Before BESTORE cut prices, the three squirrels took the lead in "high-end cost performance".

"High-end snacks" BESTORE has reduced its price.

On November 30, BESTORE announced the first large-scale price reduction in 17 years, with an average price reduction of 22% and a maximum reduction of 45% for more than 300 products on sale in stores. Behind the price reduction, demand is changing, and consumers are increasingly reluctant to pay for high-priced snacks.

Consumers in the future want "high-end cost-effective" snacks.

Just now, Zhang Liaoyuan made a public response to "high-end cost performance" in the circle of friends, pointing out the three key points of "high-end cost performance", and made a comprehensive and in-depth elaboration of "high-end cost performance" from the perspective of business model, consumer demand and brand strategy.

Looking at the price reduction of BESTORE, the public response of Zhang Liaoyuan's circle of friends and the overall economic situation in the past year, we can draw a conclusion: this matter is not so simple.

Behind the price cut, the snack industry may usher in a deep adjustment, and the three squirrels are running ahead of the trend. As early as the beginning of this year, the three squirrels announced the "high-end cost-effective" strategy to the outside world, and the official proposal of this "high-end cost-effective" strategy was actually at the end of last year, a whole year of rush. 

If you want to dig deeper, the three squirrels ran away not for a year, but for six years.

1

Lay out early, work for a long time

Back to six years ago, in August 2017, Three Squirrels invested in a park in Anhui Wuwei, the project is divided into two phases, with a total area of about 890 acres, integrating production, testing, logistics, research and development, comprehensive services and other functional areas. At that time, the new consumer market was booming, and the prices of many national fashion brands were soaring, so the news of the three squirrels building factories in Wuwei did not attract much attention.

In the eyes of the outside world, the construction of the three squirrels in Wuwei is just a regular expansion, an evolution of the brand after it has reached a high level, and a key step in its ecological development.

In the subsequent development, Three Squirrels launched a cloud manufacturing system, using the digital cloud manufacturing system to open up the management of the whole process from material supply, food safety testing, product packaging, storage and storage, transportation and product circulation, shorten the time from the factory to the consumer, and improve management efficiency.

Similarly, in the eyes of the outside world, this is still an inevitable step in ecological evolution, and it is not surprising that the volume of the three squirrels went deep into the supply chain to start "intelligent manufacturing" at that time.

However, looking back now, whether it is to build a factory without doing anything or launching a cloud manufacturing system, it is not so simple, and while going deep into the supply chain, the three squirrels have already begun to optimize the cost structure.

In this process, Three Squirrels takes traditional e-commerce as the core, focuses on emerging e-commerce, and coordinates the entire link from order to manufacturing to delivery to consumers, realizes the vertical collaboration of the supply chain and the horizontal collaboration of channels, and creates a "1+4+1+N" full-category omni-channel capability.

The so-called "1+4+1+N" refers to the underlying supply chain and brand system, four emerging channels, community snack stores and other channels, which run through the high-end cost performance.

No matter how the outside world interprets it, in the current consumer market, "sinking" and "cost-effective" are undoubtedly two key words, which are more and more valued by enterprises and consumers. Xianyu users are becoming more and more active, more and more restaurants on the street have started a la carte fast food business, and the market value of Pinduoduo has grown by leaps and bounds. These signs all seem to indicate that consumption is becoming more rational and people are becoming less willing to pay a premium for brands.

The three squirrels put forward the "high-end cost-effective" strategy, which is the right choice to stand in the trend. As Zhang Liaoyuan, the founder of the company, said in an exclusive interview with the media, from the perspective of the entire large consumption level, the broader consumption in the middle and lower tier markets has awakened, and the current consumption power is mainly in the middle and lower tier markets. The "high-end cost-effective" strategy is in line with the overall environment and the changes of large e-commerce, and everyone wants to buy something delicious and cheap, which is a common demand.

In Zhang Liaoyuan's view, the essence of the "high-end cost-effective" strategy is to provide consumers with more high-quality, high-priced, and abundant snacks in all categories. The improvement of product cost performance is not a single profit, but through the optimization of the whole link of the supply chain to ensure product quality and realize the overflow of profits, and transfer this part of the profit to consumers, so as to achieve high quality and cost performance.

2

From the inside out, intensive farming

Running ahead of the trend sounds easy, as long as you predict the future, but in fact, it is not, procurement, production to operation and sales, there are countless links that need to be finely polished.

Let's talk about procurement first, in fact, since its establishment, the three squirrels have been constantly optimizing procurement, constantly guiding market demand to the supply chain through large-scale procurement and technology empowerment, and integrating production, supply and marketing. There are two key contents of this, one is to continuously find high-quality original mining sites, and the other is to promote technical forces to play an important role in it.

At the supply chain end, the cost of nut products has been effectively reduced by broadening the source of suppliers, shifting the procurement of some nut raw materials from abroad to domestic, establishing direct cooperative relations with large international farms by relying on the "direct procurement and direct sale" model, and optimizing the efficiency of its own factories. On the delivery side, the three squirrels have comprehensively upgraded the logistics delivery model in combination with the channel strategy adjustment, actively explored the origin warehouse and cloud warehouse model on the basis of their own warehousing business, and cooperated with many upstream suppliers to promote direct delivery from factories to further reduce costs and increase efficiency.

The effect of this is obvious, according to the person in charge of the three squirrels category, the price of mass-selling large bags of macadamia nuts (500g) sold online last year was about 30 yuan per bag, and now it is priced at 22.9 yuan in the Tmall flagship store. During this year's Double 11, the sales of this product increased by more than 50% year-on-year.

On the operation side, taking Jingdong's self-operated channels as an example, based on refined operations, the three squirrels have adapted to 1.1kg, 750g, 500g and other multi-price band daily nut matrices, 6 large-grain tree nut matrices, and channel customized nut gift package matrices, which have won consumer recognition with a layered price band strategy. In November this year, a total of 325,000 boxes of daily nuts were sold on JD.com, with sales exceeding 22 million yuan.

Through the upgrading of automated production equipment, the optimization of packaging materials, the reshaping of product grams, the exploration of the ultimate delivery mode - factory direct delivery, and the optimization of the details of the main picture, the overall delivery cost of the teared bread was reduced by about 18%, and the cost of mainstream grammage meat muffins was optimized by 40% compared with last year, from 300 boxes sold per day to more than 10,000 boxes per day. Spicy marinade gift pack 60 packs (priced at 19.9 yuan), 75 packs (priced at 20.9 yuan), 70 packs (priced at 19.9 yuan), etc., with daily sales of 10,000+.

The boundaries of best-selling products are still expanding, with sales of quail eggs, milk shaqima, air-dried beef, nut gift boxes, dried mangoes, cod intestines, boneless phoenix feet, etc., skyrocketing.

3

Community stores, soaring

Not only can everyone afford it, but it must be available everywhere. The aroma of wine is also afraid of deep alleys, and the whole category naturally has to adapt to all channels. Since it is omni-channel, offline is naturally indispensable, and the focus here is on community snack stores.

Different from snack mass stores, Three Squirrels defines it as a "private label community snack store", with its own brand products as the main position, to meet the community consumption scene of high-quality and high-price snack products.

In addition to differentiated business methods such as peeling and weighing, integer quantification, no discount and no promotion, the community store of Three Squirrels adheres to the business philosophy of "high-end can also be cost-effective, and the real reserve price is set at one time", which is also the highlight advantage of its own independent brand by relying on its own core brand advantages of nuts and the supply chain capabilities of the development of all categories, directly customizing to high-quality factories, removing middlemen and brand premiums, which is also a prominent advantage of independent brands.

These business ideas have obviously been recognized by the market and franchisees, and in June this year, the layout has been launched for half a year, and the three squirrels have exceeded 150 community snack stores in Jiangsu, Zhejiang and Anhui alone. Just yesterday, the news came that three squirrels opened 17 stores in Jiangsu and Zhejiang provinces, including 9 in Hangzhou. Three Squirrels said that as one of the important channels for the company's future layout of the offline market, with the continuous optimization of the single-store model, the national layout will be accelerated in the future.

According to the data of the WeChat official account of "Three Squirrels National Snacks", the Three Squirrels Community Snack Store performed well during the Double 11 period, with sales exceeding 4.1 million.

The flip side of performance is traffic.

Judging from the current market situation, the trend of consumers returning to offline is accelerating, which means that consumers' demand for offline scenarios will increase, and for Three Squirrels, community snack stores will take on this demand. While undertaking the return of offline consumers, the Three Squirrels Community Snack Store also undertakes the important task of bringing traffic to Three Squirrels.

When it comes to community snack stores, it is inevitable to mention mass snack brands.

In the past, snack brands such as Snack Busy and Zhao Yiming were very popular, and through the collection of multiple categories, multiple brand products or white-label manufacturers, mass retail brands have risen rapidly. But fundamentally, the mass snack brand is more like a traffic platform, which is fundamentally different from the three squirrels of its own products and brands.

From the perspective of revenue structure, the wholesale snack stores selling Sprite, Coca-Cola and other big brand products not only do not make money, but also have to subsidize, why? Because Sprite, Coca-Cola and other self-generated traffic, the mass merchandising snack stores need to rely on this type of products to attract traffic for themselves. From this point of view, there may be opportunities for mass retail brands to cooperate with Three Squirrels and BESTORE.

There is no other reason, the products of the three squirrels and BESTORE have their own traffic.