The 2024 New Year is approaching, and the popularity of the casual snack track is high again. However, with the advent of the new retail and new consumption era, the leisure snack track is also undergoing "big changes".
The most obvious change is that the performance and stock price of the casual snack brands represented by Three Squirrels and BESTORE are both under pressure, and even under the impact of new mass merchandising snack stores, local life service platforms, emerging instant retail and other models, there is a tendency to retreat.
Taking Three Squirrels as an example, according to its third-quarter results announcement, its revenue in the first three quarters of 2023 was about 458.2 billion yuan, a year-on-year decrease of 1407%；The net profit attributable to shareholders of the listed company was about 1700 million yuan, an increase of 81 percent year-on-year42%。
Although looking at the data of the third quarter alone, the overall performance of the company to achieve positive profitability is quite beautiful, but compared with the same period in 2020 and 2021 during the epidemic, there is a significant gap in profits of 76.45 million yuan and 90.43 million yuan respectively. This is enough to show that the three squirrels have entered a period of declining performance.
Coincidentally, the performance of another hot player in the casual snack track, BESTORE, is also not optimistic in the first three quarters of this year. According to the data, BESTORE achieved an operating income of about 59 in the first three quarters9.9 billion yuan, down 14 percent year-on-year33%；The net profit attributable to shareholders of the listed company was about 19.1 billion yuan, down 3343%。
It can be seen that compared with the three squirrels who barely achieved profitability through "cutting down on food and clothing", BESTORE recorded a double decline in profits, which can be described as a lot of pressure.
So, why did the "beautiful-looking" leisure snack track enter a period of declining performance when the domestic economy recovers and offline traffic "resurrects" after the epidemic?And how can such star snack brands break the deadlock of weak revenue growth and difficult profitability?When the economic environment, industry pattern, and market demand are quietly changing, the answer may not be so simple.
In the era of the stock market, how do giant players play?
According to the "2020 Domestic Snack Market Development Status and Trend Research Report" released by the China National Commercial Information Center, at present, the snack industry has begun to transform from an incremental market to a stock. However, the "snacks" in the report are more likely to refer to traditional snacks.
At the same time, the new consumption outlet is coming, and the snack track has also ushered in new changes. According to the statistics of the China Business Industry Research Institute, in 2022, China's generalized leisure snack market space will exceed 15 trillion yuan, with a compound growth rate of more than 10% in the past five years.
This also means that the development space of the leisure snack market is still huge. It's just that the leisure retail track is a track where large industries and small enterprises are concentrated, and the industry concentration is not high. Relevant statistics show that in 2022, the CR5 of the leisure snack industry will be 147% and 23 for CR103%, the lack of strong brands in the industry under low concentration, which also leads to downstream channels having relatively higher bargaining power.
The degree of dispersion of the snack industry can be seen through the number of snacks-related companies in China. According to Tianyancha data, there are currently 16There are more than 30,000 snack-related enterprises, and 14 snack enterprises with a registered capital of less than 1 million yuanMore than 40,000, accounting for 888%；10.More than 30,000 snack-related enterprises were established within 5 years, accounting for 634%, there are 3More than 80,000 have been established for 5-10 years, accounting for 231%。
However, with the changes in the market guided by concepts such as home economy and consumption upgrading, the current business model of the snack track is mainly divided into two types. One is a large-scale single product manufacturing snack business represented by Qiaqia and Weilong Food, which is mainly based on "supermarket + distribution channels". The other is the B2C model of channel-based snack brands represented by the three giants of Three Squirrels, BESTORE and Laiyifen Snacks.
In addition, in recent years, under the baptism of the epidemic, the "instant retail" model formed by local life service platforms represented by Meituan and Ele.me, as well as O2O fresh food platforms represented by Dingdong and Meituan, as well as many community ** platforms, has gradually replaced the traditional offline shopping model, allowing domestic residents to develop the habit of shopping at home, and gradually becoming the mainstream of the times.
Taking Meituan Grocery as an example, recently, Meituan Maicai, which has been established for five years, announced that it would change its name to Little Elephant Supermarket. The head of the Little Elephant supermarket business emphasized that the launch of the new brand is a strategic move for Meituan to advance into the local retail sector.
It is observed that this is also an important strategic decision for Meituan to expand its category based on Meituan's basic market in local life services, and after realizing the "fresh instant retail" business model. It is the same as Meituan's previous transformation from food delivery to delivery of everything.
It is precisely because of the influence of such industry trends that the three squirrels that used to occupy a great advantage in the first place, and BESTORE, which relied on the scale effect of offline stores, have gradually fallen into a growth bottleneck period, and launched a new round of market games with major new retail platforms.
It can be seen that with the gradual recovery of the domestic economy, casual snack brands may need to actively adapt to the new era and new trends, and strengthen the integration of online and offline, in order to grasp the incremental opportunities brought by new retail formats such as instant retail O2O.
The fierce battle in the industry is in full swing, who is the master of ups and downs?
At the beginning of listing, many companies will find a title for the company to be the first in the industry, and the standard format is "xxx first share". The same is true for the leisure snack track, Laiyifen has landed in the A-share capital market since 2016 and self-styled "the first share of leisure snacks", and then the three squirrels and BESTORE listed in 2019 and 2020 have also named themselves "the first stock of Internet snacks" and "the first stock of high-end snacks" respectively.
It is not difficult to see that although the concentration of the snack track is not high and there is no obvious industry oligopoly, the industry competition has long been a red sea, and the resulting industry pattern is also the "leading starring" of the head brand.
However, the comparative analysis of the three major snack players has its own advantages and disadvantages, and it is difficult to distinguish between them. Moreover, these leading snack players are not only facing the pressure of catching up with the performance of mid-to-waist brands, but also being affected by the competition and impact of "cross-border players" such as local life services and instant retail platforms represented by Meituan.
On the one hand, there are a large number of players in the leisure snack track, and although many players are not enough to match the three listed companies, their competitive strength should not be underestimated, and they are even "chasing and fighting" the three leading players.
It is observed that with the blessing of new retail, new commerce, new consumption and other concepts, many emerging players have poured into the snack track, and continue to penetrate this trillion-dollar market with players different from traditional snack giants.
For example, in recent years, the mass snack stores that can be seen everywhere on the streets and alleys are showing a trend of rapid expansion of the new tea beverage track, especially some brands that are positioned as high-end snacks, and they are also constantly using capital and online and offline sales channels to pry open this huge market.
On the other hand, with the intensification of competition in the industry, the mass closure of some snack brands is also happening simultaneously. For example, in the middle of this year, Zhejiang's local snack store wife came out with the news of "closure", and the once soaring brand A1 Snack Research Institute also closed eighty percent of its stores.
In stark contrast, some hot new players are being sought after by capital and are gearing up. Public data shows that since 2022, the investment and financing events in the snack track have become more and more intensive. According to Enniu data, a total of 11 investment and financing will occur in the leisure snack track in 2022, and as of May 2023, 6 snack brands have received financing or IPO.
Among these players, regional leaders such as Snacks are very busy, Zhao Yiming Snacks and other regional leaders are in the limelight, and they have successively received huge capital blessings.
What cannot be ignored is that the Internet platform represented by Meituan is also aiming at the huge market of casual snacks, and trying to get a piece of the pie through its traffic advantages and chain advantages.
In addition to the above-mentioned upgrade of "Meituan Grocery Shopping" to "Little Elephant Supermarket", which exposes Meituan's ambitions in the retail track, Meituan Optimal and Meituan Flash Sale, as another player in Meituan's layout of local life services and instant retail, are also constantly encroaching on the local consumer market represented by snacks.
As we all know, intra-city distribution and so-called instant retail are mostly based on the rigid demand related to "clothing, food, housing and transportation" in residents' daily consumption. As one of the rigid needs of this category, snack products will naturally become the focus of Meituan's platforms.
Taking Meituan Flash Sale as an example, Meituan Flash Sale, which delivered a total of 6.2 billion orders in the third quarter of this year, is widely connected to local supermarkets, convenience stores and other formats from the perspective of business model. According to the data of the third quarter, Meituan Flash Sale has established partnerships with nearly 400 retail brands, and the number of annual active merchants has increased by 30% year-on-year.
It is worth mentioning that in addition to the "drastic" integration of resources on the merchant side and the expansion of all categories, Meituan has already shown a scale effect in the terminal consumer market. It is understood that at the Meituan Instant Retail Industry Conference in September this year, Xiao Kun, vice president of Meituan and head of flash sales, revealed that in the past four quarters, the scale of Meituan's flash sales has reached 175 billionIt will exceed 400 billion by 2026.
It can be seen that today's snack market is no longer a track where head players such as Three Squirrels and BESTORE occupy the absolute right to speak. In the industry melee, if you want to maintain lasting vitality and growth, you can only be invincible if you want to adapt to the changes of the times and master the upstream chain resources, midstream traffic resources, and downstream user resources.
Write at the end
Looking at the development of the leisure snack track in recent years, the changes in the industry pattern may be related to the earth-shaking changes in the sales channels of retail products. 10 years ago, the three squirrels relied on the traffic entrance of the "Tao system" to create a business model based on third-party platform traffic, and dominated the market for several years. BESTORE, which was established earlier, has gained a firm foothold in the industry with the strategy of "store sea tactics".
However, a closer look at the products and chains behind the two, it is difficult to say that there are too many barriers and advantages, and they can't even escape the constraints of the OEM model, and therefore often fall into the crisis of "food safety".
Some people believe that this is the market gap of "there are categories and no brands" in the snack industry in the past, and the opportunities brought to the two have nothing to do with the product and the first chain. In fact, countless snack players seem to be using their growth process to prove that the snack industry is a track where sales channels are king and traffic is king.
Therefore, when consumers' purchase channels quietly change, and the traffic dividends of these brands are no longer there, and brands that rely on channels such as Three Squirrels and BESTORE seem to be unable to stand the test, and even after swimming naked in the tide of the industry, they have encountered a crisis of low traffic. Therefore, it is inevitable that the performance of such brands at this time will be ugly and retreating.
I hope that these leading brands can foresee and make full preparations for this volatile market. Perhaps only in this way will the situation of the snack industry be reversed, and these brands, which were once incomparable, will have the opportunity to reverse the trend.
Author: Niko
Editor: Nick
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