The Dragon Boat Festival came, but the rice dumplings were unsold

The Dragon Boat Festival came, but the rice dumplings were unsold. On June 21, the day before the Dragon Boat Festival, Wufangzhai, the "king of zongzi", was exposed to a large backlog of zongzi that could not be sold, and agents had to desperately discount and clear the inventory. Since its listing last year, Wufangzhai's performance has also been very dismal, falling again and again. Why don't people love to eat zongzi anymore?

01, zongzi "out of favor"

"Do you buy rice dumplings to eat during the Dragon Boat Festival this year?" The moment she received her friend's private message, Gao Meng realized that the Dragon Boat Festival had arrived.

"Don't buy!" She gave the answer without thinking, this thing is sweet, greasy and difficult to digest, a few years ago a friend gave her a zongzi to eat, she did not feel hungry all day, and since then zongzi has not been on the shopping list of Gao Meng.

After replying to the message, Gao Meng casually asked a few friends, and few people ate zongzi this year.

After receiving the gift box of zongzi issued by the unit, Li Liting, a white-collar worker after the 90s, sent it back to her hometown as soon as possible. "I won't eat it, and according to past experience, I will take this box of rice dumplings back, and I will not open it, but will only pile it in the corner until it is discarded."

"The thing of zongzi, that is, during the Dragon Boat Festival, is similar to the nature of the Qingtuan in the Qingming Festival. Moreover, the current zongzi are not too new. Li Liting said bluntly.

Feng Jingshan, a white-collar worker who is also a post-90s generation, simply did not let zongzi enter the house. "Glutinous rice is not easy to digest, and it is too top after eating, and it will be guilty of people who lose weight." Feng Jingshan told Shijie that for her, zongzi are at best a way to mark the Dragon Boat Festival, but now "there are too many ways to celebrate, there are more substitutes, there is no need to eat zongzi."

This year, Feng Jingshan is ready to make a short trip with friends, shopping and eating. "Of course, the best food about zongzi is still made at home, and young people like us who work outside the home can't eat grandma's brand zongzi, and slowly stop eating." Feng Jingshan told the "city boundary".

Zongzi, as part of the ritual sense of building the Dragon Boat Festival, has brought countless topics and business opportunities to consumers and businesses. Consumers are arguing about "sweet or salty zongzi", while merchants can rub hot spots, such as roasted duck zongzi, umeboshi vegetable buckle meat zongzi, and ramen zongzi.

Today, zongzi are likely to "fall out of favor".

▲(Source/Visual China)

Early on the morning of June 21, the topic phrase "I can eat one or twenty of these rice dumplings at a time" briefly rushed to Weibo's hot search. Two hours later, the entry fell off the hot search list and was stolen from the limelight by social and entertainment topics. Earlier, topics such as "zongzi issued by the company" and "zongzi also have conspicuous bags" did not provoke splashes, and finally disappeared.

Consumer interest is not high, transmitted to the merchant side, can be described as bleak. A netizen broke the news that on June 21, the day before the Dragon Boat Festival, the "Zongzi King" actually had a large backlog of zongzi that could not be sold, and agents had to desperately discount, hoping that corporate customers could buy more.

"In previous years, the sale of zongzi was almost over at this time, but I didn't expect that the zongzi have not been sold so far this year." Knowing the market, he was very emotional.

His Weibo caused heated discussions among netizens, and many people left messages saying: "I don't buy rice dumplings, and I don't have to eat them." "Where are there still people eating zongzi now." "My rice dumplings from last year are still frozen in the refrigerator." "Just now, a unit purchased 900 barrels of laundry detergent from me, and the employees did not want rice dumplings."

Lin Peng, who does zongzi production and wholesale, also sensed this change, he told the "city boundary" that in the past two or three days, Wufangzhai dealers have been frantically discounting goods, and the lowest can be pressed to 5 discounts, which is also a matter of no way, and when the Dragon Boat Festival passes, no one buys zongzi for 1 yuan, so they can only take advantage of the fact that the festival is not over, and hurry up.

Fang Ke, who has just come into contact with group buying customers, told "Shijie" that recently all companies are doing group buying promotion meetings, "as long as they make rice dumplings, every family is getting it". Fang Ke estimated that excluding good shops and other enterprises, the sales of rice dumplings are good, and on the whole, the market of rice dumplings this year is not very good.

02. Why don't people buy rice dumplings?

There are many factors behind the "fall from favor" of zongzi.

First and foremost, it is not in line with people's pursuit of health. For today's consumers who advocate low sugar, low-carbon water and low fat, zongzi can be said to be a terrifying "carb bomb". "Eat at most one at a time, and digest most of the day after eating."

Zongzi are mainly made of glutinous rice with different fillings, the main composition of glutinous rice is a large number of carbohydrates, protein, dietary fiber and other nutrients are very low. Studies have said that each 100 grams of zongzi contains 35-58 grams of carbohydrates, calculated that the carbohydrates contained in a small zongzi are about equal to two bowls of rice, accounting for almost half of the total carbs required by the human body every day.

The above study said that the calories of zongzi are roughly 180 calories/100g, and the calories of a zongzi are more than 500 calories, which is higher than the calories of eating a double layer of cheeseburger, a pair of spicy chicken wings and a cup of zero Coke at McDonald's. If converted into exercise, it takes 1 hour of jogging or skipping rope to burn the calories of eating a rice dumpling.

According to the Rees Consulting report, 77.5% of "Gen Z" respondents believe that healthy ingredients are the most important consideration. It is mentioned that the younger generation is more aware of health and wellness, and prefers healthier and cleaner raw materials, ingredients and ingredients. And high-calorie, high-carb foods like zongzi can no longer attract young consumers to pay for it.

Zongzi that consumers are not happy to eat are becoming more and more expensive, and "Shijie" has found that zongzi under 3 yuan have almost disappeared from the market. "Yesterday, I went to RT-Mart to buy two bulk rice dumplings, but when I checked out, I found that the two spent a total of 13 yuan", and some consumers complained, "The result was to search on the e-commerce platform, and the average price was not less than 5 yuan." Some netizens were puzzled: "It's all rice, why is it several times more expensive to wrap it with leaves, and it's not Moutai." ”

The increasingly expensive zongzi are also related to the rise in the price of raw materials, and some stores said, "This year, rice dumplings have risen by about 20 yuan per piece (7 kilograms per piece), and rice has risen by about 50 yuan per bag (100 jin per bag)." A food brand said that due to the increase in environmental protection and energy saving requirements, the supply of paper products in the market is insufficient, which has pushed up the price of packaging materials, and the price of rice dumplings in gift boxes usually increases by about 10%.

Some people who really want to eat zongzi choose to make their own, which is not only healthy, but also cheap. Data from Meituan's grocery shopping platform shows that sales of rice dumplings have increased 8 times this year. In Beijing, sales of Dragon Boat Dumpling Leaves increased 8 times month-on-month, glutinous rice increased by 75%, and sales of wormwood leaf doubled year-on-year. Dingtone grocery shopping data also shows that in the past week, sales of rice dumpling-leaf-related SKUs have grown rapidly, especially in South China, where sales increased by nearly 700% compared with last week.

▲(Source/Visual China)

On the other hand, the gift attributes of zongzi in the past have also been greatly weakened. Chinese food industry analyst Zhu Danpeng believes that zongzi gift boxes are not only food, but also carry the attributes of holiday gifts. Beautiful, high-grade packaging can increase the premium ability of goods. In the past, "sky-high rice dumplings" were once flooded, including thousands of yuan zongzi gift boxes, almost luxurious packaging, and also claimed to have "ginseng zongzi" and "bird's nest zongzi" and other precious ingredients.

However, with the introduction of policies to limit excessive packaging of goods, the value of zongzi as gifts has become lower. According to the restaurant owner's internal reference, a person in charge of supermarket procurement said, "Enterprise group buying now receives relatively few orders, and many companies do not pay benefits or have reduced their budgets." Meituan's grocery shopping data also shows that compared with high-end packaging zongzi, affordable zongzi with simple packaging and high cost performance are more favored, and the sales of affordable zongzi under 20 yuan account for more than eighty percent.

03. The "Zongzi King" can't be sold

Although it is also a seasonal food, compared with the "Mid-Autumn Festival" mooncakes, the zongzi market space of the Dragon Boat Festival is much smaller.

Wufangzhai, the "king of zongzi", disclosed in the prospectus that it is expected that by 2024, the size of China's zongzi market will increase to 10.291 billion yuan. In contrast, the scale of the mainland mooncake market has already exceeded 20 billion yuan.

"Zongzi can't be compared with mooncakes, zongzi are rice, and mooncakes are pastries." Lin Peng told Shijie that although he is doing zongzi business, he rarely eats zongzi. "Eating mooncakes in autumn and October means beauty, what can eating zongzi mean?" Lin Peng threw out the question, and then took over the conversation, "So like Wufangzhai is expanding its capacity to mooncakes, but mooncake companies are not rushing to the zongzi track." ”

Fan Ning, co-founder of Red Food.com, also told "City Boundary" that compared with mooncakes, zongzi's premium ability is weaker. "On the one hand, the Dragon Boat Festival is not as important in the hearts of the Chinese people as the Mid-Autumn Festival, on the other hand, unlike the mooncake fillings with all kinds of varieties, there is more room for innovation, and it is difficult for zongzi to increase the premium space through filling and processing technology.

Although the relevant companies have not yet disclosed the second quarter report of 2023, the outside world has no way of knowing the sales of their rice dumplings, but from the current stock price, the capital market is not optimistic about Wufangzhai.

▲(Source/Visual China)

On June 21, Wufangzhai's stock price opened low and closed at 32.06 yuan per share, down 4.04%. Many shareholders can't help but complain, "Zongzi are green", "Zongzi can't be sold anyway, why don't you consider sending some to shareholders" and "No one eats zongzi this year".

Stretching the timeline, Wufangzhai's performance has not been ideal since its launch. In the 2021 Dragon Boat Festival, Wufangzhai stuck in the time node and submitted a prospectus to the CSRC. Previously, Wufangzhai's listing process was turbulent, and three listing counseling brokers were changed within two years. In August 2022, Wufangzhai, who has been tossing for a long time, finally knocked on the door of the capital market.

In April 2023, Wufangzhai handed over its first annual report after listing. Financial report data shows that its revenue decreased by 14.87% year-on-year to 2.462 billion yuan, and its net profit decreased by 29.01% year-on-year to 137 million yuan. Among them, the revenue of zongzi decreased by 12.97% year-on-year, and the revenue of mooncakes increased by 8.53% year-on-year.

The first quarterly report of 2023 disclosed at the same time showed that Wufangzhai's revenue fell again, down 28.74% year-on-year to 216 million yuan, and the company's loss reached 63.9367 million yuan.

Wufangzhai is known as the "King of Zongzi". On the one hand, more than 70% of its revenue comes from the zongzi business, on the other hand, according to the data of Huajing Industry Research Institute, Wufangzhai's market share in the mainland zongzi market has exceeded 30%, and it is approaching the "ceiling". In today's zongzi market, not only is it difficult to be a king, but other players are also not performing well.

On June 21, Sanquan Foods, which also sells rice dumplings, did not perform well. On the same day, Sanquan Foods closed at 15.65 yuan per share, down 1.20%. Some shareholders tried to popularize science, "The Dragon Boat Festival, the Zongzi Festival, and the three are all selling zongzi." "Financial report data shows that in 2022, the business where zongzi is located is the lowest growth rate among all businesses of Sanquan Foods.

04. Wufangzhai struggled to survive

To compete in a stock market, only by constantly "involving" can we create a way. From endless flavors to bells and whistles, competition between companies is constantly heating up, and eighteen martial arts are used to please today's consumers.

Wufangzhai is currently actively looking for ways to respond.

For example, in product innovation, brands have racked their brains. From traditional hand-wrapped rice dumplings to self-heating rice dumplings suitable for lazy people today; From "carb rice dumplings" based on glutinous rice to brown rice dumplings and quinoa dumplings that emphasize health and no burden; From traditional tastes such as red dates and fresh meat to curious tastes such as spicy strips, durian and ice cream, innovative initiatives are emerging.

In addition, the long-established brand represented by Wufangzhai has also taken a series of measures to try to win the hearts of young people. In recent years, Wufangzhai has continuously launched co-branding with well-known IPs such as Honor of Kings and Marvel to regain the favor of young people. This joint effect is indeed effective, Jingdong data shows that in the sales of traditional zongzi gift boxes launched by Wufangzhai, "Generation Z" consumers only accounted for 6% of purchases, but in the joint zongzi gift boxes, "Generation Z" consumers bought 25%.

Despite this, the tens of billions of market supported by small rice dumplings are still facing a shrinking situation. According to data reported by Huajing Industry Research Institute, the growth rate of the market size of China's zongzi industry has gradually slowed down in recent years, from more than 14% in 2016 to about 7% in 2023. "The zongzi circle is so big," Li Jianping, chairman of Wufangzhai, said as early as 2018, "It has almost reached the ceiling." ”

Wufangzhai, who is dominated by zongzi products, apparently realized that it was not a wise move to go all in zongzi. Therefore, in recent years, the transformation path with the theme of diversity has also begun. Beyond zongzi, Wufangzhai extends his hand to other seasonal products. At present, Wufangzhai has developed foods such as tangyuan, eight treasure rice, qingtuan, and chongyang cake, which usually revolve around traditional Chinese seasonal scenes.

In 2019, Wufangzhai also launched the "glutinous +" strategy, indicating that it would upgrade from zongzi to glutinous rice food, "We have now formed a product group dominated by zongzi, integrating mooncakes, rice balls, pastries, egg products, other rice products and other foods." Wufangzhai said that the company hopes to create a second growth curve in baked and quick-frozen foods.

▲ (Source/Wufangzhai official website)

Wufangzhai, who has benefited from cross-border joint branding, has also started a Chinese food business. At the end of last year, Wufangzhai opened its first "seasonal gift shop", official information shows that the store's menu categories cover both Jiangsu and Zhejiang taste braised pork, as well as Sichuan and Chongqing taste of spicy chicken nuggets, but there are not many SKUs, most of them are still based on staple food products such as xiaolongbao and soup dumplings.

At the beginning of June this year, Wufangzhai also said that it was about to welcome the news of the opening of 16 new stores, showing the outside world the enthusiasm of actively embracing franchisees. However, in the eyes of some industry insiders, Wufangzhai's eagerness to seek franchisees does not rule out the suspicion of "cutting leeks". The financial report shows that since 2019, the revenue of chain stores has declined year after year, from 643 million yuan to 288 million yuan in 2022, accounting for less than 15% of revenue.

Under the "fall of favor" of zongzi, Wufangzhai, the "king of zongzi", seems to have to work hard to reverse his performance.

(Gao Meng, Li Liting, Feng Jingshan, Lin Peng, and Fang Ke are pseudonyms in the text)

(Author | Li Dan Zhang Jikang, Editor | Chen Fang)