Can t get a new future?

Mondo Social Updated on 2024-01-29

Written by |Cao Shuangtao.

Edit |Yang Bocheng.

Title Picture | ic photo

The 30-year-old "melon seed king" Qiaqia is stalling in development.

From 2019 to 2022, the net profit attributable to the parent company of Qiaqia Food increased year-on-year respectively. 35% and 51%。The net profit attributable to the parent company continues to decline, and the net profit attributable to the parent company will enter an era of negative growth in 2023.

From Q1 to Q3 this year, the growth rate of net profit attributable to the parent company was -1442%、-23.39%、-19.3%。The corresponding revenue growth rates in the same period were: 14%。In other words, in the first quarter, the company suffered both revenue and net profit attributable to the parent company, and in the second and third quarters, the revenue increased but did not increase profits.

Although the product line includes melon seeds, nuts, etc., the interim report shows that melon seed products have always been the majority of the company's core revenue, accounting for nearly 69%, and it is also the only product with a decline in revenue in the semi-annual report.

Source: Qiaqia company's financial report.

At the same time, in the first half of this year, the gross profit margin of Qiaqia Food fell by 4 year-on-year77% to 2452%, the lowest reported gross profit margin in the past 11 years.

For the above questions, in September this year, when answering investors' questions, Qiaqia has been "throwing the pot" to the upstream raw material cost**. Qiaqia pointed out that about 50% of the company's sunflower seed raw materials are purchased through the contract farming model. The procurement cost of sunflower seed raw materials has risen rapidly for two consecutive years, mainly due to the increase in land rent, labor costs, the reduction in production due to the impact of weather last year and the increase in demand for sunflower seed exports.

As early as last year, when the company raised the price of the product twice, it was also the upstream raw material of the pot, although Guojin pointed out that Q4 gradually entered the sales season, and the revenue side is expected to return to double-digit growth. The profit side benefits from the decline in the cost of melon seeds and the release of the scale effect of nuts, and is expected to release higher performance elasticity next year.

However, considering that the sales of melon seeds have strong seasonal attributes, especially in the northern part of the country. The winter in the north is cold and long, and local residents have reduced outdoor travel, and many families Xi used to eating melon seeds. However, the high summer temperature in the north and the thirst caused by eating melon seeds make the demand for melon seeds in the north extremely low in summer.

That is to say, after the end of this year's winter sales peak, the later negotiation will face the problem of what to rely on to improve performanceAt the same time, the multiple contradictions on Qiaqia make it debatable whether Qiaqia can achieve high performance flexibility.

1. The mysterious "planting base" and "order agriculture".

I can't understand the "dumping pot" of Qiaqia, and the domestic sunflower seeds have fluctuated significantly in the past two years. Some industry insiders said that subject to land rent, seeds, pesticides, and fertilizers, the cost of planting per mu in Xinjiang, one of the main producing areas of sunflower seeds, has increased from 2,300 yuan to 12,300 yuan in the past two years.

July every year is the critical period for melon seeds to mature, once the temperature is too high, it is easy to affect the quality and yield of melon seeds. In the past two years, extreme weather has been frequent, so that the yield of melon seeds is facing a reduction. According to the calculation of Guojin**, sunflower seeds ** in the first half of 2023 will be double-digit year-on-year, suppressing short-term profits and direct material cost per ton**123%。

However, in answering investors' questions and related financial reports many times, Qiaqia has repeatedly mentioned that it has formed an advantage in the upstream ** chain. In this year's semi-annual financial report, it was mentioned that the sunflower seed raw materials of Qiaqia Food adopted the procurement model of "company + order agriculture + growers", and the other part was the procurement model of ** merchants and cooperatives.

Zhao Wei (pseudonym), a young returnee, told Donews that the popular understanding of order agriculture mentioned by Qiaqia is that farmers plant relevant agricultural products according to the requirements of the enterprise based on their trust in the enterprise, and the enterprise provides seeds, pesticides, fertilizers, etc., and promises to carry out the order at the lowest price. In order to ensure the interests of both farmers and enterprises, enterprises often sign long-term cooperation agreements with farmers before acquiring land.

According to the current volume of the negotiation of the high demand for upstream melon seeds, not only can we sign a contract with farmers at the lowest price, but also stabilize the uncertainty caused by the fluctuation of melon seeds. Moreover, for the land rent proposed by farmers, the negotiation can also form a voice for farmers by virtue of the scale advantage.

However, the cost of raw materials mentioned by Qiaqia many times essentially shows that the current procurement of upstream sunflower seeds by Qiaqia is a kind of procurement on the market, which is completely contradictory to what Qiaqia said has formed an advantage in the first chain.

Not only that, Qiaqia, which has been deeply involved in the melon seed track for more than 30 years, can resolve the uncertainty caused by upstream sunflower seeds in a variety of ways. First of all, sunflower is different from yam and cotton, and it does not have high requirements for soil quality, similar to Xinjiang drought and irrigated land, which can meet the requirements of sunflower planting.

According to Tuliu.com, the average price per mu of land in the dryland of Altay Prefecture in Xinjiang has been stable at 400 yuan to 500 yuan in the past 10 years. In other words, Qiaqia can transfer the risk of land rent ** by carrying out large-scale planting in some areas where land rent is stable.

Source: Tuliu Network.

Secondly, considering the frequent occurrence of extreme weather in recent years, why not cooperate with domestic agricultural colleges and universities in depth, establish an industry-university-research mechanism, and continuously upgrade the existing sunflower seed varieties. And through small-scale planting, it is constantly iterative to breed varieties that are more resistant to heat and have more stable yieldsOr for labor costs, Qiaqia can cooperate with agricultural machinery companies to launch more mechanized products to replace labor, thereby reducing labor costs.

At the same time, the blue bag and red bag products of Qiaqia melon seeds use 361 varieties of raw materials;Peeling products are 363 varieties;Kwai Zhen products use Chifeng 363 varieties, which is also the best 363 raw materials in the industry. However, considering the serious homogenization of domestic agricultural products, the raw materials used in Qiaqia can be used by other melon seed manufacturers and even dry goods stores. But why did we negotiate for so many years, and did not come up with a few truly differentiated sunflower seed varieties, but continued to roll ** with our peers?

Finally, as mentioned above, July every year is the critical period for the maturity of melon seeds, and it is possible to establish an internal early warning mechanism and a big data analysis mechanism for so many years to resolve this risk in advance of the trend of sunflower seeds.

However, when answering investors' questions in September this year, Qiaqia pointed out that at present, the sales volume of sunflower seeds has increased rapidly, and the planting area of sunflower seeds has increased greatly, but it is uncertain whether it can be passed on to the procurement of raw materials and how much the decline will be delivered, and the company will pay close attention to the changes in procurement.

In other words, after decades of playing melon seeds, the fluctuation mechanism of raw materials has not even been established, which has to make the market question the comprehensive ability of the current negotiation.

Not only that, but it is also a mystery whether Qiaqia really has its own planting base. In 2011, after the company went public, it said that the funds raised would be used for the construction of raw material bases in Xinjiang and Inner Mongolia. Among them, 8798 have been invested in the raw material base in Xinjiang470,000 yuan, Inner Mongolia raw material base investment 264940,000 yuan. In 2014, due to the increase in pests and diseases around Wuyuan in Inner Mongolia and the lack of excellent varieties, resulting in the reduction of raw material planting area, Qiaqia Food announced the termination of the project.

In 2016, Qiaqia announced that the company was forced to suspend the construction of the Xinjiang planting base because the Xinjiang production base could not meet the company's acceptance standards. A few days ago, the staff of the ** office pointed out in response to the question that the company does not have its own sunflower seed planting base, which is contradictory to the fact that it has established nearly 1 million acres of sunflower planting base in the world, covering Inner Mongolia, Xinjiang, Gansu and other high-quality sunflower producing areas in China alone.

Second, the cost performance is lost, and it is becoming more and more difficult to sell the negotiation

Although in September this year, when answering investors' questions, it was pointed out that Qiaqia has no plans to raise prices in the current period. However, the negotiation submitted many times has completely lost the cost performance of its melon seed products.

Due to the relatively low market access threshold of the snack industry, the small product specifications and the complexity of the products, not only the sub-categories are rich, but also the substitutability between the single products within the sub-categories is strong, and consumers naturally have a continuous taste and trial and error mentality for snacks. This leads to the fact that the repurchase rate of a single product within a certain category may be relatively stable in the snack industry, but based on the low cost of trial and error + the mentality of consumers, the repurchase rate of single products within a certain category will be lower.

Therefore, except for a few brands with a relatively long history that can take advantage of the mentality of "brand is category" in exchange for consumer repurchase, and successfully incubate national single products, so as to have a certain degree of brand potential energy, most snack brands are often subject to a low single product repurchase rate, and it is difficult for phenomenal large single products to appear, and the premium space for snack brands is naturally limited.

In other words, snacks themselves are suitable for the public's cost-effective business, which is not only the root cause of the rapid development of domestic snack discount stores this year, but also the reason why BESTORE chose to reduce prices on a large scale and abandon the high-end route a few days ago.

Moreover, in addition to seasonal demand differences, there is also a large substitution for categories such as melon seeds. The loose melon seeds scattered in the roasted food shops, large supermarkets, and commissaries on the roadside naturally constitute a strong diversion of bagged melon seeds. Based on this, melon seeds, a snack, should be more cost-effective.

The loss of cost performance is making it more and more difficult to sell Qiaqia melon seeds. Reflected in the financial report of Qiaqia, from the first half of last year to the first half of this year, the number of sales terminal outlets on the channel side of Qiaqia increased from 170,000 to nearly 250,000, and the number of dealers increased from more than 1,000 to more than 1,200. The sales volume in the first half of this year was 94,20853 tons, down 4 percent year-on-year69%。

The increase in channels not only failed to drive the improvement of performance, but also reversed. First of all, offline channels are unlikely to sign an exclusive agreement with Qiaqia based on their own interests. In particular, some stores say that the melon seeds are lower**, which makes consumers feel that it is too expensive.

Donews found during a visit to a supermarket in Jieshou City, Anhui Province, that the store said that the price of melon seeds was 98 yuan catty, but the price of 160g melon seeds is 7$9. According to this estimate, a pound of melon seeds is about 20 yuan.

Source: donews

Source: donews

Secondly, the channel ** is in chaos. During the visit, we found that the price of 130g of melon seeds in the local snack discount store was 48 yuan, 90g melon seeds are sold at 4 in local supermarkets8 yuan, 40g more than the price is only 06 yuan, this price is not reasonable.

Although snack discount stores have procurement advantages, the pricing difference is so large that it is easy to cause dissatisfaction among other channel providers, which in turn affects the stability of the negotiation channel system.

Source: donews

Finally, offline channels are a battleground for FMCG soldiers, which also determines that offline channels display and negotiate products are limited. In our survey of local mom-and-pop shops, large supermarkets and snack discount stores, we found that the products currently displayed in the local Qiaqia are still dominated by traditional melon seed products, which makes Qiaqia face the problem of insufficient sales channels for nuts.

In addition to channel problems, in the past few years, Qiaqia has been obsessed with joint activities, and even formed a situation where everything can be negotiated.

Source: Collation of public information.

However, as mentioned above, the non-rigid demand of melon seeds themselves and the cost performance of melon seeds are suitable for cost-effectiveness, so the decision to negotiate a joint name has little effect. Reflected in the financial report of Qiaqia, although its joint activities are increasing, its revenue and net profit are stalling.

And brand co-branding also needs a degree, because too much brand co-branding seems to increase the product's **, but the price is a decline in consumers' favorability of the brand, and even the loss of brand value.

3. The contradiction between the second curve and family firms

Although in recent years, Qiaqia has continued to make efforts to other nut products in addition to melon seeds. The recently launched peanut products have also directly rushed to the 6th place in Douyin's popular style and the first place on the popularity list.

Source: Douyin.

However, Du Lei (pseudonym), the person in charge of e-commerce of a domestic peanut snack company, told us that the threshold for peanut snacks is extremely low, and food manufacturers can only distinguish them in taste and technology at most. At present, e-commerce platforms are pursuing low prices, and it is decided that peanut snacks can only be fought in exchange for sales growth and user repurchase.

But in the case of Douyin, the company's price is 168 yuan of peanut snacks, deducting the cost of raw materials, express delivery, labor, after-sales and other costs, as well as the continuous live broadcast room streaming costs, talent promotion commissions, its net profit can only be 0$4 to $0$6. And Qia Qia 9The peanuts of 9 yuan are more like draining traffic to the live broadcast room, and the overall profit is minimal.

As Du Lei said, not only peanuts, but also the entire nut products are facing this problem. At the same time, with the increasing maturity of the current Douyin live broadcast, as well as the grass e-commerce + algorithm recommendation mechanism, food manufacturers can easily explode nut products in a short period of time through low prices. If you want to follow up, you can only passively reduce the price.

Moreover, the preservation technology that Qiaqia is proud of, with the increasing maturity of food preservation technology and the efforts of other food manufacturers, its advantages are also being lost. In other words, the follow-up negotiation wants to achieve the same market share of nuts as melon seeds, and the difficulties faced can be imagined.

If you want to break the situation, you naturally need to establish an efficient team internally, from consumer insight to product research and development, from product launch to rapid market explosion, from raw material procurement to stable dealer team and so on. However, the overly negotiated family business culture has become an invisible resistance.

According to Tianyancha, many of the current executives are not only relatives of Chen Xianbao, but also the overall "aging" of the senior management team. Although the older generation of enterprises have advantages in corporate strategy formulation and personnel management, nut products themselves are facing young consumer groups and pay attention to rapid innovation.

Source: Tianyancha.

In particular, in the past two years, Qiaqia has almost not launched a real single product to the market, but has only simply upgraded the packaging of the original product.

Not only that, in September this year, an investor asked, peers have introduced a large number of top 500 talents, and our executives are all internally cultivated (serious nepotism) vision and execution do they match the highly competitive snack food industry?

In recent years, the company's R&D investment has continued to increase, and the company has promoted talents internally by encouraging technology, R&D, and management innovation, and increased industry-university-research cooperation externally. For the internal cultivation mentioned by investors, the issue of vision and execution is not discussed at all.

In fact, investors' questions are also issues that must be solved in the future. Because when the company's core power is always in the hands of a small number of people, it will inevitably cause strong dissatisfaction among internal employees, resulting in a large loss of the company's core talents, which will lead to a significant reduction in the efficiency of Qiaqia, which will affect the long-term development of Qiaqia.

Conclusion:

Eating the old money is the biggest problem in the current negotiation, and in the face of this problem, does the company's existing senior management team have enough determination to come?After all, this kind of top-down reform will inevitably harm the interests of existing executives. But if it is a negotiation that does not adjust, what awaits negotiation in the next decade?

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