This May Day holiday, it seems that as long as you go out to play, you can't avoid the queue. Not only are the railway station halls full of people, but you have to wait for hundreds of tables to choose a random restaurant to eat and get the number, and the videos of "tourists collectively performing punishment stations" in various scenic spots are frequently searched.
Obviously, a while ago, everyone was still watching the special forces tourism of college students on the Internet, lamenting that being young is good, but now they have encountered the "hottest May Day in history" and are forced to become "special forces".
But I don't know if you noticed, once the queue was a pioneer, and the Internet celebrity snack brands known for grabbing and waiting are now difficult to hear how many long queues are heard.
Because in the past period, most of these once popular new Chinese noodle restaurants, new Chinese bakeries and other shops have experienced heat retreat, closure and layoffs.
Behind this phenomenon is the failure of the Internet celebrity catering model.
The top dining stream fell off the altar
In December 2021, Momo Dim Sum Bureau, an Internet celebrity snack brand that started in Changsha, opened its first store in Beijing in Xidan Joy City in Xicheng District, attracting a large number of customers on the same day, and it took seven and a half hours to queue for at peak times to buy it, and the mall even took flow restrictions to persuade some customers to return [1].
Dim sum is so popular that, according to founder Wang Yuxiao's plan at that time, by 2022, when the brand is three years old, Momo Dim Sum Bureau will open 100 stores [2].
But by the end of April 2023, according to brand monitoring platform Jihai, the influencer brand had only 40 stores in operation, even fewer than the more than 50 stores when the first store opened in Beijing.
In the past year or so, the large-scale closure of Internet celebrity snack brands is not only Momo Dim Sum Bureau.
Among them, the highest closure rate is Hutou Bureau Standard Chartered Cake Shop, which is also a new Chinese bakery, and 56.8% of its stores have closed so far.
At the beginning of April this year, a Xiaohongshu blogger with the online name "Crazy Product Jason" and the introduction "former product director of Byte Ctrip and current Hutou Bureau rights protection salary seeker" posted that the Shanghai headquarters of Hutou Bureau has been vacated and all employees have left.
A reporter then went to verify and learned that Hutou Bureau's headquarters in Shanghai Green Valley Plaza had moved out at the end of March and owed the lessee more than 1 million yuan in rent [3].
In the end, Hu Ting, the founder of Hutou Bureau, had to come out and respond, saying that he was still doing his best, "It may take more than half a year (time) to decide the life and death of the project." ”[3]
In addition to baking desserts, other categories of Internet celebrity snack bars are not having a good time.
Jiang Peijun, who is determined to break the category and no brand in the ramen field, said in an interview in July 2021 that he founded Chen Xianggui and planned to open 600 stores in 2024 [4].
However, according to Jihai's monitoring data, Chen Xianggui, once the chain brand with the largest number of stores in Lanzhou beef noodles in China, has fallen from a total of 149 stores nationwide in November 2021 to 78 today.
Just like Chen Xianggui, the development of the flour industry has stagnated throughout 2022, which is in stark contrast to the skyrocketing expansion of store openings in 2021.
Among the six noodle restaurants "upstarts" (Hefu Lao Noodles, Meet Xiao Noodles, Wuye Noodles, Ma Jiyong, Chen Xianggui, Zhang Lala), except for Ma Jiyong, who received Tencent investment, other brands have contracted to varying degrees in 2022.
Considering that these Internet celebrity snack bars have achieved catering standardization at the beginning of their establishment, and there is no problem of declining quality control after large-scale expansion in traditional catering, it is probably still a problem of mode to slide from "store opening fever" to "closing tide".
Why can't the Internet celebrity snack bar work?
The restaurant industry is a very volatile industry, and these brands that have been among the top in the food industry are indeed good in themselves.
In September 2019, Hutou Bureau opened its first store in Changsha, with an area of 53 square meters setting a single-store revenue record of 1.27 million yuan per month. Subsequently, the star brand chose to continue to raise funds and use capital to open new stores, thus quickly "scrambling".
How easy is it for F&B brands to raise money in 2021?
When Ma Jiyong opened less than 20 stores in Shanghai, Sequoia Capital China gave a valuation of at least 1 billion yuan [5]; What is even more exaggerated is the Momo Dim Sum Bureau, which only opened 10 stores, and investors valued it to 1 billion yuan, with an average store and a small target [6]. In contrast, Starbucks at that time had 32,900 stores around the world and a market value of only 900 billion yuan [7].
But in 2022, the financing situation in the restaurant industry took a sharp turn.
According to the records of Ene Niu Data, from December 2021 to November 2022, the number of financing events in the catering category, including Chinese fast food, decreased rapidly compared with the previous cycle, with the largest decline in the category being noodles, which fell by three-quarters compared to 2021.
Why is this?
In July 2021, the founders of brands such as Baman Hunan Rice Noodles and Ma Jiyong were invited to participate in a forum on the theme of catering, and one of the founders mentioned on the scene: "Consumer tastes have cycles... Once a customer puts a celebrity label on us, it is equivalent to telling him: If you don't like me, you are out... If you still like me a few years later, you're out. ”[8]
At that time, these catering brands with social as the selling point were still very popular with capital. Now that the wind has passed, the Internet celebrity snacks that are good at online marketing have been more calmly scrutinized by investors.
When "abandoned" by capital, Internet celebrity brands can only shrink for the winter by closing those expansion stores that have been financed by high valuations. However, some still encounter problems such as broken capital chains because of too rapid expansion in the past.
On April 4, Hu Ting admitted in an interview, "Capital can give birth to scale, as a lever for speed, but it will also pry up people's hi points, and (I) am not particularly calm in terms of scale and rhythm control." ”[9]
In addition to the hindrance of financing, affected by the epidemic, in the context of consumption downgrading, the high pricing of Internet celebrity snacks is also very embarrassing. Different from traditional street food, Internet celebrity brands were positioned to take the high-end route when they were founded, selling a bowl of small noodles for 30 or 40 yuan, and a spicy hot for 45 yuan.
A bowl of ramen costs 40 yuan, is it a special amount of ingredients? Or does it taste great? In fact, there is not much difference compared to other normal beef noodles, and the biggest difference is the dining environment.
Unlike some noodle shops that open along the street, the interior is dark and the table is greasy, Internet celebrity brands such as Chen Xianggui and Malala will choose to locate in urban business districts and create a sense of luxury for diners with elaborate decoration and open lighting.
Even if you don't dine in and order takeout, you can see a certain "sense of premium" from the outer packaging of these foods. Baking brands will also regularly do new packaging designs or look for popular IP to do joint models.
It's just that for most people, the added value of these social media attributes is not a must-have, and if you only want to eat enough or eat well, then why not choose a more affordable store?
Once you and I couldn't afford to climb high, now I love to ignore it
It is precisely to feel the change in the mentality of today's consumers, throughout 2022, in the catering industry is full of mourning, the chain brands of the coffee category have achieved strong development.
Not only has Luckin Coffee come back to life, but many new coffee brands have emerged. In addition to developing in first- and second-tier cities, these coffee shops are also targeting the sinking market and attacking cities and land in the county.
And these coffee brands all have one characteristic: cheap, cheap, or cheap. Luckin used to be synonymous with cheap coffee, but the lucky coffee launched by Michelle Ice City is only a few dollars a cup.
Another typical representative is Coody Coffee, whose founder is Lu Zhengyao, who created Luckin Coffee [10]. After folding fun noodles and pre-made dishes, the investor went around in circles and remade coffee in 2022, and it is still a trick to subsidize expansion with burning money.
Only this time, there are more coffee brands that focus on cost-effectiveness.
Another important branch of the beverage industry, milk tea brands, has also learned the price-performance marketing magic weapon that is not timeless for 10,000 years. "We feel that consumers are holding the 'money bag' in their hands tighter", this is a sentence written by Nai Xue's tea in its annual report released in early 2022 [11].
It is also from 2022 that milk tea brands that have always taken the high-end route have begun to reduce prices. In January 2022, Heytea took the lead in starting to reduce prices, and the ten-yuan area became the main price band for products; In March, Nai Xue's tea also launched a drink series of 9 yuan to 19 yuan.
Although these high-end milk tea brands have reduced their prices, it seems that the effect is not obvious. Take Nai Xue's tea as an example, according to its latest financial report, the adjusted net loss for the entire 2022 year was as high as 461 million yuan, which is more than twice the 145 million yuan lost in 2021 [12].
Behind this, due to the high cost of materials and stores, Nai Xue's tea cannot really be affordable.
Many netizens pointed out that the so-called price reduction is actually more "reducing the amount and reducing costs": for example, reducing the original 650 ml cup to 500 ml. This is also why Naixue's average sales price per order in 2022 is still maintained at more than 30 yuan, although it has been 7.3 yuan lower than the average price in 2021, but it is still not cheap.
This is also why, after giving up Starbucks in the milk tea industry, it is difficult for Heytea and Naixue's tea to compete in terms of cost performance over Michelle Ice City, which takes an extremely affordable route. The positioning of not relying on the two has made it more difficult for them in 2022.
After all, for ordinary people, queuing, clocking in, and sending moments are all occasional additional experiences. When buying snacks, it is important to choose the right taste, and it is also important to cover your pockets. A delicious and affordable food is the favorite choice of foodies.
Bibliography:
[1] GUO Jing. (2021). Momo Dim Sum Bureau entered Beijing, and the first store set off a queue frenzy. Touzhong.com. Retrieved 30 April 2023 from https://www.chinaventure.com.cn/news/64-20211221-366266.html.
[2] Aju Khan. (2022). Momo Dim Sum Bureau, between fast and slow. Economic Observer. Retrieved 30 April 2023 from http://www.eeo.com.cn/2022/1210/570437.shtml.
[3] Ma Yunfei. (2023). Desperate Tiger Head|Depth. International Finance News. Retrieved 30 April 2023 from https://www.ifnews.com/news.html?aid=478103.
[4] XU Wenjing. (2021). "Rob" a pit in the shopping center with 3 times the rent, Lanzhou ramen "kills crazy"! . Winshang.com. Retrieved 30 April 2023 from http://news.winshang.com/html/068/7383.html.
[5] ZHOU Mo. (2021). Three consecutive brands have received venture capital, why did Lanzhou ramen suddenly catch fire?. Red Food.com. Retrieved 30 April 2023 from http://www.canyin88.com/zixun/2021/05/11/83404.html.
[6] Dawn. (2021). 1 store is worth 100 million, and the capital to open a store is crazy?. Deep burning. Retrieved 30 April 2023 from https://mp.weixin.qq.com/s/XflQA8NmZlbubxBnACEVlQ.
[7] Starbucks. (2021). Starbucks Reports Q2 Fiscal 2021 Results.
[8] Feng Chuang. (2021). Under the popularity of restaurant chains, the cold thinking of 10 CEOs. Retrieved 30 April 2023 from https://mp.weixin.qq.com/s/rL8mr6yPnVWdUsNwP3RoUw.
[9] Kailin Zhu, Shiya Zeng & Hao Qiu. (2023). When a star consumer company runs out of fuel. LatePost. Retrieved 30 April 2023 from https://mp.weixin.qq.com/s/mbky0skz7qulLHmNeCjrtQ.
[10] Wang Lin. (2022). Exclusive | Lu Zhengyao fights the coffee market again, can the new project Kudi be the second Luckin. Tech Planet. Retrieved 30 April 2023 from https://mp.weixin.qq.com/s/TXKgJ5j4qyM21Hdn01Bv_w.
[11] Nai Xue's tea. (2022). Annual Report 2021.
[12] Nai Xue's tea. (2023). Annual Results Announcement for the Year Ended December 31, 2022.