Text: Li Zhenxing
For Xiang Piaopiao, the launch of frozen lemon tea in 2023 may be more important than the launch of Honey Valley Juice Tea in 2018. Xiangpiaopiao is no longer a milk tea brand, but a beverage brand.
On April 17, the 2023 financial report released by Xiangpiaopiao showed that its performance ended a three-year decline, with revenue of about 3.625 billion yuan in 2023, a year-on-year increase of 15.9%, and net profit attributable to shareholders of listed companies of about 280 million yuan, a year-on-year increase of 31.04%.
The brewing business is still the main source of revenue, but the growth of the ready-to-drink business is key.
Previously, from 2020 to 2022, Xiangpiaopiao's revenue declined for three consecutive years, and the net profit attributable to the parent company also fell off a cliff.
In the eyes of industry insiders, in the past few years, the decline in Xiangpiaopiao's performance has been due to the decrease in consumers going out during special periods, and there are also reasons why its own brewing products cannot meet the needs of consumers in multiple scenarios, groups of people and categories. The recovery of growth in 2023 will be driven by the adjustment of traditional brewing products, and more importantly, the launch of more competitive frozen lemon tea for ready-to-drink products, and the focus of internal resources.
End three years of decline
In 2023, as far as Xiangpiaopiao is concerned, the most important thing is to stop the decline in performance and resume growth.
From 2020 to 2022, Xiangpiaopiao's operating income will be 3.761 billion yuan, 3.466 billion yuan and 3.128 billion yuan respectively, a year-on-year decrease of 5.46%, 7.83% and 9.76% respectively. In 2020, Xiangpiaopiao's net profit was 358 million yuan, a year-on-year increase of 3.15%. However, in 2021 and 2022, Xiangpiaopiao's net profit will be 223 million yuan and 214 million yuan respectively, a year-on-year decrease of 37.9% and 3.89% respectively, declining for two consecutive years.
For the resumption of performance growth in 2023, Xiang Piaopiao said in the financial report that the company will continue to focus on the "two-wheel drive" strategy, with repair and innovation as the main keynote, and cultivate the "second growth curve" as the main goal, actively optimize resource allocation, explore the establishment of a corresponding organizational management team and operation development model, and fully explore the development opportunities of new categories while striving to achieve the recovery and growth of the original business.
As long as the double wheel is the brewing business. The brewing business remains the largest source of revenue. During the reporting period, the brewing business achieved revenue of 2.686 billion yuan, an increase of 9.37% year-on-year. The gross profit margin of the brewing business reached 44.68%, an increase of 4.03 percentage points, and the sales volume was 38.1712 million boxes, a year-on-year increase of 8.51%. A box of 30 cups sold a total of 1,145.13 million cups of brewed products.
The ready-to-drink business is the growth engine of Xiangpiaopiao. Focusing on the two core products of Meco Juice Tea and Lan Fang Yuan Frozen Lemon Tea, we actively promoted related work and explored the growth opportunities of the ready-to-drink business. During the reporting period, the operating income of Xiangpiaopiao's ready-to-drink business was 901 million yuan, a year-on-year increase of 41.16%, and the gross profit margin of the ready-to-drink business was 18.41%, an increase of 6.73 percentage points. The sales volume reached 23,027,400 TEUs, an increase of 41.01%, and the sales volume of 15 cups in a box was 345 million cups.
In terms of sales regions and models. Sales in East China reached 1.6 billion yuan, a year-on-year increase of 18.16%, and the gross profit margin reached 39.58%, an increase of 1.88 percentage points. Northeast China has the fastest growth, with sales revenue of 44,009,800 yuan, a year-on-year increase of 30.01%, gross profit of 21.42%, an increase of 8.09 percentage points, and the lowest gross profit margin. The highest gross profit margin was in the northwest region, reaching 42.98%, but the growth rate was the slowest at 9.55%.
The operating income of direct channels was 63.2028 million yuan, an increase of 119.29% year-on-year, and the gross profit margin reached 50.95, an increase of 6.79 percentage points.
Xiangpiaopiao said that the operating income in Northeast China increased by 30.01% year-on-year, mainly due to the increase in sales of ready-to-drink products in Northeast China, and the increase in revenue from direct sales channels was mainly due to the company's active expansion of new channels and year-on-year sales growth.
It is worth noting that the number of dealers in Xiangpiaopiao increased from 1,332 at the end of 2022 to 1,531 at the end of 2023, an increase of 406, a decrease of 207, and a net increase of 199.
From the product, channel, terminal Xiangpiaopiao's performance in 2023 to achieve comprehensive growth. Feedback from the capital market has also been positive.
Wind shows that Gong Yuanyue and Wang Kexin, food and beverage analysts at Huatai Securities, believe that the peak season of the Xiangpiaopiao brewing business has been smooth and recorded steady growth, and the ready-to-drink business has also built momentum in advance for the peak season. Looking forward to 24 years, the brewing base is expected to achieve steady growth, and the three strategic products of ready-to-drink (Meco juice tea/frozen lemon tea/milk tea) are poised to take off, and are expected to achieve good growth driven by the increase in outlets, the expansion of new channels such as snack mass sales, and brand marketing investment.
On April 18, Xiangpiaopiao opened up 5%, as of 9:26, at 18.11 yuan. At the close, Xiangpiaopiao's share price rose 4.5% to close at 17.66 yuan. The market value is 7.3 billion yuan.
It starts with internal drive
2023 is a year of self-reform.
On the product side, the perception of Xiang Piaopiao is a milk tea brand. In 2023, Xiang Piaopiao has sharpened its sword for five years and launched its second ready-to-drink product, Lanfangyuan Frozen Lemon Tea. In 2018, Xiangpiaopiao launched cups of honey valley juice tea, breaking the problem of Xiangpiaopiao's big sales in the first and fourth quarters and pre-cooling in the second and third quarters.
The ready-to-drink product is created by Jiang Xiaoying, the daughter of Jiang Jianqi, the chairman of Xiangpiaopiao.
As a female "second generation", when the company's performance has declined year after year, Jiang Xiaoying rushed to the front line to understand product products and channels, improve her own cognition, and help Xiang Piaopiao get out of the trough.
Jiang Xiaoying said that the ready-to-drink business is the second curve that Xiangpiaopiao focuses on, but it should not be too anxious, and it must be steady and steady. "The bottling market is very volatile, and to enter this market, we must find our own advantages, either the product strength is differentiated and competitive, or there is a strong channel network. We don't have a strong channel in the beverage business, so we choose to start from the product and make a breakthrough product. ”
According to the financial report, Lanfangyuan Frozen Lemon Tea focuses on "authentic Hong Kong-style flavor", follows the health trend of "0 sucrose", and has achieved good sales feedback in Guangdong, Beijing, Shanghai, Jiangsu, Zhejiang and other regions. In the first year of the official listing of the product, the pre-tax sales revenue exceeded 200 million yuan.
The biggest feature of Lan Fang Yuan Frozen Lemon Tea is its expertness.
"The Lan Fong Yuen brand comes from Hong Kong, China. Frozen lemon tea itself is a popular drink in Hong Kong, and in addition to stockings milk tea, Lan Fong Yuen Central store is frozen lemon tea, so from the perspective of consumers' psychological cognition, Lan Fong Yuen has a unique expert. Jiang Xiaoying said.
He Songsong, partner of Reece Strategic Positioning Consulting China, said: "In the market, the brand recognition of Vita (lemon tea) is very strong, but its sugar content is very high. Therefore, the sugar-free lemon tea market contains huge strategic opportunities. Sugar-free or low-sugar lemon tea is the space for lemon tea upgrades, and it is also an opportunity point for frozen lemon tea. ”
In addition, Xiangpiaopiao also upgraded the packaging design of Dahongpao milk tea, and jointly launched Tieguanyin oat milk tea with OATLY.
Ready-to-drink is a key that unlocks the key to Xiangpiaopiao's recovery of growth, but according to the brewing business.
In 2023, Xiangpiaopiao will focus on the two major routes of "health" and "pan-brewing" to promote the innovation and upgrading of brewing products. Strengthen the positioning of the brand "warm", actively build terminal sales potential, and help the peak season sales of products.
It is worth noting that at the end of 2023, Jiang Jianqi resigned as general manager, retained as chairman, and appointed Yang Dongyun as general manager. Yang Dongyun has worked in Procter & Gamble, Triumph Group, Yida Group, Super 8 Hotel and other companies. It can be said that it has a wealth of resources and experience.
Gong Yuanyue and Wang Kexin believe that the new CEO of Xiangpiaopiao has officially taken office in the organizational structure, and the ready-to-drink/brewing team has basically been sorted out, and the business potential is expected to continue to rise.