China Food

There are no stars in the tepid baking industry

Compared with the noise and silence of big factories, the decline of small brands is more helpless.

“In Wuhan, if you are not ready to lose money, don’t open milk tea shops and bakeries!”, Xiang Hong, who has been in the baking industry for nearly ten years, knows the fierce competition in this industry.
this is not a joke. For decades, her bakery has experienced ups and downs from the peak to the bottom. From the once popular online restaurant on the public comment list to now there are only four stores left. The management of backward times and the emergence of new brands have shattered the “star dream” of a small brand.
in the past 2021, negative news of store closures, layoffs and infighting in the baking and tea industries was everywhere.
market and consumers habitually turn their attention to star brands such as Xi tea, Starbucks and even Ruixing. However, under the dimensionality reduction blow of cross-border baking of these tea brands, small players in the baking industry are also much more impacted than expected. Under the background of the complete defeat of the brand effect of
, small players need to rely on their own “Internet celebrity settings” to win high traffic if they want to stay on the track.
from Xiang Hong’s point of view, this is the reason why his brand finally went downhill: there is no continuous capital chain to fight this endless consumption war.
how should small brands on popular tracks survive? Through the dialogue with the store manager who has been deeply involved in the baking industry for decades, quxiaofeiba tried to explore and disassemble this problem.
layoffs and closing stores are more than happy tea
“Layoffs” and “store closures” have always plagued the top players in the new tea industry in the past year. The latest hot search is Xi tea, which is reduced to less than 30 yuan and involves 30% layoffs. Behind it is a compromise to cool down the new tea circuit.
Another head brand, Naixue’s tea life is also difficult. In the performance forecast released in February this year, it is expected to record an adjusted net loss of 135 million yuan to 165 million yuan, which is very eye-catching. With the expansion of perspective, Starbucks, a star coffee brand, has repeatedly rushed to the hot search for news such as driving away the police and raising prices.
Regardless of other factors, among the three brands, there is a common feature: more or less involved in baking tracks. The success of the concept of “new tea + baking” has also suffered a number of traditional baking brands, which has indirectly become the reason for brands to retreat.
These traditional baking brands disappeared earlier and gave relatively low perception to the market. More famous brands, such as buoyant forest and yizhiduo, closed their stores in the middle of 2021.
At the same time, the online popular brands in this track are also having a hard time. In December 2020, beeplus lifestyle super bakery, known as the largest bakery in Asia and the largest bakery in Shenzhen, posted a notice of suspension of business. This has also become the epitome of the decline of new and old online popular brands represented by Beth guest and uncle chase cheese cake.
In addition to the epidemic, product aging and other reasons, the cross-border competition of head players has almost become the last straw to crush many baking brands.
The bakery where Xiang Hong works also ranks among the vast and dissipated brands. Before and after the epidemic, Xiang Hong experienced two job transfers because the company closed two stores in Wuhan.
After the first outbreak in Wuhan recovered in 2020, this brand, located on the 4th floor of Wanda Plaza in Han street, did not revive with other brands. On the contrary, a notice of closing the store was posted later, and not many consumers felt the disappearance of the store when people came and went offline. There are few online discussions.
From the peak period, it has spread all over Wuhan business district to now, and the business has returned to the base camp. Affected by the epidemic, Xiang Hong’s brand has almost adopted the same contraction strategy as chayan, Xicha and other head brands.
Xiang Hong used to work in a different place
But the only difference is that compared with the fierce discussion between the founders and employees in chayan Yuese group. There are too many waiters working in the restaurant from the top to the bottom, and there are not too many waiters working in the restaurant from the top to the bottom. No differences, no quarrels, everyone seems to have seen through their own future.
According to the enterprise check app, the registered capital of Xianghong bread brand is 300000 yuan, while the latest market value of Naixue’s tea after listing is as much as 7.2 billion yuan. Xiang Hong clearly remembers that after the epidemic, the boss regarded Naixue’s tea as a potential competitor and target of the brand at the company meeting more than once.
when there is a red fire in baking
Before the emergence of the new tea brand, Xiang Hong’s western baking brand was also impacted by another wave of upsurge: Chinese baking. With the popularity of Hutou Bureau and Momo dim sum bureau just settled in Wuhan, the defeat of Western baking is not unjust at all.
Before that, European bread once became a magic weapon for Western baking to occupy the domestic baking market.
There are up to 9 bakeries nearby. Photo source: Gaode map
Back in 2013, Xiang Hong was attracted by the harmonious working atmosphere of the company in her first year as a part-time employee. Later, she gave up the chance to go to college and decided to devote herself to baking.
“Clerk – reserve cadre – Team Leader – Store Assistant – store manager”, according to the fairly clear promotion mechanism, Xiang Hong achieved the post of store manager in eight years, one step away from the management. However, according to the company’s rules and regulations, the store manager is also divided into 123 levels. If you want to go up again, the difficulty of promotion is not the same as the previous promotion road.
At the same time, Xiang Hong’s salary has also increased from 80 part-time jobs to 6200 yuan after deducting five insurances and one fund as the manager of jiejiekou store in 2018. This was also a good treatment in the baking industry in Wuhan at that time.
In the past eight years, Xiang Hong has stayed in almost all branches of the company. She deeply felt the ups and downs of the company in recent years.
The store opened in April 2013 in Wuhan Square. As the first store in Wuhan, the business model focusing on Chinese simple meals and water bars was unprecedented loved by consumers at that time. Subsequently, western style catering began to prevail in China. The overall style of European style brand tone just gave the company the opportunity to transform. Of course, during this period, the ice cream business on which the brand is famous has never stopped. Because of good materials, even if the price is as high as 17 yuan, the daily sales can easily break through the three digits.
“What really makes the company to a higher level is the baking business”. From the clerk to the store manager, Xiang Hong knows the business development of the company like the back of his hand.
With the help of the cooperation with Wuhan local shangchaowu merchants, the company’s road of expanding stores is very smooth. The four stores at jiejiekou, guangbutun, Hanjie and guoguohu echoed each other. At the peak, the baking business once accounted for half of the total revenue.
The integration of dining area and baking area has also brought good improvement to the customer unit price. As long as customers come to dinner, they will also come to the baking area after dinner and take away several of the company’s signature products: Paris milk fragrance and Carmen bell.
Xiang Hong has a profound influence on these two names. Around 2016, the brand faced little competition in Wuhan Western baking sub circuit. In addition, European bag has a natural attraction for domestic consumers. Without any promotional activities, the above two products can be in short supply almost every day, although the selling prices are as high as 20 yuan and 18 yuan respectively.
Unfortunately, with the further popularity of western catering. The company has problems in the pace of iterative updating. More innovative products such as “dirty bag” and “cheese cake” occupied the mainstream of the market, and even Paris milk fragrance and Carmen bell, which are proud of the brand itself, began to flood the market.
Once the company’s signature products are now flooding the market
The homogenization of products has lost the freshness of the company’s philosophy focusing on health and quality. The entry of more players also leads to increasing pressure on profits. According to data, there were nearly ten bread brands located in jiejiekou business district in 2018. Among them, there are many old players such as Qianji, crown and Yuanzu, as well as emerging brands such as chuting and Artisan Bread.
The cross-border competition of new tea brands such as Naixue’s tea has made the company feel unprecedented pressure. “When he learned that the next door store might transfer the tea to Naixue, the boss decided to close the store at the intersection of Wuhan street for the first time.” Xiang Hong stayed here for more than three years and put a lot of feelings into it.
In addition, the company suffered an epidemic later, and its performance further declined. The number of staff in the store has decreased significantly, and the salary has also decreased significantly. “Even for our store manager, the salary of each person has been reduced by 20%, and there are only more than 5000 left.”. With the difficulties in the operation of more stores, Xiang Hong realized for the first time that he and his brand were facing the problem of survival.
big brands can’t afford it, and small brands can’t afford it
“It’s the most pleasant and difficult time to greet guests at the door of the store after handing over with colleagues on the morning shift every day”. The crowd outside the store is surging, but the store is surprisingly quiet. As the store manager, Xiang Hong is not less anxious because of traffic problems.
His jiejiekou store once handed over 50000 daily running records (Valentine’s day) before excluding the western food business. The company also put forward the goal of monthly income of more than one million. Of course, most of the time, the monthly flow of Xianghong’s store can only reach about 300000 to 400000.
“In terms of performance, even the overall level of the company can keep up with the average standard of the baking industry”. In Xiang Hong’s view, traffic anxiety did not lock the company’s development path in the baking industry.
Compared with the head brand suffering from traffic anxiety (high-speed expansion dilutes the passenger flow of stores, which is the biggest pain point), product homogenization, brand management and cost control can become more obstacles to the rise of small brands.
Traffic anxiety is not the biggest pain point of baking sketch cards, so I have to spend and shoot
The “Paris milk fragrance” and “Carmen bell” mentioned above were once the gold lettered signboards of Xianghong’s company and the guarantee for most consumers to go to stores for re purchase. However, due to the difficulty of applying for food patents, products with the same name soon appeared on the market. Trying to design another popular model is as difficult as going to heaven.
As a result, before long, the market was full of various Western baking brands with different brand names but highly similar products. They shared a smaller and smaller market share with each other until the emergence of Chinese baking and new tea, which completely pulled the Western baking down from the throne.
The second big problem is brand management. In 2021, there is still an endless stream of topics around tea beauty, internal fighting, tea preference and layoffs. With the continuous expansion of the scale, these new leading consumer brands have exposed the defects in the company structure management.
Xianghong’s own company also has many problems in internal management. “In my opinion, the boss of the company is the most human in the baking industry I have ever seen”. To some surprise, Xiang Hong gave a very positive evaluation of the boss of the company. But it is also too human, so that the company as a whole lacks clear rules and regulations.
Sometimes it takes a few hours to get a clear conclusion about the positioning of the brand as the store manager, and sometimes it takes Xiang Hong a few hours to go to the headquarters. Too many internal voices are also the biggest difficulty faced by many small brands when making important decisions.
Contrary to the continuous rumors of layoffs of head brands, Xiang Hong’s company did not lay off staff at the time of the most serious epidemic, but only reduced the scheduling. During this period, many employees who couldn’t stand low wages left by themselves, including many former Xiang Hong’s stores.
If the absence of management and product homogeneity can only be regarded as incentives, then the high cost is the biggest pressure on many baking brands.
The high rent and loss reporting rate are the biggest reasons why the company gradually turns to loss. At the beginning of the establishment of the brand, the company defined the brand as a medium and high-end baking brand. This can be reflected not only by the unit price of 40 passengers per capita, but also by the fact that the location is biased towards the negative floor of the high-end business district.
Therefore, how to smooth the rent has almost become a problem that the management is thinking about every month. According to Xiang Hong, the company’s stores at the intersection of the street need to pay up to 100000 yuan of rent to the new world department store every month (sometimes calculated based on the increase of turnover), and then exclude factors such as property fees, utilities and labor costs. Even if the baking products have a gross profit margin of up to 70%, once there is a problem in the passenger flow, the performance lower than 300000 may lead to a loss at any time.
Another major cost component makes Xiang Hong feel more deeply. Nowadays, baking brands are focusing on freshness and quality. Products without outer packaging can only be sold on the same day. Even products with outer packaging such as toast and cake can not be sold for more than three days.
After 2018, the company’s traffic declined, and Xiang Hong had to do the same thing every day after work: carry the black plastic bag with unfinished bread to the dustbin at the back door of the store and throw it away. When business is good, there are nearly ten bread losses reported every day. When business is bad, it is common to lose more than 20 bread a day.
consumption tabulation
Compared with controllable costs such as personnel salary and logistics transportation, Schrodinger’s “loss reporting rate” often makes the profit of Xianghong’s store into uncertainty. Although it has a gross profit margin of up to 70%, all this should be based on the premise of selling. In terms of material selection, Xiang Hong’s brand is also the first batch of brands that use pure animal cream. Compared with the materials mixed with animal and plant cream, the taste and quality are greatly improved, and the material cost is also greatly increased.
Not long ago, Naixue’s tea announced that the adjusted net loss in 2021 is expected to be 135-165 million yuan. From 2018 to 2020, the net losses of Naixue tea were 66 million yuan, 39 million yuan and 202 million yuan respectively, with a cumulative loss of more than 300 million yuan in three years.
Initial investment, daily operating costs, material costs, staff costs and rental expenses have always plagued the “naixues”, and small brands like Xiang Hong, which lack capital favor, are more difficult to dismember this problem.
According to the report on the development trend of baking industry in 2020, the share of offline channels such as baking stores and supermarkets has gradually decreased, while the orders of online channels of baking food continue to explode, with an average annual growth rate of 27.4%. In the context of many unsolved problems, the transfer of baking blue ocean to online is a headache for small players who still stick to the baking industry.
is written at the end
Now, Xiang Hong has temporarily left the baking brand that has worked for 8 years. On her recommendation, we went to the store of this brand in guangbutun, which is one of the few stores of their brand.
On weekday afternoons, not many consumers visited bakery stores. Including themselves, they sold only six loaves an hour. From the decoration of the store, we can vaguely feel the scene of surging crowds here.
At the moment when the new round of epidemic in Wuhan has just dissipated, offline bakeries are undoubtedly experiencing the suffering of “boiling frogs in warm water”. Head players and small brands are no exception.
According to the statistics of AI media consulting, since 2013, the scale of China’s baking market has remained above 220 billion yuan all year round. In 2021, the scale of China’s bakery market is estimated to reach 260.08 billion yuan, with a year-on-year increase of 19.9%. According to this growth rate, the bakery industry will officially reach 300 billion yuan in 2023.
In this 300 billion “cake”, sketch cards have become more and more protagonists. According to the narrow door meal eye data, there is only one brand with more than 1000 bakery West Point stores, and more brands still focus on the segment track.
These tens of thousands of “little players” are still sticking to and moving towards the super large compound baking workshop.
Author: blackcurrant; Editor: Zhao; Source: de consumption (ID: quxiaofeiba), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); Foodaily Expo 2022] in line with the original intention of providing the whole value chain and one-stop industrial innovation services for the industry, foodaily Expo 2022 (2022.05.31-06.02, Shanghai) is further upgraded. In addition to the upstream and downstream of the food industry, it also covers and gathers multiple resources such as e-commerce, social media, traffic, channels and capital, aiming to bring you an annual innovation feast. Here, products, content, technology, marketing and other aspects related to food & brand innovation will be presented in the form of “professional exhibition + innovative content + interactive experience”, breaking through and differentiating in the consistent form of industry exhibition.

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