#精品长文创作季#
Large category + differentiation, all catering categories are worth redoing.
Author: Lv Xinyi Editor: He Xiang
出品：零售商业财经 ID：Retail-Finance
"We are in the midst of a historic opportunity for China's restaurant chain, and I don't want to miss it. Li Wenyang, a serial entrepreneur in the catering industry, shared with Retail Business Finance.
In Li Wenyang's view, China's catering industry is currently in a period of alternation of old and new forces, and a large number of professional players have entered the catering industry as a whole to iterate in the direction of specialization and chaining, and the new opportunities for ordinary players or self-created brands in the original catering industry are very slim. Under the industrial window period, Li Wenyang couldn't wait to get off the field and nugget professional catering.
Source: Courtesy of the interviewee Roar Lane store
Li Wenyang's step is quite risky.
After all, at this time, as the co-founder of the ready-made dumpling chain brand "Uncle Xiong", he has already operated Uncle Xiong to grow 1300+ stores within a year, completing the important accumulation of the brand from 0-1, from less than 100 to 1,000 stores.
From a business point of view, the smoother direction of Lee's own development should be to continue to operate a mature brand, rather than to face the uncertainty of new ventures.
However, for him, the new business space is sexier.
Different times call for different solutions, and the new entrepreneurial idea given by Li Wenyang is to take "catering brand investment" as the underlying logic and incubate multiple brands at the same time.
In the first batch of brands, Li Wenyang chose four categories: steamed buns, rice noodles, hot pot, and hoof flowers. On December 10, 2023, Li Wenyang's four new brands opened on the same day. On the opening day, many friends in the industry expressed their opinions, and most of them tended to be too radical and challenging.
Source: Provided by the interviewee Ming Red Hoof Flower Store
However, combined with the consumption environment and industrial background, Li Wenyang's step is just the pulse of the times of catering specialization and chaining.
Taking a step further, the core of Li Wenyang's new entrepreneurial projects is "big category + differentiation".
In mature categories, subdivision differences are used as the starting point, which not only maintains the size of the consumer group, but also shapes the brand image with a characteristic style. If this logic is effectively verified, then all catering categories in China are worth redoing.
When the underlying logic of catering in the new era is determined, a new methodology is about to emerge.
01 Condense the "Nine-Character Methodology"
"I now see doing business as a big game that I like. To play the game, you must break through the levels, and constantly fight monsters to upgrade. This passage comes from the emotion of Jia Guolong, the founder of the catering brand Xibei Noodle Village.
As an entrepreneur in the catering industry, Li Wenyang's entrepreneurial journey is similar to Jia Guolong's emotion - always on the road and always accepting new challenges.
In 2021, Li Wenyang, who had just finished the "King of Boxing Pizza" entrepreneurship project, returned to Yunnan to do a catering takeaway brand incubation project.
Founded in March, it took only one month to achieve a flat break, and in May it began to be fully profitable, and the profit has continued to grow every month since. In October of the same year, Li Wenyang received an invitation from Liu Junxiong, the founder of Uncle Xiong.
This is the third time that Liu Junxiong has thrown an olive branch to Li Wenyang.
In the end, Li Wenyang failed to refuse the temptation of a bowl of freshly made dumplings, and it took only six days to complete the transfer of shares of the original company, bid farewell to his family and embark on a journey to the north.
When Li Wenyang joined Uncle Xiong, the brand had just been established for 2 years, and completed the A round of financing led by Meituan Dragon Ball, opening more than 70 stores.
Within a year after that, Li Wenyang led Uncle Xiong to open stores all the way against the trend, focusing on the business model of community stores, and quickly staking the market, pulling the scale of stores to more than 1,300.
Source: Courtesy of the interviewee Li Wenyang
Being able to expand more than 1,000 stores a year in a turbulent period of the external environment must be supported by a set of mature methodologies. Li Wenyang summed up to "Retail Business Finance": keep the bottom line, stabilize growth, and gather talents.
Keeping the bottom line is not a single red line, but is dismantled into more specific indicators, such as food safety, store location, investment promotion, opening performance and other multi-dimensional bottom lines. When the bottom line of each link is clear, the overall development of the brand can avoid the details of each link, so as to avoid the imbalance in the development speed of each link, and then the short-board effect.
To stabilize growth, the focus is not on whether the goal is achieved, but on ensuring an upward trend, and formulating multi-dimensional growth goals such as the growth of store size, cash flow growth, and talent density.
Gathering talents is to screen team talents through various models. In Li Wenyang's view, the implementation of this methodology reflects the feasibility of the current implementation of the enterprise and the possibility of future development.
In addition to precipitating the nine-character methodology, Li Wenyang also gained insight into the trap that catering entrepreneurs can easily fall into in the expansion of thousands of chain stores, that is, they are blinded by cash flow, resulting in weak cost control.
"The biggest feature of catering is that there is cash flow in every day, and most entrepreneurs choose to use cash flow to maintain their operations, and it seems that everything is running normally, but the actual profit is very low. Li Wenyang said.
In his opinion, because catering has revenue every day, some entrepreneurs are easy to be deceived by the surface and incur costs at will. However, the lack of cost control, even if there are funds coming in every day, it cannot improve the profit margin.
Based on this, Li Wenyang came to the conclusion that the cost of catering must be front-loaded, and the cost must be firmly grasped in the early stage in order to strive for more space for profits.
After I have a deeper understanding of the industry, the opportunity to superimpose industrial changes is in front of me. Li Wenyang chose to leave the mature and running Uncle Xiong and devote himself to a new business again.
"The pit on the road of catering entrepreneurship, each pit cannot be out without millions of trial and error costs, I want to bring my experience to the market and work with friends to achieve a new brand. Li Wenyang said with emotion.
02 Take segmentation and differentiation as the starting point to find opportunities in large categories
Different from the entrepreneurial experience of focusing on a single brand, Li Wenyang has established four brands in one go in this new entrepreneurial journey.
From the perspective of brand positioning and business model, it is not so much that Li Wenyang is doing brand entrepreneurship, but that this is a methodological entrepreneurship. After this route is completed, all restaurants in China will usher in a new story.
From the perspective of the underlying logic, Li Wenyang chose a "big category + differentiation" style of play.
"Large categories have a huge user group, which ensures the scale of brand revenue, but this part of the group needs more innovative products in large categories, and after minor changes in the category, new brands can be differentiated into the game. Li Wenyang concluded.
Specifically, the four categories of steamed buns, rice noodles, hot pot, and hoof flowers selected by Li Wenyang all have high-frequency rigid demand attributes. The characteristics of this type of product are that there is no need to do market education, and there is a group of loyal consumers. But the disadvantage is that there are difficult to shake the head in the big category, and only homogeneous products cannot compete with it.
Therefore, at this time, it is necessary for new brands to bring consumers "reasonable and unexpected" changes in large categories, so that consumers can feel fresh and will not incur excessive acceptance costs.
The raw coconut latte launched by Luckin is a classic case, and in the coffee category, it gives a new ingredient that is different from traditional coffee, milk and caramel. With subtle innovation, shape explosive products.
Li Wenyang's dedication to new entrepreneurship also has the same logic, such as the steamed bun brand "Roar Lane", which uses Yunnan broken puff pastry as the main product and mille-feuille puff pastry as the differentiated feature to enter the game. It not only meets the needs of consumers to try new things, but also ensures the repurchase rate as a just-needed breakfast product.
The hot pot brand "Lanmei" takes singing and dancing as the starting point, provides emotional value, and features Yunnan's exclusive ingredients to give differentiated products. At the service level, the former is different from Haidilao and hot pot, while the latter is different from the mainstream hot pot ingredients on the market and provides a new sense of product value.
Source: Courtesy of the interviewee Lanmei hot pot restaurant
Differentiation is not limited to front-end stores and product design, but also has the opportunity to stand out from the differences in operation management. For example, innovation from the perspective of online, private domain operation, and store model.
"I look at the two core dimensions of all stores – the rent-to-sales ratio and the gross profit margin, which is the comparison between rent and sales. ”
Li Wenyang further explained that in the model of hot pot restaurants, the lowest point of rent is 30,000 yuan, and the highest point is 50,000 yuan; at this time, the rent-to-sales ratio of a store is 1:8, which is a mediocre store, and changes need to be made, and the stores above 1:10 will reach the standard store, 1:15 will be an excellent store, and some stores will achieve more than 1:20; combined with the 60% comprehensive gross profit margin index, the standard store can obtain a profit level better than the hot pot track; Category differences will also adjust different judging criteria.
Differentiating from other brands on the business side can also help the brand take root in the market.
BOB, the founder of Tomato Capital, also shared that Tomato's investment style is "to shine the shadow of giants with strong light". In his view, a good entrepreneur should not be an imitator but a disruptor.
The choice of differentiated direction is not chaotic, Li Wenyang's "Roaring Alley" and "Murmei" two brands have strong Yunnan characteristics. In his opinion, Yunnan itself is rich in food resources and distinctive enough, with product power.
In addition, Yunnan has always been a city with traffic, and every once in a while, there will be hot spots related to Yunnan on the video platform, and the joke "Douyin's capital is in Yunnan" is the best proof.
There are both products and no shortage of traffic, which is one of the cores of Li Wenyang's choice of differentiation direction. He predicted that Yunnan will definitely become the key word in the next wave of catering.
Although the Yunnan style is quite distinctive, opening a Yunnan hot pot in Chengdu, the "hot pot capital", is not a small challenge. When it comes to how to do a good job in localization adaptation, Li Wenyang directly replied that there is no need to care too much about localization, what is needed is to be localized, "The taste of consumers is very tolerant, just make a little change in the taste of the product, but retain the original flavor." ”
In addition to Yunnan characteristics, Li Wenyang also acquired the hoof flower brand "Minghong Hoof Flower" in Chengdu. The latter has a full local character, the brand has gone through more than 20 years, and now, Li Wenyang is sending this bowl of hoof flowers from Chengdu to Jiangsu, which has a light taste.
No matter how differentiation is shaped, the essence of the catering industry cannot be abandoned. This is a business that ponders human nature, and putting human needs in the first place can reverse the capabilities that the brand should have. For example, breakfast is about efficiency and value for money, lunch is about value and efficiency, and dinner and supper are about emotional value and socialization.
Source: Courtesy of the interviewee Xiang Xiang Mixian
At present, Roar Alley has opened more than 60 stores, and Lanmei Hot Pot is also opening four stores, and the stores will return to their costs in five months. The Mixian brand is still readjusting the store model, and Minghong Hoof Flower is taking Chengdu's night culture and "relaxation" to go out of Chengdu and make millions of sales per month.
Li Wenyang, who adheres to the "big category + differentiation" style of play, is building a mature business plan with his understanding and innovation.
03 Find the "fish" in the sea of data that influence decision-making
In 2023, the chaining rate of the catering industry will reach 21%, and in 2018 this figure remained at 12%.
The chain rate reflects the level of specialization, scale, intensification and modernization of the catering industry. In just six years, the development momentum of chaining and specialization in the catering industry has been fierce, changing the characteristics of the industry with extensive competition and too low threshold.
In this environment, professional players have fertile ground for nuggets.
Through industry data, it can be more intuitively felt that in 2023, the number of newly opened catering stores in the country will reach 2.98 million, and the number of newly closed stores in the catering industry will reach 3.54 million throughout the year. The number of store closures far exceeds the number of new stores, which is enough to show the intensity of the current involution in the catering industry.
Among them, the chain restaurants with more scale effect have shown stronger vitality. Xibei Restaurant Group said that overall revenue in 2023 exceeded 6.2 billion yuan, a record high, while Yum China's total revenue increased 15% to $10.98 billion in the same period, and the restaurant's profit margin exceeded the level of 2019.
It can be seen that the time has come for professional players to land on the beach.
However, the more professional era calls for a new supply and demand model, forcing entrants to master the overall control ability and become "all-round players". This is not only to grasp the underlying logic of store operation, but also to have a strategic macro perspective, and to operate the store with the perspective of operating the brand.
But it is difficult to achieve this with the strength of entrepreneurs or entrepreneurial teams alone. The upstream and downstream of the industry need to iterate together, but it has not yet reached the ideal situation, which is also the industrial pain point faced by entrepreneurs at present.
Take supporting tools as an example, "many stores issue financial statements on a monthly basis. Li Wenyang said. This speed will be faced with the fact that the financial analysis of the previous month will not be completed until around the middle of next month, and it will result in the situation that only 11 months a year can be analyzed, and the progress is too lagging behind.
The most important thing in the catering industry is to make digitalization more detailed, down to every day or even every hour.
The data reflects not only revenue and profit, but also whether it needs to be replaced according to the number of dishes sold. Only by achieving refined digital operations can we have a clearer control of costs and free up more space for profits.
This is the best illustration of technology-enabled store efficiency.
However, the mainstream tool products on the market cannot solve the needs in one stop, and entrepreneurs need to summarize according to multiple digital panels. This is a huge challenge for entrepreneurs, and in the sea of data, it is necessary to accurately catch the "fish" that can influence decision-making.
In addition, the industry is currently facing the contradiction of mismatch between the back-end supply chain and the front-end brand demand.
Although the upstream supply chain production is very mature, and the head supply chain has begun to do C-end business and create its own brand. However, there is an "information gap" and "poor efficiency" between supply chain manufacturers and brands, and manufacturers cannot keep up with the changes in market tastes in a timely manner.
Some brands that do not want to be controlled by the supply chain have chosen to build their own supply chains. This is another hurdle for entrepreneurs.
Finally, there is the pain point faced by the entire industry, when the times need more and more professionals, there is no fertile ground for cultivating talents in the industry. Colleges and universities have majors in hotel management, but never in food and beverage management.
The importance of talents in industrial development is self-evident, and the lack of talent training will restrict the overall pace of the industry to a certain extent.
Opportunities and pain points go hand in hand, and the era of professional catering has begun.
04 Conclusion
Looking back on the ups and downs of more than ten years in the catering industry, Li Wenyang said with emotion that he had thought about giving up several times, and kept asking "Is there still a catering business?" and even changed careers to start a business for a while, but in hindsight, he felt that it was okay that he didn't get off the table at that time.
Li Wenyang, who once won the boxing championship, has a different view on "winning". He said that the championship is played for 12 rounds, which is not a matter of life and death if you lose a few rounds.
This is the same as the logic of entrepreneurship, not a successful champion is called, and a successful entrepreneur who is born in failure is the one who reaches the top. In the book "The History of the Catering Business", there is no shortage of such people.