With the ultimate cost performance, Saizeriya has successfully passed through multiple cycles of the catering industry with strong market competitiveness. However, due to the limitations of business management, Saizeriya was not able to expand on a large scale in the world. Whether a catering company should maintain a small and beautiful operation, or become bigger and stronger, is worthy of further consideration.
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Reporter He Le.
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Saizerya, an Italian restaurant chain brand originating from Japan, entered China in 2003 and became unique in the catering industry and became the preference of many consumers. So, as an Italian Western food, how does Saliya break new ground in the catering industry, blossom everywhere, and how does it win the favor of Chinese consumers?
Rise and cross
There is an ancient Chinese saying called "people take food as the sky", from Lu cuisine, Cantonese cuisine, Sichuan cuisine, Hunan cuisine to Hui cuisine, Zhejiang cuisine, Su cuisine, Fujian cuisine eight major cuisines, it can be seen that Chinese are particularly particular about "eating". In addition to China, Italy is also a gastronomic empire, which pays great attention to "food culture". Italian cuisine originated from the court of the ancient Roman Empire, with a strong Renaissance era Florentine dining charm, known as the "mother of continental European cuisine", which shows that Italian cuisine is quite famous. Among them, French cuisine, American cuisine and other factions are still derived from Italian cuisine, so Italian cuisine is recognized as the "mother of Western cuisine". Italian cuisine is loved by people all over the world for its rich ingredients and unique cooking methods, and Italian pizza and pasta are popular dishes all over the world.
In 1967, Yasuhiko Masagaki opened the first Saizeriya restaurant in Japan, targeting the field of Italian and Western cuisine, which was not yet widely available in Japan. In the late 80s of the 20th century, with the improvement of the consumption level of the Japanese people, Italian cuisine became popular, which also contributed to the success of Saizeriya, and in July 1999, Saizeriya was listed on the second section of the Tokyo ** Stock Exchange. According to the statistics of Huachuang**, as of February 28, 2022, Saizeriya has more than 1,500 stores around the world, mainly in Asia, including 1,079 stores in Japan.
In 2003, Saizeriya entered the Chinese market. As a representative of Italian Western food, Saizeriya not only infiltrates Italian Western food culture into Japanese food, but also is quite popular with consumers in China. At present, Saizeriya is mainly managed by three branches in the Chinese mainland market: Shanghai Saizeriya (established in 2003), Guangzhou Saizeriya (established in 2007) and Beijing Saizeriya (established in 2008), all of which are wholly foreign-owned. As of September 11, 2023, Saizeriya has 447 stores in China, all of which are directly operated, according to data from Narrow Door Restaurant.
In the high-end dining sequence, Western food has always been regarded as the representative of high-end dining. So, how did Saria, as an Italian Western food, blossom everywhere in the catering industry, and how did she conquer the taste buds of Chinese?
Yasuhiko Masagaki, the founder of Saizeriya, once said, "Really good things should be cheap and delicious." "In the early days of its establishment, Saizeriya's positioning was also high-end Western food, but the expensive ** discouraged consumers, so after the opening of Saria's first store, business was extremely bleak. Later, Yasuhiko Masagaki began to adjust his business strategy and tried to reduce the price, and the dishes ** were reduced from seven to five percent off, until they were reduced to three discounts, and Saria's business began to boom. At present, the unit price of Saliya's dishes is between 8-49 yuan.
In fact, there is a certain relationship between the popularity of Saizeriya and the sustainable development, as well as the economic situation at that time. In 1991, Japan's economic bubble burst, and since then Japan's economy has fallen into a decade of stagnation, with an average annual GDP growth rate of only 08%。From the perspective of catering consumption trends, saving consumption is rising, and low-price mass consumption has gradually become the mainstream. Saliya's low price not only adapted to the consumption level of people at that time, but also met the needs of many consumers to experience Italian Western food. Since then, "cheap" has become the foundation of Saria's store and has also become Saria's characteristic label. Driven by consumers, the number of stores grew from 200 to 900 between 2000 and 2010.
It is worth noting that the data shows that during the ice age of Japan's catering industry from 1996 to 2011, the scale of the entire catering market showed a downward trend, but Saliya showed strong market competitiveness during this period with the ultimate cost performance, and its operating income bucked the trend** (see Chart 1). Moreover, after being hit hard by the new crown epidemic in 2020, the economy is in a downturn and consumer demand is weak, and affordable catering has naturally become people's first choice. According to data released by Nikkei Chinese in July 2023, Saria's consolidated financial report for September 2022 to May 2023 shows that the company's operating profit increased by 34 times to 3.5 billion yen. With the positioning of affordable Western food, Saizeriya has successfully passed through multiple cycles.
But if it's just cheap, then Saizeriya may not be able to increase the customer's return rate, in addition to affordability, "delicious" is also another label it attracts customers.
Italian cuisine is based on stir-frying, pan-frying, grilling, braised and braised in red, and the main ingredients are usually wrapped or marinated, fried or grilled, and then cooked together with the ingredients, so that the taste of the dish is exceptionally good, creating a layered and multi-layered texture. From appetizers and main courses to desserts, drinks, and pre-dinner drinks, Italian cuisine is not only rich in variety, but also in great taste.
From salads, pizzas, pastas, steaks, soups, desserts, wines, and more to Saliya's menu, there are all dishes on Saliya's menu. But Saria's menu is different from traditional Italian cuisine. In 2003, Saizeriya entered the Chinese market and made appropriate adjustments to some dishes to suit the dietary tastes of Chinese consumers, such as toast, pasta, eggplant red chicken wings, pizza and other dishes.
In addition, Salria's menu is based on the traditional Italian dining model, from the starter, the first main course, the second main course to desserts, drinks, and after-dinner wines, continuing the purity of traditional Italian Western food. However, when dining at Saizeriya, the traditional etiquette of Western food is weakened. Customers do not need to follow the traditional Western food ordering mode, and can freely choose according to their favorite dishes. Saizeriya does not have the red tape of Western dining etiquette, simplifies dining etiquette, pays attention to the diversity of dishes, and pays more attention to the dining experience of consumers.
What is better than it is not as cheap as it, and what is as cheap as it is not as delicious as it", which can be said to be the highest evaluation of Saizeriya by consumers. From its establishment in Japan to its popularity to its entry into the Chinese market, Saria's low-price strategy has successfully made it unique in the restaurant industry and has become a magical presence in the field of Western food.
Behind the small but beautiful business model
Below the ** of her peers, how does Saizeriya make a profit?What is the business logic of a small but beautiful catering enterprise?Based on the business model canvas, the author will analyze the core logic and profit model of Saria's sustainable value creation from the perspectives of value proposition and cost structure.
Unique value proposition. As a representative of high-end catering, the price of Western food is generally relatively high, but Saliya aims at the Italian Western food track, but in the **, it does the opposite, and establishes its own distinctive label in the catering industry.
Under the founder's value proposition of "cheap and delicious", Saizeriya has gained a group of loyal consumers. In addition, in order to ensure quality and maintain brand image, Saizeriya has always adhered to the direct chain model, so the number of its stores in the Chinese market is not high, and it is difficult to open a broader market, which is also the limitation of Saizeriya's management. However, in his book "The Saizeriya Revolution: The Secret Story of the Birth of a World-Unique Restaurant Chain", Yasuhiko Masagaki said, "The essence of a chain is not to make a store that is prosperous, but to make a store that has mediocre sales but can still produce enough profits." ”
Judging from consumer feedback, whether it is in the dishes, ** or dining environment, Saizeriya has a good reputation, and it is already remarkable that a catering company can do this.
Cost structure. Keeping prices low is the key to Saria's success. Controlling costs and building an efficient operating system is the secret of Saizeriya's low prices. Generally speaking, the cost of a F&B outlet mainly includes upfront renovation, rent, raw materials, and staff costs. Most companies focus on the latter two items to reduce costs. However, the cost compression of Salia runs through the whole process from store location and decoration to raw materials and terminal sales.
The first is the location of the store. Most of the stores are located in shopping malls, which can not only ensure customer flow, but also provide consumers with a good dining environment, which is in line with the dining habits of most people now. But Saizeriya will not choose the core location of the mall, but choose the more remote location of the mall, and even take over some restaurants that have closed down, and can be opened after simple renovation. In this way, the rent and store renovation costs are effectively controlled.
The second is the cost of raw materials. In order to reduce the cost of raw materials, Saizeriya has built its own farm to grow vegetables and build a production and logistics base. In this way, the cost of raw materials can be accurately controlled from the upstream, maintain the stability of terminal sales, and ensure the stability of the company's gross profit margin and promote the steady growth of operating income.
In addition, Saizeriya adopts the ** kitchen model, that is, through the pre-processing of ingredients, they are made into semi-finished products and distributed to other stores. After the customer places an order in the restaurant, the kitchen staff only needs to simply heat it, plate it, and serve it. This practice not only greatly saves the operation time of the restaurant's back kitchen, improves the speed of serving, and then promotes the growth of the turnover rate, but also does not need professional chefs in the back kitchen of the restaurant, which greatly reduces the cost of restaurant personnel.
In the "**kitchen + ** chain integration" model, Saizeriya has achieved effective cost control and efficient operation, although the product terminal sales are low, but Saria's gross profit margin is not low. From FY2017 to FY2021 (see Chart 2), Saria's gross margin remained around 62%. In the long run, Saliya's gross profit margin has remained above 62% in the past ten years, and the gross profit margin is very stable. Of course, this is also due to Saria's effective cost control. Under the extreme cost control, Saizeriya also maintains a small but beautiful restaurant operation model.
The catering industry is an industry closely related to consumers, and "food" is something that everyone pays attention to in "clothing, food, housing and transportation". Whether a restaurant is good or not, whether it is expensive or not, is the perception that consumers directly touch. With its unique business model and the characteristics of high quality and low price, Saizeriya stands out in the industry, and truly brings consumers a more personalized and diversified dining experience. This is also where other F&B businesses should learn.
Note: Data**: Huachuang**2022 in-depth research report on the catering industry.