China Food

How did Lanzhou Ramen defeat Shaxian snacks and braised chicken rice?

“ 
the fate of China’s three famous dishes.
 ”

Author: Li Juzi; Editor: Yu Peiying

Source: Yuanchuan Business Review (ID: ycsypl)

In 2011, Shaxian snacks were planned to be listed.
At that time, yuan Chaohong, the newly appointed head of Shaxian County, intensively investigated Shaxian snack stores across the country and was ready to integrate owners into shares. Shaxian government has also set the tone for the long-term development of Shaxian snacks: brand protection, quality improvement, chain and listing.
Five years later, the “first share of pig raising in China” chick Eagle farming and animal husbandry invested 135 million yuan in Shaxian snacks, which is regarded by the outside world as Shaxian snacks to pave the way for listing. However, chick Eagle farming and animal husbandry was forced to withdraw from the market in 2019 – the company’s financial storm, and it is rumored that they can’t afford to buy feed, so hungry pigs eat each other in the circle [1].
However, the biggest obstacle to the listing of Shaxian snacks is not the farming and animal husbandry of young eagles, but the confusion of business subjects, great difficulty in store network integration and unclear performance return. In a word, it is difficult to chain.
Public information shows that the chain rate of Shaxian snacks is only about 3% of the total number of stores, while the average chain rate of Chinese catering is 15%. The chain degree of Shaxian snacks is far from the passing line [2].
WanDian scale Shaxian snacks can be said to be a national realization of folk wisdom. The epitomizers of this wisdom include Lanzhou beef noodles and braised chicken rice, which are also listed as the “three famous dishes in China”. However, before 2020, they are an individual practice of realizing local flavor in the country until Lanzhou beef noodles set off a round of institutional investment boom in the catering industry.
What is the source of China’s “three famous dishes”
After Lanzhou beef noodles was “redone” by Ma Jiyong, Chen Xianggui, Zhang Lala and other brands, the unit price of driving into the shopping center rose from 8 yuan to 26 yuan. There were not only diners but also wind speculation organizations in line.
By the end of 2020, Tang Binsen, founder of Yuanqi forest, had invested in Ma Jiyong, and 15 investment institutions had broken through the door of Lanzhou beef noodles. What’s more, Guo Zhenwei, investor of Sequoia Capital, ran straight to Hong Lei’s house, founder of Ma Jiyong, with a bottle of wine. Today, Ma Jiyong is valued at 1 billion yuan, while Chen Xianggui’s financing rhythm is more intensive. Four rounds of financing have been completed, with a valuation of nearly 1.5 billion yuan; Zhang Lala’s valuation also reached 400 million [3].
In the face of the popularity of Lanzhou beef noodles by institutions, Shaxian snacks and chain brands that want to be listed most, and the famous braised chicken rice, can’t help asking themselves: don’t I deserve it?
Universal: popular taste
After “Ma Jiyong” ate a bowl of noodles, Zhu Xiaohu, the managing partner of Jinshajiang venture capital, recognized Lanzhou beef noodles as the entrepreneurial outlet, and told the team to see all the Ramen tracks, and soon invested in another Ramen brand “Zhang Lala”.
Why Lanzhou beef noodle is particularly suitable for VC investment, Zhu Xiaohu explained that “it is relatively standardized and easy to expand. It is not a big problem to open 10000 stores [4]”.
At present, Chen Xianggui is the fastest expanding of the three Lanzhou beef noodle brands, with 129 stores and 77 to be opened soon; Ma Jiyong followed, opening 81, Zhang Lala walked slowly, opening 52.
However, more than 80% of the stores of the above brands are in the first tier cities, and the rest are also arranged in the new first tier, and they are only a hundred stores. Where does the investor’s confidence in the expansion of Lanzhou beef noodles come from?
The answer should be from two aspects: category advantage and efficiency advantage. The former is composed of taste itself and per capita consumption. They jointly decided that under the background of chain expansion, the ceiling of Lanzhou beef noodles was higher than that of Shaxian snacks and braised chicken rice.
The category determines the company’s traffic, indicating how pervasive this category is [5]. Compared with Shaxian snacks and braised chicken rice, Lanzhou beef noodle has a more broad spectrum in the country: the longest life cycle, the average distribution of stores, and the taste can meet the new trend.
1) Life cycle
The longer the life cycle of a catering category, it often means that consumers have a higher acceptance of this taste.
The origin of Lanzhou beef noodles is hundreds of years earlier than the other two types. The production standard of Lanzhou beef noodles with “one innocence, three red, four green and five yellow” was determined in the 1920s.
In 1919, Ma baozi established the production standard of Lanzhou beef noodles
In contrast, the standard of Shaxian snacks is vague. In the late 1990s, outsiders came into contact with the “old four kinds” of Shaxian snacks: flat meat, noodles, stewed cans and steamed dumplings. However, the previous standard Shaxian snacks did not have noodles and steamed dumplings, but sold local characteristic rice jelly and tofu. Shaxian snack office has standardized Shaxian snacks for more than ten years. The standard is “what people like to eat is Shaxian snacks”.
Braised chicken and rice are younger. They first developed from Shandong cuisine restaurant in the 1990s, but now the cognition of their taste is more derived from Yang Mingyu’s improvement in 2013.
2) Store distribution
A closer look at the store distribution of the “three famous dishes” shows that the greater the number and the flowering in various places, the stronger the national universality of this category.
First of all, according to the statistics of the narrow door meal eye of the catering data query platform, the largest number of stores in the “three famous dishes” in China is Lanzhou beef noodles, followed by Shaxian snacks. Just in response to the sentence “every Lanzhou beef noodle will ambush a Shaxian snack within 50 meters”, both of which are nearly 40000, The number of outlets for braised chicken and rice is only 5000 (the statistical caliber is different, and the actual number of outlets may be higher).
Three brothers in the street
If the scale is equal, the distribution is enough to reflect the universality of beef noodles. The average number of beef noodle stores in Lanzhou is more than 1000 in the top ten provinces. However, the top three provinces of Shaxian snack Stores – Guangdong, Zhejiang and Jiangsu – account for half of the country, and are concentrated in the above three provinces.
There are only a few braised chicken and rice in our store. In terms of distribution, one of every five stores is opened in Shandong.
Northwest wind Lanzhou beef noodles are also popular in Shanghai
3) Taste trend
Shaxian snacks are naturally light in taste, braised chicken, rice, heavy oil and salt. Lanzhou beef noodles can extend to both ends – the noodles themselves have a light taste, but adding oil and pepper to the soup not only caters to the development trend of “heavy taste” of new catering, but also does not produce a greasy feeling.
Source: AI finance and Economics
In short, compared with Shaxian snacks and braised chicken rice, the success probability of remaking Lanzhou beef noodles with the new brand is higher, because this category has a larger consumer group and is more likely to enter areas with different taste habits.
Repurchase: collocation addiction
The market size of a category is the result of the joint action of user base and per capita consumption.
The per capita consumption of Ma Jiyong, Chen Xianggui and Zhang Lala is about 40 yuan, almost twice that of braised chicken, rice and Shaxian snacks.
The high customer unit price routine of ramen is written in the side dishes, and the per capita order is a three piece set: staple food + barbecue / cold dish + dessert, which is derived from the strong combination of Lanzhou beef noodle taste.
On the menu of the new Lanzhou beef noodle brand, there are not only large items, but also various kebabs and special dishes, with unit prices ranging from 9 to 16 yuan. The income from selling mutton kebabs can account for 20% – 30% of the total turnover [6].
Chen Xianggui menu screenshot
In fact, “noodles + barbecue” is not the first of the new brand of Lanzhou beef noodles. It is done by Xiaomian (150) and Hefu Laomian (340) in larger stores. Song Qi, the founder of Xiaomian, chose barbecue as a breakthrough for product expansion. He believed that there were two main reasons:
The noodles with heavy taste are consistent with the barbecue taste; Noodles tend to be fast food, while barbecue has social function, which can extend the consumption scene after it is added.
In addition, pasta focuses on satiety, but the “fat” and “spicy” of kebabs can be more addictive and enhance repurchase. More importantly, the side dish is a high gross profit product. Sui Zhengjun, founder of the chain barbecue brand “wooden house barbecue”, disclosed that the gross profit of the barbecue string is about 50% [7].
Of course, selling small dishes will complicate the original simple SKU in the store, thus increasing the pressure on the supply chain. However, in recent years, with the rapid development of new catering, not only terminal store brands are in full bloom, but also suppliers are also catching up with the trend.
Taking mutton kebabs as an example, because it involves the link of “threading strings”, the standardization degree of the supply chain is low. As Sui Zhengjun said, if the standardization degree of the hot-pot/" 22375 rel="nofollow" target="_self">hot pot supply chain is 100%, then the barbecue is only 50% – 60%. However, while the highly addictive barbecue category is booming, it also ripens the upstream supply chain.
The new Lanzhou beef noodle brand has established cooperation with the alati barbecue supply chain, which is one of the earliest enterprises in the barbecue industry to establish a central factory through strings. At present, the daily output can exceed 600000 strings, and there is a professional cold chain logistics and distribution team to solve the store’s worries [8].
Looking at braised chicken, rice and Shaxian snacks, the supply of dishes still stays on the basis of meeting the basic needs of satiety, lacking addictive tastes such as “sour, hemp, spicy, crisp and sweet”. Whether the taste of braised chicken and Shaxian snacks can have a chemical reaction with “addictive taste”, at least there is little such supply on the market at present.
Shaxian snack menu
In addition to the addictive side dishes, the variability of Lanzhou beef noodles can also create freshness.
The new Lanzhou beef noodle store can combine 30 different SKUs on the “one side”, and there are 8 options for the thickness of smooth noodles. Whether to add soup or spicy or not can enrich the supply on the basis of “unchanged”.
This product positioning is similar to the Japanese wanghong Ramen restaurant Yilan ramen, which focuses on Japanese dolphin bone ramen. Although there is only one product, there are many changes, including the hardness of noodles, the saltiness of soup, the need for barbecue, the degree of spicy, etc. to increase the SKU of this super single product. In 2019, there were only 86 stores of Yilan ramen, with an annual turnover of more than 20 billion yen (equivalent to 1.2 billion yuan) [9].
Yellow stewed chicken and rice have some advantages in this regard. The same stewing method is reliable. The combination of side dishes such as “potatoes, oil bean skin and quail eggs” gives a sense of freshness, but it is difficult for Shaxian snacks to learn this routine. The rich supply is basically realized by increasing dishes.
Yang Mingyu’s menu of braised chicken and rice
Expansion: efficiency
The taste is naturally universal and has a strong sense of collocation with addictive dishes, which is the category advantage of Lanzhou beef noodles, and the condition that determines whether a category can expand rapidly is the degree of standardization.
Braised chicken and rice are highly standardized, with unified seasoning ingredients. Guests can heat it after ordering and serve it in 2-3 minutes, but its category advantage is inferior to Lanzhou beef noodles. The universality of taste is closer to Shaxian snack of Lanzhou beef noodles, but it can’t beat the former in efficiency.
Now, to redo a catering category, we not only need to use the direct marketing model to build a brand, but also need to have a franchise gene to improve efficiency, that is, the central kitchen is de chefs, and the new Lanzhou beef noodles are rationalized. This “both needs and needs”.
1) Mature pasta supply chain
The materials required for a bowl of beef noodles are not complex. At present, there is a relatively mature upstream supply chain, and outsourcing industries such as cooking package and pre packaging are also one-stop services.
In addition to the traditional three piece set of Shaxian snacks, there are also a series of SKUs such as set meal, cover pouring, fried rice and stewed flavor, which undoubtedly increases the difficulty of preparing materials.
2) Standardized central kitchen, independent of chefs
The investors of Huaying capital once said that one of their principles for investing in catering enterprises is to invest in standardized catering, and they don’t invest in “Chinese food with chefs”.
Lanzhou beef noodle store needs time-consuming training for only Ramen teachers, and new employees can learn it in about 7 days. However, Shaxian snack is a fast-food collection with many SKUs. It is obviously more difficult to get rid of chefs completely.
Shaxian snack chef training class opened by Chef School
Lanzhou beef noodle store now only retains four production processes: ramen, noodle cooking, soup and topping, and other material preparation work can be prefabricated.
The soup bottom can be transported to the store in the form of ice and soup jelly after being prepared in the central kitchen; Radish slices, beef slices, chili oil and dough for Ramen can be prefabricated. The on-site production in the store can serve the dishes within one minute at the fastest, which is as efficient as mechanical noodle cooking, which can effectively increase the turnover rate of the store [6].
3) Balance between efficiency and taste
Although Lanzhou beef noodles do not rely on chefs, it can still ensure the taste on the premise of pursuing efficiency. In contrast, steamed dumplings made and steamed must taste better than thawed and steamed dumplings.
Thanks to the mature supply chain and simple meal making process, the Ping efficiency of the new Lanzhou beef noodle brand is outstanding. According to a later report, the Ping efficiency of Chen Xianggui beef noodles in July this year was 3827 yuan, about half higher than that of Ajisen ramen, catching up with Starbucks. In 2019, the global average Ping efficiency of Starbucks was 4430 yuan [10].
Ending
A few months before the outbreak of the epidemic in 2020, the chain brand “extra pickled fish” performed poorly, and investors did not appear like guests.
Jiang Jun, who had worked hard in the fast food industry for many years, finally “abandoned pickled fish and went to Lanzhou beef noodles”, because he found that the business of the noodle restaurant on the street was very good at that time. In March 2020, Jiang Jun renovated the original two one person pickled cabbage and fish stores into Lanzhou beef noodle stores. Four months later, Chen Xianggui appeared.
Hong Lei, the founder of Ma Jiyong, started selling noodles earlier than Jiang Jun. opening Lanzhou beef noodle restaurant is their second catering venture. Hong Lei was a “shovel seller” in the catering industry and engaged in the sales of kitchen utensils. Now, they are chain noodle restaurant owners valued at more than 1 billion.
When Lanzhou beef noodles became the traffic darling of the shopping center, Shaxian snacks and braised chicken rice became people’s memory negatives, still recording some “invariance” of life on the street.
However, Lanzhou beef noodle, which won Shaxian snacks and braised chicken, is just a new group of tenants of the shopping center: in order to get a good position, the new Lanzhou beef noodle brand charges a high price for the shopping center, and some are even three times higher than the average level [11].
Who is the snipe and clam, who is the fisherman, history is always surprisingly similar.
Reference: [1] more than ten million generations of breeding fees are pending. The farmers “collect debts” for the chick Eagle farming and animal husbandry. The international financial news [2] created an “upgraded” Shaxian snack. What changes have been made to this brand? The catering boss’s internal reference [3] well-known VC’s have invested in Lanzhou beef noodles, and the investment network [4] crazy Ramen: Sequoia and Gaoling bet, and Zhu Xiaohu said he can open 10000 stores, Entrepreneurs want to be 100 billion companies. Chinese entrepreneurs [5] are new catering chains. How do investors value it? Why does bright company [6] focus on Lanzhou beef noodles? Which is the best in the country? What makes the most money is it. The egg sister entrepreneurship [8] produces 600000 mutton kebabs per day. The alati barbecue supply chain helps the performance of catering peers take off again. The narrow door meal eye [9] moves up and down, and the impact of the new type of lamb kebab? Number of stores? Fukuoka intelligence [10] the capital transformation of the catering industry, latepost [11] used three times the rent to “rob” a pit in the shopping center later, and Lanzhou beef noodles “killed crazy”, yingshang.com
 
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