Hot sauce jianghu rumors: more expensive than the old dry mother can not sell, cheaper than the old dry mother does not make money. Lu Wenjin, founder and CEO of Hubang Hot Sauce, proposed to find an incremental market in addition to the old dry mother. Through the "takeaway + marketing" approach, Hubang Hot Sauce has successfully avoided the old dry mother and solved the "survival problem", and now it has greater ambitions.
Author| Zhang Chao Editor| Luo Lijuan
What should I do if the takeaway order is not full enough?
I believe that many people who have encountered such scenes will have a "single artifact" in their minds - Tiger Bang Hot Sauce.
50g a can of tinplate canned Tiger Bang spicy sauce, the price is less than 10 yuan; and for Ele.me and Meituan two major takeaway platform merchants, HuBang has launched 15g, 30g small packages, the price is mostly 3-5 yuan, with the merchant preferential activities may also be as low as 0.1 yuan.
A takeaway platform porridge shop sells Tiger Bang hot sauce
Small canned Tiger Bang hot sauce, the portion is appropriate, while meeting the needs of consumers to make up for a full order, there are still multiple flavors to choose from. Through the cooperation with takeaway merchants to bundle sales, Hubang hot sauce has gradually become a "takeaway standard" in recent years.
Before cutting into the takeaway scene, Hubang did not have a ready-made model to rely on, once even the most basic dealers could not be found, only relying on the members of their own team, city by city, store by store communication, but the beginning of offline new things is often not easy.
In addition to promoting products, the method that the members of ditui came up with was to incarnate the store "Jack-of-all-Trades" to help merchants solve other daily problems, from takeaway App downloads to store operations. This "intimate" service model finally helped Hubang open up the situation in 2016 and form a certain foundation in the takeaway market.
Online, Hubang is also sparing no effort to publicize, on the one hand, it cooperates with internet celebrities such as Big Stomach King and Pepsi Cola to expand its popularity among young groups; on the other hand, it hitchs a ride on the live broadcast express and enters the live broadcast room of well-known head anchors such as Li Jiaqi and Wei Ya to further expand consumer groups and brand exposure.
According to the latest official data, as of now, Hubang has set up offices in more than 20 cities such as Beijing, Shanghai, Hangzhou, Chengdu, Guangzhou, Shenzhen, etc., and has reached cooperation with 70+ chain brands and 30,000+ merchants in the takeaway Top 200. Almost to "let a takeaway escape the Tiger State hot sauce".
After successfully breaking the game, Hubang was favored by capital and received tens of millions of yuan of A round financing from Qingdao Wangying Ruifeng Fund and Chenguang Bio in 2019.
According to the exclusive information of all-weather technology, Hubang is currently seeking tens of millions of financing in the B round, and the first round of roadshow has ended; it is expected that in the next three years, Hubang's financing will reach the level of 100 million yuan.
Its own development seems to be smooth, but in the entire hot sauce industry, the reality is that the domestic has long laid a "super and many weak" competitive pattern, more than 20 years of the old brand Lao Gan Ma is a big family, other brands are difficult to look back on.
Even if new brands such as Hubang and Rice Ye have risen sharply in the past two years, they have only set off a brief wave on the Internet, and their revenue capacity is still not comparable to that of the old mother, "the industry has been working hard for a long time."
Lu Wenjin, founder and CEO of Hubang Hot Sauce, revealed to All-Weather Technology that in 2019 Double 11, Hubang's sales reached a small climax, selling 5 million cans of hot sauce a day, but then began to decline; this year's Double 11 sales were basically the same as last year, there would be no big profits, and there would be no losses.
Standing at the inflection point of enterprise development, how should Hubang break through the predicament? How big a storm can it make in the hot sauce market?
<h1 class="pgc-h-arrow-right" data-track="20" > helplessness under the pattern of "one super and many weak"</h1>
Before founding Hubang Hot Sauce, Lu Wenjin was the vice president of marketing of Tsingtao Beer and had nearly 20 years of sales experience in the catering and FMCG industries.
In 2015, Lu Wenjin, who has helped Tsingtao Beer win the Shandong market, build the second brand "Laoshan Beer", and successfully operate the "Betis" olive oil, has moved his entrepreneurial mind and wants to truly build a brand of his own. He pulled up sun fuyou, a long-time friend and investment worker, to find suitable projects and opportunities together.
Lu Wenjin, founder and CEO of Tiger State Hot Sauce
At that time, another of Sun Fuyou's friends, Tan Yingchao, the founder of Zhongjiao Yingchao Spicy Industry Development Co., Ltd. (hereinafter referred to as "Yingchao Hot Sauce"), was planning to do a hot sauce business.
Tan Yingchao, who has been deeply involved in the pepper industry for many years, has always dealt with B-end merchants and provided raw materials for well-known enterprises such as Haitian. Seeing some new brands pouring into the hot sauce market, he also moved his mind and wanted to lay out at the C-end and join the hot sauce industry.
At that time, after understanding Tan Yingchao's plan, Today Capital Xu Xin clearly pointed out that the team lacked C-end sales experience and "couldn't do it". After all, from the B-end to the C-end, whether it is the sales link or brand operation, it is a completely different set of logic. So, the two found Lu Wenjin, who wanted to "do big things" and was familiar with C-end sales.
After conducting a month-long hot sauce market research, the three of them hit it off and officially registered Qingdao Spicy Workshop Food Co., Ltd. (the main body of Tiger State Hot Sauce) in October 2015, with Lu Wenjin in charge of marketing, Tan Yingchao managing production, and Sun Fuyou raising funds.
However, when choosing a specific development path, several people have made difficulties. Looking at China's hot sauce industry, whether it is brand recognition, product sales, or channel share, Lao Gan Ma is the absolute leader.
For any new brand that wants to enter the hot sauce market, it is inevitable to encounter an embarrassing problem: it is more expensive than the old dry mother, and it cannot be sold; it is cheaper than the old dry mother and does not make money.
To occupy the market, the first thing is to occupy the minds of consumers. As a new brand, how to break the purchase mentality formed by consumers' habits for more than 20 years is a very worthy of exploration.
After many offline research and market analysis, the founding team found that hot sauce is a condiment for accompanying meals and must rely on scenes. The "simple meal" scene of takeaway is the blue ocean market where hot sauce can be explored; whether it is yellow braised chicken rice, or nutritious warm stomach porridge, or a one-person food package, with a hot sauce can add a lot of points to the meal.
Therefore, from the beginning of its development, Hubang avoided direct competition with Lao Ganma and chose to compete in the takeaway market.
In addition to accessing the takeaway scene, Hubang has also joined the Internet tide, harvesting online traffic by opening stores on e-commerce platforms such as Tmall and JD.com; at the same time, through cooperation with Internet celebrities such as Big Stomach King and Pepsi Cola, entering the live broadcast room of well-known head anchors such as Li Jiaqi and Wei Ya, further expanding consumer groups and increasing brand exposure.
The direction is right, the brand is launched, and the performance growth seems to have become a natural success. On The day of Double 11 in 2019 alone, the sales of Tiger State hot sauce reached 5 million cans. Lu Wenjin revealed to all-weather technology that from 2019 to 2020, Hubang hot sauce basically maintained the frequency of li jiaqi's live broadcast once a month, and each time the sales could reach the million level; but in 2021, the landing frequency was slowly decreasing, and the sales volume also fell.
In addition to being affected by the rapid growth rate in the previous two years, it is also because of the serious homogenization of the hot sauce industry in the past two years. In addition to Hubang, brands such as Rice Ye, Rice Sweeping, Plum Ziqi, and Ji Xiangju have launched hot sauces containing meat, and products such as "meat hot sauce", "chili sauce", and "shiitake mushroom sauce" are emerging in an endless stream, making it difficult for consumers to distinguish.
According to the data released by Rees Strategic Positioning Consulting, there are currently more than 18,000 hot sauce brands in the country, and the entire market size of spicy sauce has exceeded 37 billion, of which the proportion of meat-containing hot sauce has reached 44%; after 2015, more than 40 brands have launched meat-containing hot sauce products, and this number is still rising.
There are fierce enemies in the front and pursuing soldiers in the rear. This means that Hubang must have a unique product in the current market competition to stand out.
<h1 class="pgc-h-arrow-right" data-track="38" > raw materials "price increases", and then the cost challenge</h1>
As a new Internet celebrity brand in the hot sauce industry, the market test to face is far more than this.
First of all, in the context of rising global raw material costs, Hubang needs to balance the relationship between selling prices and costs.
As a hot sauce company, chili pepper is naturally the most important raw material. The main production areas of Chinese peppers can be roughly divided into six: the main production areas of southern winter peppers, the main production areas of open-earth summer and autumn peppers, the main production areas of high-altitude and summer delay peppers, the main production areas of high-spiciness peppers in spicy areas, the pepper production areas of northern protected areas, and the main production areas of Central China Henan, Anhui, southern Hebei, Shaanxi and other major production areas.
China's six major pepper producing areas (Source: 2020 China Pepper Industry Data Analysis Report)
The peppers of Hubang hot sauce are mainly selected from line peppers and chicken peppers, the former has a relatively wide planting area, covering central China, south China, southwest China and other places; while the latter is specially supplied by Jize County, a subsidiary of Handan, Hebei Province, and is currently the main raw material of Hubang hot sauce. At the same time, considering the genes close to the raw material and Yingchao hot sauce, Hubang built a production plant in Dezhou, Shandong.
Therefore, the transportation cost of raw materials in Hubang will not be too high, but mainly in raw material storage, manual operations and other aspects of consumption.
According to Lu Wenjin, after the peppers are ripe from August to September every year, Hubang will arrange manual picking, but there may be differences in the ripening time of the same pepper, in order to ensure the quality, it can only wait for the peppers to be red, and pick them in batches; the plucked peppers will be stored directly in the cold storage within 24 hours. Compared with the old dry mother who uses dried chili peppers to make sauce, Hubang uses fresh chili peppers, which also requires higher storage costs.
Not only that, vegetable oil, beef, sauce and other raw materials needed for the production of hot sauce have begun to increase in prices in the past two years.
Previously, Haitian Flavor Industry announced that due to the continuous rise in the cost of raw materials, transportation, energy and other major raw materials, the ex-factory prices of some products such as soy sauce, oyster sauce and sauce will be adjusted, and the adjustment range of major products will range from 3% to 7%, and the new price will be implemented on October 25, 2021.
Lu Wenjin also admitted that the non-GMO vegetable oil that Hubang has been using, the price in 2018 is only 5000-6000 yuan / ton, about last year, oil prices have continued to rise, this year has been sold to 12,000 yuan / ton, the increase range is 100%-140%, "it is expected that in about 5 years, (we) raw material costs will rise by at least 50%"; affected by this, the retail price of Hubang products has also risen slightly recently, but the overall increase has been controlled, "to leave room for future price increases".
In fact, the price of Tiger Bang hot sauce is not cheap. Taking its signature beef hot sauce as an example, the 210g bottle sells for 28.9 yuan; in comparison, the 210g bottle of LaoGanma beef chili sauce is only 9.9 yuan, which is about one-third of the former. If the price of Tiger State hot sauce continues to rise in the future, consumer acceptance may be doubtful.
Comparison of the price of a certain e-commerce platform Hubang meat hot sauce and Lao Gan Ma meat chili sauce
There are many obstacles in front of Tiger State. Lu Wenjin knows that in the complex new media environment, consumer sentiment changes rapidly, and Hubang, which is at the inflection point of development, still needs to continue to explore a relatively lower cost and more suitable for the development of its own brand.
According to data from the Ministry of Industry and Information Technology, the market size of sauce reached 40 billion yuan in 2018, of which hot sauce accounted for 80%; and the market size growth rate of the entire hot sauce industry remained above 7%. By the end of 2020, China's hot sauce market may reach 40 billion yuan.
"The 40 billion market is really created by the C-end, and it may only be 12-15 billion yuan." Lu Wenjin hopes that through Hubang's efforts to make meat and hot sauce, the future will double the industry to 30 billion, "that in the growth of 15 billion, there is no doubt that Hubang (if) has the largest share, so as to avoid the frontal conflict with lao ganma." ”
Even if "avoiding the old mother" only solves the "survival problem", Hubang still urgently needs to find the answer to "sustainable development" in the "from 1 to 10" stage.
<h1 class="pgc-h-arrow-right" data-track="55" > to expand the incremental market and fight a war</h1>
In Lu Wenjin's view, in order to complete the leap from "1 to 10", Hubang must abandon the shrub-style way of survival, create a new category, expand the category strategy, and break through the existing channels.
Recently (October 19), Hubang announced a strategic upgrade, upgrading from the "Hubang" brand to "Hubang Meat And Spicy Sauce", and launched two products, the signature beef sauce and the devil's spicy beef hot sauce, positioning the "meat hot sauce" category, distinguishing it from the traditional chili sauce, and wanting to seize the consumer's mind in the subdivision track, occupy the first place in the "meat hot sauce" category, and become the "second brand" in the hot sauce industry after the old dry mother.
According to the "2020-2025 China Chili Sauce Industry Market Prospects and Investment Opportunities Research Report" released by the China Commercial Industry Research Institute, Laoganma Chili Sauce currently occupies about one-fifth of the market share of China's hot sauce market, about the sum of the second and third Lee Kum Kee and Spicy Girls, firmly occupying the minds of consumers.
The proportion of the domestic brand hot sauce market (Source: China Business Intelligence Network)
Although in the past few years, because the founder Tao Huabi retreated to the second line and the raw materials of the hot sauce were replaced, the performance of Lao Ganma has declined briefly; but after the return of Tao Huabi in 2019, the performance of Lao Ganma has increased for two consecutive years, and the revenue in 2020 is more than 5.4 billion yuan, a record high. This performance is placed in a number of C-side hot sauce companies, which is enough to stand out from the crowd.
Lu Wenjin observed that at present, the C-end hot sauce enterprises in the Chinese hot sauce market, in addition to the old dry mother taking the lead, most of the revenue of other enterprises is on the scale of 100-200 million yuan.
"We want to achieve a revenue level of 400-500 million in three years." Lu Wenjin said that if Hubang can achieve revenue of 400-500 million, "in fact, it has become the second place in the industry." ”
Since its establishment, Hubang has maintained a situation of "slight loss and slight profit", and the overall financial situation is basically in a state of revenue balance. But sales have slowed for two consecutive years.
Upgrading the brand and focusing on a single category is like a self-redemption of the troubled tiger state, which is somewhat a bit of a backwater war.
Lu Wenjin defines Hubang as a market "challenger". He believes that under the "shadow" of the industry giant of Lao Ganma, if the new brand wants to become bigger and stronger, the most important thing to do is not to seize the stock market, but to create an incremental market, "Only by doing incremental, making the whole cake bigger has the opportunity to develop." ”
He has two levels of understanding of the current industry competition.
Although looking at the domestic hot sauce market, from the brand point of view, rice, rice sweeping, Ji Xiangju, Zhongjing and other enterprises have covered in the field of meat hot sauce; from the category point of view, beef hot sauce, pork hot sauce, chicken hot sauce and other varieties are also very common in the market, which inevitably makes the outside world think that the industry competition is very fierce.
However, Lu Wenjin believes that at the strategic level, the current emerging brands of Hubang and meat hot sauce are more similar to cooperative relations, and once more brands emphasize the meat hot sauce category, it is easy to send consumers a signal of "meat hot sauce is better"; at the same time, it guides consumers to buy meat hot sauce, stay away from ordinary hot sauce, and tactically "isolate" the old dry mother.
He pointed out that there are not so many players in the entire meat and hot sauce market, far from the competition stage, but at the same time, he also likes to compete from sales, "It is best to have two or three giants in the industry to fight and make the industry bigger." ”
This strategic upgrade of Hubang, trying to break the old order, is a strategic surprise attack under the "shadow" of the industry leader Lao Ganma.
On the one hand, when many brands gathered on the meat and hot sauce track, Hubang first used the meat hot sauce as the brand name, which is conducive to preemptively occupying the minds of consumers; on the other hand, in order to achieve this goal, Hubang made a large category strategy and broke through the existing sales channels.
Lu Wenjin revealed to all-weather technology that at present, the sales channels of Hubang hot sauce are roughly divided into three categories: traditional e-commerce, takeaway, supermarkets, etc., accounting for about 40%, 40% and 20% of the total sales.
In the future, Hubang also plans to increase the layout of the new retail platform, and cut into multiple subdivision scenarios such as aviation and high-speed rail, opening an "unlimited game" of hot sauce.