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“enclosure” war of Chinese children’s snacks.
Today, several media reported that the cutting-edge children’s snack brand duomaomao has completed nearly 100 million yuan of a + round financing, which is led by Wen’s capital and supplemented and invested by the old shareholder Haina Asia venture capital fund sig. This is the third financing completed by duomaomao this year.
Last week, the cutting-edge children’s snack brand vegetable Gele also announced the completion of tens of millions of Yuan Angel round financing, led by 13 capital.
Further on, more than ten children’s snack brands, including Niuniu, woxiaoya, yucute and Akita Manman, have won capital favor in the past few months.
It can be seen that capital continues to add weight to children’s snack track.
Over the past two years, China’s adult leisure snack industry has become a foregone conclusion. The price war and marketing war of the three major snack shops, baicaowei and three squirrels were once at an impasse. In the process of seeking differentiated competition, the consumer business opportunity in the snack field – children’s snacks finally surfaced in China.
Especially after the implementation of the relevant standards of the general requirements for children’s snacks last year and the publication of the “three child policy”, the children’s snack market behind China’s 150 million children aged 3-12 continued to heat up, becoming a new driving point of the leisure snack track.
According to statistics, children’s expenditure in 80% of households accounts for 30% – 50% of household expenditure. Among them, snacks are an indispensable “just need” in children’s daily consumption. It is predicted that from 2019 to 2023, the children’s snack market will continue to grow at a compound annual growth rate of 10% to 15%, and the market scale is expected to reach 150 billion yuan in 2023.
As a result, the influx of capital, leisure and snack giants have been added to the board, and even traditional food giants such as Shuanghui and new hope have stepped up the layout of this golden track.
However, the hot track does not mean that domestic children’s snack brands can rush to the sky through the air outlet. Most children’s snack enterprises are still trapped by the supply chain, good at traffic and neglect innovation.
Overall, the consumption of children’s snacks is still in the primary stage. The market pattern is relatively scattered and there is no absolute monopoly, which also creates many opportunities for newcomers.
This is Chapter 6 of the new consumer industry War series of Shangyin society. Shangyin society, the founders of five children’s snack brands and two senior industry practitioners have conducted in-depth discussions and done a lot of research. After reading, you will have a comprehensive and thorough understanding of the industry, see the ways and rationally observe the business world.
Children’s snacks and “junk food”
The development of children’s snacks in China contains a history of consumption changes.
In the 1940s and 1950s, Feng Boyong, a businessman who was addicted to “British milk sugar”, announced excitedly that he would develop a Chinese milk sugar, which opened the prelude to the prosperity of big white rabbit milk sugar.
Just a few years after listing, the big white rabbit made the slogan of “seven big white rabbits are equal to a glass of milk”, which was popular all over the country. It not only had a unique taste, but also had a certain nutritional value. At that time, it was equivalent to nutritional and health care products.
At that time, when milk resources were scarce, white rabbit milk candy was even regarded as a substitute for milk to supplement the necessary nutrition of the human body and became the earliest “nutritional snack” in the eyes of the Chinese people.
It can be said that before children’s snacks became a subdivided industry, some products were recognized by parents in the name of “helping children grow up healthily”.
Even in the 1980s and 1990s, Wahaha’s children’s nutrition liquid opened the market with the advertising language of “drinking Wahaha, eating is fragrant”. Not only children love to drink, but parents will also pay for nutritious drinks.
Although according to today’s health standards, these children’s nutritional snacks may not be healthy.
As the raw materials for the production of white rabbit milk candy need to be imported, the cost is very high. The status of one candy is almost equal to that of meat, which discourages many ordinary families. Adults only buy two in the new year to make their children happy.
Children of ordinary families can only eat maltose, old popsicles and other traditional snacks several times a year. At that time, snack vendors mainly relied on manual production, and there was neither food production standard nor snack packaging and brand awareness.
Most well-known domestic snack enterprises were established in the 1990s. With the gradual enrichment of material resources, snacks have become an indispensable “fourth meal” for children. The canteens in the streets are filled with spicy strips, snow cakes, jelly, candy, biscuits, fried puffed food, etc. there are more and more packaged snacks. Parents’ concerns also follow.
At that time, many children’s snacks were still made by rough hand. It was easy to have problems in raw materials and hygiene. Without norms and insufficient supervision, it was easy to let these problems go.
Snacks in snack bars such as spicy bars often become “regular customers” of food safety news. The savage growth of “three no products” urges parents to equate snacks with “unsafe”.
In addition to a few branded children’s snacks such as kiss, unity, Wangwang, Dali, Xizhilang and Wahaha, many unlicensed products and counterfeit products have long fled in the vast sinking market. Many urban parents trust the cereal puffing, candy and chocolate products of international giants such as Nestle and Leshi.
In the long run, domestic snacks have become a taboo in the eyes of parents, which not only affects the normal diet of children’s three meals a day, but also various additives are the great enemy of children’s health.
In terms of composition, these children’s snacks are often what we often call “junk food”, with high contents of fat, salt and sugar and low contents of dietary fiber, iron, calcium, vitamins and other nutrients.
Eating too many snacks like this will not only stimulate the taste buds in a short time, but will inevitably affect children’s eating dinner. In the long run, unbalanced nutrition will affect children’s development, lead to problems such as dental caries and obesity, and increase the risk of chronic diseases.
Most domestic snacks have been recognized as “junk food” for decades. During this period, the category of nutritional snacks was blank, and there was no enterprise specializing in children’s health snacks.
Smoke everywhere, “the target of public criticism”
When time goes back to today, the post-80s and 90s quietly grow up fighting with their parents. Although this generation has deep feelings for spicy bars and biscuits, they inevitably “inherit” the anxiety and fear of all kinds of snacks after becoming parents.
They have also received a higher level of knowledge education and pay more and more attention to the food health of the next generation from the perspective of nutrition science.
At the same time, behind the huge demand for snacks, the barbaric competition without standards has become the main factor restricting the upgrading of the industry.
In earlier years, a variety of children’s soy sauce, children’s milk, children’s food and other series products with the gimmick of “children’s nutritional snacks” were just the publicity strategies of some businesses. Products with the same ingredients and production technology can easily harvest consumers at doubled prices after “gilding” in the name of children.
Therefore, for a long time, the trust of the new generation of parents in snacks has decreased again and again. Until the last two years, the concept of “healthy snacks” began to appear.
It is not only the change of people’s consumption concept, but also the emergence of industrial standards and norms.
On May 15, 2020, the general requirements for children’s snacks (hereinafter referred to as the requirements) was promulgated, which stipulates the scope of application, product classification and technical requirements of children’s snacks, which is the first children’s snack standard in China. For the whole children’s snack industry, this standard is undoubtedly sending carbon in the snow.
Since then, children’s snacks have a clear concept: besides dinner, they are suitable for children aged 3-12 who can supplement energy, balance nutrition or increase water, relax and have a pleasant mood.
According to the data of the National Bureau of statistics, the population of children aged 0-14 in China has exceeded 230 million, of which the number of children aged 3-12 has exceeded 150 million, and children have become one of the largest consumers in the snack market.
According to the data released by China children’s industry center, children’s expenditure in 80% of households accounts for 30% – 50% of household expenditure. Among them, snacks are an indispensable “just need” in children’s daily consumption. With the upgrading of consumption in the new era, a new generation of young parents pay a sharp increase in their attention to the health factors of children’s snacks.
According to the forecast, from 2019 to 2023, the children’s snack market will continue to grow at a compound annual growth rate of 10% to 15%. According to the estimation of Huaying capital, the market scale of children’s snacks is expected to reach US $21 billion, or about 150 billion yuan, in 2023,
The children’s snack industry has become one of the most potential tracks, and the children’s snack, which has been known as “junk food” for many years, is also “changing its face”.
Without profit, liangpin shop revealed its “ambition” three days after the release of the requirements, and officially released the first sub brand “liangpin snack Fairy”, which focuses on children’s snacks, so as to gain the communication of the brand and the recognition of the market.
Many brands followed closely, and the other two snack giants baicaowei and three squirrels launched baby food sub brands “Tong An’an children” and “Xiaolu blue” respectively.
Many traditional mother and baby brands have also launched new products suitable for children aged 3-12, such as BEIMEI, Yingshi, etc.
The so-called standardization is the golden spoon for capital to pursue profits. The magic of standards to the industry is not only the industry itself, but also can attract the influx of billions of capital.
Although the collapse of online education in 2021 has greatly damaged the vitality of capital in the cake of “k12 education”, the major VC’s have been watching and listening in all directions, and soon find new comfort in the children’s snack track seamlessly.
As the whole industry is in its infancy, although “liangpin snack Fairy” and other brands are endorsed by traditional snack giants, the market share is not high, and the industry pattern has not been solidified. Therefore, there is still a lot of living space for new brands and small enterprises. In the past year, children’s snack brands have sprung up, and at least 10 relevant brands have obtained financing. Among them, baby greedy and wo Xiaoya got three or two rounds of financing respectively within five months, while the rookie brands with full scores, Niuniu and vegetable Gele, etc., gained tens of millions of yuan of investment at the beginning of their establishment.
The battlefield of Chinese leisure snacks was full of gunsmoke for a time, and children’s snacks became the “target of public criticism”.
However, the hot track and the influx of capital do not mean that domestic children’s snack brands can rush to heaven through the air outlet. “Product quality” has always been the key to the survival of children’s snack enterprises and brands.
Since ancient times, the Chinese people have advocated “food for the people”. The development of food economy has always been popular, but it has frequently fallen off the chain on food safety issues. Even if China’s supply chain has developed quite mature, the supply chain of the food industry still needs to be improved relatively.
Especially for the children’s snack segment track with higher requirements on “safety”, the improvement of the supply chain of raw materials, R & D and production is the top priority. The requirements clearly stipulates that the indicators of food additives for children’s snacks should be in line with the standard of complementary foods for infants and young children.
For example, children’s snacks cannot use irradiated raw materials.
“Irradiation” is a sterilization process commonly used by most snack products in the market. Its advantage is that it can prolong the shelf life of the product, but it will destroy the nutritional components in the food in the sterilization process. It is a problem that can not be ignored for children who are in a critical period of physical development but have limited food intake.
Therefore, any product in children’s snacks should not be added or subtracted on the basis of adult snacks, but should customize the supply chain system for each category or single product in all links of raw materials, product R & D, production process, quality control, logistics and transportation and sales service.
Due to the early and complete introduction of relevant standards in the mother and baby industry and the mature control ability of the supply chain, this should be a good opportunity for the traditional mother and baby brand to expand the brand power.
However, it is worrying that there are at least more than 2000 domestic infant nutrition brands, but at present, all links such as raw material procurement, R & D and production of children’s snacks are still disconnected from the “standards”. So far, a supply chain that meets children’s standards has not been formed, and nearly 90% of them adopt the OEM production mode.
In particular, leisure snack brands and cross-border traditional food brands continue to use the original mature factory production line, and the production standards are not compliant. Once there are problems in the agent factory, it is bound to affect food safety.
Deer blue is a typical example.
Xiaolu Lanlan, a children’s snack brand under the three squirrels, produces its products on a OEM basis. Only the procurement, sub packaging and storage of raw materials are controlled by Xiaolu Lanlan, and the processing and transportation of raw materials are outsourced to the OEM. According to media reports, many OEM factories that provide services for Xiaolu blue have been punished by relevant departments due to production problems.
It is understood that the cost of the three squirrels to these foundries is relatively low, which also makes the foundries invest less in food safety, resulting in frequent quality problems in the products of the three squirrels.
Moreover, due to poor control over the OEM link, Xiaolu blue has made repeated mistakes in food quality and safety, which has also buried deep hidden dangers for the development of Xiaolu blue.
According to the black cat complaint platform, there have been 13 complaints about fawn blue, of which 10 complaints claim that foreign matters such as hair and plastic appear in fawn Blue’s food.
How to improve the control ability of the upstream supply chain and how to ensure food safety have become the pain points of the whole industry.
Many rookie brands provide some new solutions because they are not shackled by the traditional supply mode.
For example, the children’s tuna brand Xinxiu yucute has a source advantage in the supply chain. The family of its founder sun Xiaotong has been engaged in ocean tuna fishing for nearly 18 years, has the industrial chain resources and integration ability from the source of tuna fishing to deep processing, starts screening and controlling the product quality from the source of tuna industrial chain, and plays a differentiated advantage, Become a key point to win in the industry.
To solve the problem of children’s snack processing in an all-round way, self built supply chain is the core and powerful way. It must be one of the core competitive advantages of this industry to completely control the raw material source to the product factory. However, because most enterprises have just started and are not enough in terms of funds, self built supply chains are often more than willing but less than able.
Even if OEM enterprises are selected for processing, strict screening should also be carried out. For the nutritional requirements and safety standards of children’s snacks, select OEM plants that meet the requirements, and strict requirements for each link such as production and quality inspection, so as to ensure product quality.
The current children’s snack track has just sprung up in recent years. Although the competition is fierce, it is new enough. No enterprise can occupy an absolute position in a category.
Take bat in the snack industry – liangpin shop, baicaowei and three squirrels as examples. Liangpin snack fairy under liangpin shop basically covers the main categories of children’s snack industry, including biscuits, dissolved beans, jelly, fish intestines, candy, seaweed, etc. Xiaolu blue and baicaowei are almost the same. Many other latecomers also derived on this basis.
From this point of view, the richness of children’s snack products is not high at present.
This also leads to the crazy imitation of children’s snack enterprises in a limited number of categories, and the problem of homogeneous competition is prominent. Moreover, the entry threshold of the snack industry is low, and low-end brands have become the hardest hit area of “copying”. As long as a brand benefits from new products, other businesses will flock to share the cake.
In addition, the current OEM mode of children’s snacks makes it difficult to go deep into product R & D and supply chain to innovate products. Even multiple brands may be produced by the same foundry, which is easy to copy each other. Product “crash” is also common.
For example, liangpin snack fairy gives priority to sugar free Hawthorn stick, and other brands flock to launch the same one; Miaoke Lando launched a popular cheese stick, so friends and merchants quickly followed up and launched similar products. At present, there are more than ten brands selling Hawthorn lollipops and cheese sticks on Taobao.
Most brands have weak R & D capabilities and compete with similar brands, focusing on marketing and brand wars.
Even at the marketing level, the major brands are surprisingly consistent. Looking ahead, “healthy sugar free” is the common publicity point of almost all products. Trend labels such as “0 sucrose” and “no addition” will become the minimum requirements of the industry in the future.
The three giants of snacks we are familiar with attach great importance to the publicity and sales of online channels. The three squirrels continue the advantages of e-commerce channels, baicaowei continues to adhere to the price oriented strategy in e-commerce channels, and liangpin store continues to shape the brand image of “high-end snacks”.
The three have their own IP image, and they all hope to capture consumers with interesting and exquisite ideas in product design or publicity.
As for some mainstream sales channels, most brands take the way of cooperation with the big V and the main tiktok, and use the social media to play the explosive payment. In addition, Tmall and Jingdong take large amount of coupons.
“Marketing money burning method” has achieved rapid results. During the double 11 this year, the sales of baby snacks increased by 5 times year-on-year. Among them, Xiaolu Lanlan, Yingshi and heyangyang also led the double list of brand sales and growth. In the brand sales list, duo Maomao and Akita Manman followed closely, and fayoule and Heinz also ranked top 5 in the growth list with their continuously rising product sales.
However, if the enterprise’s R & D capacity continues to drop, the bonus period of the children’s snack industry will be the past two years. For brands that enter the market with the thinking of explosion, the subsequent growth will inevitably become weak, and most brands will only be interested in traffic and trapped in innovation.
Therefore, the real breakthrough of the snack industry lies in the long-term deep cultivation in product research and control, continuous iteration and innovation in product formula, category R & D and taste, and the second is the matching product marketing.
In addition to enriching the categories of children’s healthy snacks, enterprises have too much to do in innovation.
For example, how to iterate the product formula and processing technology to achieve the balance between “nutrition” and “taste”, and how to consolidate the market through the popularization of snack education are the innovation entry points for snack manufacturers.
For consumers, how to distinguish between traditional snacks and children’s health snacks lies in the ingredient list.
At present, there are two main ideas for the formula of domestic children’s snacks, one of which is “subtraction”.
Children’s snacks with this idea focus on “zero” addition, do not add chemical components such as pigments and preservatives, and achieve less sugar and low salt. High end ingredients often only need simple cooking. These products are committed to presenting the most original nutrition and taste of food.
For example, the good food snacks pay more attention to the health labels of the products, including the “non frying” of baked biscuits, the “Zero sugar granulated sugar” and “zero flavor” of the candy.
Another idea is to innovate in the nutritional and functional aspects of products, which can be simply classified as functional snacks.
On the one hand, it can meet the needs of children for high protein, high calcium and other nutrients during their growth; On the other hand, adding functional ingredients can improve children’s immunity, brain vitality, intestinal function and other health.
For example, adding iron and zinc is conducive to children’s physical and mental development; FOS and GOS are prebiotic ingredients widely used in products conducive to children’s growth.
On the contrary, the content of calories, fat, sugar, salt and additives in traditional junk food is very high, and the exciting food and taste prepared are irresistible, but excessive intake of energy and food additives will lead to obesity and disease.
But in the public perception, delicious food and health can not have both. How to satisfy children’s taste buds while meeting parents’ health requirements?
Perfect in every respect, Li Xiang, the founder of the children’s face brand, Yi Buya, believes that in recent years, the food with less salt and sugar based on the substitution of meal is definitely hard to perfect. The incidence rate of cardiovascular disease is one of the highest diseases in the world. In essence, the body’s taste has been adapted to the heavy mouth state and the body’s taste has been adapted to the human body. To a certain extent, children’s health food can help children develop a healthy eating habit and adapt to a low sugar and low salt diet in the period of low taste sensitivity.
As early as 1947, Japan promulgated the nutritionist law, established nutrition investigation and nutrition guidance systems in most schools and kindergartens, equipped nutritionists to manage children’s school meals, promoted organic food, and guided children to develop healthy eating habits.
At present, the penetration rate of healthy snacks in China is not too high, and there is still much room for growth.
Instead of being more voluminous, it’s better to be different
As the market value of children’s snacks gradually revealed, the track became more and more crowded.
From the current market pattern, the mature import brands such as Xiaopi, Jiabao and Heung’s are developing strongly in China. This is because, on the one hand, foreign brands have occupied the minds of consumers in the past few years; On the other hand, foreign brands are highly competitive in products and quality.
How do domestic emerging brands differentiate?
Li Rui, founder of Full Score Niuniu, believes that: “In the past, foreign brands occupied the minds of consumers, and most Chinese brands are imitating western brands. However, there will be some differences in the dietary structure at home and abroad. The nutritional ratio of meals and snacks is different, and the physique of Chinese and foreign children is also different. Therefore, by constantly improving product quality and gaining the trust of consumers, domestic brands are very competitive.”
Veteran players in the snack industry with brand endorsement have accumulated a certain amount of capital and reputation, while emerging brands need to cultivate in subdivided fields and create brand characteristics in an all-round way from the aspects of channels, operations and products.
Take the channel, from the current observation, many children snacks new brands are inclined to adopt the mixed mode of the main line, public domain and private domain when building the tiktok, including the online, Taobao, Jingdong and other electronic business, and the social network of jowl, Xiao Hong and so on.
Although the new generation of parents are Internet natives and have a special preference for online channels, with the increase of e-commerce traffic, the purchase scene has become diversified, and offline opportunities are also highlighted. The laying of offline channels can effectively cover the parents, prolong the user consumption cycle, or become an effective way for children’s snack brands to break through. In short, brands need to be laid out in combination with the preferences of the crowd.
Of course, what is more important is the differential competition of products. It is better to be different than more volume.
“No added snacks” is one of the most concerned vertical markets for leisure snacks this year. At present, many players have gained a foothold in the subdivided categories. In the face of major strong brands, emerging brands, Jianghu doctors and yulovely have chosen misplaced competition.
Established in 2018, the “Jianghu doctor” is now rooted in the subdivided field of children’s “medicated meals and snacks”, has established the positioning of “no added meals and snacks”, and is committed to remaking the concept of medicated meals for products on the market. At present, it is the leader in this subdivided field.
With the endorsement of its parent brand yutaiping, yulovely has certain advantages in the source supply chain. From the perspective of product layout, its main tuna meat intestines have made some differences in the same cod intestines and pork intestines. However, due to its conservative publicity on public traffic, it focuses more on its own operation and maintenance, so the current audience The group is still relatively narrow.
From the observation of the commercial hidden society team on the children’s snack track, the domestic children’s snack consumption is at a relatively primary stage, the children’s snack market pattern is relatively scattered, there is no absolute monopoly, which belongs to the “enclosure war” , this also creates many opportunities for newcomers. Enterprises need to constantly grasp the market trend and consumer demand, adjust the channel, marketing and other strategies in time, but finally return to the differentiated innovation of products.
Author: Ling Zhu; Editor: Qi Ma; source: shangyinshecj, reprint authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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