Edit | Yuer Lake
出品 | 潮起网「于见专栏」
Summer is approaching, and the heat of the casual snack track is "heating up". Recently, at the 17th China Nuts and Dried Fruits Food Exhibition held in Hefei, Zhang Liaoyuan, executive chairman of the Nuts and Dried Fruits Professional Committee of China Food Industry Association and founder and CEO of Three Squirrels, shared the development paradigm of "high-end cost performance" and the future trends and opportunities of the industry in the opening keynote report, which attracted wide attention from the media.
Before that, the three squirrels had just released their financial results for the first quarter of 2024, and the performance was gratifying. According to the financial report data, in the first quarter of 2024, Three Squirrels achieved operating income of 3.646 billion yuan, an increase of 91.83% year-on-year, net profit attributable to shareholders of listed companies (hereinafter referred to as "net profit") of 308 million yuan, an increase of 60.80% year-on-year, and non-net profit of 263 million yuan, an increase of 92.84% year-on-year. The market also gave positive feedback after the release of its earnings report, and its stock price rose 8.36% as of press time.
What did the three squirrels do right when their revenue and net profit returned to rapid growth this time? We look back at the strategic direction and market strategy of the three squirrels in the past 2023 and the just-concluded first quarter of 2024, and we may be able to find the answer.
Online and offline efforts have been made together, and the diversified layout of channels has begun to show results
In fact, in 2023, the three squirrels have already practiced their "internal skills" for the rapid growth of their performance. According to the 2023 annual report data released by the company, during the reporting period, the company's operating income was 7.115 billion yuan, net profit was 220 million yuan, a year-on-year increase of 69.85%, and non-net profit was 102 million yuan, a year-on-year increase of 148.72%. During the period, the three squirrels also achieved substantial growth in core performance indicators such as revenue, net profit, and non-net profit.
It is observed that the performance of the three squirrels in 2023 will grow strongly, thanks to the promotion of the "high-end cost-effective" strategy of the three squirrels, as well as the continuous layout of retail channels, popular products, supply chain resources, etc.
Among these layouts, the most important thing is the diversification of retail channels based on online and offline.
First of all, in terms of private domain channels, the three squirrels have entered 8 private domain platforms such as Whale Spirit, Youzan, Dewu, and Xiaohongshu, covering a total of more than 600,000 group leaders, ranking first in the private domain food list, and ranking first in sales in all channels.
Through the creation of popular products such as daily nut canning, vitality orange nut gift box, and daily nut private enjoyment, the three squirrels also broke the record of 20 million single-day sales of whale spirit food. In addition, the increment of its new product contribution has increased month by month, and the monthly contribution in December exceeded 100 million increments.
Secondly, in 2023, the three squirrels will also take "omni-channel + all-category" as their development strategy, and will deeply cultivate Douyin short videos and live broadcast e-commerce, which will also perform well. According to the data, in 2023, the revenue of the three squirrels Douyin channel will be 1.204 billion, a year-on-year increase of 118.51%, of which the revenue in the second half of the year will be 768 million, a year-on-year increase of more than 260%. On the Douyin platform, its monthly sales exceeded 200 million and 100 million in a single day. According to the data, the three squirrels have maintained rapid growth since June 2023 and have ranked first in the rest market for 7 consecutive months.
It is understood that the three squirrels bet on Douyin live broadcast e-commerce, using the "Shake + N" omni-channel collaboration system. This shows the importance of the Douyin channel for the three squirrels.
On the one hand, its landing strategy is to improve product competitiveness and marketing efficiency through efficient matching of goods and operations, so as to give full play to its supply chain advantages and maximize the scale effect. On the other hand, through its short videos and live broadcast content, with the help of the long-term experience of the company's content creation and brand operation team, it can release the brand potential energy and achieve the integration of product and sales.
Facts have proved that the development strategy of Three Squirrels has achieved a huge breakthrough and success. By fully embracing Douyin's short video e-commerce, Three Squirrels also created a variety of large items such as canned daily nuts, macadamia nuts, quail eggs, shaqima, and cod intestines during the reporting period, all of which ranked TOP1 in the corresponding categories of Douyin, which can be described as veritable explosive products.
Thirdly, Three Squirrels also diversified its layout in offline distribution, community stores and other retail channels, and received positive and positive market feedback. For example, in the offline distribution part, Three Squirrels has started to lay out since 2021, and the sales of this part will reach 1.641 billion yuan in 2023, a year-on-year increase of 11.3%. By the end of 2023, there will be more than 37,000 terminal stores, and more than 70 chain systems such as Walmart, China Resources, Wumart, and Liansheng have reached a direct sales model.
Photo caption: Residents line up to shop at the nearby Three Squirrels community store
In terms of the layout of community stores, Three Squirrels currently has more than 180 stores, and has successfully expanded stores in Zhejiang, Anhui, Jiangsu and other provinces. Industry insiders believe that the scale of the Three Squirrels community store is an important step for Three Squirrels and its online channels to complement each other's advantages and realize the diversified layout of channels.
With the blessing of supply chain resources, we use popular products to "hit the country"
As we all know, the foundation of the development of retail enterprises is the product. In this era when Internet traffic is king, popular products are the password for the growth of enterprise retail business. The three squirrels who rose from the Tao channel are obviously "well versed in this". Therefore, the creation of explosive models has always been the growth secret of the three squirrels.
It is understood that there are as many as 13 billion-level items of the three squirrels. Includes daily nuts, macadamia nuts, paper walnuts, hand-peeled almonds, pistachios, nut milk, shredded bread and more. They are all super popular items that are familiar to many consumers and have a high repurchase rate.
In addition, the performance growth of explosive products in the middle and waist has also "shouldered" the beams of the three squirrels. The data shows that there are 14 large items of more than 50 million in 2023. Including open pine nuts, purple skin cashew nuts, pork jerky, gray dates, dried mangoes, hawthorn sticks and other single products, as well as more than 10 million (including 50 million) single products as many as 87 items.
In addition, the products of the three squirrels are becoming more and more abundant, and the number of SKUs is even doubling. According to the financial report data, as of the end of December 2023, the three squirrel SKUs exceeded 1,500. Moreover, among all products, the sales proportion and performance contribution of new products are both growing rapidly.
If we say that the rich and diverse and very popular popular products are the performance of the three squirrels. Then, the strong and perfect supply chain behind it is the performance backing of the three squirrels. It is understood that at present, the three squirrels have re-positioned their brands as "manufacturing-oriented private label retailers", and have fully entered the independent manufacturing link of the nut category, and built an automated production line upgrade with "gift packing, daily nuts, macadamia nuts, pecans, pistachios" and other categories.
Caption: Wuhu Three Squirrels Modern Nut Demonstration Factory
According to media reports, at present, the three squirrels have built a joint venture production line with the world's top 500 Olam International, and at the same time, it has penetrated into the raw material production area with independent manufacturing as the key point, realizing the optimization of the whole link cost.
The high-quality supply chain resources have also laid a solid "basis" for the performance growth of the three squirrels. According to the data, during the reporting period, the company's nut category revenue accounted for 53.59%, of which the proportion of self-production of nuts was about 40%, and the proportion of self-production will continue to increase in the future. At the same time, the company will continue to take "one product and one chain" as the core, continue to consolidate the main category of nuts through a global vision, and strengthen a number of large single products.
It can be seen that with the two-way blessing of the supply chain and popular products, the three squirrels have mastered the "password" of revenue growth, and it is just around the corner to return to the 10 billion revenue club.
Implement the "high-end cost-effective" strategy and return to 10 billion yuan to "become stronger in all"
It is understood that at the time of rapid growth in performance, the three squirrels have also set the goal of "returning to 10 billion yuan and becoming stronger in the whole country" in 2024. There is no need to repeat the return to 10 billion, and the so-called "stronger in all" refers to the three pines will adhere to the general strategy of "high-end cost performance", adhere to the business mode of "all categories and all channels", give full play to the company's innovation gene advantages, and implement the strategy.
In fact, as early as the end of 2022, the three squirrels clarified the company-level core strategy of "high-end cost performance". At that time, the company believed that China's retail industry was undergoing a profound transformation of supply and demand, which was characterized by an imbalance between oversupply and diversified supply modes and a relative lack of aggregate demand. Focusing on this strategy, the company's front-end departments such as channels and categories and middle and back-office departments such as goods, logistics, and supply chain have fully practiced the "integration of pan-product and sales".
As the saying goes: Spring River plumbing duck prophet. As one of the earliest explorers of the snack industry, Three Squirrels also has the most profound perception of changes in the retail industry.
On the one hand, from the perspective of product supply, the upstream infrastructure such as the manufacturing and processing of snack products is becoming more and more perfect, and product supply is no longer a problem, and there is even a situation of oversupply.
At the same time, with the support of digital and intelligent technology, the diversification of marketing channels and the improvement of the logistics supply chain have also diversified the channels to reach consumers and reduced costs.
As Zhang Liaoyuan said in the report, the transportation efficiency of the whole of China has changed very much, and the logistics cost has become lower and lower under the scale effect. Based on AI digitalization, new channels such as Douyin and Pinduoduo have made it very convenient to sell goods and can reach anyone.
Zhang Liaoyuan also believes that in the context of the mismatch between aggregate supply and aggregate demand, there is still a phenomenon in China: supply is very diversified, and there is no country in the world like us, where everyone is a retailer.
In fact, such changes are also taking place inside the three squirrels. For example, under the traction of the "high-end cost-effective" strategy, the three squirrels insist on leading the supply chain reform with high-quality channels, and up to now, macadamia nuts, pecans, hand-peeled almonds, cashew nuts, dried cranberries and other large items have achieved direct sourcing from the place of origin.
On the other hand, from the perspective of consumer demand, although consumption is upgrading, consumers are becoming more and more rational, not only paying attention to the brand and quality of products, but also paying attention to the cost performance of products.
As Zhang Liaoyuan, founder and CEO of Three Squirrels, said at the 17th China Nuts and Dried Fruit Food Exhibition, the wholesale snack industry is saying: "We are very cheap", so 22,000 new offline physical stores were added in a year, generating nearly 70 billion sales. And the "lowest price on the whole network" has made Douyin and Pinduoduo become giants of new e-commerce, breaking the pattern of the two strong.
Behind these changes, there is actually an important underlying factor, which is not the consumption upgrade or consumption downgrade as we usually understand it, but I think it is the rational upgrade of consumption, that is, people are becoming more and more rational.
Therefore, the three squirrels also conform to the trend of the times, and at the same time keep up with the high-end and cost-effective. The three squirrels have been deeply involved in the leisure retail industry for more than ten years, and have a deep precipitation in both the food supply chain and marketing channels. Therefore, the three squirrels proposed the "high-end cost-effective" strategy at this time, which can be said to be opportune, and fully prepared, and the landing efficiency is naturally very high.
Unlike the outside world's understanding, many brands are simply quantified and superimposed on "channels and categories", and the three squirrels have their own understanding of high-end cost performance. As Zhang Liaoyuan, the founder of Three Squirrels, once explained in the circle of friends when the 2023 financial report was released, its essence is to achieve better goods and better prices through the optimization of supply chain and efficiency.
And now the breakthrough made by the three squirrels on the new channel of Douyin and the deepening of the nut supply chain are some positive phenomena that are explicit. It is also further consolidating the basic plate of the three squirrels, so that its future road will be more solid and stable.
epilogue
It is understood that the three squirrels have launched the principle of "two choices and three benchmarks": choose products with quality assurance and choose products with market share. The price should be far lower than that of the benchmark expert brand, the benchmark of the same industry brand should be significantly lower, and the benchmark of the low-end brand should be close.
It is also under this guiding ideology that Three Squirrels is becoming the first choice of more and more consumers and becoming a true practitioner of "high-end cost performance". Under the guidance of such a strategy, the three squirrels will return to 10 billion in 2024, and the future is promising.