After cross-border liquor, snacks were sold, and Quanjude, the "first share of roast duck", ended a three-year losing streak, but what was waiting for it was to fall to the limit

Source of this article: Times Finance Author: Zhang Xuemei

Source: Unsplash

After three consecutive years of losses, Quanjude, a time-honored brand with a history of 160 years, can finally take a breath.

On the evening of April 15, Quanjude (002186. SZ) released its 2023 annual report, the company achieved operating income of 1.432 billion yuan, a year-on-year increase of 99.27%, net profit attributable to shareholders of listed companies of 60 million yuan, a year-on-year increase of 121.67%, and non-net profit of 47 million yuan, a year-on-year increase of 116.52%.

Quanjude's main business is catering services and food processing and sales business, both of which will record growth in 2023. Among them, the catering service revenue was 1.107 billion yuan, accounting for 77.29% of the operating income, a year-on-year increase of 111.00%, the sales revenue of goods was 301 million yuan, accounting for 21.00% of the operating income, a year-on-year increase of 70.89%, and the leasing income was 25 million yuan, a year-on-year increase of 35.33%.

This is also due to the recovery of the tourism industry in 2023, and the revenge travel has driven the Quanjude store to break a number of daily sales records. At the same time, Quanjude made efforts in prefabricated dishes, liquor and leisure snacks, and increased marketing on Douyin and double V brands, trying to break the stereotype of "old" time-honored brands.

It is worth mentioning that in 2023, the investment income of Quanjude will be 31 million yuan, accounting for about half of the net profit.

Quanjude's performance rebounded, with a loss in the fourth quarter

After a cumulative loss of 700 million yuan in three years, Quanjude will win a short respite in 2023.

Driven by consumers' revenge travel, the catering industry has a clear recovery trend. According to the National Bureau of Statistics, in 2023, the national catering revenue will be 5,289 billion yuan, an increase of 20.4% year-on-year, and the catering income of units above designated size will be 1,335.6 billion yuan, an increase of 20.9% year-on-year. According to the China Cuisine Association, the growth rate of catering revenue is 13.2% ahead of the growth rate of total retail sales of consumer goods.

When tourists come to Beijing, tasting roast duck is almost the first choice when dining. All stores in Quanjude also seized the opportunity of the recovery of the tourism market and made every effort to generate income during the small long holiday. During the Mid-Autumn Festival and National Day, Quanjude's catering revenue recovered to 111% of 2019, reaching a new high in five years, and creating the highest daily sales record in the past five years for 8 consecutive days. Among them, 11 stores in Beijing set a new high in a single day of annual business, 12 stores in East China set a new high in holiday sales since opening, and Beijing Road store of Xinjiang regional company refreshed a new holiday sales high for two consecutive times.

Specifically, in the catering business sector, Quanjude has brands such as "Quanjude", "Fangshan", "Fengzeyuan" and "Sichuan Hotel". By the end of 2023, the company has a total of 101 catering stores, including 48 directly operated stores and 53 franchised stores. During the reporting period, 3 new directly-operated stores were added, while the number of franchised stores continued to decrease. Among them, there are 87 Quanjude brand stores, 6 Fengzeyuan brand stores, 7 Sichuan Hotel brand stores, and 1 Fangshan brand store.

At the same time, Quanjude relies on imitation dietary products company and Quanjude Sanyuan Jinxing Food Company to get involved in prefabricated dishes and leisure snacks. Quanjude Sanyuan Jinxing Food Co., Ltd. is mainly engaged in the processing and sales of raw food mainly engaged in the slaughtering and processing of stuffed duck in Beijing, including roast duck blanks, duck by-products, etc., and the processing and sales of cooked meat products based on smoked barbecue, sauce marinade and quick-frozen prepared products, including vacuum roast duck, hand-sliced roast duck, flavored duck, etc.

During the "618" e-commerce shopping festival in 2023, the omni-channel sales of Quanjude e-commerce increased by 200% year-on-year, and during the Double 11 period, the hand-sliced roast duck gift box also had a good sales performance.

However, the trend of revenge consumption in 2023 did not run through the whole year, and after making a profit in the first three quarters, Quanjude still recorded a loss in the fourth quarter, and the net profit attributable to shareholders of listed companies was a loss of 11 million yuan.

New brands are emerging, and the road to transformation is long and difficult

As a time-honored brand with a history of 160 years, Quanjude is also facing problems such as aging management services. At the same time, new roast duck catering brands continue to emerge, and how to go through the cycle and last for a long time is a commonplace topic around Quanjude.

Relying on honors such as imperial food and century-old brands, Quanjude in the past occupied a dominant position in the roast duck industry. However, high-profile practices such as aging dishes, high prices, and charging service fees have also made Quanjude more and more criticized by consumers. In the second half of 2020, Zhou Yanlong, director and general manager of Quanjude, lit the first fire since taking office, announcing a comprehensive price reduction of dishes and the cancellation of service fees.

In order to change the image of Quanjude, Zhou Yanlong replaced the duck sculpture at the entrance of the store with the cartoon IP "Meng Bao Duck", and opened a Meng Bao Duck cultural and creative flagship store in Universal Studios.

In 2023, Quanjude will still focus on rejuvenating its brand image and expanding its product line. In the third quarter of last year, Quanjude entered the snack food track and launched the sub-brand "Zero Research Institute", with single products including duck neck, duck wings, duck paws, etc., which were successively sold in offline supermarkets, convenience stores and online platform channels. At the sugar and wine meeting in March this year, Zhou Yanlong explained the original intention of Quanjude to enter the snack food track, that is, to create a younger brand image, promote the two-wheel drive of catering and food, and expand market share.

However, the duck goods track already has mature lo-mei brands such as Zhou Heiya and Huang Shanghuang, as well as snack brands such as BESTORE and Three Squirrels. Times Finance noticed that in the official flagship store of Quanjude Tmall, the sales of a duck snack gift box and a lo-mei product of the Zero Research Institute were both 0, and the performance was not ideal.

As the time-honored brand title gradually loses its influence among young people, in order to shorten the distance with young consumers, Quanjude upgraded its cooperation with Douyin, participated in Douyin's "Heartbeat Time-honored Brand" event, held offline local head talent meetings, etc., and used double V brand marketing. In 2023, the company's operating costs and sales expenses will be 1.173 billion yuan and 55 million yuan, respectively, a year-on-year increase of 44.50% and 11.42%.

In addition, casual snacks are not the first time that Quanjude has crossed borders. In December 2022, Quanjude said on the company's interactive platform that the company sells its own brand Erguotou liquor and sauce-flavored liquor, and the sales of liquor are not mentioned in the 2023 financial report. However, Times Finance found that on platforms such as Tmall and JD.com, the sales of its alcohol products were dismal.

Zhu Danpeng, an analyst of China's food industry, told Times Finance that Quanjude's performance is only a phased rebound, and in the long run, it lacks the core competitiveness to support its sustainable development, and the mechanism and system cannot match the current high-intensity catering competition.

At present, Quanjude is also facing competition from brands such as "Cheap Square" with lower prices and new Internet celebrities such as "Four Seasons Minfu". Times Finance compares the salaries of Quanjude and Four Seasons Minfu on the recruitment website, Quanjude's recruitment positions include chefs, catering supervisors, foremen, etc., with a reference salary of 6,000-8,000 yuan/month, and Four Seasons Minfu recruiters, catering reserve cadres, etc., with a reference salary of 8,000-10,000 yuan/month.

On April 16, Quanjude shares closed with a fall limit, with a total market value of 2.925 billion yuan.