良品铺子急了

The open letter from Yang Yinfen, the new chairman and general manager of BESTORE, shocked the industry. Few people at the helm have made the issues facing the company directly public, and they are new to their tenure. At the same time, BESTORE announced a large-scale price cut, but related products are mainly concentrated in offline stores.

01, the new handsome knife to reduce the price

"At present, what is in front of us is not only the question of how difficult it is to live, but also the question of whether we can live. BESTORE has 11,000 employees, 11,000 families behind it, and thousands of businesses and families in the supply chain. ”

This is the description of the company's current situation by the new helmsman of A-share snack king BESTORE. Recently, Yang Yinfen, the new chairman and general manager of BESTORE, issued an open letter to all employees, officially starting the first round of reform after taking office. Yang Yinfen, like his predecessor Yang Hongchun, is a member of the founding team of BESTORE and is the actual controller of the company, and they are still old colleagues when they were in Kelon Electric.

In addition to the open letter, another fire after Yang Yinfen took office burned to the price.

BESTORE told "City Boundary" that "this is the company's largest price reduction in 17 years, with an average price reduction of 22% for 300 products", mainly "focusing on snacks with cost optimization but not affecting quality and high repurchase rate", and the overall principle is "price reduction without quality reduction".

"Macadamia nuts, pine nuts, pistachios, cashews and other nuts, pork jerky, duck neck, grilled sausages and other meat snacks, spicy strips, dried tofu, bread cakes, melon seeds and other popular products with a high repurchase rate are now the main force for price reduction. BESTORE said.

In the open letter, Yang Yinfen mentioned that the reform is mainly based on "three looks":

Looking at the industry, online consumption traffic has shifted, competition has intensified, various offline snack models have blossomed, and a series of new species have emerged.

Looking at users, consumption has entered a rational era, consumers' money bags are tighter, different groups of people are more differentiated and distinct, how to meet the needs of different users, is also a test in front of them. In addition, the fact that consumers think BESTORE is expensive also indicates that the price of its products must be more affordable.

Looking at itself, with the development of the company for 17 years, the organization is bloated, people are superficial, and bureaucracy and self-centeredness have emerged. Externally, it is the sluggish development and the decline in scale and profitability.

The open letter shocked the industry. Few people at the helm have made the issues facing the company directly public, and they are new to their tenure.

In the open letter, Yang Yinfen repeatedly emphasized that the core purpose of BESTORE's reform is only one: to return to the image of BESTORE as a neighbor and move towards a route of good quality and affordable price. "There is a real risk that we will lose our qualification at the table. ”

BESTORE previously positioned itself as a "high-end snack", so this time the price reduction has a great contrast to the market. Some consumers said: "Consumers are becoming more and more rational, and brands that have reduced prices are sober." ”

After the price cut was announced, BESTORE's share price also reacted.

▲ (BESTORE stock price chart since its listing.) Source/Straight Flush)

In the three trading days from December 1 to December 5, BESTORE's stock price rose continuously, and the previous two trading days continued to rise and fall. This is really rare for BESTORE. In the previous nine months, its stock price had been "cut in half".

However, this price adjustment will not have much impact on the short-term performance of BESTORE.

BESTORE told "City Boundary" that the products with adjusted prices are mainly sold in offline stores, with an adjustment range of 10%-47%, and in the first half of 2023, the operating income of this part of the products in offline store channels accounted for 13.5% of the total operating income.

In the first half of 2023, BESTORE's revenue will be less than 4 billion yuan. In other words, the revenue of this part of the price adjustment products in the first half of the year was less than 540 million yuan.

This also answers the doubts of some consumers: "It is said that the price has been reduced, but why does it not feel obvious?"

For example, BESTORE said that the large-opening macadamia nuts (400g) on sale have dropped to 29.9 yuan per can, and the pork jerky, which has the highest order rate, is the key product of this price adjustment, with the price of classic pork jerky at 65 yuan per catty, and the price reduction of some products is achieved through member prices.

However, after the price reduction of some products in offline stores, compared with e-commerce platforms with long-term promotional activities, the price advantage is not obvious. On December 7, in Tmall Supermarket, the discounted price of Bestore's large-opening macadamia nuts (400g) was 27.9 yuan/can, while in Pinduoduo's BESTORE flagship store, the large-opening macadamia nuts were 29.8 yuan/can after 10 billion subsidies, and they were 500g.

02. Development has encountered bottlenecks

Three Squirrels, BESTORE, and Baicaowei were once the three giants of Internet celebrities in the leisure snack industry.

Among them, BESTORE was established the earliest. Baicaowei was founded in 2007, Three Squirrels was founded in 2012, and BESTORE opened its first store in Wuhan in August 2006.

In August 2016, Baicaowei was acquired by Haoxiangyou for 960 million yuan, and took a shortcut to achieve listing, three squirrels finally landed in the capital market in July 2019 after many listing failures, and BESTORE fulfilled its dream of listing in February 2020, calling itself "the first stock of high-end snacks".

If you want to talk about the first stock, in fact, Laiyifen, which has been listed in October 2016, is the "first snack stock" in China. It's just that Laiyifen has been completely overtaken by the juniors in recent years, and compared with the three giants of Internet celebrities, the light has long been dimmed.

On the eve of BESTORE's listing, Baicaowei "remarried" Pepsi for $705 million, and the story of Baicaowei has been missing from A-shares. However, the three squirrels and the good store have been chasing me.

In 2022, BESTORE will finally surpass the three squirrels (revenue of 7.293 billion yuan) with a revenue scale of 9.44 billion yuan and become the leader of the snack industry.

▲(Data source/Wind)

There is a very important premise for BESTORE to surpass the three squirrels - the three squirrels have had a bad time in recent years. As early as 2019, the revenue of the three squirrels exceeded 10 billion, but with the dissipation of the first wave of e-commerce dividends, the development of the three squirrels encountered a bottleneck, and from 2019 to 2022, the revenue continued to decline.

From 2019 to 2022, although BESTORE's revenue continued to grow, in fact, it was not much better than the three squirrels - the revenue in 2022 only increased by 1.24%. Moreover, the problems of BESTORE have also begun to be exposed.

In the first three quarters of 2023, BESTORE achieved operating income of 5.999 billion yuan, down 14.33% year-on-year, and net profit attributable to the parent company was 191 million yuan, down 33.43% year-on-year. Among them, the revenue in the third quarter was 2.013 billion yuan, a year-on-year decrease of 4.53%, and the net profit attributable to the parent company was 1.9984 million yuan, a year-on-year decrease of 97.88%.

So far, BESTORE's revenue has declined for five consecutive quarters, and in the past five quarters, net profit has declined in three quarters. In 2022, BESTORE's net profit will be 334 million yuan, which is less than that in 2019.

BESTORE's current situation is very difficult.

Yang Yinfen wrote in an open letter: "I said in August this year that 17-year-old Liangpin is facing the most difficult challenge since its establishment. At present, this challenge is still intensifying, and in order to stand out from the encirclement, Liangpin must be like a high-flying eagle, fading from aging and regaining life. ”

From the perspective of sales model, BESTORE is mainly divided into online and offline channels. Among them, online sales are mainly through e-commerce, while offline sales are mainly divided into direct retail business and franchise business.

In 2021, its e-commerce business accounted for more than 53% of its revenue, but from 2022 to the first three quarters of 2023, e-commerce business revenue continued to decline, accounting for less than 45% in the first three quarters of 2023.

Regarding the decline in the performance of the third quarter, BESTORE explained that the company's overall sales scale fluctuated due to factors such as the hierarchical grading of consumer demand, the differentiation of online platforms and users, and the fluctuation of the company's profit in the third quarter due to the increase in labor and leasing expenses corresponding to the newly opened directly operated stores, and the fluctuation of gross profit margin.

The leisure snack industry has a low entry threshold, low industry concentration, and serious homogeneity. In addition, many snack giants are mainly OEM models, which leads to low profit margins in the industry.

In the first three quarters of 2023, BESTORE's gross profit margin was 28.54%, but its net profit margin was only 3.18%. BESTORE's net profit margin has shown a downward trend in recent years, from 4.53% in 2019 to 3.54% in 2022.

Snacks are not easy to sell, revenue is declining, at the same time, online traffic is shifting and the cost is getting higher, the new offline model is rising, and new stores are opened, and the cost investment is increasing. The profit margin, which is not high, cannot withstand much toss.

Under the pressure of performance, while optimizing costs, it seems that it is also a "must-have" action to make product prices "more affordable".

03. A new round of "fighting" begins

Consumption has entered the era of rationality, and the province and the flower are the mainstream consumption concepts of Generation Z. Various research reports are proving that young people's consumption is returning to "rational pragmatism".

At this time, BESTORE with the label of "high-end snacks" has become a little out of place.

At the beginning of 2019, BESTORE held a high-end snack strategy conference, and spent a lot of money to invite celebrity endorsements. While shouting "high-end snacks", BESTORE also said that it would "abandon the price war".

Yang Hongchun, then chairman of BESTORE, said: "The reason why we launched the high-end strategy is actually to avoid homogeneous competition, we want to take their different development path, in all the pursuits, there are price-oriented, quality demand, and brand-oriented, we choose to enter the high-end quality demand." ”

Behind the high-end transformation of BESTORE was the consumption upgrade that people were mentioning at that time, and the leisure snack industry was also in a period of growth.

China's snack industry started from a bag of melon seeds, to the rise of large and small brands, and then to the competition for traffic by Internet celebrity brands. At that time, high-end had the hope of jumping out of the homogeneous price war from the positioning, but the current industry was fully competitive, and the general environment had changed.

On November 28, BESTORE announced that Yang Yinfen was elected as the chairman of the board, and at the same time, he was re-appointed as the general manager of BESTORE. Yang Yinfen used to be the director and general manager of BESTORE, and in September 2022, he resigned as general manager at the same time as he became vice chairman.

With this "change of leadership", Yang Hongchun, who is one year older than Yang Yinfen and born in 1973, stepped down as chairman and general manager.

Yang Hongchun and Yang Yinfen are both founding team members of BESTORE. Since its listing in 2020, the actual controllers of BESTORE have been Yang Hongchun, Yang Yinfen, Zhang Guoqiang, and Pan Jihong.

▲ (Diagram of the property rights and control relationship between BESTORE and the actual controller.) Source/2022 Annual Report)

Immediately after the change of helm, the strategy is also changing.

Yang Yinfen said that BESTORE will launch a new round of reform around the theme of "strengthening business innovation and comprehensively improving operational efficiency", with the aim of making product prices more accessible to the people on the basis of adhering to "good products", and the so-called "price reduction without quality reduction". "This is also a major change in the company's operation. ”

This is somewhat similar to the current strategy of the old rival Three Squirrels. At the end of 2022, Three Squirrels proposed a "high-end cost-effective" strategy. Three squirrels told "City Boundary" that the "high-end cost-effective" strategy will start to work together from March 2023, and at the same time, some products will begin to reduce prices one after another.

In other words, the three squirrels have already begun to reduce the price.

The three squirrels have encountered a series of problems in the past few years, especially in 2022, and their performance has declined significantly. In the words of Zhang Liaoyuan, chairman and general manager of Three Squirrels, "last year was a heavy blow." In an interview with Red Star News, Zhang Liaoyuan concluded that the core reason for the heavy blow was that in the process of e-commerce evolution, the three squirrels did not fully keep up. The three squirrels have taken root very firmly in the era of shelf e-commerce, but they have not quickly entered the emerging e-commerce.

As an online brand, Three Squirrels relies on third-party e-commerce online, and it is not smooth to open stores offline.

At the end of 2020, Three Squirrels had 171 food stores and 872 alliance stores. By the end of the first half of 2023, there will be only 1 food store left, and 316 alliance stores left. In 2022 alone, 118 food stores and 431 alliance stores were closed. Behind this, it is rebuilding the offline store - the transformation system to the community snack store.

The Three Squirrels Community Snack Store mainly sells its own brand, which is different from the original format stores, focusing on "cost performance" and mainly opening in second-tier cities. A person related to Three Squirrels told "City Boundary" that since June, Three Squirrels Community Snack Stores have more than 150 in Anhui, Jiangsu, and Zhejiang, and will expand to the whole country next.

Low price or cost performance has become the focus of the snack industry.

According to PwC's Global Consumer Insights Survey 2023, one of the most significant changes in consumer behaviour is a shift towards more pragmatic and rational purchasing decisions, given the impact of the current economic environment and the potential cost of living. Consumers pay more attention to the quality and value of products, and will make full use of promotions to compare prices from different sellers.

Do the strategy, compare the price, find the coupon... It has gradually become a Xi before shopping.

More and more rational consumers are becoming more and more price sensitive. In the snack industry, this is no exception.

In recent years, expiring food stores, snack discount stores, and mass-selling snack stores have risen rapidly, and the most significant feature of these stores is cost performance. In particular, the mass-selling snack stores represented by Snack is very busy, Zhao Yiming Snacks, Snack Youming, etc., have taken advantage of the new outlet and expanded violently with the help of capital, which has brought a great impact to the snack industry.

In November, Zhao Yiming's snacks and snacks were very busy merging. Prior to this, in October, BESTORE announced its withdrawal after investing in Zhao Yiming Food through a wholly-owned subsidiary for half a year. Recently, BESTORE said that it had sued Zhao Yiming Food for deliberately concealing the company's major matters, namely the above-mentioned merger, during the cooperation period between the two parties.

Right and wrong, the jury is still inconclusive.

However, BESTORE will also deploy a mass merchandiser brand in 2022 - snack stubbornness. BESTORE said in mid-November that the snack recalcitrant focuses on the Hubei market and plans to open 500 new stores this year.

The snack industry is turning to a price-performance or price war. Behind this, the competition is the cost advantage under the quality.

By optimizing the supply chain, distribution, packaging, channels, etc., we can reduce costs and increase efficiency, thereby reducing prices. Whether it is for the old Internet celebrity brands Three Squirrels and BESTORE, or for the newly rising Zhao Yiming and Snack Youming, this is a long-term solution.

On the leisure snack track, the past two years have been very lively, expansion, overtaking, merger, store closing, store opening, reduction, price reduction, transformation, change... There is also defense and counter-attack. The industry seems to have entered a new cycle, and the "fight" on prices has begun.

Zhang Liaoyuan said that the current snack food field is like the "Warring States Period".

On this battlefield, the heroes are competing for the deer, and the smoke of gunpowder is filled, and it depends on who is going to sing and who will appear.

(Author |.) Lei Yanpeng, editor | Chen Fang)