Jingguantai (ID: jingguantaicn) original.
Text丨Xie Yuanyuan.
Editor丨Cao Huimin.
The head brand of casual snacks, BESTORE and Three Squirrels, can't be sold.
According to the Q3 financial report of 2023, BESTORE achieved revenue of 59 in the first three quarters9.9 billion yuan, down 14 percent year-on-year33%；Net profit was 19.1 billion yuan, down 3343%。Three Squirrels' revenue for the first three quarters of 2023 was 458.2 billion yuan, compared to 53.3 in the same period in 20223.3 billion yuan, down 1407%。This is the third consecutive year that Three Squirrels' revenue has declined since the third quarter of 2021.
Consumers don't buy it, and the fundamental reason is that the pricing of the two brands that take the high-end route is too high. In August 2023, BESTORE will sell duck tongue** as high as 2644 yuan catty, which was complained by netizens as a "snack assassin".
On the other hand, the mass-market snack stores that cater to consumers are very busy, and snacks are ringing.
These stores bring together a variety of brands of snacks, whether it's well-known brands like Coca-Cola, Shuanghui, or unheard of white-label snacks, you'll find them all in these stores. In addition to the rich variety of goods, the ** of mass sales snacks is also very attractive. Compared with convenience stores, supermarkets and other channels, these stores are directly connected to manufacturers, and can get goods at a lower cost, so as to sell at a lower price
According to the research report of Guanyan World, in a store where snacks are very busy, the ** of a 500ml bottle of Coca-Cola is only 23-2.4 yuan,** usually 20-30% cheaper than the supermarket price.
With ultra-cost-effective, rich categories and people-friendly shopping experience, mass-market snack stores have successfully attracted a large number of consumers. The market share of traditional casual snack brands BESTORE and Three Squirrels has been eroded. In order to change the status quo, major brands have lowered their figures, started to reduce prices, and at the same time, they have made efforts to compete head-on with mass sales of snacks such as snacks are busy and snacks have a sound.
Mass-selling snacks are on the rise
Mass-marketed snack stores, represented by snacks are busy and snacks are ringing, and they are becoming a treasure place for consumers to buy snacks.
The products in this type of store are rich, not only Mengniu, Want Want, and delicious snacks with high national popularity, but also all kinds of white-label snacks. What's more, it's more affordable, and the price of 312 grams of Weilong small gluten is 79 yuan, sales in the supermarket ** reached 168 yuan; 95 grams of Fun Duoduo** is 52 yuan, supermarket sales ** is 6$7.
And each brand's store is highly recognizable. The eye-catching signs, warm yellow lights, and neatly arranged display shelves create a "check-in" atmosphere for young people.
With these advantages, some mass-market snack brands have successfully attracted consumers to their stores, forming an impact on traditional casual snack brands in the form of online and offline omni-channel containment.
Taking snacks as an example, in 2022, the sales of snacks will be about 6.4 billion yuan, surpassing the 28 percent of Yanjin Shop9.4 billion yuan and 43.3 billion in Laiyi8.2 billion yuan, close to 72 of three squirrels9.3 billion yuan.
In the first half of 2023, BESTORE's revenue declined for the first time since its listing in 2020, and the reason behind it was the decline in online revenue. The three squirrels also mentioned in the financial report that e-commerce revenue has decreased.
This is not only a problem faced by the two leading brands. According to a recent research report by Dongxing**, during the "Double Eleven" period last year, the sales of leisure snacks were 12.1 billion yuan, a year-on-year decrease of 104%。
As for the reasons behind it, Dongxing** analysis said that it is mainly due to the channel changes experienced by leisure food in recent years, and the rapid rise of snack stores focusing on cost-effective snacks in the environment of rational consumption has caused a certain impact on traditional e-commerce channels.
Like online, traditional casual snack brands have also encountered the problem of not being able to sell offline.
Although Three Squirrels and BESTORE seized the offline market by opening stores and entering supermarkets very early, it is still difficult to compete with mass snack stores.
Taking Three Squirrels as an example, after opening its first store in 2016, Three Squirrels continued to expand the number of stores for a period of time, and proposed the "10,000 Store Plan" in 2019, but it soon shrank. In 2021, Three Squirrels closed stores en masse, and in April 2022 announced a strategy to suspend store expansion.
* Visual China.
There are uncontrollable environmental factors behind this, but more because of the rise of mass selling snacks. In 2021, when Three Squirrels closed their stores in large numbers, the number of mass-selling snack stores has increased significantly.
According to the Founder** research report, about 250 mass-selling snack stores will be opened across the country in 2021, and the number will be nearly 8,000 in 2022. According to iiMedia Research, as of October 2023, the number of snack collection stores in China has exceeded 220,000 units. After the merger of the head brand Zhao Yiming Snacks and Snacks Very Busy, the total number of stores in the country has exceeded 7,000.
Mass merchandiser snack shops have a huge foot traffic.
Financial data shows that Zhao Yiming Food's revenue in 2022 is 121.5 billion yuan, net profit of 38.44 million yuan. In 2023, in just half a year, the company's revenue will exceed the volume of the whole year of 2022 by twice the volume. From January to June 2023, Zhao Yiming's food revenue reached 278.6 billion yuan, with a net profit of 76.31 million yuan. Snacks are very busy, but they also have a bright revenue growth rate.
Today, the expansion of mass-marketed snacks is still advancing.
After winning a number of provinces in Central, South, East and Southwest China, Snacks was busy and began to expand its territory in other regions. Recently, the snack group is very busy revealed that it plans to invest more than 1 billion yuan in the next six months for the development of the national market, focusing on the northern region.
In order to prevent further encroachment, leisure snack brands such as BESTORE, Baicaowei, and Three Squirrels have started a defense battle and began to reduce prices on a large scale.
High-end snacks put down your body
Affected by the change of consumption concept and the influence of mass snack stores, traditional snack brands have to reduce their prices, especially the three giants of casual snacks that took the high-end route before.
According to Dongxing's ** research report, the average prices of three squirrels, baicaowei, and BESTORE products fell year-on-year on Tmall. 5%, which fell year-on-year in JD.com. 3%, the average price of the three leading brands on Tmall and JD.com fell by more than 10 percentage points year-on-year.
Before the residual heat of Double 11 has completely dissipated, BESTORE announced the largest price reduction in 17 years. 300 products with a high repurchase rate, such as macadamia nuts, dried pork, and spicy strips, have become the main targets of price reductions, with an average reduction of 22% and a maximum reduction of 45%. Three squirrels followed, suggesting that the company was implementing a "high-end cost-effective" strategy.
* Visual China.
Supporting this wave of price reductions is the ** chain behind the Big Three. In order to give a more competitive price, Three Squirrels, Baicaowei and BESTORE all mentioned that they wanted to squeeze out the "moisture" in the ** chain
Major brands are reducing costs and increasing efficiency through direct procurement of raw materials, upgrading production equipment, improving product production processes, and delineating gross profit red lines, and even set their sights on self-built factories.
In 2022, Three Squirrels, which originally focused on the OEM production model, opened a factory and put it into production that year. Previously, BESTORE also said that in the future, it will select 5-8 deeply cultivated SPU varieties from 1,600 SKUs (inventory unit SPUs) to lay out the industrial chain with equity participation or self-built factories.
After a set of combinations, the prices of BESTORE and Three Squirrels have decreased. According to the information provided by the three squirrels, macadamia nuts in 2023 will be 30% lower than in 2022, and the sales will be more than 20 yuan a catty.
These reduced-priced products not only appeared in e-commerce channels, but also in offline stores, and even appeared first in the next store. According to the city report, the main sales channel for the products announced by BESTORE to reduce prices is stores, with an adjustment of 10%-47%. Like mass-selling snacks, BESTORE hopes to attract consumers with low prices.
This is related to the size of the offline market. 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. Among them, offline channels account for 859%。
Also focusing on offline channels are three squirrels. Although Three Squirrels also has its own offline store, the current traffic of mass merchandising snack stores is booming. Brands such as Yanjin Shop, Jinzai Food, and Ganyuan Food have achieved revenue growth after partnering with snack mass merchandisers such as Snack Busy. In their recent earnings meetings, all three companies highlighted the contribution of the snack discount format to profit growth.
The three squirrels who put forward the "all categories + all channels" business strategy also tried to eat this wave of dividends.
The three squirrels told Jingguantai that in mid-January 2024, the three squirrels 4 nuts (macadamia nuts, pecans, pistachios, almonds) will be stationed in all the stores of Zhao Yiming and Zhao Yiming in the country, and will cooperate with other snack stores in the later stage, while gradually expanding the category, and may even launch channel exclusive products.
But collaboration is not the end. The three squirrels, like BESTORE, began to dig offline dividends in person. ** Traditional snack brands and mass-marketed snacks have begun to compete with each other.
Offline PK, the war of attrition opens
More and more consumers are going offline, and major casual snack brands have to move with it. Previously, Yang Yinfen, deputy director of BESTORE, said to the outside world that the snack industry has not moved, and offline companies have been prepared.
In order to compete for the market with brands such as Snack Youming and Snack Busy, BESTORE and Three Squirrels have adopted a new approach to offline stores. The former joined the army of mass snack sellers and launched the affordable sub-brand "Snack Stubborn", while the latter opened its own brand community snack store
At present, the brand composition of the Three Squirrels Community Snack Store is 70% of its own brands and 30% of its outsourced brands, while the snack shop mainly sells third-party products.
Like brands such as Snacks are Busy and Zhao Yiming Snacks, low prices are also used as a weapon to tap the offline market.
Three squirrels told the Mirror Observatory that macadamia nuts are sold for $29 at the community snack store5 yuan a catty, member price 278 yuan a catty, while the price of other stores is 58 yuan a catty. The price of air-dried duck neck is 49 yuan a catty, snack stores are 5$9 or $65 yuan, the supermarket ** is higher, the price is 99 yuan a catty.
Snack stubbornness is a chain snack store brand specially launched by BESTORE to expand the sinking market, and the slogan is "cheap is cost-effective".
As of October 2023, the number of stores in Hubei Province, the base camp, has exceeded 300. At present, the total number of stores in the three squirrels private label community snack store exceeds 180 nationwide, covering Anhui, Jiangsu, Zhejiang and other provinces, and the number of stores will be increased through franchise in the future.
However, under the homogeneous competition, it is difficult to see how much effect the low-price competition can bring. BESTORE once said that the competition barriers of snack collection stores are not high, and they are fighting a war of resource consumption. Therefore, the company is also thinking about new changes in its business model after opening 1,000 stores in the future.
In order to achieve differentiated competition, Three Squirrels has been emphasizing quality. At the same time, we customize products for community stores, trying to create a batch of differentiated large single products to precipitate the advantageous pallets of community stores, and distinguish them from other channel pallets to avoid unnecessary competition.
In June 2023, Three Squirrels opened its first community snack store, and according to Tiger Sniff's report in January this year, the snack mass stores on the market generally provide more than 1,000 SKUs, the Three Squirrels community snack store has more than 1,500 SKUs, and the number of SKUs in the snack store is as high as 1,600.
At that time, Zhang Liaoyuan, the founder of the company, also told ** that at this stage, the category richness and adhesion of the three squirrels are not enough. However, recently, the three squirrels told the mirror platform that through some measures, the current SKU of the store has approached 2,000.
BESTORE also has a series of actions in store construction. In July 2023, BESTORE opened a 1,200-square-meter snack kingdom store, which not only focuses on product differentiation, but also attaches great importance to consumer experience, creating concepts such as "snack drift".
Snacks are busy, and the guys are not sitting still. A few months later, the "Super Snack is Busy" with an area of more than 1,300 square meters was opened. The first floor is a snack shopping area, and the second floor is a snack theme leisure and entertainment area, which fully caters to the diverse needs of contemporary young consumers for "consumption + socialization".
According to the "Retail Circle" report, snacks are very busy with Mengniu, Want Want, Jiashili, Delicious and other well-known brands, docking and customizing dozens of plus snacks to sell in stores, and the snack packaging is also customized packaging.
Offline snack shops have developed from the previous volume ** to the volume experience. In the end, who can eat more dividends needs to be answered by consumers with actions.
Reference: Douyin accidentally "saved" three squirrels", *Tiger Sniff.
Title image** in Visual China.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to any person.