China Food

Oreo is going to launch the cake? Snack giant Yizi is also eyeing the new baking!


Snack giant cross-border baked goods, what is Yizi thinking?


Text: Carol he

Source: foodaily daily food (ID: foodaily)

Oreo is going to launch cake products?
Recently, while attending an important meeting to talk about the future development plan of the Chinese market, snack giant Yizi will launch a series of Oreo cake products this year.
How did Yizi, who has always taken biscuits and candy as its basic business, suddenly decide to cross into the field of baked goods in the blank market?
Next, foodaily will come and take a look with you. What exactly does Yizi want to do behind Oreo’s march into baking? In the current Chinese baking market, how many chances can Yizi, a “newcomer”, win?

from Oreo into baking, Yizi’s ambition has traces to follow

On February 22, Yizi international focused on the Asia Pacific, Middle East and Africa (AMEA) regional strategy at the 2022 New York consumer analysis conference (cagny), and introduced in detail this huge and diversified market opportunity and key strategic initiatives to promote sustainable growth and create value.
When talking about the strategic objectives of the Chinese market and future growth opportunities, Joost Vlaanderen, President of Yizi Greater China, mentioned that it would enter the blank market of Yizi China – the baking food field with large scale and rapid growth through the launch of Oreo (frozen) cake.
Source: cagny 2022 focus on Asia Pacific: long term growth engine
However, Yizi’s move is not a sudden fever, but “premeditated”. Previously, in November last year, Yizi China signed a strategic cooperation and equity investment agreement with baking business evirth in Shanghai. At the same time, it will also make minority equity investment in Enxi village industry to accelerate its development in the baking industry.
Enxi village industry is a leading enterprise in the domestic baking industry. It mainly produces mousse cake, thousand layer cake, Dafu, ice moon cake, cookie and other types of cakes. The product sales network has spread all over the country and is also exported to the Japanese baking food market.
Source: Enxi Village
Through this cooperation, Yizi has entered 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. As a new entrant in the baking industry, Yizi introduces domestic mature baking partners to jointly develop innovative business through “cross-border cooperation” with baking suppliers, which will greatly reduce the problems of product development, brand cognition, cold chain establishment and so on from the cross-border of snack brands to unknown fields.
The launch plan of Oreo cake is an important step for Yizi to enter the Chinese baking market after this local cooperation.
Why did Yizi choose to enter the cake market from the Oreo brand? Foodaily believes that this may be related to Oreo’s perennial experience in the baking industry.
Source: Little Red Book
Everything is Oreo. As the most classic IP of Yizi, Oreo has long been the fairy CP of milk tea, baking and dessert, “twist, lick, soak…”, Oreo keeps unlocking the innovative eating methods of patterns. In 2020, Oreo once again broadened the eating scene of Oreo biscuits and launched Oreo biscuit crumbs, making its matching image in the baking scene more popular.
Small monster cake with explosive cute value and Oreo Haiyan Mousse with sweet and salty value. Search for Oreo baking applications on platforms such as little red book and kitchen, and you can find a variety of relevant recipes.
Oreo, who has a sense of existence in the cake, bread and even milk tea industry, has long been unwilling to only play a supporting role in the baking field.
Source: Oreo
In 2017, Oreo locked in the Chinese moon cake market and released four flavors of Oreo limited moon cake series. In 2020, Oreo and holly come together to launch the limited Oreo air box, semi cooked cheese, double cheese and soft heart cake series, which can be described as the double kitchen ecstasy of the dessert party.
Source: Holiland
With genes similar to baked goods, Oreo has accumulated strength and experience in exploring the Chinese baking market.

cross border new fields, what’s Yizi’s idea?

For Yizi, China is a huge market in rapid development.
According to the financial report data released by Yizi, in the post epidemic period, AMEA (Asia Pacific, Middle East and Africa) region has achieved a strong recovery, with an annual compound growth rate of 4.7% in the past three years; In terms of profitability, key markets such as China and India exceed the average level of the group. Among them, the Chinese market accounts for 22% of the revenue of Yizi AMEA area.
As a global snack giant, Yizi also has a high enough Jianghu position in China’s snack industry.
At this meeting, fan Ruisi mentioned that in China’s biscuit business, with its 25% market share, Yizi is the “indisputable” market leader in China’s biscuit category, and its share is four times that of its second ranked competitor. In the field of chewing gum, Yizi rose to the second place in the category in nine years from scratch, and its market share increased to 20%.
Source: cagny 2022 focus on Asia Pacific region: long term growth engine
In terms of biscuits and chewing gum business with strong foundation, Yizi has achieved steady development. This time, Yizi has focused on the bakery field with relatively blank market, which is Yizi’s insight into the great potential of China’s bakery market.
The report on the development trend of baking industry in 2021 released by youzan x Weiyi pointed out that the market scale of China’s baking industry was 235.8 billion yuan in 2020. The growth rate of industry market scale from 2015 to 2019 was more than 9%, much higher than the growth rate of global baking industry market scale. It is expected to maintain a growth rate of about 7% in the next five years.
Photo source: 2021 baking industry development trend report praised x Weiyi
Among the snack foods with a trillion market, baked goods has become the first competition. However, due to the low entry threshold of the baking industry, the leading enterprises have not yet formed a large-scale advantage. In 2020, the market share of the top 5 enterprises in China’s baking industry accounted for only 10.8% of the whole industry.
Photo source: 2021 baking industry development trend report praised x Weiyi
If we can take a share in the baking cake market with large stock, fast growth and low market concentration, Yizi’s business development in China is bound to go to a higher level. Aware of the growth opportunities of this blank market, Yizi China will also take the Oreo cake as an opportunity to enter the baking market as one of the “clear strategies” to continue to accelerate its growth trajectory.

hot baking track, is Yizi a good chance of winning?

But the baking track that Yizi likes is not easy to survive. There is a strange theory in the baking industry that cards are shuffled once every five years.
Over the past period of time, the baking industry is also experiencing the current situation of “ice and fire”. On the one hand, there is the “closing tide” of traditional baking stores and former online popular stores, and on the other hand, a large amount of capital has poured into the baking industry, giving birth to a number of emerging baking cake brands, stirring the whole baking market and becoming an important position for new consumption innovation. AI media consulting data show that from January to September 2021, there were 22 investment events in the baked food industry, with an investment amount of 5.7 billion yuan.
Photo source: 2021 food and beverage industry investment and financing inventory
With the upgrading of national consumption, consumers’ demand for baked goods continues to rise, and presents a more diversified development trend. While the scale of China’s baked goods market continues to expand, baked goods also continue to derive more consumption scenes and segments.
For example, the egg yolk pastry of xuanma food and the hand-made toast of dad sugar cut into the baking market with a single subdivided commodity to grasp the specific memory points of consumers; The cutting-edge brands represented by Mo Mo dim sum Bureau, Hutou Bureau and Standard Chartered cake integrate Chinese dim sum ingredients with Western baking methods, and innovate in combination with national fashion elements; Daoxiang village, Xianghe Bobo shop and other traditional and time-honored brands also dig deep into Chinese traditional culture in product development and marketing, and rejuvenate the brand vitality with fashion, national style and other elements
Photo source: Mo Mo dim sum Bureau, Hutou Bureau, Standard Chartered bakery
These new baking brands poured into the track and developed rapidly with innovative product forms and marketing methods. At the same time, they also had a great impact on a group of brands with single products, aging brands and old operation modes in the industry.
So in the increasingly fierce competition in China’s baking market, can Yizi, a “newcomer”, seize the opportunity and expand its territory in this new field?
First of all, Yizi has enough confidence in its ability to build brands and carry out localized innovation in China.
“The wave can’t stop at all”. Since its entry into China in 2012, Yizi’s xuanmai chewing gum has led the trend of chewing gum with the characteristics of “lasting delicacy”, portability and sharing. At the beginning of China’s “acclimatization”, Oreo quickly adjusted its localization, reduced its size and sweetness, and more catered to the tastes and eating habits of Chinese consumers. In order to meet the contradictory psychology of young consumers who want sweets and don’t want to get fat, Oreo launched a new 0 sugar Oreo series last year
Source: Oreo
Secondly, Yizi’s market access ability in China is also a major advantage. “Yizi China has entered the top 30 cities in the market, and these places account for 40% of category consumption, and Yizi China has developed the channel expansion mode in each place according to local conditions.” Fan Ruisi pointed out.
Take Oreo as an example, first cultivate deeply in the traditional channels, optimize and reform its own dealer system, and quickly penetrate into the convenience stores in the third and fourth tier cities; It is also working on e-commerce and o2o platforms, cooperating with tmall platform to create phenomenon level out of circle cases such as Oreo music box and DJ station of “playing while eating biscuits”, and jointly release spring series of new products online on platforms such as hungry and taoxianda in 2020.
Orio music box, photo source: Orio
However, what can capture the hearts of consumers most is Yizi’s ability to “play together” with young people.
For mass consumers, Oreo is no longer just a simple cookie, but has become a delicious and fun social currency.
The perfect diary of cross border beauty brand has been launched, and Oreo has launched the two “powder air cushion” of Oreo’s White Peach Oolong incarnation, and the powder mattress of “Cherry Blossom Matcha flavor Oreo incarnation” inspired by Oreo’s spring limited products. Last year, Oreo also joined hands with the Forbidden City to build a “edible Forbidden City” with 10600 Oreo biscuits, showing huge brain holes and novel fun.
Source: Oreo digital English
These excellent congenital conditions are undoubtedly a great help for Yizi to develop the bakery business in the Chinese market, but it is not easy for even giants such as Yizi to achieve considerable development in the highly competitive bakery industry. With the cake launched by Oreo, we will wait and see how Yizi will cut into the baking track and how this entry will stir the “bloody rain” of China’s baking food track.
reference material:
[1] Cagny 2022 spotlight on AMEA region: a long-term growth engine
[2] “Yizi is replicating Yizi! China’s president recently revealed that Oreo cake has been arranged” he Danlin
[3] Analysis report on competition pattern and consumption behavior of China’s bakery industry in 2021
[4] Why can Oreo continue to “fire” in China Morketing Rita Zeng
Cover image source: Oreo official website
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