China Food

30-year history of Chinese snack Jianghu


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when you look back, you will be surprised that China’s leisure and snack industry has evolved for more than 30 years, and the development track of snack enterprises has changed several times.
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Chicken chips, konjac toast, collagen soft candy, seaweed fish crispy, protein bar, low calorie milkshake, tiger skin chicken feet, egg yolk crispy, yogurt fruit cereal… Contemporary young people are more and more particular about eating.
Different from the previous white rabbit milk candy and superior potato chips, even three squirrels, baicaowei and liangpin shops are “getting old”. The new brand captures the psychology of a new generation of consumers who want to eat and are afraid of being fat, and opens up a new category in the field of no man’s land.
According to AI media consulting data, since 2010, the scale of China’s leisure and snack industry has been expanding. By 2020, the scale of China’s leisure and snack industry has reached 1120 billion yuan, and it is expected to reach 1156.2 billion yuan in 2021.
There are thousands of snack track brands, which are very lively. When you look back, you will be surprised that China’s leisure and snack industry has evolved for more than 30 years, and the development track of snack enterprises has changed several times.
Behind it is the gradual upgrading of China’s consumption trend and the rise and fall of snack enterprises due to product and channel changes.
Snack 1.0 era: great quantity is king
The first generation of snack giants in China generally rose in the 1990s. The post-80s and post-90s who grew up in the most fashionable single “the spring breeze of reform” in the millennium are the first generation fans of the snack market.
The Four Eyed prince who dominated the campus in those years was not the one who had a full set of Water Margin hero cards with simple face flavor, or the girl with steel teeth who could inadvertently take out lonely God (langweixian) during the spring outing.
Behind these bizarre snack bags were the two Taiwan funded giants in the leisure food industry at that time, unity and Wangwang.
Uni president group came to the mainland market in 1990. With advanced marketing, uni president’s small head, small raccoon and other simple noodle products are popular in the leisure food industry.
Almost at the same time, Wangwang group began to build factories in the mainland. After several years of product and channel exploration, it won half of the domestic market by relying on several snack explosives such as langweixian, Wangwang Xianbei, snow cake and wangzi milk, and landed in the capital market in 1996.
There is also Xu Fuji, a contemporary student of a Taiwan enterprise that can not be ignored. From its establishment in 1992 to its stable position in the domestic candy industry in 1998, Xu Fuji has been gradually integrated with gold coin chocolate and Zeng Zhiwei’s duck barking laughter. Even today, the post-80s and post-90s still have a conditioned reflex when they hear the new year BGM.
In the era of blooming flowers, local snack brands are no less impressive.
It was once given to then US President Nixon as a “national gift” in the 1970s. It is a leisure pen that big white rabbit milk candy disdains to repeat. This old Shanghai sugar factory, which has had “China’s famous trademark” since 1993, even undertook the historical mission of “anti Western revolution”.
Xizhilang entered the jelly industry with only 400000 yuan of original accumulation in 1993, and realized the field monopoly five years later. “Xizhilang”, “Crystal Love” and “CICI jelly” became the top products in the jelly pudding industry at that time.
In 1998, Chen Xianbao, the father of “bang bang Bing”, aimed at the melon seed business prevailing in his hometown of Anhui, and Qiaqia melon seeds were born through a new process of boiling spices and herbs. Put on a red kraft paper package, Qiaqia stands out from its peers mainly in bulk.
Fujian Dali, founded in 1989, looked forward to a turnaround opportunity at the beginning of the 21st century. At that time, Dali launched Daliyuan egg yolk pie with a price lower than 1 / 3 of haoliyou, which impacted the sales monopoly of this Korean food enterprise in China for four consecutive years. Subsequently, Dali followed suit and produced two kinds of explosive products, vibe and delicious, so that the business line spread all over the country.
It was a fascinating “big” era——
The model of “large single product + large production + large channel + large retail” gave birth to these “snack kings” in the 1.0 era. According to the public demand and market characteristics, they focused on the research and development of a small number of SKU goods, and then through large-scale mass production, with the help of thousands of dealers, they finally reached consumers all over the country.
They are also the first, largest and best batch of enterprises to do marketing. Contemporary popular ghost animal advertising, star endorsement, IP co branding and customized packaging are nothing more than the concept renovation of that year.
As the fundamentalism of China’s snack market, they have been trapped in the illusion of glory for 20 years because of their rich profits and experience. When I got back to my mind, I found that those ugly opponents had erected insurmountable walls around them.
Snack 2.0 era: brand chain
After 2000, the “snack kings” who have accumulated more than ten years have successively dug up the first pot of gold in the field.
The turnover of big white rabbit milk candy reached 600 million yuan, Qiaqia melon seeds opened the rapid growth of sales of more than 1.5 billion yuan, Dali directly entered the 10 billion club and ranked among the “top 500 Chinese private enterprises”
Even if these senior enterprises have entered the top ranks in financial performance, they are far from enough to fill China’s wide and deep snack market, and some latecomers gradually emerge.
In 2002, I really want you to be no longer limited to jujube slice products, and complete the subdivision of “jujube snacks” with jujube vinegar, strange fragrant jujube and red jujube ginseng tea; In 2005, Yanjin shop, which grew up from a small food workshop, officially embarked on a long and hard road of self-developed food.
In 2004, the newly launched fragrant tea had few rivals in the instant cup milk tea market, and made rapid progress towards the sales target of “two circles around the earth”; Youyou food, which was founded in 2007, soon established its position in the vertical category with a pickled pepper chicken claw.
Facts have proved that although these snack enterprises generally followed the old path of their predecessors, these followers who focused on making products were later recognized by the capital market. Almost at the same time, a new model of snack industry is quietly emerging.
In 2001, Laifen, a chain brand of leisure food, was officially born. In fact, it had its first small store in Shanghai two years ago.
At the beginning, Laifen mainly engaged in the speculation business that was not prosperous at that time, among which the sales volume of the single product “Honey walnut” was particularly top-notch. Perhaps it is to remember the “walnut rich history” with strong age color. When Laifen was listed, he directly led a cow carrying walnuts to the door of the Shanghai Stock Exchange.
Later, with the continuous expansion of business, the categories of fried goods in Laifen increased continuously, until it covered the whole category of snacks such as meat products, bean products, dried fruits and vegetables, Tangqiao jelly, pastries and imported food.
From the perspective of development ideas in the initial stage, laiyifen has inspired many new snack upstarts intentionally or unintentionally. The one who has learned the most is the liangpin shop founded by Yang Hongchun.
In 2006, Yang Hongchun, who had just resigned from Kelon Electric Appliance, took up several old acquaintances and more than 600000 borrowed from relatives and friends and embarked on the road of entrepreneurship. The fledgling liangpin shop is not only the business model of chain stores, but also the idea of relying on dried fruit speculation to make a circle in the industry is the same as laiyifen.
However, different from Laifen’s hindsight in terms of categories, liangpin shop moved the idea of “gathering delicious snacks from all over the world in one store” as soon as it was founded; In terms of expansion, liangpin store’s tolerance to franchise stores is also different from Laifen’s persistence to direct stores.
Therefore, following the opening of the first store in Wuhan in 2006, a set of “set up a model first, and then recruit to join” has promoted the rapid expansion of liangpin store. From 28 stores in 2007, 88 stores in 2008 and nearly 1000 stores in 2012, liangpin store is not inferior to laiyifen in the first seven years in terms of store scale.
Such conspicuous achievements naturally attracted the attention of capital. In December 2010, today’s capital invested 51 million yuan and obtained nearly 30% of the shares of liangpin store.
In general, compared with the traditional snack enterprises’ overall responsibility from production to sales, the leisure snack chain stores represented by Yifen and liangpin stores have opened up an idea of “asset light operation”.
In terms of production, their products are manufactured by many OEM factories. At the same time, they do not adhere to the research and development of a few products, but strive to carry as complete snack SKUs as possible; In terms of sales, these enterprises rely on self built channels, and most of them are small and medium-sized street shops.
Both the production side and the sales side determine the competitive barrier of chain brands, which is changing from product R & D capability to enterprise supplier management capability. Therefore, they are not so much good at marketing brands as powerful retailers.
It is worth mentioning that liangpin shop and laiyifen have developed and expanded step by step, which makes it easy to forget the smell of grass sandwiched between them at that time.
Born in Hangzhou next door to laiyifen in 2003, he studied the style of liangpin shop and worked hard to expand baicaowei, which did not become a model sample of the third 2.0 era. In 2009, Baicao flavor, which barely opened 100 stores, had to stop in the chain era because of the bottleneck of expansion.
Fortunately, baicaowei’s achievements are not here.
Snack 3.0 era: national online
2012 is another watershed in the leisure and snack industry.
This year, the traditional food giants represented by Wangwang and uni president approached the highest point of market value one after another, but they didn’t know that this upcoming peak was their final glory.
Because in this year, the embryonic form of competition in the second half of the snack industry began to appear, and the first successful water tester was baicaowei, which failed in the era of chain brands.
At the end of 2010, Baicao flavor, which encountered the bottleneck of expansion, set foot online at the invitation of Alibaba. It seems that it saw the infinite potential of the Internet. Cai Hongliang, the founder, chose to completely abandon offline and concentrate on online.
Therefore, in 2012, when three squirrels and liangpin shop just started online, Baicao flavor had achieved online sales of 140 million yuan.
Liangpin shop is almost the fastest response in snack chain retail stores. In 2012, Yang Hongchun, who boasted to open 5000 stores across the country, got online with liangpin store and successively landed in dozens of online e-commerce channels such as tmall, jd.com and store 1.
Facts have proved that up to now, liangpin store still has only more than 2000 offline stores, but it does not hinder the online business from contributing billions of yuan of revenue to the company every year.
Of course, the most eye-catching snack brand in those years was the three squirrels known as “the first online snack”. After all, its rise was characterized by the unique story of that time – model subversion and capital fanaticism.
Founder Zhang Liaoyuan is the kind of business genius loved in Entrepreneurship articles. He took the lead in smelling the opportunity of e-commerce B2C as early as the beginning of 2010 and launched a project to sell pecans online. The online store called “shell fruit” achieved a sales volume of 20 million yuan in only one year.
After Zhang Liaoyuan’s sales target of “200 million in three years” was ridiculed by all “conservatives”, he decided to start his own business.
 
In 2012, three squirrels of the online brand “pure online + high-end nuts + cute pet IP” were favored by the capital obsessed with capturing the tuyere once they were online. Li Feng, who also worked for IDG at that time, and Xu Xin, who had invested in liangpin store, successively approached Zhang Liaoyuan and successively offered financing totaling more than 21 million US dollars.
The three squirrels, capital’s favorite, also lived up to expectations and achieved sales of 7.66 million yuan in the double 11 in that year, which directly exceeded 500 million yuan in 2016.
So far, the snack industry has entered the third era dominated by the Internet. Online prosperity gives the post-80s and post-90s who just grow into the main force of market consumption more choices, and also gives brands more ability to digest surplus production capacity and have closer contact with consumers.
In this stage of Online Leadership and product marketing, the core competitiveness of enterprises has become the adaptability to the Internet.
Therefore, the three squirrels and baicaowei that grew up in the beginning, as well as the liangpin shop that seeks deep access to online channels as soon as possible, can stand out and form a tripartite trend in this era. In contrast, Wangwang, who still rely on the old offline roads, inevitably began to pay for missing an era.
In 2014, the market value of Wangwang, Tongyi and Master Kang collectively peaked. Although the industrial accumulation ensured their financial dignity, it also sounded the horn of turning prosperity into decline mercilessly.
According to the financial report, Master Kang and unified beverage and instant noodles business entered a stagnation period in 2014; The revenue growth of Qiaqia food and Dali group slowed down, while Wangwang fell into negative growth for four consecutive years from 2014 to 2017, and the market value fell by nearly half.
It was not until 2017 that the awe of “Omni channel” appeared in the organizational structure of these enterprises. But at that time, three squirrels, Baicao flavor and liangpin store had ranked among the top three in the market share of the snack industry. Among them, Baicao flavor was listed with the help of the acquisition case of Haoxiang you.
In the 1.0 era, in addition to their tired performance, they also suffered the fate of being forgotten by the “children” who made them in that year.
Snack 4.0 era: health is king
When you are struggling to buy three squirrels, baicaowei or liangpin shop, the young generation Z have begun to abandon them.
According to the data, the market share of three squirrels, liangpin shop and baicaowei declined from 35% in Q1 in 2020 to 23% in Q1 in 2021. The recent third quarter financial report shows that the bat performance of the three snack companies has declined one after another, and negative marketing occurs frequently.
When snacks enter the “healthy” 4.0 era, what are young people eating?
Yuanqi forest leads the food and beverage industry into the era of Zero sugar, zero fat and low calorie; Fit8, a protein bar sold 100 million a year; Cereals such as Wang Manchu and ozak and wonderlab have opened a scientific alternative meal; Hyaluronic acid fudge and buffx have opened the door to functional food
“The previous food industry lacked demand for today’s young people, and there were major opportunities in the upgrading of the whole lifestyle.” Zhang Guangming, founder of fit8, said to the new consumption of watching the tide, “all kinds of snacks and drinks in life can be re made with healthy logic. The younger packaging, vision and communication language can be re marketed.”
In many conversations, Zhang Guangming said that what fit8 wants to do is to make future young people eat healthier, rather than simple fit8 products. Therefore, following the protein bar, probiotic protein powder, protein meal shake, protein biscuit and so on, “protein” has more possibilities.
Functional food, healthy food and healthy snacks are markets where consumers actively seek products with demand, which has also brought rapid dividends to the industry.
Specifically, taking “health components” as an example, higher-order health can be summarized by three additions and three subtractions:
The first addition is that modern pain points make classic tonic materials fashionable again. Modern pain points plus classic mental components become new health preservation methods, such as Quaker five black cereal;
The second addition is ingredient innovation. Food is the “new health care” choice of young people. Functional snacks, or functional snacks;
The third addition is to directly hit the pain points of the subdivided population, and add ingredients to make the mature categories get new opportunities. For different groups, find entry points, such as children’s growth needs, beauty of young adults and so on.
The first subtraction is sugar reducing wind. Minimalist formula, green sugar substitute, scientific sugar substitute;
The second subtraction is precise salt control. Natural salty and fresh, or the next outlet of health management;
The third subtraction is scientific meal replacement and nutrition management. Substitute meal is not equal to weight loss. There are many other effects and scenes, such as energy supplement for sports people, nutritional supplement for office workers, etc.
Under the national tide, new and cutting-edge domestic products emerge one after another, and old brands are upgraded and rejuvenated. Behind this represents new trends, new quality and new values, more dimensions of emotion, more yuan of senses and higher-level health.
A careful study of current net red products will find that their combination is not excessive curiosity, but a new soul under the harmonious collision of old elements; The new taste of wanghong meets the trend category, which is the inspiration of new pop products.
“The most surprising difference of new brands is that this generation of new brands has changed from the previous generation’s focus on sales to more emphasis on brand building. They usually have a deep understanding of marketing, product R & D and design, skillfully use digital marketing tools, and master the skills and methods of communicating with consumers.” LV Zhibin, director of the new consumption research center of Ali Research Institute, once said.
Consumers’ tastes and preferences are no longer a single dimension of preferences. Today, to meet consumers, they must start from their facial features.
Delicious food is of course very important for fresh food, but we should also pay more attention to consumers’ sense of smell, taste, hearing, vision and even tactile perception. At present, the interaction and experience between consumers and products are omni-directional, multidimensional and three-dimensional.
 
All roads lead to the same goal
In the 30 years since the 1990s, the snack industry has generally experienced three rounds of model innovation and opened the fourth round of change. Today, while the internal structure of the industry is basically taking shape, new challenges have come.
After about three years of adjustment and reflection, the snack kings in the 1.0 era have made efforts to layout online.
In 2014, Yanjin shop established an e-commerce company following the trend of the Internet; In 2016, I really want you to bring the new upstart baicaowei of online snacks under your command; In 2017, Wangwang shifted its focus to the in-depth layout of all channels.
In addition, in the 3.0 era when the national tide is popular and marketing is in power, the early generation giants who have always been good at publicity have opened a new marketing path of emotional theme without exception.
So Wangwang knitted sweaters, and the big white rabbit sold ice cream and perfume, and Xu Fu Chi and the Summer Palace jointly launched the cake box, trying to pry open modern consumers’ long memory and wallet.
At present, the diversification strategy makes the financial data of the above enterprises improve slightly, but “it is difficult to turn around”. Today, with mountains and traffic differentiation in the field of snacks, it will be difficult to return to the peak of market value that year.
Lai Yifen, who did not transform in time in the 2.0 era, worked in two ways, one to make up for the outstanding online homework and the other to improve the shopping experience of offline stores.
In 2018, Laifen became the fourth brand in the snack industry with a year-on-year increase of 7.01% and a total operating revenue of 3.891 billion yuan, following liangpin store.
However, the net profit of only 10.2655 million yuan, a sharp year-on-year decline of 89.87%, still makes the underachiever look weak.
During the period of rapid development, the “big three” in the era of 3.0 also encountered the stagnation of online penetration and the price struggle between the public and the private. The gradual homogenization of models and products once blurred their brand recognition. The intense track competition forced them to embark on the road of collective transformation without exception.
For the three squirrels and baicaowei online, switching offline is the most practical way to obtain traffic increment.
At the end of 2018, three squirrels announced that they would open 150 offline stores in 2019; Baicao flavor, which specializes in online, has picked up the physical store business again by relying on the offline advantage of missing you after a lapse of 8 years.
The liangpin shop, which originally walked on two legs online and offline, continues to speed up the offline layout when it already has more than 2000 stores offline.
It can be seen that although each strategy and path are different, omni-channel, diversification and difference have become the survival consensus of all snack enterprises. At a time when the industrial links are getting closer and smoother, traditional enterprises have put down their stature and online enterprises have returned to the entity. The core force of all participants is returning to the essential needs of consumers.
In terms of industry opportunities, the market depression in the 1.0 era will no longer exist, the bottom rotation in the 3.0 era may not appear in the short term, and the snack field has entered a relatively stable industrial period.
In terms of enterprise structure, liangpin shop, baicaowei and three squirrels are large and complete, with many categories and no characteristic memory points. The products of new brands emerging in various segments cater to the tastes of young people and continue to erode market share.
But even so, the heads of all capital markets add up to only 10 billion. This means that for the players who still stay, whether they can make it and how big they can make it depends on the ability of the enterprise.
After all, China’s snack market is like a child’s snack pocket. There will always be a place for better latecomers.
Author: Xinyi; Editor: perilla; Source: tide watching new consumption (ID: tidesight), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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