#FMCG Eight Talks##Consumption##Snacks##Food#Mass selling snacks has become a battleground for soldiers, the story of Zhao Yiming's grievances with BESTORE is unfinished, and snacks are very busy and become really "very busy"...... In 2023, the snack rivers and lakes can be described as surging. When BESTORE announced the largest price reduction in 17 years, and the three squirrels emphasized cost performance, the market predicted the direction of casual snacks in the next year or even longer - it will enter the era of low-price racing. With consumers' choice of healthy eating, casual snack brands are busy labeling themselves with health labels, which seems to indicate that snack brands that take into account both cost-effective and healthy diets can have a certain competitive bargaining chip in the future market competition.
The snack industry is ushering in a major channel change.
With the advantages of low price, many varieties and fast new products, mass sales snacks have ushered in a crazy expansion this year, and more and more snack companies such as Ganyuan Food, Miss You, Yanjin Shop, Jinzai Food, and Weilong are busy expanding mass sales channels. Statistics show that at the end of 2021, the total number of domestic mass snack stores was only about 2,500, and the number of stores in 2022 will be about 13,000, and it is estimated that by the end of 2023, the number of mass snack stores nationwide will reach about 25,000.
In order to have more scale advantages, some brands choose to merge. In September this year, Wanchen Group's four major snack chain brands Hao Xiang Lai, Lai Youpin, Lu Xiao Gluttony, and Qi Di Di Di merged into "Hao Xiang Lai"; in November, the two major brands of domestic mass snack snacks are very busy, and Zhao Yiming Snacks announced a strategic merger into a snack very busy group, in terms of the volume of the two, there will be more than 6,500 stores after the merger, or will become the head enterprise in the field of mass sales snacks.
It is worth mentioning that behind the merger between Snacks and Zhao Yiming, there is also a grievance between Zhao Yiming and the former shareholder BESTORE. From April to October this year, Guangyuan Juyi, a wholly-owned subsidiary of BESTORE, invested in Zhao Yiming and became a shareholder of Zhao Yiming. According to Guangyuan Juyi, only 22 days after it sold its shares in Zhao Yiming, on November 10, Zhao Yiming and Snacks were very busy and officially announced the merger. This made Guangyuan Juyi believe that Zhao Yiming deliberately concealed the company's major matters during the cooperation period between the two parties, harming the right of minority shareholders to know. On November 27, Guangyuan Juyi officially filed a lawsuit with the people's court. In less than a year, BESTORE and Zhao Yiming went from "cooperation" to "breakup".
At this juncture, on December 18, I miss you and Yanjin Shop Holdings invested 700 million yuan and 350 million yuan respectively in the snack group, once again pushing the war of mass selling snacks to a peak. According to the announcement of Miss You, Snack is very busy and has hired a professional team of lawyers to carry out the relevant work of the declaration of concentration of undertakings in accordance with relevant regulations, and it is expected that the materials will be formally submitted to the anti-monopoly law enforcement authorities in the near future.
At this point, the fierce battle of the mass sales channel is in full swing, and the "standing in line" situation of snack companies has begun to appear, which can be called a "year-end drama".
Behind the popularity of mass selling snacks is that the market environment of casual snack brands is changing.
In an interview with a reporter from Beijing Business Daily, Dou Yanyan, deputy general manager and secretary of the board of directors, said that in the past two years, the growth of traditional domestic supermarket channels has been sluggish. On the whole, there is still huge potential for the development of the snack wholesale industry. I think you have paid attention to the rapid development of interest e-commerce and mass sales snack industry, and strive to lay out mass sales snack channels and accelerate the development of the company's second curve business. I think you will comply with consumer needs, develop more abundant snack channel products, give full play to the advantages of the supply chain, and provide more healthy and delicious snacks for the snack group. Through the in-depth cooperation of mutual empowerment of all parties, it will have a positive impact on the short, medium and long-term development of the snack industry.
According to Zhan Junhao, founder of Fujian Great Aim Brand Positioning Consulting and public relations partner of Fuzhou Gongsun Ce, the reason why food companies are trying to curry favor with mass merchandising snack chain brands is mainly because mass merchandising snack stores are characterized by low prices and all types of snacks, which attract many consumers. However, at present, the mass snack chain brand is still in the stage of savage development, in addition to the leading scale advantage after the merger of snacks and Zhao Yiming, the entire industry has no other unique differentiated positioning, and peers still use price wars to obtain users, which is a very unhealthy competition pattern. If the mass merchandising snack chain wants to develop sustainably and healthily in the future, each brand should have a unique differentiated positioning to ensure good product quality, and cannot blindly exchange lower production costs for low prices.
The war of selling snacks here is not over, and the casual snack companies are looking for another way to break the situation at a low price. When the competitive landscape of snack brands changes, cost performance will become one of the keys to the next stage of competition for traditional snack brands.
At the end of November, BESTORE, which has always positioned high-end snacks, shouted "you can't live without price reduction", announcing the largest price reduction in 17 years, with an average price reduction of 22% and a maximum price reduction of 45% for 300 products. A reporter from Beijing Business Daily learned from the official staff of BESTORE that in November, some offline stores in the south of BESTORE have begun to implement price reductions, and only for offline stores, and online channels do not participate.
The three squirrels told the Beijing Business Daily reporter that since March 2023, the three squirrels have focused on the implementation of the core strategy of "high-end cost performance", creating an "omni-channel + all-category" business model, and ensuring product quality while realizing profit overflow through the optimization of the whole link of the supply chain, and transferring this part of the profits to consumers, so as to achieve high quality products and cost-effective products.
The two high-end casual snack brands are both "putting down their bodies", which is seen as a signal that casual snacks have entered the era of low prices. According to iiMedia Consulting survey data, the market size of China's snack food industry is expected to reach 1,237.8 billion yuan in 2027, and the market size of the mainland snack food industry will shift from a rapid incremental market to a slightly increased market. Experts believe that the leisure snack track has entered the "parity" cycle, and change is an inevitable choice.
According to Zhu Danpeng, an analyst of China's food industry, after the price reduction of BESTORE, which is the head brand of the snack industry, other snack brands may also carry out the layout of reducing costs and increasing efficiency, and continuously optimize the supply chain to control costs and improve the operational efficiency of stores, which is the future development trend of the snack industry.
Zhu Danpeng said that from the perspective of consumption environment and development trends, China's leisure snack industry has entered a parity cycle, and leading brands such as BESTORE and Three Squirrels are achieving "cost reduction and efficiency increase" through supply chain optimization and store operation. With the official announcement of large-scale price reductions by BESTORE, it is expected to bring continuous response from the industry, and the industry is expected to enter the era of discounted snacks.
Xu Xiongjun, a strategic positioning expert and founder of Jiude Positioning Consulting Company, believes that the price reduction of snack companies is due to the impact of survival and market competition, and also to better seize market share. Through the optimization of the layout of the industrial chain and the scale effect of its own, the marginal cost of the leading snack brand can be reduced, so it has the strength to reduce prices. From a strategic point of view, the appropriate concession of profits by enterprises will also drive sales.
The market environment has changed, and market players need to find new stories to form new competitive advantages, in addition to talking about cost performance, how to make products healthier has become the highlight of snack brands, and this is mainly reflected in the product ingredient list of a "minus" and a "plus".
With the "three reductions" initiative to reduce salt, sugar and oil, the snack industry has blown a "healthy wind", and brands are working hard to subtract the ingredient list. In October this year, the core product line of Lay's potato chips was upgraded to "reduce saturated fat by 50%", Baicaowei launched the "Benwei Zhenguo" series of products to cater to health, and the ingredient list of individual products only has nut raw materials, and Laiyifen Supply Chain and Food Research Institute jointly launched small walnut kernel products with 20% reduction in sugar.
While snack brands are trying their best to "scrape" sugar and oil from the ingredient list of their products, they are also trying to add some ingredients with health attributes to them to add more health to their products. Since the beginning of this year, nourishing health and functional foods have been welcomed, such as probiotics, collagen peptides, dietary fiber, sodium hyaluronate, white kidney bean extract, vitamins, lutein, ...... More and more snacks are incorporating functional ingredients as selling points. For example, in October this year, Alps launched its first functional gummy "Alps Plus+" multivitamin gummies in China, focusing on gummy products with vitamin nutritional supplements.
According to the 2022 Online Snack White Paper, the sales growth rate of snacks related to the concept of health is much higher than that of ordinary snack foods, and consumers should not only eat deliciously, but also eat healthily. The data shows that more than eighty percent of consumers are more willing to pay more for high-quality leisure snacks, and leisure snacks are developing in the direction of quality and health.
In Zhu Danpeng's view, after the epidemic, mainland consumers have risen to the dimension of daily management for their own health management, nutrition management, appearance management, and weight management, and leisure snacks are moving towards health and nutrition, which coincides with the concept of healthy diet pursued by consumers. From the perspective of future development, the trend of health is in line with the consumption thinking and consumption behavior of mainland consumers. For casual snacks, health is the new point of contention in the current industry, and many companies are trying to seek opportunities to break the situation through health.
Beijing Business Daily reporter | Guo Xiujuan Zhang Han
Image source: Three Squirrels official website
Edited by Topol