As an accelerator in the industry, VCs are accelerating the outbreak of new catering.
The "2021 China Chain Catering Industry Report" jointly released by the China Chain Store & Franchise Association and China Renaissance Capital shows that after experiencing the epidemic in 2020, the enthusiasm of capital has risen again. As of August 2021, the amount of investment and financing in China's catering industry was 43.91 billion yuan, twice that of 2020.
According to the forecast of the Head Leopard Research Institute, from 2020 to 2025, the compound annual growth rate of the new catering track will reach 33.8%, and many new catering brands are eager to try against capital.
However, as the touchstone of the industry, VCs are accelerators and may also be executioners, and new catering is moving away from the essence with the help of capital. On the one hand, the pursuit of standardization and large-scale growth effect is fast, on the other hand, the traditional catering culture is slow, and the contradiction is difficult to reconcile. Under the chase of speed and explosive models, people have lamented that the ingredients have lost their "original taste", the high firepower blessing fueled by the seedlings, the new style of catering, where to go?
Super-speed development, robustness to be tested
The problem of the catering industry is standardization.
The innovation of the new catering is to innovate in the supply chain and solve this problem. As a very small number of categories that can be standardized in Chinese food, the Chinese noodle shop track with a high degree of standardization and a good degree of transformation is the Chinese noodle shop track. Traditional noodle restaurants have a relatively single taste, and it is difficult to get rid of the positioning of fast food restaurants. However, under the development direction of the new catering wave, the new catering noodle shop track has been favored by capital. In the first half of 2021, the domestic noodle shop track once again ushered in a wave of financing.
Lanzhou beef noodle brands - Chen Xianggui, Ma Jiyong, Zhang Lala have also completed a new round of financing, the image is renewed, in line with the preferences of young people, focusing on innovation and change; in addition, rice noodle brands "Yangji Shanye" and "Hegemony" have also been favored by capital.
Among them, nearly 800 million yuan of E-round financing has been completed, positioning Chinese noodles and Fulao noodles are the most representative.
Being able to run out of the noodle track where the strong are gathered, and Fulao noodles rely on a strong supply chain. Before opening the first store, Hefu Lao noodles have begun to establish a supply chain, set up a 15,000㎡ central kitchen, which can meet the basic operational needs of 1,000+ stores in the future, and have been invested in digital construction since the early days, building an information system including supply chain, operation, logistics, etc., opening up the front, middle and back office business.
Standardization, big strides, and fulao noodles in the expansion level of a ride in the dust. According to the narrow-door restaurant eye data, as of March 2022, the number of Hefu Noodles stores nationwide reached 392, and 381 stores were in operation, of which 83.9% were first-tier and new first-tier city stores, and 109 stores were in Shanghai alone.
Rapid expansion has also become a symbol of its development. The number of new stores added by Hefu Lao noodles in 2021 doubled compared with 2020, and a new store was opened in about 2 days across the country.
Is such a super-speed development stable?
According to the financial report released after the E round of financing, the revenue of Hefu Noodles in 2020 was 1.107 billion yuan, and the net profit loss was 215 million yuan. It was not until the first half of 2021 that Hefu Lao noodles turned a loss into a profit, with revenue of 846 million yuan and net profit of 13.85 million yuan. According to the FMCG Self-media Food Capital Bureau FoodBud calculation, subject to the huge investment in the supply chain, when there are about 30 stores, it is almost difficult to make a profit; when the stores are opened to 30 to 100, the advantages of the scale benefits of Hefu noodles begin to appear.
Therefore, many financial investors believe that Hefu Lao noodles is a consumer business that relies on the "scale effect" after all, on the one hand, it has to expand its territory and race to the land for profit, on the other hand, it is also trending under the heavy cost inputs such as high rents, direct operation models, and supply chain containment.
The pace of expansion is not only constrained by the need to burn money, but also the food safety issues that are more of concern.
In July 2021, the "Rat Gate" incident was exposed, and then "Hefu Lao noodles apologized" on Weibo hot search first, which undoubtedly caused the brand reputation of Hefu Noodles to be damaged a lot; and on the consumer service platform black cat complaints, there were also complaints about the food safety of Hefu Noodles: product odor, eating hair, unknown black worms, eating foreign objects... And so on. Helplessly, the "high-end" Hefu noodles, still can't get rid of the rough management of products.
Supply chain standardization is even further advanced, why are there problems in the last mile? While rapid expansion and recruitment, it is more difficult to take care of the management level, and food safety issues have been shocking. Whether it is a franchise store or a direct store, food safety issues are a warning line that enterprise development must pay attention to for a long time.
3 awkward contradictions
It cannot be denied that the subversiveness and innovation brought by the new catering, but the "fast" of holding high and hitting high also brings inevitable development contradictions.
The first contradiction: quality contradiction, gradually drifting away from the standardization.
China has eight major cuisines and countless local cuisines, Lu cuisine is full of qi ileum, Sichuan cuisine is varied, Hunan cuisine is intense, Cantonese cuisine is Qingqi... All of them are nourished by time sedimentation and water and soil. Catering entrepreneurs who hold the way of the Internet are moving away from the essence of the industry under the pressure of standardization.
Diners pursue "experience", under the chain of restaurants to try to ensure that the dishes are "not wrong", and to exclude the influence of the flow of chefs on the business operations, the central kitchen came into being, only the selection of ingredients and seasonings of a dish was quantified, in order to mass produce. Under such pressure, pre-made dishes are "beating" chefs and becoming the mainstream, such as Grandma's house and green tea, which are semi-finished products that do not require skill, and "send a small worker to do it".
Also taking Hefu Noodles as an example, positioned in the high-end quality noodles, from the environment to the consumer population are catering to the elite, and the elite brand image created by The Fulao Noodles makes it quickly attract a large number of white-collar customers. However, in terms of taste, the taste of Chinese food is closely related to the cooking process, and under the standardized replication of the central kitchen as the core, Hefu Lao noodles generally use industrial noodles and semi-finished ingredients, and even according to insiders: in just two months of part-time work, cooking bags are everywhere.
Products are the core competitiveness. Hefu Lao noodles main health quality noodles products themselves, in the evaluation of consumers there is no special place, the general evaluation is general, not good to talk about delicious, can not talk about not delicious, can eat. In terms of taste, it is difficult to make an essential difference. Even the direct evaluation of unpalatable is not in the minority.
This is undoubtedly "losing the soul" for Chinese food that pays attention to "pot gas". This also allows consumers who pay for the taste to vote with their feet, after all, the freshness under the gimmick cannot be repeated a second time.
The second contradiction, the speed contradiction, the production had to become faster and faster.
Capital pursues scale, which in turn needs to improve efficiency, simplify processes, and pursue the speed of production, but not to break.
A typical example is the already listed restaurant group 909. At the beginning of its founding, Jiumaojiu was just an ordinary Chinese food brand, with a total of more than 100 dishes, and the time-consuming degree of operation can be imagined. "Slow Pace" expanded 5 stores in 10 years.
In 2015, Jiumao Jiuzhuang slashed the product line with a broken wrist, leaving only the later big single "Taier Sauerkraut Fish". Such subtractions allow Tai'er to greatly improve operational efficiency and standardization. The success of "Tai Er" has led to a gorgeous turnaround of the entire Nine Mao Nine. According to the financial report, as of the end of 2020, the number of Taier restaurants reached 233, with revenue of 1.962 billion, an increase of 53.6% year-on-year, and it is expected to maintain 100-120 stores in 2021.
Under the "spell" of standardization, people eat faster and faster, single, and pursue the quality of the taste bud experience farther and farther.
The third contradiction: the price contradiction, the difficulty of supporting quality and premium.
Does the new catering offer a sense of value matching its higher premium?
In the wave of catering consumption upgrading, "pseudo-upgrades" similar to decoration upgrades have emerged. Still taking Hefu Noodles as an example, the scene of "Study + Noodles" initially made Hefu Noodles stand out among the cookie-cutter noodle restaurants, earning enough eyeballs and a sense of ceremony. But after the hilarity, marketing gimmicks, formalism, and low practicality are criticized by more and more people, after all, few people will read books and talk about big business in a noodle shop.
Just as Nesher's tea has always wanted to replicate the wall of Starbucks's "third space", it can only be said that the scene of the new catering marketing mind war and go far and wide. The core is that even the best of the environment cannot be a premium reason for frequent consumption. There is no doubt that the atmosphere of the restaurant that makes a big fuss about the decoration is becoming a "decoration".
From the perspective of cost, the high rent in the first-line business circle and the cost of decoration of characteristic stores must eventually be passed on to consumers, so it is inevitable that the "IQ tax" will be questioned.
From the perspective of the market, the current main battlefield in the first and second-tier cities of Hefu Lao noodles to further expand is bound to enter the sinking market, the high price outside the fifth ring road is undoubtedly difficult to pass. In other words, the consumption upgrade of new restaurants is not much imagination in the expansion.
Moreover, the competitive environment in the industry is also becoming increasingly fierce, and under the squeeze, the differentiation of the new catering with high-end refinement similar to the model of Fulao noodles is essentially unsustainable.
Cycle crossing question
In addition to the various senses of separation exposed internally, the external environment of more and more inward rolls also makes new-style restaurants face more challenges.
Not only was it noodles in Hefu, but it is not uncommon for cutting-edge restaurants to be popular in recent years, but the industry reshuffle is still in progress.
In fact, the ebb tide is already on the horizon.
Taking the first generation of net red restaurant Green Tea, which is impacting the Hong Kong stock IPO, as an example, in the early years, with innovative explosive products such as "bread temptation", with the help of the two highlights of "fusion dishes" and "high cost performance", green tea restaurants stepped on the trend of upgrading the domestic catering industry to refined and fashionable consumption, and positioned themselves as "Chinese casual catering track". Now that I have stepped off the altar, I am already facing the dilemma of a decline in the turnover rate and a flat profit margin.
As we all know, compared with other industries, the catering industry has a low entry threshold, high replicability, serious homogenization, and fierce competition on a daily basis. As Li Xuelin, founder of Hefu Noodles, once mentioned, "We are now thinking more about how to make Hefu live longer, and the most difficult thing in the catering industry is sustainability." "Can internet celebrities become changhong? Explosive products will fail, brands will age, and the basic skills of longevity are king.
In addition, the survival of the catering industry itself is also being tested.
Subject to the uncertainty of the post-epidemic era and the downward trend of the economic cycle, according to enterprise investigation data, more than 1 million catering stores have not survived in 2021. At least 25 food and beverage brands have experienced large-scale closures or direct deaths, involving multiple categories.
Total F&B revenue in 2021 will only return to pre-pandemic levels, i.e. the 2019 period. But in terms of growth, the restaurant industry in the past two years is equivalent to a near shutdown. The pressure on the catering industry in the post-epidemic era is still lingering. Support is weak or strategically contracted, and many star brands such as Sipping, Haidilao, and Chayan Yueshi have also been forced to close stores.
Capital pays more attention to profit premium, scale and quantity, catering has always paid attention to high-frequency demand, and the catering industry under the Internet thinking is becoming unified, boring and unsustainable.
Why break the game? The topic lies in large-scale expansion and refined operation, returning to the "taste" of catering pursuits.
We cannot deny that the new catering under the blessing of capital is iteratively upgrading from all aspects, but after the tide of capital retreats, consumers will personally vote with taste.
Can new restaurants go through the cycle, under the ripening of capital on the growth rate, do a good job of expanding the speed of expansion and quality of production, and do not forget the original intention of taste? (Text/Zhiton Qingfeng)