Reporter Sun Jizheng reports from Beijing.
Recently, the competition in the leisure snack industry has entered a new stage. Yang Yinfen, the new chairman and general manager of BESTORE, issued an open letter to all employees on November 29, saying that a new round of reform will be launched. The business side will implement the largest price reduction in 17 years, with an average price reduction of 22% and a maximum reduction of 45% for 300 products, mainly focusing on snacks with cost optimization but no impact on quality and high repurchase rate.
On the day the information was disclosed, BESTORE's stock price hit the daily limit for two consecutive days. The market and the industry have given positive comments and feedback on the transformation of BESTORE. On the other hand, in the snack food industry in recent years, some leading brands have explored the high-end market for many years, but have never been able to break through the gross profit bottleneck of the industry. At the same time, with the continuous emergence of mass merchandising brands, the low-tier market is harvested quickly and in large quantities. In this context, BESTORE took the lead in proposing to optimize products, actively respond to market changes, and open up the downward exploration of the market.
Snack food is not a rigid consumption, and brands such as BESTORE and Three Squirrels will directly face the impact of mass food brands in competition for cost performance. Brand marketing expert Sun Wei said.
Return to cost-effective competition
The reporter of "China Business Daily" noticed that on the day BESTORE announced the price cut, the stock price hit the daily limit. It is not difficult to see that the market at all levels is optimistic about the adjustment of BESTORE's business. Yang Yinfen told the outside world that competition has made the company more aware of its own problems, that is, consumers think that BESTORE's products are higher. Therefore, the company decided to return to "everyone's shop" to make consumers feel that the product is "delicious and inexpensive".
The price reduction of BESTORE means that BESTORE will win the favor of consumers with cost performance. The reporter noticed that shortly after Yang Yinfen issued an open letter on price reduction, Zhang Liaoyuan, the founder of Three Squirrels, said that the company had implemented a "high-end cost-effective" strategy as early as a year ago. For consumers, high-end cost performance is a "different, rich choice" snack under the premise of low price.
For a long time, Three Squirrels and BESTORE are synonymous with high-end snack food, and most of their products are not cheap, and the premium of their products mainly depends on brand IP, especially Three Squirrels, which has won the favor of many teenagers and young children in product IP. Gao Jianfeng, an expert in the FMCG industry, said that in the shaping of high-end IP, both BESTORE and Three Squirrels have completed the established tasks and established their own image of high-end snack food.
However, since the beginning of this year, the demand for high-end FMCG products in China's consumer goods market has cooled down, and consumers have gradually returned to rational consumption, which has made many people choose between brands and brands. In recent years, some emerging snack food brands and commercial chains have taken expiring food as a breakthrough to quickly open the market with low-cost snack food, although the outlet of expiring food has passed quickly, but the format of this low-cost product has been retained, which is a potential competition for BESTORE and other brands. Zhu Danpeng said, so we see that BESTORE has returned to the cost-effective this time, and it is also to strive for and develop its own potential users.
Due to the many types of snack foods, for a long time, capital wants to create one or even several head enterprises in different segments, such as nuts, dried fruits, candies, etc., but from the current point of view, the consumption power of most market segments cannot support so many brands, especially the brands under the blessing of capital, everyone is looking at the high-end market. Sun Wei said.
Yang Yinfen believes that there is a certain capital bubble in the snack industry. She pointed out that the fact that a county town has 18 snack brands means that Chinese consumers are suddenly four or five times more enthusiastic about snacks?She believes that the snack industry is earning hard-earned money, and the low price without profit support cannot be continuously replicated, and it may face a period of elimination and cooling-off in the future.
According to Yang Yinfen's point of view, it is not difficult to see that BESTORE's price reduction strategy is based on the consideration that the snack food market will enter the stock competition.
According to the data of the narrow door dining eye platform, the per capita consumption of BESTORE stores is currently 5424 yuan, the per capita consumption of three squirrels is 5992 yuan, the per capita consumption of baicaowei is 4875 yuan. From the perspective of per capita, the per capita consumption of major brands is similar. "The major brands are almost the same in terms of gross profit and per capita consumption, making it difficult to differentiate the competition. Zhu Danphong said. As Yang Yinfen mentioned in the open letter, "Our current difficulties are caused by our failure to make a sense of differentiation and value. ”
According to the Nielsen Market Report, the omni-channel strategy of snack brands can be summarized as follows: the growth of the online market is slowing down, and the focus is on optimization;The offline market is still the focus and needs to be consolidated;O2O is an incremental market, which should be grasped in time. The data shows that in 2022, although the supermarket channel will still be the main sales channel for leisure snacks, accounting for 463%。However, with the rise of e-commerce, online channels have gradually become the main battlefield of competition in the leisure snack track, and many casual snack brands have begun to break through online and offline barriers to seek omni-channel layout.
It is very likely that the war will become the core of the next stage of the market, and under the premise that the high-end cannot break through the upper limit of gross profit, it will be crucial to obtain the incremental market. Gao Jianfeng said.
Can mass selling become a breakthrough?
A few days ago, the boss and third of domestic mass snack brands - Snacks are very busy and Zhao Yiming Snacks announced a strategic merger, which has aroused the attention of the entire industry.
According to ** reports, as the leader of the mass snack industry, snacks are very busy this year and Zhao Yiming snacks have never stopped at the ** level. From the 8 that just opened20% off, to the lowest time Zhao Yiming snacks can be 55% off. Therefore, the merger became inevitable.
As early as 2021, Yanjin Shop has increased cooperation with snack discount brands such as Snack Busy, Snack Youming, and Dai Yonghong. In 2022, Snack is busy to become the largest customer of Yanjin Shop, and the snack is busy system accounts for 7% of its total sales31%。In the second half of 2022, BESTORE launched its own mass-selling snack brand, Snack Stubborn. At present, the snack store has been updated to the fourth generation, and it plans to take the lead in opening 500 stores in the Hubei market, the base camp of BESTORE, within this year. At the same time, BESTORE also invested in Zhao Yiming's snacks.
In addition, Three Squirrels launched a community snack store, Jiajiayue founded the snack chain brand Yue Ji Good Snacks, and Zhongbai Group created a snack discount store Xiaobai Snack Shop. The entry of new and old brands has intensified the competition in the mass snack track.
A large part of the reason for the price reduction of BESTORE is also the pressure given by these wholesale brands, and with the blessing of capital, the wholesale market has hit the market at all levels with a low-price strategy. Zhu Danphong said.
There are different voices in the industry about whether the track of mass merchandisers can be sustained. Zhu Danpeng believes that the positioning of mass selling snacks is very clear, and the demographic dividend is very large in the face of the Taji population. However, on the whole, capital may push the invested enterprises to the capital market and quickly reap the dividends and leave, which is not conducive to the healthy and stable development of the entire industry. At the same time, some industry insiders pointed out that the wholesale market is a business format brought about by the mismatch of production capacity, but now it has become the focus of many brands' choices, and whether the business model can be sustainable itself remains to be examined.
According to the research report of Huatai**, Huatai ** believes that snack wholesalers achieve high turnover by exchanging price for volume, and the ping efficiency and investment period are relatively leading, and the short-term look at the expansion of staking stores, and the long-term "snack +" expansion of single store revenue.
The essence of mass sales is the contention of product cost performance, especially in low-tier cities, which directly determines the competitiveness of products. Sun Wei said that from the perspective of marketing itself, the first war cannot continue indefinitely, and when the brand is overly competitive in the same market, it will eventually lead to reconciliation between all parties.
The reporter noticed that on December 6, Ningbo Guangyuan Juyi Investment, a wholly-owned subsidiary of BESTORE, formally filed a lawsuit with the people's court on November 27 because the invested company Yichun Zhao Yiming Food Technology Co., Ltd. deliberately concealed the company's major matters during the cooperation period between the two parties, damaging the right to know of minority shareholders.
Judging from the essence of the lawsuit, there is indeed a head-on conflict between mass snacks and traditional snacks, and this lawsuit has made the long-term contradiction between the two public. Zhu Danpeng said that although many brands have injected capital and investment into mass merchandisers, they are only forced to innovate under the pressure of the industry, and mass merchandiser snack brands may be able to win the hearts of consumers in the short term, but in the long run, the experience for consumers is average.