Text | Giant Tide WAVE, author | Jingyu
After leaving Luckin Coffee, Lu Zhengyao has been walking on the road of catching up with the new outlet.
After the two entrepreneurial projects of shared space and fun small noodles disappeared, Lu Zhengyao kept his eyes on a new business - pre-made dishes.
It is reported that Lu Zhengyao's prefabricated vegetable project has begun to attract investment in January this year, promoting the pre-made cuisine project in a hotel in Xiamen and opening a store in Beijing's East Fifth Ring Road.
Driven by many factors such as the "lazy economy" and the epidemic at home, prefabricated dishes have gradually become popular in recent years, and their acceptance among C-end consumers has become higher and higher, so it has also received the attention and favor of capital.
According to statistics, in 2021 alone, there will be Wangjiadu food, fresh food, three meals with ingredients, taste of the lion and other C-end prefabricated dish brands to obtain financing, zhenwei Xiaomeiyuan has obtained two financing in the past six months. STAR INSTITUTIONS SUCH AS IDG CAPITAL, SOURCE CODE CAPITAL, TOMATO CAPITAL, AND MEITUAN DRAGON BALL HAVE BETS.
According to NCBD's "2021-2022 China Prepared Vegetable Industry Development Report", the size of China's prepared vegetable market will exceed 300 billion yuan in 2021 and is expected to exceed 830 billion yuan by 2025.
But the problem with this data is that there is no clear distinction between B-side and C-side services. Among them, although the B-end business is nominally called prefabricated vegetables, it has a stronger supply chain and agricultural and sideline products processing attributes, and the profits are thin.
Pre-made dishes are undergoing a transformation process from the B-end to the C-end, and the proportion of pre-made dishes in the true sense of C-end consumer goods is less than 30%, and the scale is only about 90 billion yuan. And the C-end channel also includes a variety of business formats such as traditional e-commerce, KA channels (hypermarkets and supermarket chains) and specialty stores.
Among so many routes of prefabricated dishes, Lu Zhengyao may have chosen a more difficult one: not only to do offline stores, but also to add a large number of fresh side dishes to the product, which makes the supply chain management and store turnover more difficult, which can be called the Hard model.
01 The "narrow door" in the air outlet
Unlike the current pre-made dishes at the C end, which generally use pure quick-frozen conditioning products, the products of the tip workshop also contain a large number of fresh side dishes.
When the pre-made dishes stand on the wind outlet, all kinds of quick-frozen pasta, self-heating small hot pots, brine dishes and other foods have rubbed on the concept of pre-made dishes. This has led to a blurring of the definition of prepared dishes in the primary and secondary markets.
"Narrow" pre-made dishes refer only to semi-finished dishes, which are stored frozen or vacuum packaged after the factory has been paired with the dishes, and after the consumer buys them back, they only need to simply heat or cook to make a dish in a short period of time. In particular, well-known meat dishes, such as plum button meat, sauerkraut fish, Buddha jumping off the wall and other dishes.
In a broader sense, the variety and ingredients of prepared dishes have been greatly increased. According to the scope of sales and business, a prefabricated dish industry expert divides the pre-made dish into 6 categories, including 1) cooking package 2) hotel dish, 3) quick-frozen conditioning products, that is, pre-made dishes in the traditional sense 4) fresh food, generally pure dishes in supermarkets 5) barbecue categories; 6) hot pot categories; 7) semi-finished dishes such as small crispy meat.
In these N pre-made dishes route, Lu Zhengyao may have chosen the more difficult one.
In terms of product categories, unlike the current pre-made dishes at the C end, which generally use pure quick-frozen conditioning products, the products of the tip workshop also contain a large number of fresh side dishes.
Image source: Tip of the Tongue Workshop Partner Proposal
In a cooking bag, there are both quick-frozen conditioning products and fresh clean dishes. Take a dry pot fat sausage with a net content of 345g on the Tip of the Tongue Workshop APP as an example, of which 200g is marinated fat intestines, 115g garnish packages (including onions, green and red peppers), and 30g of spicy sauce.
As a fresh product, the addition of side dishes has a better improvement in the flavor of the entire prepared dish, and it is more convenient for consumers, but as we all know, the loss of fresh products is difficult to avoid, and it is easy to affect store profits. This may be a big burden for prepared dishes that are not high in their own gross profit margins.
At present, the pre-made dish brands on the market to C end, such as Zhenwei Xiaomeiyuan, Weizhixiang, and Mr. Frozen Pin, are generally pure quick-frozen conditioning products, with a shelf life of several months or even a year, and the requirements for store turnover are not high.
Once fresh side dishes are added, their shelf life is only a few days, which makes the entire supply chain more complex and the requirements for store turnover efficiency are greatly improved.
According to the common practice in the industry before, these clean vegetable side dishes are generally processed and distributed to stores in the urban area by factories in the suburbs, almost opening up another supply chain, which is much higher in the overall cost.
02 Upgraded version of "Young Chef"?
The most critical factor affecting the success of the tip of the tongue workshop comes down to consumer acceptance.
An investor focusing on the consumer sector told Juchao that the tip workshop reminded him of the young chef who failed in the last round of O2O entrepreneurship that began in 2012.
Founded in 2013, Young Caijun is an O2O company that sells semi-finished clean vegetables, and has received multiple rounds of financing from well-known institutions such as Meihua Venture Capital and Zhen Fund, but fell due to the break of the capital chain.
Due to the reason for its failure, relevant practitioners believe that the unit price of young vegetables is low, and the costs of logistics and fresh food loss have eroded profit margins. In the case of difficult profitability, the investment of heavy assets such as young caijun offline stores and self-pick-up cabinets consumed too much money, and finally the capital chain had problems.
Zeng Xing, president of the young caijunyuan supply chain, once wrote "Three reasons why I advise everyone not to do To C clean dishes", pointing out that one is that consumers' acceptance of clean vegetables is not high; second, the pre-sale model is difficult, and consumers do not know what to eat tomorrow; the third is to do community fresh or to solve the problem of order density, and it is difficult to support clean dishes alone.
The tip of the tongue workshop does not adopt the online pre-sale model, and its pre-made dishes are almost all meat dishes, which also guarantees a higher unit price, but the problems of heavy asset investment and order density still exist, which makes it look like an upgraded version of the young chef.
Like the original young chefs, Juchao believes that the most critical factor affecting the success of the tip of the tongue workshop is still due to consumer acceptance.
For an offline store, it is very important whether the customer flow within the radiation range can support its normal operation. Although the acceptance of prepared dishes in the hearts of the public has increased in the past two years, it is partly due to the change of catering consumption caused by the epidemic from going out to staying at home. Whether pre-made dishes can continue to be hot on the C-end still needs to be verified by the market.
Some industry experts have pointed out that the current distribution of consumer groups of prepared dishes is pyramid-like. The top of the pyramid accounts for 10%, such families have full-time wives or nannies to cook, generally do not purchase prepared dishes; the bottom of the pyramid accounts for 50%, such people are sensitive to price, require low prices, and are not the main customers;
Consumers, who account for about 35% of the middle of the pyramid, are the customers who really need to grasp the pre-made dishes. These consumers often have a certain spending power and certain requirements for quality, but do not spend too much time on cooking.
In the case of low consumer acceptance and relatively scattered distribution, if you take online channels and offline KA channels (large stores and chain supermarkets) there is no problem, but rushing to lay offline stores on a large scale may mean excessive heavy asset investment and risk, especially the products of the tip workshop have not yet established enough recognition on the C-end.
Although the tip of the tongue workshop can share the risk to the franchisee by joining, in the end, the community store still needs a certain order density to support, otherwise the franchisee will lose confidence after the store operation has problems.
In addition to the young chefs, the community fresh chain Qian Dama, which recently closed all stores in Beijing, is also a good lesson for the tip of the tongue workshop. Aunt Qian focuses on the Nissin model, which requires very high operating costs, so it has caused a lot of pressure on enterprises and franchisees.
03 The profit model is still to be run
Compared with the "mini grassroots store" of Weizhixiang, the tip of the tongue workshop needs a larger customer flow to ensure the operation of its stores.
In the case of low consumer acceptance and relatively scattered distribution, whether the customer flow of a prefabricated vegetable store can support its normal operation is very important, which determines whether its profit model can eventually run through.
Juchao observed that at present, in the prefabricated dish brands of to C, there are not a few who open offline stores like the tip of the tongue workshop, typical of Ruwei Zhixiang, which has more than 1600 stores in the country.
However, the conditions for joining The Taste Of The Tongue are much lower than those of the Tip of the Tongue Workshop. According to its official website, its requirements for stores are not less than 8 square meters, the door head is more than 3 meters, and the store site selection requirements are set in the farmers' market and fresh supermarkets. And zero franchise fee, 100% of the store profit belongs to the franchisee.
Weizhixiang joining requirements Image source: Weizhixiang official website
In contrast, the minimum area requirement for the franchised store is 10 square meters, and the upgraded fresh supermarket store and experience restaurant store area is even as high as 60 square meters. Franchisees need to pay brand usage fees and quality fees of 30,000 yuan each, and operating service fees of 20,000 yuan / year.
Such a high store specification and configuration naturally means a lot of cost investment, compared with the "mini grassroots store" of Weizhixiang, it is more necessary to have a larger customer flow to ensure the operation of its stores. This is no small challenge for the Tip of the Tongue Workshop.
The tip of the tongue workshop team also seems to realize that in specialty stores that only sell prepared dishes, the frequency of consumer consumption will not be too high, and may not be able to support enough traffic and orders.
Juchao found that the first offline store in Beijing, the products sold by the Tip Workshop not only include the pre-made dishes of the Tongue Tip Workshop brand, but also include unprocessed meat frozen products, quick-frozen staple foods, pill hot pot ingredients, fast-heat lazy meals, condiments and many other products.
Screenshot of the Tip of the Tongue Workshop APP
This category setting makes the tip of the tongue workshop look less like a pre-made specialty store, but more like an offline food supermarket featuring pre-made dishes. At the same time, in its promotional image on the website, the words supermarket 3.0 also appeared on the signboard.
The choice of such a store category is very similar to that of the pot circle food exchange. Recently, Pot Circle Food Exchange has been expanding its product categories on the basis of the original products, and it is becoming more and more like an ingredients supermarket, rather than a hot pot ingredients store.
The reason is that the tip of the tongue workshop and the pot circle food hui, are facing the problem of narrow audience of the main products, in order to support the efficiency of the store, other products were introduced, and finally the same destination, became an offline food supermarket.
It is reported that at present, the fresh supermarket Qian Aunt has also adjusted its market strategy and wants to exert efforts to "short-term guarantee" pre-made dishes. In terms of consumption frequency, buying vegetables is more extensive and more frequent than buying prepared dishes, and the business model is more dominant.
It is not difficult to find that almost all offline fresh stores, vegetable stores, community supermarkets, convenience stores, online supermarkets to home, front warehouses, community group buying platforms can theoretically sell long shelf life of prepared dishes (some can sell short-term warranty), can be the opponent of the tip of the tongue workshop, the competitive pressure it faces can not be ignored.
At present, the tip of the tongue workshop is still in the exploration stage, its partner plan set up 10 square meters, 30 square meters, 60 square meters of different store types, the future of different store types can run through, how to run through, may be adapted to local conditions, continuous improvement.
04 Write at the end
There are many routes for pre-made dishes, and Lu Zhengyao may have chosen the more difficult one.
When peers have chosen traditional e-commerce, KA (hypermarkets and chain supermarkets) multi-channel at the same time, the tip of the tongue workshop will spend a lot of money to explore offline specialty stores.
In the case that peers are making pure quick-frozen conditioning products, the tip of the tongue workshop has added side dish packets, which improves the difficulty of supply chain and operation.
Fortunately, as a new company at the beginning of its business, the strategic shift is not difficult. In the future, will the tip of the tongue workshop give up fresh side dishes, will it take the KA channel or even to B, will it use a more mini store? Anything can change.
But to stand out from the competition, one of the things that the tip of the tongue workshop must do is to create high-quality, popular and explosive pre-made dishes. Otherwise, the format of the pre-made vegetable store cannot be established.
This puts high demands on Lu Zhengyao's team, after all, pre-made dishes are not coffee, and their supply chains are much more complicated.
Experts in the prefabricated cuisine industry above pointed out that prefabricated dishes involve eight major cuisines, hundreds of categories, and it is difficult to take into account the diversification of tastes, it is difficult to create super large items, and the scale and diversification of factories are also contradictory.
However, it is precisely because of the inherent problems of these industries that the prefabricated vegetable market is still in its infancy, and there are no leading enterprises to dominate the market. For new players represented by the Tip of the Tongue Workshop, it's just getting started.