enter & the substitution ability of substitutes In the previous article, we talked about the three forces in the five forces model, namely, the competitiveness of existing competitors in the same industry, the bargaining power of suppliers and the bargaining power of buyers.Next, let’s talk about the last two forces, namely, the ability of potential competitors to enter and the substitution ability of substitutes.From another angle, these two forces can also be understood as the innovation opportunities of new entrants.1. The concepts of no addition, less sugar and less salt deserve attentionAccording to the online children’s retail market data, the consumption of products without the concepts of addition, less sugar and less salt continued to rise.Among them, deer blue, baby greedy and Jane Eyre yogurt are the representatives.No addition is the main core selling point of these brands. While adding the core product points, they also achieve the subtraction at the additive level, which puts forward new requirements for the quality of food materials and the process itself.2. Consumption upgrading of children’s snacksCheese enjoys the reputation of “milk gold”. Its nutritional value is much higher than that of other dairy products. It is rich in protein, calcium, fat, phosphorus, vitamins and other nutrients.The development process of dairy consumption can be divided into three stages: milk powder, liquid milk and cheese. Cheese is located at the top of the dairy structure pyramid and is one of the main directions of dairy consumption upgrading.According to Euromonitor International data, among various categories of dairy products, the growth rate of domestic cheese retail market is leading. From 2015 to 2020, CAGR reached 21%, which is far higher than the overall growth rate of dairy retail market.By 2024, the scale of China’s cheese retail market will reach about 10 billion, with an average annual growth rate of 8.18%.At present, the existing competitors in the market mainly include foreign forces such as baijifu, Lezhi, Anja and kraft, and domestic brands include miaokolando, miaofei, etc.3. On the marketing side, brand IP has become the biggest highlightIn the joint names of children’s snacks, most of them are brand and IP, and a few are brand and brand.Among the joint names of brands and IP, cartoon and animation IP is the most popular, mainly including “Burberry”, “SpongeBob”, “robot cat”, etc.Some brands have incubated their own IP from the beginning of establishment. For example, the “Tong An’an” with herbal flavor is an image of Chinese children with strong practical ability, lively and lovely, and full of thirst for knowledge.The overall market development potential of children’s snacks in China is huge, but it is not easy to do a good job of children’s snacks.High production costs, imperfect standards and low public awareness are the main reasons that have hindered the development of children’s snack market.However, with the deepening of the concept of “raising children scientifically”, snacks have become the “just need” of parents.All brands have a chance before the head players appear in the children’s snack track!reference material: Behind the 250 million “four legged gold eater”, there is a 100 billion children’s snack market and Huaying capital 2020 tmall snacks market analysis report (children’s snacks), magic mirror Market Intelligence 2021 children’s snack consumption insight report, cbndataAuthor: Nicole; Source: consumer (ID: xiaofeijie316), reprint has been authorized. 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