China News Finance, January 15 (Shi Rui) "The south does not understand the salty bean flowers of the north, and the north does not understand the salty bean flowers of the south", the dispute between the salty and sweet rice dumplings of the north and the south is said to be "noisy" from the Qing Dynasty to the present, and it is still the focus of the discussion on the whole network that can set off the difference between the north and the south.
On the evening of January 13, the China Securities Regulatory Commission announced that the initial offering of Zhejiang Wufangzhai Industrial Co., Ltd. (hereinafter referred to as "Wufangzhai") was approved, which means that the IPO of Wufangzhai was successful.
"Salty Dumpling Party" prefers to buy rice dumplings?
Wufangzhai was founded in 1921, from the Zongzi shop, has been more than a hundred years, is a proper "old brand", its products are mainly salty meat zongzi, only in the first half of 2021, bought nearly 140 million yuan of pork as raw materials, a total of 423 million zongzi produced, sold nearly 46,000 tons of zongzi, relying on zongzi income of 1.7 billion yuan.
Image source: Wufangzhai official website
According to the wufangzhai prospectus, in 2018 and 2019, the scale of China's zongzi market was 6.8 billion yuan and 7.337 billion yuan respectively, and in the same period, the sales revenue of Wufangzhai zongzi was 1.5 billion yuan and 1.609 billion yuan, accounting for 22.09% and 21.93% of the national market, which means that the market share of Wufangzhai is stable at one-fifth, ranking the forefront in the difficult to adjust zongzi market.
Another data shows that the "salty dumpling party" has more purchasing power in the supermarket scene. According to the data of the national chain store supermarket information network, during the 2019 Dragon Boat Festival, the "champion" of Zongzi sales in the supermarket channel was Wufangzhai with a brand share of more than 30%; while the brand share of sweet Zongzi representing Beijing Daoxiangcun was less than 3%.
Salty rice dumplings are mainly "active" in the south, and the "package mail area" supports the business foundation of Wufangzhai based on "Jiahu Fine Point". Prospectus data show that the East China region, which is dominated by Jiangsu, Zhejiang and Shanghai regions, contributed more than half of the operating income of Wufangzhai specifically, in 2018, 2019, 2020 and the first half of 2021, the proportion of East China in the main source of income of Wufangzhai was 63.23%, 61.45%, 55.82% and 54.67% respectively.
Can "net red" marketing boost zongzi into a democratic food?
Eating Zongzi during the Dragon Boat Festival is a tradition of Chinese, but outside of the Dragon Boat Festival, how many people buy Zongzi?
Due to the seasonal nature of Zongzi, only before the Dragon Boat Festival (the fifth day of the fifth month of the lunar calendar) is the peak season for purchasing, and the rest of the time is the off-season. Therefore, the production of Wufangzhai also has to show the characteristics of "top-heavy" - "non-stop" in the first half of the year, and "years and years" in the second half of the year. In 2020, Wufangzhai produced 214 million zongzi in the second quarter, accounting for nearly 80% of the annual output, and in the second half of that year, Wufangzhai produced less than 12% of the zongzi of the whole year.
Zongzi is "bound" to the Dragon Boat Festival and also "delineates" the ceiling of the industry. Wufangzhai prospectus disclosed that in 2015, the size of China's Zongzi market was 4.916 billion yuan, and the compound annual growth rate by 2019 was less than 11%, and it is expected that the zongzi market size will exceed 10 billion yuan for the first time in 2024, but the compound annual growth rate from 2020 to 2024 is expected to drop to single digits, only 7%.
How do "niche" foods break through the ceiling? Wufangzhai chose two directions, one is to use "net red" marketing to lengthen the sales period of zongzi, and change zongzi from a seasonal "limited food" to one of the daily staple foods on the public table. According to The Understanding of China News Finance, Wufangzhai has launched cooperative products with popular brands such as Leshi, Zhong Xuegao, And Xicha (Hot Wheat); it has also used the brand of "Wufang Pictures" to produce a large number of "blockbuster" videos, in this way to try to change consumers' positions and consumption habits for Zongzi.
Image source: Zhong Xuegao official website
The second strategy of Wufangzhai is to expand the type of products, according to The New Finance and Economics, in addition to Zongzi, Wufangzhai has also launched mooncakes, mung bean cakes, green dough, salted duck eggs, instant cup porridge, rice set, soup noodles, roasted wheat, wontons, tangyuan and other products.
Image source: Cut from the prospectus of Wufangzhai
However, judging from the current financial data, Wufangzhai's efforts are still difficult to say successful. In 2018, 2019, 2020 and the first half of 2021, the proportion of Zongzi series revenue to the total revenue of Wufangzhai was 66.28%, 67.74%, 70.77% and 84.06% respectively, and the concentration was still rising. The road to innovation of the old brand cannot stop. (End)
Source: China News Network