Zebra consumption Ren Jianxin
At a time when all industries are seriously involuted, no one can lie down and win.
On the evening of April 25, BESTORE, a leading enterprise in leisure snacks, disclosed its 2023 annual report: operating income of 8.046 billion yuan and net profit attributable to the parent company of 180 million yuan. In the case of cyclical pressure, the basic market has generally stabilized.
According to the first quarter report of 2024 disclosed on the same day, the company's operating income has returned to the growth track, with a year-on-year increase of 2.79% to 2.451 billion yuan. Because of the terminal initiative to make profits, the company's net profit attributable to the parent decreased by 57.98% year-on-year to 62.4828 million yuan.
In the past two years, the frantic expansion of mass-selling snacks, the smoke of terminal price wars, the transfer of online traffic, the inability to eat all the tricks, and the return of the concept of rational consumption. All this has forced casual snack players to re-examine themselves.
The BESTORE is not hidden. Dare to face up to their own problems, and have made targeted adjustments one after another. The company does not fight a single-dimensional price war, and insists on actively participating in industry competition through innovation and differentiation, so that business can return to valuable growth.
Don't underestimate the difficulties, and don't underestimate the resilience of this 18-year-old snack leader.
Tear off the bandage to heal
The trillion-level leisure snack market is not made in a day. Market participants should not only be KA, nor should there be only brand operators such as BESTORE and Three Squirrels, and mass sales of snacks are not destined to be the end of the model.
The continuous innovation of models and channels can stimulate the innovation vitality of the entire industry and jointly expand the market, so that users can ultimately benefit.
As a leading enterprise in the industry, BESTORE (603719. SH), admitting that he is currently going through a more "painful" period. If it is just an explanation for investors, it can be attributed to the impact of mass selling snacks.
However, looking at the essence through the appearance, BESTORE deeply realized that the root cause of the current pressure on the company's performance is that the brand does not provide users with a sufficient sense of value. Only by facing up to our own problems can we find targeted solutions.
Engaged in the leisure snack industry for 18 years, BESTORE knows that blindly rolling prices and fighting price wars will only affect the healthy development of the entire industry.
The competition between enterprises is essentially the competition of the supply chain. Only through the improvement of quality and efficiency of the supply chain can we truly provide users with products with high quality-price ratio.
Different from the simple procurement relationship between mass snack and suppliers, BESTORE leads the entire industrial chain as a brand owner, and controls the whole process of products from raw material planting, procurement, product research and development, production and sales.
Therefore, mass sales snacks and BESTORE are completely different price logics, and the methods of "squeezing water" from the supply chain are also completely different. For BESTORE, "squeezing water" is by no means the ultimate squeeze of suppliers, but is accomplished through lean management in terms of cost control, production efficiency, and business efficiency. It can make every supplier in the industrial chain become a participant, contributor and beneficiary of cost reduction and efficiency increase.
Based on this, in November 2023, BESTORE launched the largest price adjustment since its establishment 17 years ago, with an average price reduction of 22% and a maximum price reduction of 45% for more than 300 products.
How can we reduce prices without reducing quality?
Taking nuts as an example, in the past, BESTORE purchased products of specified specifications, and the high grade led to high raw material procurement costs. The company has made adjustments to this, on the one hand, it will incorporate the procurement of bulk nut raw materials into the supplier direct procurement system, and at the same time, it will change the acquisition strategy, and the raw materials will be graded after the market is unified.
For example, macadamia nuts, the company single-handedly uses domestic macadamia nuts instead of imported raw materials by jointly building a raw material base. At the same time, different specifications of raw materials are used to produce canned, bagged, mixed nuts and other products. By maximizing the use of raw materials, the price of each type of product has dropped by 5 to 10 yuan.
Light sweet dried mango is a very popular product of BESTORE. In the past, the company purchased mangoes from abroad to domestic processing, and the fresh fruits drifted across the sea, which inevitably caused a lot of loss. In 2023, the company will support suppliers to build factories overseas, and the total cost of raw materials will be reduced by local processing. As a result, the company's 112g standard light sweet dried mango dropped from 16.9 yuan to 8.9 yuan, or 39.7 yuan per catty, which is far lower than similar products in well-known supermarkets.
With the continuous deepening of the reform and innovation of the supply chain of each product line and the overall improvement of operational efficiency, BESTORE will make users have a more obvious perception of the terminal price of the product.
Gather advantages and seek growth
In the casual snack industry, BESTORE is the brand with the most balanced online and offline development, which is also its biggest difference and advantage from competing products on the channel side.
In 2023, BESTORE will open 537 new stores in the four core provinces, bringing the total number of offline stores to 3,293 at the end of the period, a net increase of 67 stores over the same period last year. For the whole year, the revenue of offline channels was 4.294 billion yuan, a year-on-year increase of 4.02%.
At the 2024 annual meeting of BESTORE, Yang Yinfen, chairman and general manager of BESTORE, emphasized that stores are the most important channel of BESTORE and the main position of brand promotion.
In the future, the improvement of store management and efficiency, updating and model optimization will still be the top priority of BESTORE. Yang Yinfen emphasized that the company's various channels should take the products and prices of the stores as the basic disk, and the channels should move closer to the products and prices of the stores, and resolutely not let the involution occur internally.
Many users who frequent BESTORE have seen significant changes. With the introduction of new models and new products, the stores are younger and have fireworks. BESTORE introduced high-frequency consumer goods such as coffee and short-term insurance for stores in specific scenarios, and launched innovative small categories such as frozen products, grilled sausages and roasted sweet potatoes seasonally, which effectively increased the unit value and sales of customers in the current season.
For the operation of online traffic, BESTORE got rid of the single money-burning purchase volume of its peers, and relied on its own offline store advantages to build a diversified and unique model such as "city matrix live broadcast", "influencer bringing goods" and "official account live broadcast".
Take a different path
Any industry cannot only have low-end and low prices, which can only bring "sickness", and ultimately the user will be damaged. Snacks are closely related to people's daily lives, and they are related to health, especially when it comes to health.
Nowadays, users' consumption behavior is becoming more and more rational, and the requirements for snack products are more demanding, which should not only be "delicious", but also "healthy" (light burden), "cost-effective", and "emotional value". Only brands and products that can fully meet the needs of users can have long-term survival value.
As a brand owner and owner of the industrial chain, BESTORE controls the whole chain of raw materials, product research and development, production, etc., and has the advantage of satisfying the "both wants and wants" of users.
As early as the second half of 2023, BESTORE will promote product upgrading with "good raw materials, good formulas, and good taste" as the anchor. From wild bamboo shoots with minus salt and preservatives, crispy pancakes with non-fried 0 trans fatty acids, 2.0 version of plum with "nothing added", to toast with 0 preservatives and 60 days shelf life, these seemingly subtle changes require long-term accumulation of the brand to find the optimal solution in taste and health.
As one of the drafting units of the "General Requirements for Healthy Snacks", BESTORE advocates the concept of "five reductions" (salt reduction, sugar reduction, fat reduction, oil reduction, and food additives reduction), focusing on the two research and development directions of pure natural and healthy food ingredients to make products and reduce additives in the production process, so as to make snack formulas more concise, low burden and healthier.
Recently, Shanghai has set a precedent in the country and taken the lead in piloting the "nutritional choice" grading label in the beverage industry. ABCD is clearly printed on the packaging of the drink, and it is clear whether the product is healthy or not.
After the completion of the pilot project in Shanghai and the experience is summed up, it is believed that this model will be further promoted to the whole country and eventually expanded to the entire food industry. This is both a consumer demand for a healthy diet and a general trend.
In the face of the general trend, enterprises can only take advantage of the opportunity by taking precautions.
Deeply cultivated in the leisure snack industry for 18 years, BESTORE has witnessed changes in the industry, experienced ups and downs, and developed a differentiated competitive physique.
In 2019, tired of the endless price war in the industry, the company decisively jumped out of the red sea of low-quality and low-price competition, carried the banner of high-quality snacks, and walked out of a wave of independent market.
Today, despite cyclical pressure, the company has always adhered to the high-end. Return to the original intention of "the quality of conscience, everyone's shop", and win users with "quality-price ratio" through the improvement of its own efficiency. In the end, go out of the way of BESTORE itself.