120 million pets, "eat" a 20 billion company!

Author: Mi Liping

来 源:正和岛(ID:zhenghedao)

First, the "IT economy" exploded, and domestic brands caught up

In China, more and more people are raising furry children.

According to the "2023-2024 China Pet Industry White Paper (Consumption Report)", the number of pet dogs in mainland China in 2023 will be 51.75 million, a year-on-year increase of 1.1%, and the number of pet cats will be 69.8 million, a year-on-year increase of 6.8%, making it the second largest pet market in the world.

Raising pets has become a new fashion, and it has also created a booming "it economy" in the new consumption era.

According to iiMedia Consulting data, the scale of China's pet economy industry will reach 592.8 billion yuan in 2023 and is expected to reach 811.4 billion yuan by 2025.

Among them, the pet food market is the largest and most mature segment. After nearly 30 years of development, the market size of this field will reach 146.074 billion yuan in 2023, a year-on-year increase of 5.85%.

One topic that cannot be avoided in this field is the dominance of international brands.

In 1992, the China Small Animal Protection Association was established, marking the germination of the domestic pet economy. Then, in 1993, Mars entered China and soon established the country's first factory dedicated to the production of pet food.

Since then, international brands such as Nestle and Royal have poured in one after another, becoming a major force in the Chinese pet market.

The turning point occurred in 2012, with the development of the mobile Internet, local brands took advantage of the dividends of e-commerce, social media and other channel changes to catch up.

According to Euromonitor data, from 2013 to 2022, the combined market share of Mars and Nestle's major low-end brands decreased from 11.0% to 2.5%, and among the top 20 brands in China's pet food sales in 2022, the total market share of domestic brands has surpassed that of foreign brands, reaching 17.2%.

Judging from the sales of major brands, during the "Double Eleven" period of Tmall in 2023, the top brands in terms of sales volume include Maifudi, Royal, Lan's, NetEase Yanxuan, Honest Bite, Xianlang, Baili, etc., most of which belong to domestic brands.

Domestic pet companies have a similar development path, that is, OEM for international brands in the early stage, and develop their own brands in the later stage. Among them, Ganbao Pet is a very successful example of the transformation from OEM to its own brand.

When it comes to Ganbao, everyone may be a little unfamiliar, but when it comes to "Maifudi", pet owners must be no strangers, it is Ganbao's own brand established in 2013, and has been ranked No.1 in Tmall, Jingdong and Douyin in China's pet food market for many years.

Founded in 2006, Ganbao was listed on the Shenzhen Stock Exchange on August 16, 2023, and closed on the afternoon of the issuance day, with a total market value of 23.4 billion yuan, exceeding the total market value of other A-share pet food listed companies.

At present, it is the largest enterprise in terms of revenue among listed companies in China's pet industry.

As early as before the listing, Ganbao as an OEM manufacturer, its products are exported to North America, Europe, Japan and South Korea, and the export volume reached 157 million US dollars in 2011, accounting for 21% of the country's pet food exports.

Later, Ganbao transformed into its own brand, established "McFudy" and "Fregat", and also acquired Waggin' Train, a famous American high-end dog pet food brand under the original Nestle Purina.

In 2023, Ganbao's own brand revenue will be 2.745 billion yuan, a year-on-year increase of 34.15%, accounting for 63.44% of the main business income, and the scale, growth rate and revenue proportion of its own brand revenue are far ahead of comparable listed companies in the same industry.

How did Ganbao complete the transformation from OEM to its own brand, and how to build a successful private brand, with these two questions, the author followed the case of Zhenghe Island to visit the headquarters and factory of Ganbao, and found the answer in the process of communicating with Qin Hua, chairman of Ganbao.

Qin Hua, chairman of Ganbao Pet

Second, a good product is a necessary condition for a good brand

After graduating from university, Qin Hua worked as a teacher and civil servant, but in the end he chose to go to the enterprise, and later went to the sea in 2006 and established Ganbao.

At that time, there was no domestic pet food market, and Ganbao was initially engaged in the export processing business of pet food, and its main customers included Wal-Mart, Smack, Pinpu and other global large retailers and well-known pet brand operators. In 2011, the export value reached 157 million US dollars, accounting for 21% of the country's pet food exports.

In 2012, due to the trade friction between China and the United States, Ganbao's exports in the United States were affected, so it transformed to the domestic market and began to make its own brand, which was earlier than other domestic pet industry enterprises.

In 2013, Ganbao launched the brand "Maifudi", positioning the mid-to-high-end pet food market, and subsequently developed the "Fregat" series, focusing on the high-end cat food market.

In 2021, it acquired Waggin' Train, an American high-end dog pet food brand under Nestlé Purina, to continue to enter the high-end pet food market.

At present, Ganbao has become the leader of the domestic pet food industry, with the first sales volume in China for three consecutive years, among which Maifudi has become the only brand in the pet industry on Tmall Double 11 to break 100 million yuan for four consecutive years.

One of the most important aspects of Ganbao's business philosophy is "quality as the foundation".

Pet food, first of all, food, and the food industry, the most important thing is to be safe, delicious and nutritious, and having a good product is a sufficient condition for making a brand.

Speaking of which, we have to talk about the origin of the name "McFudy":

One day in 2007, Luke saw his one-year-old daughter snatching a chicken strip with a dog, "My! The daughter shouted as she grabbed it, "It's mine!" The dog seems to be trying to grab it too.

Luke realized how meaningful it was to make a human-standard pet food. Thus, the "My Food", "Myfoödie" brand was born.

Qin Hua said that McFudy's canned cat food can be eaten by people with some seasoning, and his breakfast is canned cat food.

Ganbao can have the above good performance, but it is also inseparable from its great attention to research and development. In the early days of its establishment, Ganbao set up a research and development center, responsible for new products, new technology research and development and pet basic research, in terms of research and development expenses and research and development expense rate, are higher than other companies in the industry.

At present, Ganbao has R&D bases in China, the United States and Thailand, as well as the direct supply of 9 natural ingredients in the world.

Ganbao also has a pet nutrition research center, a new product research center, a pet health care research center, a pet training research center, a testing center and a central laboratory under the R&D center.

As of December 31, 2023, Ganbao R&D institutions have a total of 97 full-time R&D personnel, including 3 core technical personnel, 23 professionals with more than ten years of work experience, 317 national patents, and more than 30 published papers.

After years of accumulation, Ganbao has 12 core technologies, and has taken the lead in introducing the world's leading American WINGER high fresh meat addition equipment in China, which can add up to 70% of fresh meat, so that each grain particle contains fresh meat, and ensure that the proportion of meat sauce and fruits and vegetables in each cat food is balanced.

In addition, Ganbao will also apply a series of core pet food technologies to the production process, such as oral care product function improvement technology, hot air drying pet food quality, vacuum freeze-dried full-price pet food quality, pet staple food wet food quality, process and equipment control technology.

With technical support, Ganbao has launched innovative products such as Fregat High Meat Grain Series, Fregat Full Price Freeze-Dried Series, Shuangpin Grain Series, and Little Orange Cap Health Care Product Series, which have achieved multi-category coverage and become one of the domestic brands with the most abundant product series.

On this basis, Ganbao has also creatively built a personalized MES intelligent flexible production line to provide customers with customized formula and production services for nursing food and prescription food.

Third, the key to a good brand is consumer orientation

It is necessary to make brand products well, and it is a necessary condition. In addition to good products, a good brand also requires a lot of mindset changes.

In the construction of its own brand, Ganbao has made a series of innovations.

1. Single-brand & full-category strategy

In the pet industry, many companies have a multi-brand strategy.

Like these companies, at the beginning, Ganbao was also a long brand, but Qin Hua found after analyzing the market that no brand can completely replace the two categories of cat food and dog food, and from the perspective of market share, the largest is less than 10%, but a single brand can improve the mental share of the brand among consumers.

Qin Hua said, "The category is not regulated by the manufacturer, but the consumer, all the decisions of the enterprise are close to the consumer, the consumer no matter what process you have, as long as my cats and dogs eat well, eat safely, and eat nutritious." ”

Therefore, starting from the thinking of consumers, Maifudi chooses to do a single-brand, full-category strategy. In 2023, Maifudi's revenue will be 2.745 billion yuan, a year-on-year increase of 34.15%, which is higher than the combined revenue of all brands of some companies.

2. Pan-entertainment marketing

According to the "2022 China Pet Industry White Paper", the mainland pet population is dominated by the post-80s and 90s, of which the post-80s account for 20.3% and the post-90s account for 55.9%.

In a period of rapid growth in an industry, enterprises need to rely on marketing to open up brand awareness.

For young user groups, Ganbao began to build its own brand through "pan-entertainment" brand marketing as early as 2016.

McFudy not only invites entertainment stars as brand spokespersons, but also cooperates with variety shows, film and television dramas and mobile games such as "Hello Life", "Longing for Life" and "Thirty Only" to attract young consumer groups, and transforms the traffic advantage of entertainment IP into brand recognition.

At present, the slogan of "If there are cats and dogs, there is McFudy", has gained great popularity and reputation, and it has been at the forefront of pet food sales on various e-commerce platforms for many years.

3. Omnichannel reach

According to Euromonitor, the compound annual growth rate (CAGR) of online pet food sales in China from 2013 to 2023 reached 49.05%.

In order to capture the young consumer group, in addition to the traditional store channels, Ganbao chose online channels from the beginning, and realized the online and offline omni-channel layout in the domestic market.

On e-commerce platforms such as Tmall, JD.com, and Douyin, Ganbao has continuously expanded its online business scale through a combination of online direct sales and online distribution. At the same time, offline sales channels have been established in major cities across the country to distribute products to pet stores and pet hospitals around the country.

In the international market, Ganbao sells its products to more than 30 countries or regions, including the United States, Japan and South Korea, through Walmart and its Sam's Club supermarkets.

Again, to be close to consumers, the young consumers that Ganbao wants to capture are all buying things online.

4. High-end positioning

In order to seize high-end users, Ganbao made a sub-brand of Fleetgate under the main brand of Maifudi, which is positioned to only use fresh meat, "fresh" not only tastes good, but also has better pet digestion.

This "fresh" imported product can't be done, and now McFudy has signed an agreement with upstream suppliers to get fresh meat within 30 minutes.

Although the price is close to that of imported brands, it also sells well, which is also the orientation of consumer thinking, and the core point of all decisions is around the user.

In addition, the rapid development of Ganbao is also inseparable from organizational change, the organization is generally composed of factories and functional departments, this form is prone to some internal problems, its core concept is command, control, interpersonal relations, will hinder the development of enterprises.

Now is the digital era, the future organization will become a department, the enterprise is no longer an independent department, but one process after another, the future organization is empowerment, collaboration, co-collection, modern work must be managed by process.

From 2018 to 2023, Ganbao's revenue increased from 1.2 billion to 4.3 billion, and the net profit increased from 53 million to 429 million in the same period, achieving about 3 times and 8 times growth in revenue and net profit respectively in 5 years.

This data makes the Maifudi brand the first among domestic brands to enter the "annual sales of 2 billion" brand club, and also makes Ganbao Pet the one with the highest proportion of domestic revenue and the highest proportion of independent brand revenue among the existing A-share pet companies.

4. Conclusion: Grow up in hardships and forge ahead in hope

Ning Gaoning once said that whether things can be done or not depends on 70% selection and 30% on training; When it comes to specific things, 100% of them are selected.

Ganbao is headquartered in Liaocheng, Shandong, which is a third-tier city in the north, known as "Jiangbei Water City, Ancient Canal Capital", and is also one of the few cities with free public transportation during the annual heating period, advocating green travel for everyone.

Compared with first-tier cities such as Beijing, Shanghai and Guangzhou, Liaocheng is not so attractive to talents, but Ganbao has a lot of talents.

Qin Hua's answer to why he can attract so many talents is two, the first is to use equity incentives, and the second is to provide them with a platform that allows him to give full play to his abilities and trust him.

In Ganbao, there are facilities with pet elements everywhere, and employees can bring their pets to work.

Someone asked Qin Hua what his dream was, and Qin Hua said shyly: "I don't have any big ambitions, I just want to make more contributions to everyone, I enjoy the process."

This low-key Shandong entrepreneur can achieve today's results, perhaps just like his WeChat signature: grow up in tribulations and move forward bravely in hope!

Bless Qin Hua and Ganbao.

Typography | Edited by Shen Wangwang | Mi Xiaobai Rotating Editor-in-Chief | Xia Kun