Original Blue Shark ConsumptionBlue Shark Consumption2023-12-11 19:37 Published in Henan
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Minute. Author |On December 2, 2023, the 2023 New Consumer Industry Unicorn Summit, hosted by Blue Shark Consumption, strategically supported by Sina Finance and New Trend Media, with the theme of "The Power of Consumption", was successfully concluded in Liaoning Building, Beijing. The strong lineup of more than 30 guests, consumer trends, investment directions and other wonderful content attracted more than 1,000 people including consumer entrepreneurs, consumer investors, consumer industry practitioners, consumer brands, consumer listed companies, unicorns, and future unicorn executives. In addition, six live broadcast channels, including Sina Finance, Blue Shark Consumption, and Unicom Wo, also broadcast the conference live, attracting a total of more than 1.55 million people. In the roundtable forum session of "Domestic Snacks: Outbreak and Challenge".Yi Jiayu, partner of Buconfi Venture Capital, Zhang Guangming, founder of FFIT8, Wang Sheng, general manager of Hanjin Food Operation Center, and Hou Jianjian, co-founder of Panda MomoThe reasons for the outbreak of snack categories, the difficulties in the operation of snack brands and snack chain stores, the wave of mergers and acquisitions of snack discount stores, and how to break the situation in the case of monopoly of online and offline channels, etc., further clarified the direction of China's snack industry, and gave great inspiration to many consumer entrepreneurs in the audience.
The following is the full text of the roundtable forum, which has been edited by Blue Shark Consumption and has been deleted:Yi Jiayu: Let me introduce myself first, we are not confused by venture capital, a small investment institution, but we have two single investments that are well-known to everyone: before investing, they only had one or two hundred stores, and after investing, they quickly achieved five thousand or ten thousand stores, they are Tustin and Guoquan. Because of this characteristic, it is difficult for us to tear off the investment label of "10,000 store chains". At the same time, we are very concerned about the projects related to the food, drink and snack track, and we also have a lot of questions to consult with the three entrepreneurs who are starting their own businesses. Please start by expressing what you have done in one sentence. 
Don't confuse venture capital partner Yi Jiayu.
Hou Jianli: Hou Jianjian, co-founder of Panda Momo, we do offline fried food stores, and now we have opened 200 stores, with the same goal as Kuafu fried skewers, a chain of 10,000 stores. Wang Sheng: Wang Sheng, general manager of Shanghai Hanjin Food Co., Ltd., we mainly do ZEK brand, mainly seaweed, and have been doing it in the Chinese market for 20 years. Zhang GuangmingZhang Guangming, the founder of ffit8, we are a nutritious snack brand with scientific and technological protein as the core, and we are also the leader and pioneer of the two categories of meal replacement protein bars and protein wafer biscuits in China.
Why did the snack track break out? Yi Jiayu: We all see that the snack track, whether it is a branded snack or a chain snack, is rising faster than the main meal track that we have invested in. I would like to ask you a questionWhat do you think is the reason why this category has quickly become the second largest category in the food and drink track?
Hou Jianli: The snack market is large enough, with 15 trillion market size. There are several reasons for this: First, there is a growing trend of meal replacement. Second, the development of the discount snack format. Their gross profit is only 18%, which is lower than the gross profit of e-commerce, giving rise to some new demand, mainly cheaper. Third, our freshly made snacks, focus on better quality. It belongs to both snacks and snacks, expanding the boundaries of snacks. Now these types of snacks are relatively popular.
Wang Sheng: In the past two years, we have paid special attention to the growth of the snack track. In fact, from 2022 onwards, the entire snack track has expanded dramatically, major capitals have poured in, and East China and Central China have their own snack brands running forward. In fact, this is an inevitable trend in the development of the industry. All industries go from 0 to 1 and then from scattered to whole.
The snack sector has always been an impulse purchase. In recent years, China's consumption model has undergone several iterations, from terminal retail stores to Internet e-commerce, and then to Internet 20, to **, to live. However, in the entire Internet industry, the proportion of the entire snack sector is quite low, because the demand for snack consumption lies in constantly tasting and trying. Therefore, the main consumption scenario of snacks is still offline, not online.
Wang Sheng, general manager of Hanjin Food Operation Center.
In the three years of the epidemic, the entire Chinese market cannot be said to have downgraded consumption, but it should be said that the consumption of ordinary people has tended to be reasonable and has begun to consume more rationally. At the same time,The offline snack platform has experienced from scattered to whole, optimized the entire chain, including the output of benefits, reduced middlemen, and led to the retail of the front desk tending to be e-commerce, or more advantageous than e-commerce. In such a "two-pronged" situation of economy and industry, its rise is inevitable.
Zhang Guangming: The underlying logic of the change of the snack category is based on the change of the user's lifestyle, and now everyone's understanding of snacks is different from before. In the previous generation, eating three meals a day and eating at one o'clock, rarely snacking, and the act of snacking is often identified as not eating well. But the current change is more towards eating fewer and more meals, five or even six meals a day. This way of life is becoming more and more like "sheep eating grass", which refers to eating everywhere, taking a bite when you want to eat, and looking at the scenery when you don't want to eat. It is also this change that has redefined snacks and increased the frequency of snack consumption.
In addition, everyone's expectations for snacks have changed, and now everyone pursues healthy snacks and snacks for meals, and the requirements for the convenience of snacks are getting higher and higher. In addition, now snacks should also be able to create spiritual value for consumers, and have the effect of relaxing and pleasing themselves.
This can explain that the product types of brands also change according to lifestyle, including healthy snacks, children's snacks, and nutritious meal replacement snacks, protein snacks, etc. It can also explain the changes in the channel, it used to be very convenient to buy from the Internet, but now it can no longer meet the immediate needs, and it can be bought at the doorstep, or O2O way to buy. The structural changes we have seen recently in online and offline snack channels, as well as the changes in the product structure of snacks, are all brought about by the above two changes, and I think this is the underlying logic.
What are the difficulties between brands and chain stores?
Yi Jiayu: My understanding is that snacks are a bit like tea, due to the growth of people's income, there is a new demand for self-pleasure, which brings an incremental market. At present, the snack track is indeed a bonus period, under this bonus period, some people choose to be a chain, and some people choose to be a brandWhat do you think are the biggest advantages and difficulties of these two models?
Zhang Guangming: My personal opinion, it depends on whether you are a snack channel or a product category. If it is a product category, it may be necessary to convey the unique category value to users. Users' purchase decisions are based on category, not brand, such as who I want to buy for nuts and who I want to buy for protein bars. If it is a channel, the value created for users is that they can buy a variety of snacks with more choices in one store. The core of the channel brand is not the same as the core of the product brand, and my personal opinion is that for the priority establishment of the user's mind, only one can be chosen.
Wang Sheng: From the perspective of the snack track, it is divided into brand owners and channel providers (platform providers). For brand owners, the brand is greater than the source of the whole, in fact, whether it is a snack channel of 10,000 stores, or a snack channel of 100 stores or 1,000 stores, it is just a consumption matrix. The so-called consumption on the platform comes from traffic, and traffic comes from **? First, the products in the store (on the platform) meet the needs of consumers, and they are more abundant, and the needs of consumers can be assembled and re-exported in your platform. The second is the brand products from other ** merchants, because the brand power in the Chinese market is still very important, if the store (platform) consumers have a designated brand, they can get part of the traffic. It can't be said which aspect is better or weaker, but there will be a partial loss in traffic acquisition.
For manufacturers, there should be both. If you want to do your own brand, you must also have your own ** chain. As an existing brand or manufacturer, we must embrace this environment. There are more and more consumption models or consumption tracks, whether it is the previous KA or the new retail we are talking about, or the rise of snack discount stores, there will be some changes in the development process of each track rise. For example, the previous snack ancestors used to sell products from other brands in stores, and later exported their own brands. Whether it's Walmart or Sam's Club, they all have their own products. Channels are changing, as a manufacturer, in addition to sticking to their own brand line, they also need to embrace the needs of the B-end customers who cooperate with you.
Hou JianliNow there are two big opportunities for snacks, one is the opportunity of 10,000 store chains, and the second is the opportunity of 10 billion large single products. As a product brand, it is very important whether you can find this kind of big single product and whether you can discover big hits. Two days ago, we chatted with the spicy prince, and their two spicy strips can sell for more than 100 million, which is an opportunity for tens of billions of large items. The 10,000-store chain has grown rapidly in the past two years. For the development of 10,000 store chains, first, the requirements for organizational power are relatively high, and the requirements for commodity management are relatively high. Second, the first chain management requirements are higher, commodity power, whether the goods can be effectively controlled, and efficiency is king. Third, it lies in operational capabilities. These parts determine whether the 10,000-store chain can be opened well.
How do you see the merger tide of snack chains?
Yi Jiayu: We all know that there are two directions for snack products, one is to open a chain, and the other is to buy a consignment model and sell it in other people's channels. There have been several major events recently, and there is one related to the chain, a lot of discount chains,Snack chains are merging, what do you think of their merger? After the merger of thousands of stores, what do you think about the future of the 100 stores and more than a dozen stores on the next level?
Hou Jianli: In the past six months, the consolidation of the entire industry has been accelerating. **Under the chain, it is difficult to say that there are only two giants. For example, in the entire convenience store field, in addition to 711, FamilyMart, and Convenience Bee, there are also many brands. Offline chains still have a certain degree of regional and differentiated competition. The same is true for supermarkets, and they are not the only ones that occupy the entire market, because its market is large enough. In the future, there will be more differentiation in the snack industryIn terms of categories, we have roasted snacks, fruit snacks, and categories with regional characteristics, and there will be a situation of strong side by side. Offline chains will also have super channels of 10,000-store chains, and there will also be a number of sub-strong channels with thousands of stores.
Panda Momo co-founder Hou Jianjian.
Wang Sheng: As of now, several snack shop giants in China, Tang Dynasty in Fujian, snacks in Central China are busy, snacks in the southwest are Ming, and Zhao Yiming snacks...In recent years, the speed of development has been very fast. In September, Wanchen announced the merger of its four major snack chain brands and integrated them into one brand, which is currently the largest number of stores in China's snack sector. Last month, we saw that Snacks was very busy and Zhao Yiming Snacks immediately posted relevant content, and the two were integrated and merged. The earliest snack channel "Wife" also merged with Wanchen.
The snack channel has developed too fast, and the investment and financing of this sector in the past three years have been relatively active, and everyone is rushing to this track, whether it is a small store group of more than a dozen stores, or a hundred stores or a large store group with a scale of thousands of stores, they are rapidly increasing and expanding their positions on the basis of market dividends and consumption dividends. We need to see voices like that to move the whole snack industry forward and get more people in, whatever your motivation for coming in.
There are two types of business, the first is a money-making business, what is a money-making business? Opening a store at the right time to enter this track and knowing how to merge and acquire is a profitable business. The second is a valuable business, that is, I want to run the head, even if I can't do the head, I have to be relatively highWhen dividing the Chinese snack track, it is necessary to have enough right to speak, I want to be a more valuable company in the future. Either way, it will be a boost to China's snack track.
Zhang Guangming: We look at this matter from the perspective of FFIT8 as a snack brand, and it is an inevitable result to merge and expand offline channels. In the past two years, there has been a downward trend in consumption, and the traffic is becoming more and more expensive, which is more likely to cause strong uncertainty in brand management, resulting in situations such as inventory backlog, which often appears in the stock of brands seeking cooperation with online and other head anchors or during the big promotion period. Therefore, in the first two years, the main **chain** of offline discount snack stores were all cutting-edge brands online.
When the scale of the discount snack channel is getting larger and larger, it will form a reverse chain customization ability, and it is completely possible to customize its own channel brand in large categories with large standard products and no difference in users' brand awareness, and make it lower. Discount snacks have changed from the nature of activities to a norm, and users continue to be provided with cheaper snack products.
Zhang Guangming, founder of ffit8.
What is doing well now is not a simple snack channel, but a supermarket channel similar to Sam's. How do their snacks come out? In a certain category, a product has a very unique value, and users are more recognized, and they will name the products they buy. They will bypass the brand to find the best chain to customize, so that users can buy cheaper, higher quality, and more diversified snack products.
I think the current integration of snack discount channels will continue, and the concentration will be higher and higher, and a very large chain may be formed in the future, can form a monopoly platform effect, unless there is a very distinctive sauce beef, fried melon seeds at the door of the irreplaceable taste, the standard category of snack brands will be covered by discount snack stores.
How to deal with the monopoly of snack channels?
Yi Jiayu: We see that in 2021, many brands that make wine and snacks have received a lot of support from Douyin and have made a lot of money. We also know that there is a saying: there is no grass under the big tree. When the brand has completed its historical mission, the traffic dividend has been cut to the end. There is a question that I would like to ask to the entrepreneur who is doing brandingIf online giants monopolize, and offline stores become big through mergers and acquisitions, how do you deal with it and how to break the situation?
Zhang Guangming: What you're talking about is indeed one of the things that we brand entrepreneurs are feeling more painful right now. ffit8 is just a typical case, we are a brand founded in 2019, at the beginning of the online force, one after another stepped on Xiaomi crowdfunding, Luo Yonghao live broadcast, Douyin live broadcast the first wave of dividends and other outlets, that year became the leader of the protein bar category.
But we also realized a problem later, if you are completely based on the traffic dividend, when your product power, brand power, and ability to reach users are not sustainable, you will soon fail. It is impossible for any brand to seize every wave of traffic dividends. So, we quickly launched our offline business, and distributed our products to some supermarket membership stores like Sam's Club, as well as gyms, yoga studios, etc.
By last month of this year, we had balanced our online and offline ratios, with half of our revenue. And, you can see an obvious trend, the offline has been rising, the online fluctuation is large, it is possible to catch a wave of dividends, relying on a head anchor, the sales will rise, and if you don't catch it, it will be very poor. Brands that started online are difficult to have the ability to pay a premium unless their products are very strong. The same is true offline, and large chain stores only choose head cooperation. If the threshold of a certain category is not so high, it will make its own brand. For brands, the challenge is huge. You have to be at the top of a certain field to have a chance of surviving in the future competition.
Wang Sheng: The word brand is too big, in my opinion, any short-term profit output is not a brand. The definition of the brand is the connection between the product and the C-end, which is the consumer experience. From the short-term benefit output, or you can see the interest line, such as the popularity of a certain channel, but this is just a sales action, and there will be periodic fluctuations. Branding is a long-term action, not a short-term action. Whether it is the Internet, the previous KA channel, or the terminal push tactics of 20 years ago, including the current large snack collection stores or system stores, for any new sales model or new track that appears, we must embrace the new environment, embrace new changes, and do not resist. I often have meetings and say that a brand that doesn't make money is not a brand. From the perspective of short-term benefits, we will have some trial and error costs in it, but in terms of the overall direction, the gains are much higher than trial and error.
Talking about this issue from the perspective of the brand, the C-end customer experience and brand matrix building have always been what Hanjin Foods has to do, or the Zek brand has been doing things in the Chinese market for 20 years.
Yi Jiayu: Mr. Hou, you are an offline chain, so if you are Wandian, how to deal with the relationship with the brand?
Hou Jianli: There is a saying called: ".There is no Party A and Party B, only the scarcity party”。First, I hope that more snack brands can research more products that meet the needs of consumers. Second, the snack mix of chain stores, both branded and non-branded. If it is a non-brand, the product is good, ** is relatively cheap, and we also hope to be deeply bound with this non-brand, so that we have more gross profit space.
Yi Jiayu: We end this session. Thank you!