Source: Parity
"Very sudden", neither its employees nor consumers were prepared for the bankruptcy liquidation announcement issued by The New Element Restaurant.
Of course, this does not prevent the fact that this nearly 20-year-old Western food brand is heading for extinction.
In fact, this cold winter in the catering industry this year is a bit too long. Compared with the 300 haidilao closed stores and the civil strife with pleasant tea, the new elements of healthy catering went bankrupt, which is not prominent in the negative news of many catering brands.
However, narrowing the perspective to the light food industry, the new element can already be regarded as the head brand in the industry, occupying most of the market share of light food catering for a long time.
Not only light food, but also Western food represented by new elements has also been outside the new consumption era in recent years with a tepid "elegant" attitude.
With the upgrading of old brands, new Internet celebrities came into being, the prices of steaks, pizzas, and salads have come to a three-digit level, and even burgers have been praised by capitalists with a "high price" that is not acceptable.
When the wave of price increases and store closures rush to the Western food track at the same time, more people will wonder whether many of these brands can survive this downturn in the catering industry and whether the large-scale closure of Haidilao will be repeated in Western food brands.
Read this article and you'll learn about the following three questions:
1. As a well-known veteran player of light food and even Western food track, how did the new element go bankrupt?
2. In addition to light food, what is the reason behind the fact that Western-style dining is becoming more expensive?
3. With the arrival of the cold wave in the catering industry, how will Western food brands survive the winter?
The new element is over, who is the next to fall?
In the catering industry under the repeated epidemics, the cold winter is still continuing.
"The collapse of a well-known restaurant chain with a 19-year history", some time ago, such news headlines were widely spread in the catering industry.
Scott Minoie, who single-handedly created new elements, may not have imagined that his brand could survive the SARS epidemic, but failed to survive the winter of 2021.
The epidemic has become the best explanation for the fall of the head brand of the new element of this light food track. At least two official announcements have blamed it for its ultimate failure.
In a statement on the new element public account, the company said that in the past month or so, the company has closed several directly operated stores, and will make corresponding operational adjustments in the next few weeks according to the business conditions to reverse the financial difficulties that have plagued the company in the past two years.
Image source: New Element WeChat
In fact, the decline of new elements is indeed inseparable from the sudden epidemic. But as early as 2020, the originator of the light food track has shown signs of fatigue.
In early 2002, when Scott Minoie decided to rename Element 72 Juice Bar as New Element and open its first store in Shanghai, Western-style foods such as salads, sandwiches, and pasta were all fresh in China, not to mention the rare open production and service process in China.
With a unique in-store catering model at the time and the rapid expansion of the audience from expatriates, the new elements maintained a strong upward momentum in the following decades.
In 2015, tennis player Li Na became the spokesperson for the new element, and the newly retired tennis player had a very hot popularity at the time.
Especially in Li Na's hometown of Wuhan, in 2107, the new elements and Li Na's joint store were grandly opened in Wuhan Tiandi, and the multiple IP of "sports + localization + internet celebrity" allowed the new elements to gather almost all the factors that can burst into flames.
It was also in that year that the new elements ushered in their final peak. The 50 stores covering the whole country, the annual turnover of more than 200 million yuan, and the only Western food brand selected as the "Dianping Must Eat List" are all praises for the successful operation of the new elements.
In the 12 stores of new elements in Shanghai that year, the average monthly turnover reached 1.8 million yuan.
Of course, the new element then slid as fast as it did in the first place. Affected by the restructuring of the catering industry by the new consumption wave and the rise of takeaway, the new elements have not been able to stand out in the more competitive light food track.
Without the "Na-like Vitality" series of dishes recommended by Li Na, even the familiar and popular breakfast series was lost. The new elements of replacing new suppliers are actually not many "new tricks" that can be taken.
The subsequent outbreak of the epidemic only became the last straw to crush the new elements. After the worst 15 months of the pandemic, the new element still did not survive the last winter of 2021.
Before the Double Eleven period, the new element opened the "omni-channel recharge 1000 yuan that is, send 500 yuan" activity, in the face of the company's bankruptcy notice, has long lost the passion for self-help and the hero broke his wrist.
Combined with October this year, Bloomberg also reported that Wagas (another light food and beverage brand) plans to sell, many people attributed the demise of the new elements to the abandonment of the once hot light food track by capital.
After the formal transformation into a light food and beverage brand for the general public, the new elements have not even received even one financing. Compared with dozens of hundreds of financing cases in other catering sub-sectors every year, the light food industry does have too much less competitive capital.
The new elements are most complained about by consumers, and nothing is the salad and pasta with a unit price of nearly 100 yuan. Behind these two major items, there is also another anxious track "Western food".
Also recently officially announced that it is about to close down, also originated in Shanghai, Mi's Western Restaurant officially announced that Mi's Western Restaurant and Charm Blue Restaurant will officially close after the lease expires on February 15, 2022, and the restaurant will be open normally until February 15, 2022.
The Western food brand, once one of Shanghai's landmark restaurants, may be just the tip of the iceberg of turmoil in the Western-style dining industry.
Price increases have become the first changes that consumers can perceive.
Light food fell, and the price of Western food rose
Western food has always been synonymous with elegance. The two sit face to face, lined with candlelight and red wine, carefully cutting steaks, savoring pizza and pasta, plus appetizers and desserts, the whole process is exquisite and romantic.
Now, with the cost of achieving this scenario slowly rising, the joy of Western food freedom is saying goodbye to consumers.
Take the "herbivorous" track of the Western food industry as an example. Dianping shows that whether it is a new element restaurant in Shanghai, Beijing or Guangzhou, the per capita consumption is about 120 yuan. Among them, the classic Copper salad and grilled salmon salad are priced at 95 yuan and 120 yuan respectively.
Switching the positioning to Wuhan can find that it is almost difficult to find a light food Western food brand at the price of new elements, and the new element store in Wuhan Tiandi has quietly closed and replaced with other catering brands.
As a typical "imported product", after experiencing the initial freshness, the single, dull taste of the new element dishes with extremely low cost performance products is obviously difficult to continue to get the favor of consumers.
Returning to the perspective of traditional Western food, are the prices of steaks and pizzas more well known in Western restaurants? With such doubts, the jioupai went to the local Western restaurant in Wuhan to find out.
Compared with the high-end Western restaurants in the north, Guangzhou, and Shenzhen, Banqiu Mountain, Luyin Pavilion, and Xiuyu, the number of such affordable Western restaurants in Wuhan is more. According to the narrow door restaurant eye data, the number of stores of the above three Western restaurant brands is 51, 45 and 34 respectively. Among them, the number of Xiuyu Black Tea House stores in Wuhan has reached 23, accounting for 70% of its total number of stores.
At 4 p.m. on Wednesday, a time perfect for spending time and enjoying a meal at a Western restaurant. Come to Xiuyu Black Tea House in Wuhan Optics Valley, a Western restaurant that has been founded in Wuhan for 25 years and has always been known for benefiting the people.
Price "upgraded" after the Xiuyu Black Tea House Parity pie shooting
Among them, the price of 48 yuan of Xiuyu selected beef fillet and 38 yuan of low-temperature tender grilled chicken steak has remained unchanged after decades of consumption level improvement, and the price of iron plate beef steak is generally below 70 yuan.
However, in front of a large number of affordable steaks, more "selected" series of steak products are placed in a more prominent position on the menu by merchants. After careful selection, I ordered a charcoal grilled Angus S-grade hip meat for 117 yuan and a classic original steak for 54 yuan.
In terms of the final dining experience, there is indeed a gap in taste, but whether it is enough to fill the price gap may be a matter of opinion. According to Xiuyu's menu, the highest-priced one called "Charcoal Grilled Angus T Bone Steak" cost 268 yuan, nearly 4 times the restaurant's per capita consumption of 72 yuan.
On the other hand, in the whole dining process, until nearly 7 o'clock in the evening, the two-storey 500-square-meter restaurant is less than 40% of the full rate, according to the clerk revealed that the total number of Chinese dinners on weekdays is about 150 tables, and the consumption of each table is about 150 yuan.
Of course, the coldness of mid-range Western restaurants is also closely related to the epidemic and the diversification of consumer demand. In recent years, high-priced steak products with the main quality have continued to spread from the north, Shanghai, Guangzhou, and Shenzhen to new first-tier cities such as Wuhan. According to the popular list of public reviews, eight of the top ten brands in Wuhan's Western food hot list have a per capita consumption of more than 115 yuan, and most of the brands are the new Internet celebrity brands that have entered Wuhan this year.
After experiencing a series of rising beef costs and per capita consumption levels, high-end products from the past such as carbon-grilled Angus and Wellington are now being accepted by more people.
Parity tabulation
If the price increase of steaks and salads in Western restaurants is not so easy to detect. In the field of Western-style fast food, the trend of rising prices seems to be easier to catch by the public.
On December 22, 2021, McDonald's, which had just ended its December Carnival Month, quietly raised its price.
According to careful netizens, at noon on the same day, he found that McDonald's most popular "1+1 with heart" package became expensive. From the 12 yuan that consumers are familiar with in the past, it has risen to 12.9 yuan, and some breakfast series packages and single products have also seen a price increase of 1-3 yuan.
"Return my poor ghost package", for a time, the topic of McDonald's price increase also rushed to Weibo hot search. Compared with eating more than a billion melons in the entertainment industry, McDonald's's wave of 7.5% increase is obviously a greater impact on netizens.
Back in October, in some parts of the United States, the price of McDonald's iconic "Big Mac Burger" rose from $6 to about $10. Other Hamburgs have also seen different degrees of gains, and the drive-thru (American car shuttle service) offer has also been cancelled.
Light food fell, Western food generally rose, this year's catering industry in the cold winter, the Western food industry has been particularly bad.
Western food into the next capital darling?
Why did McDonald's, which has been in China for more than ten years, choose to increase prices at this node?
Jioupai asked the local McDonald's store clerk in Wuhan, and the answer was a unified notice from the headquarters, the specific reason is unknown. So far, McDonald's has not publicly responded to the price increase.
However, through a "McDonald's word map" circulating on the Internet, we can understand the clues.
Image source: Network
As can be seen from the figure, changes in raw materials and operating costs are the most important reasons for McDonald's's decision to increase prices.
In the past, short-term raw material price changes, through the supply chain to drive to the downstream manufacturers, the impact is minimal, but this time is different.
In October, a number of mass necessity brands announced price increases, including condiments involved in the production of McDonald's products.
On October 13, Haitian Flavor Industry announced that it would adjust the ex-factory prices of some of its products, including soy sauce, ranging from 3% to 7%, and the new price would be implemented on October 25. Subsequently, upstream and downstream manufacturers of condiments such as Hengshun Vinegar Industry, Jiajia Food, and Lee Kum Kee have announced price increases.
In November, the research minutes disclosed by the grain, oil and food company Arowana showed that the company began to raise the price of its products twice at the end of 2020, with the highest rate reaching 15%. Arowana also said that there is still a possibility of continued price adjustment according to the price trend of raw materials.
Arowana's parent company, Yihai Kerry, is McDonald's' largest supplier. I am afraid that it is also affected by the sudden price adjustment of many suppliers that McDonald's has chosen the same price increase strategy.
Abroad, inflationary pressures come in greater. According to a report by the Wall Street Journal website at the end of October this year, the cost of salaries in American restaurants alone has risen by more than 10%. Average wages at McDonald's stores rose by about 5 percent in the second quarter, while the company also faced price pressures from rising costs of paper, food and other supplies.
The impact of price adjustment brought about by the continuous rise in the price of upstream raw materials not only involves McDonald's, but also is an issue that all Western food brands need to consider. Statistics show that the price of U.S. beef has risen by 20% in the past year.
Recently, Yoshinoya and other three major beef rice chain brands have announced price increases, citing the price increase of imported beef, and it is only a matter of time before this wave of price increases affects the price estimates of steaks.
Of course, far more than Western food, this year's entire catering industry when it comes to supply chain struggles, can not avoid the topic of price increases. For capital and consumers, Western food seems to be difficult to become the darling of the market.
In the catering industry in 2021, the attention of Western food is much lower than that of other popular tracks. According to the data of the narrow door restaurant eye, the total number of brands in the Western food industry is currently 505, far lower than the 2631 in the hot pot industry and the 2256 in the tea industry. Even among the exotic cuisines, there is not much difference between the 460 Japanese cuisines and the 379 Korean cuisines.
Source: Narrow Door Dining Eye Parity Mapping
At the same time, the Western food track has a low market concentration, and the chain scale brand has not yet appeared. According to the data, there are only 110 Western food brands with the largest number of existing stores, and only 13 brands with more than 50 stores.
The high standard supply chain supply requirements have become the biggest problem encountered by Western food brands in expanding to the whole country. For example, the new elements mentioned above have encountered great challenges after the brand began to take shape and the number of stores reached the peak level of 50 plus.
Chicken breast, eggs, tuna, corn, lettuce, these popular products in the light food track have a short shelf life, which puts forward higher requirements for raw material selection and logistics distribution, and also leads to new elements in the expansion stage that need to invest more money than other catering categories in the core links of the supply chain such as cold chain transportation. Not to mention the More Diverse and More Complicated Production Process for Western Food.
On the other hand, the high unit price that prevails in the Western food track has also become a constraint for brands to enter second-tier cities: it is obviously not so realistic to quickly change the consumption habits of the sinking market. Continuing to establish high-quality, high-priced net red stores in first-tier cities that are close to saturation has become the second choice for more Western food brands.
Founded in 2018, THE BUTCHER Steakhouse has stores in first-tier and new first-tier cities accounting for 93.62% of its total number of 99 stores.
Coming to the capital market, the Western food track is also difficult to find. According to the recently released "2021 China Catering Brand Power White Paper", the number of catering financing events for drinks and snacks and fast food in 2021 accounted for more than 70% of the first-class catering category. Very few Western food brands have received financing.
Even in the secondary category, Western food products such as steaks and pizzas are far less attractive to the market than tea, coffee and flour noodles. Among them, tea and beverage financing incidents are the most, reaching more than 30.
Of course, this can not be judged that the Western food industry is in decline, especially in the context of the endless emergence of online red steaks and pizza stores. On Christmas Eve and Christmas Day, the popularity of these popular single shops remained unabated, and the queues once reached three digits.
The "2021 China Catering Brand Power White Paper" pointed out that in 2021, the Western food industry continued to consolidate the position of the second largest sector of China's catering industry. In the five years from 2014 to 2019, the compound annual growth rate of Western food reached 12.8%, higher than the 9.2% of the Chinese food market in the same period.
In 2021, which is called the worst year in the catering industry in the past 10 years by Meituan CEO Wang Xing, how should Western food brands survive the winter? The market may have already given the answer.
According to statistics, in 2021, starting from the number of stores, catering brands with 50 stores and below are the most favored by capital, and the number of financing events accounts for up to 41%.
The number of stores of most Western food brands is located in this range, and the catering brands in this range have a high demand for funds on the road of further expansion to enhance popularity, and the high popularity of a few stores and the low valuation of brands are the shining points that attract capital to enter the market.
Parity mapping
The recently popular Western restaurant Nameless Uncle, relying on the unit price of less than 100 yuan and the standard exquisite Western food dishes, is praised by consumers as "the Helen Division of the Western food industry". From breakfast to dinner, full-time, high turnover rate also provides a profitable foundation for it.
The nameless uncle, who has just completed the angel round of financing, is also one of the few brands in the Western food industry to receive financing this year.
Entering 2022, the Western food industry that gets rid of the haze of the epidemic may have more "nameless uncles" favored by the market.
Write at the end
Friends who love Western food joked with me that the more popular Western restaurants now love to "drive away" guests, in order to achieve the effect of increasing the turnover rate and daily turnover. In contrast, Western-style fast food brands such as McDonald's and KFC prefer to use activities to "retain" customers and increase store popularity.
According to Frost & Sullivan, the market size of China's catering industry will return to the level of 4.7 trillion yuan in 2021.
Similarly, the darkest hours that belong to the light food and even western food industry will pass. However, the baptism of the epidemic on the industry and the ebb and flow of brands such as new elements are changing the standard play of the Western food industry. From the current point of view, low-chain operation may be more suitable for most Western food brands than crazy expansion.
Market demand, which is still on the rise, also supports this view. Although the upcoming 2021 has not been favored by too much capital, there are still many sub-segments of the Western food industry that maintain upward potential.
According to statistics, in 2020, 5792 new stores and 3985 stores were closed in light food stores nationwide. Light food is also one of the few catering categories with a positive net store growth in 2020.
Western food, at least there is still a chance.