Recently, the well-known hot sauce brand Lao Gan Ma was rumored to have raised the price of products.
A "price adjustment official letter" of Guiyang Nanming Laoganma Flavor Food Co., Ltd. shows that due to the rising cost of raw materials, labor costs, freight, etc., the rising cost has seriously affected the production and preparation of some of the company's products. After careful consideration in many aspects, the company decided to readjust the sales price of some products from March 1, 2022.
Lao Gan Ma mainly produces more than 20 series of products such as flavored tempeh, oil chili pepper, fresh beef minced, water tempeh, flavored curd milk and so on. Hearing the news of the price increase of the old dry mother, many netizens have ridiculed, "As one of the necessary condiments for dry rice, or do not increase the price, is it time to consider changing the goddess?" ”
At the same time, more and more people complained, "The taste of the old dry mother is not as good as before" and "it is no longer the old dry mother before." The old dry mother, who was once popular for its delicious price, has "no price-performance ratio as before".
As for whether the price increase news is true, the relevant customer service personnel of Guiyang Nanming Laoganma Flavor Food Co., Ltd. have admitted the price increase when responding to external inquiries.
A laoganma dealer in Kunming, Yunnan Province, said that the price of lao ganma has increased in early March this year, and the price of a piece (24 bottles) of hot sauce is about 20 yuan, with an average price increase of nearly 1 yuan per bottle. "Mainly peppers, oil, soybeans have increased prices, and costs have risen." The dealer also said that even if the price increases, the sales of Lao Gan Ma's products have not been affected at present, and they are still hot sauce bestsellers.
In fact, not only the old dry mother, since 2021, soybeans, soybean meal, soybean oil and other bulk commodities have increased prices, many condiment food companies such as Haitian flavor industry, Arowana, Hengshun vinegar industry and so on have announced price increases. However, in condiments, the price of many single products is not high, the average price increase of each product does not exceed 1 yuan, if there is a preferential promotion, the discount can often offset part of the increase. Therefore, the market price perception has not changed particularly significantly.
Old mom is not fragrant? New brands compete for the minds of users
In 2014, the founder of Lao Gan Ma gave the company he founded to his youngest son Li Miaoxing to manage, and he took a back seat. However, due to Li Miaoxing's replacement of Guizhou pepper raw materials with Henan peppers, the taste of Lao Gan Ma is not as good as before, and consumers have also said that Lao Gan Ma is not fragrant.
The data shows that in 2014, the income of the old dry mother was 4 billion yuan, and in 2016, it reached 4.549 billion yuan. However, in 2017, with the departure of Tao Huabi, the founder of Lao Gan Ma, the company's revenue began to decline, with revenue of 4.447 billion yuan that year, and revenue further declined to 4.389 billion yuan in 2018.
Due to the sluggish performance, in 2019, Tao Huabi, the founder of Lao Ganma, returned, changed the seasoning of Lao Ganma to the original material, and at the same time rearranged the formula of Lao Ganma. Subsequently, the company returned to the growth channel, and the sales revenue of Lao Gan Ma reached 5.023 billion yuan in 2019, an increase of 14.43% year-on-year, hitting a record high, with sales reaching 5.3 billion yuan in 2020.
However, in 2019, the price of guizhou fresh pepper and dried pepper raw materials rose sharply by about 50%, and the old dry mother changed the pepper raw materials in order to save costs, rather than increasing the price. However, under the pressure of public opinion of "changing peppers and deteriorating tastes", they changed back to Guizhou peppers. This has caused some consumers to have a crisis of trust in the old mother, and also given the new brand an opportunity. In the years of sluggish performance, watching the industry boss make mistakes, a number of domestic Internet celebrity brands believe that this is a once-in-a-lifetime good opportunity, and finally a number of new brands such as Hubang, Rice Ye, and Zuo Dashi came into being.
Different from the old ganma who does not raise funds and is not listed, emerging brands actively embrace the power of capital, through capital operation, financing and other ways, quickly grab the user's mind, and find ways to seize market share in the hot sauce market, which also brings certain pressure to the old ganma.
As the mainland's spicy-eating population continues to climb, in 2021, China's spicy-eating population has exceeded 650 million, and it is also expanding at a growth rate of 10% per year. Therefore, it is expected that in the future, there will be more players in the overall Chinese hot sauce market, and the popularity of capital and the entire industry for new brands will continue to be further enhanced.
Zhu Danpeng, an analyst in the Chinese food industry, said, "Because the thinking and consumption behavior of the new generation of consumer groups are different from the old generation, they prefer the new and tired of the old, like some brands with high appearance and faster innovation and upgrading iteration, which has led them to start considering trying some new flavors and brands." This also forces the iteration speed and quality of innovation and upgrading of traditional enterprises. ”
It is firmly positioned as the first in the industry, but internal management needs to be improved
At present, in addition to continuing to produce traditional products, Lao Gan Ma is also trying new products, such as tomato chili sauce, spicy dishes, hot pot base and so on. But these new products still lack core competitiveness compared to their traditional tempeh hot sauce. When it comes to Lao Ganma, the first reaction of consumers is still hot sauce, not spicy vegetables or hot pot base, reflecting that the new products launched by Lao Ganma do not occupy the consumer mind.
No financing and no listing means that it is difficult for lao gan mama to expand production capacity with the help of capital, or to concentrate funds on research and development of new products and large-scale marketing. However, it is understood that after His comeback, Tao Huabi still insisted on his "four no's principles" and said that he would pass on these principles to his sons and grandchildren.
Despite this, the old mother's attitude towards marketing is quietly changing. In 2019, Lao Gan Ma, who has never advertised, launched a magical video advertisement "Unscrew Dry Mom", and every picture in the video is very eye-catching. At the beginning of 2020, the official flagship store of Lao GanMa cooperated with Taobao to launch the "Lao Gan Ma Love Bottle", and each bottle cap was printed with an earthy love sentence, such as "the most free words in love are nothing more than sauce". After the event, sales at the Tmall flagship store increased by 20%.
However, in the current Internet era, the hot spots of marketing activities come and go quickly. Therefore, if you want to capture the hearts of young consumers for a long time, the old mother may also need to carry out cross-border co-branding more frequently and create new explosive products.
After The comeback of Tao Huabi in 2019, Lao Ganma's revenue has rebounded, and its revenue of 5.4 billion yuan in 2020 is still firmly on the throne of the hot sauce market boss. But this year's 75-year-old Tao Huabi will have a complete retirement day sooner or later, in the current increasingly competitive chili sauce industry background, her old management methods can no longer meet the company's future development needs.
Zhu Danpeng said that at present, Lao GanMa has a market share of nearly 5 billion, similar to the share of emerging brands such as Rice Ye and Tiger Gang is still very small, and in the short term, it is still impossible to shake the status of Lao Gan Ma. However, with the entry of new brands, the entire domestic hot sauce industry structure will enter an all-round, multi-dimensional state of blossoming in the future. The old mother needs to do a good job of top-level design as soon as possible to avoid the internal relationship of the follow-up family business from being too complicated and chaotic.
Therefore, in the face of the encirclement and suppression of new brands, the price increase strategy of lao ganma may bring about short-term income increases, but in the long run, the company still needs to exert efforts in new product development, marketing and internal management.
(Titanium media APP editor Zhai Biyue synthesized from the daily economic news, Sina Finance, Beijing News, etc.)