The supply chain should create "cost-effective" and transfer profits to restaurant companies.
This article is a transcript of the speech by Wang Hai, deputy general manager of Chuanhai Chenyang, at the "2024 Fourth China Catering Brand Festival", which was compiled and released by Red Meal.com.
First of all, I would like to introduce Kawami Chenyang. Founded in 1994, Chuanhai Chenyang is located in Pidu District, Chengdu, covering an area of more than 100 acres and an annual output value of nearly 1 billion yuan. Chuanhai Chenyang's products are mainly based on base materials, covering six categories: hot pot, special catering, snacks and fast food, barbecue, Chinese food and noodles. As of 2024, we have reached cooperation with nearly 6,000 brands, covering about 100,000 stores.
Next, I would like to share with you some thoughts on catering and supply chain.
△ Wang Hai, deputy general manager of Chuanhai Chenyang
01. The supply chain should create "cost-effective" and transfer profits to restaurant companies
First of all, I would like to share some data with you. In recent years, the per capita consumption of the national catering market has continued to decline, and the per capita consumption of the national catering market in 2023 will be 42.6 yuan, a decrease of 0.6 yuan from 2022, a year-on-year decrease of 1.4%; In the first half of 2024, the per capita consumption of the national catering market fell to 42.1 yuan, down 1.2% from 2023.
It can be seen that in recent years, people have become cheaper and cheaper, which has also led to the growth of some brands. Chuanhai Chenyang's cooperative brands are mainly pan-hot pot brands, and it can be clearly felt that the growth rate of such brands has declined significantly this year. However, the demand for the products of the noodle and snack fast food brands we work with is increasing year by year, and the noodle brands have increased by 67%.
The trend of consumption downgrade has been very obvious, and "delicious and inexpensive" must be the mainstream trend of the catering market in the next few years. So we are also thinking about what supply chain companies can do in terms of "delicious and inexpensive"?
This is not a simple matter, so we spend a lot of time to optimize the entire supply chain, management system and organizational structure, to reduce the overall cost, so as to give part of the profits and resources to the brand, only really make the cost performance of the supply chain, the brand has a strong pillar to do the cost performance, rather than sacrificing the profit of the brand to improve the cost performance.
In order to do this well, we work more closely with the upstream supply chain and jointly manage upstream ingredients, so as to maintain relatively stable raw material prices and avoid cost changes caused by fluctuations in ingredient prices. Only by controlling the price of raw materials can we better make cost performance.
For example, we cooperate with butter suppliers from the first step of product production, jointly optimize the entire process from source oil refining, oil refining to production, and try to optimize costs and improve efficiency from packaging materials, labor and other aspects to achieve cost-effective improvement.
At present, Chuanhai Chenyang has successively optimized 16 core products. Through our efforts and development in the past few years, the same products and formulas are produced in Chuanhai Chenyang, and we are confident to help catering brands reduce their costs by 10%.
02. Compared with seasonings, catering brands need a "dish that can make money"
In addition to the cost performance of products, Chuanhai Chenyang is also doing a lot of cost performance in terms of services. I hope that catering brands choose to cooperate with Chuanhai Chenyang, not only because our products are cost-effective. We hope to have more communication opportunities with catering brands, and supply chain companies must continue to understand catering, communicate with catering brands at the same frequency, and improve cooperation efficiency.
An interesting point is that after communicating with some catering brands, we found that in fact, what they need is not a certain hot pot base or seasoning that we produce, but a cost-effective dish solution.
Therefore, Chuanhai Chenyang has launched a number of dish solutions through the research of the marketing department and the integration of industry resources. Specifically, we mainly analyze the product model through big data and AI, understand which dishes consumers like and anchor a flavor type, and then work with the industry to make a dish solution, which includes production SOP, dish gross profit margin, marketing landing plan, etc.
In our view, a complete transaction chain of catering transactions is that after the supply chain enterprises do a good job in product research and development and provide them to the catering brand, the catering brand will fully sell a complete set of dish solutions to customers. In this chain, supply chain enterprises also need to help brands refine selling points, make sales plans, and help catering brands sell products well, which is what Chuanhai Chenyang has been doing and doing well.
For example, some time ago, we made a proposal for a casserole brand, and helped the brand make a creative dish called hawthorn sour soup and smooth meat, and did a good job in the entire production SOP, marketing plan, gross profit margin and supply chain of smooth meat. After the product is launched, we will use big data analysis to work backwards to determine whether the product is really popular with consumers.
At the same time, my personal account "Hello Haizong" currently has 1.7 million+ fans on the whole network, and I will also send some samples to fans for them to taste, and through later data tracking, to understand their love for the product. In this way, we can judge the sales profile of this product on the catering brand side. We try our best to make the product market, so that both consumer and catering brands are satisfied, which is the cost performance in terms of service.
In addition, Chuanhai Chenyang organized three study tours in the previous period, and we hope that catering brands will cooperate with Chuanhai Chenyang, not only to get cost-effective products and services, but also to learn on the platform of Chuanhai Chenyang. Once a food and beverage brand has found the right flavor in a certain region, we can quickly transform it into a standardized product.
At the same time, on the way to taste, a platform for in-depth exchanges between catering practitioners in different fields has also been built. Up to now, our study tour projects have landed in Yibin, Zigong, Leshan, the current market feedback is good, we feel that we have gained a lot, got a lot of product innovation ideas, and deepened the understanding of Chuanhai Chenyang.
In the future, we will strengthen this strategy and grow, learn and develop together with catering brands. According to the plan, Chuanhai Chenyang will organize 22 study tours in 2025, including not only domestic study tours, but also overseas study tours, and go overseas with catering people to find good taste, good products, and find new opportunities to go to sea. Finally, I hope that supply chain enterprises and catering enterprises will coexist and win-win and go hand in hand, thank you!