Snack discount store, open a supermarket business

Text丨Lieyun Selection Han Wenjing

After experiencing the wave of store opening, financing, and mergers, in 2024, the "savage growth" of the mass snack market will show a more obvious trend of differentiation - some brands have obtained tickets to 10,000 stores, while others have failed to keep up with the pace of market changes and have withdrawn.

However, the industry has not reached the end, and the scuffle between mass-selling snack stores continues. Recently, the mass snack player "Snack Youming" from Chengdu has found another way and opened a wholesale supermarket.

At the end of last month, Snack Youming announced that it would fully enter the new format of hard discount full-category wholesale supermarkets, and realize the simultaneous opening of 189 stores during the National Day. This model not only retains the characteristics of the snack business, but also expands the categories of frozen products, department stores, daily chemicals and other categories.

Coincidentally, more and more snack players have begun to change their direction: in August this year, the snack wholesale brand "Love Snacks" announced that it would enter the field of convenience stores; In September, Huizhen Wholesale Supermarket, a brand of Snack Preferred, began to distribute goods; The store is rumored to have launched a wholesale supermarket......

On this already overcrowded track, is the "snack Mingming" cross-border discount supermarket taking the initiative to explore more possibilities, or is it forced to respond under pressure?

From discount stores to wholesale supermarkets

According to public information, since the establishment of the first store in Chengdu in 2021, the territory of Snack Youming has gradually expanded from Southwest China to South China, Central China, Northeast China and other regions, official information shows that Snack Youming has developed at a rate of 200 new stores per month, and currently has more than 3,500 stores.

Talking about the rapid growth of snack Youming, He Jinpeng, chairman and CEO of snack Youming, once publicly said: "The first is the power of choice, we keenly capture that consumers use convenience food as one of the main ways to obtain energy, so snack Youming chose to open stores intensively in the community and sinking market, seizing the opportunity of the return of offline business." ”

This high-profile "transformation" of wholesale supermarkets may be because Snack Youming sees the new trend and new opportunities in the discount format.

Compared with the existing vertical store type of snack collection store, Snack Youming wholesale supermarket is obviously a "new way of playing", and there are obvious changes in terms of commodity structure, location logic, store area, and other aspects.

(Source: Snack Youming WeChat)

In terms of product structure, the number of SKUs in wholesale supermarkets exceeds 3,000+, including pre-packaged food categories such as wine and dairy products, instant food, baked pastries, puffed biscuits, fish and meat products, etc., as well as non-food categories such as paper products, daily chemicals, and daily necessities, covering the holographic life scenes of consumers of all ages in the whole family.

In terms of site selection logic, the location of Snack Youming Wholesale Supermarket is mainly based on communities, vegetable markets, and farmers' markets, covering a wider range and a larger audience.

In terms of store area, the snack Youming wholesale supermarket has expanded to a certain extent in store area, with a single store area of 200-400 square meters.

As early as June 2024, Snack Youming has begun to test the wholesale supermarket format, and tested and launched the first "Snack Youming Wholesale Supermarket" store in Chengdu, and the business boom after opening far exceeded expectations. During this year's National Day, 189 snack Youming wholesale supermarket stores ushered in the opening.

Regarding the move to enter the full-category wholesale supermarket, Snack Youming explained in the official WeChat public account that it is to meet consumers' pursuit of a better life and iterative upgrading of their own capabilities.

In fact, in the past few years, Snack Youming has been constantly consolidating its own internal strength, and has attracted capital injection many times.

In November 2021, Snack Youming received a Series A investment from Cathay Consumer Co-creation Fund. In March 2022, it received A+ round of strategic investment from Xinxian Capital and Qingtan Private Equity Fund Management (Nanjing). In May 2023, Snack Youming once again received the B+ round of financing led by New Hope Grassroots Zhiben's Hope Fund and followed by Jiayu Capital.

According to the "2023 TOP30 Mass Merchandising Snack Chain Brands" released by Lianshang.com, Snack Youming ranks fourth, second only to Snacks is very busy, I want to come, and Zhao Yiming snacks.

(Source: Lianshang.com)

How can snacks that are already in a relatively head position continue to bring imagination to capital? The discount supermarket that can be replicated has obviously become a powerful bargaining chip for snacks at the moment.

The logic of cross-border wholesale supermarkets

This entry into the discount wholesale supermarket track is not a simple "crossover", and Snack Youming has a clear business logic.

First of all, from the perspective of the supply chain, Snack Youming has established a mature supply chain system in the field of snacks, and by entering the wholesale supermarket, it can extend its supply chain advantages to more categories, realize the optimal allocation of resources and synergies, and improve the overall operational efficiency and profitability.

In addition, from the perspective of industry competition, in the case of fierce competition in the snack wholesale industry, it is difficult for the simple snack sales model to stand out. By becoming a supermarket, Snack Youming has expanded its product categories and formed differentiated competition with traditional snack stores and large supermarkets.

Coincidentally, for players in the snack track, transformation and upgrading are nothing new: in August this year, the snack wholesale brand "Love Snacks" announced that it would enter the field of convenience stores; In September, Huizhen Wholesale Supermarket, a brand of Snack Preferred, began to distribute goods, and videos related to the membership day of Qiaxiang Store Wholesale Supermarket also began to spread......

However, it should be noted that the cross-border wholesale supermarket is not a simple copy of the snack collection store, from the simple snack to the multi-category, the variety of snacks purchased has increased significantly, and the difficulty of supplier selection, negotiation and management has also increased accordingly.

With the expansion of the store area, the cost of rent, decoration, equipment procurement and other costs has increased significantly, which puts forward higher requirements for the financial strength and profitability of Snack Youming.

In general, although cross-border supermarkets have increased commodity categories, snacks, as the core business of snack Youming, how to maintain the advantages and characteristics of snack business while expanding supermarket business, and achieve a balanced development of snacks and other categories is a key issue.

The snack track has reached an inflection point

A simple combing of several changes in the snack track can be found that from the whirlwind of snack wholesale at the beginning, to the entry of capital with capital, and then to the merger and integration of the industry, the major players have "huddled" to cooperate, and it has only taken a few years before and after.

In June this year, Snack Busy Group announced that the total number of stores nationwide exceeded 10,000, and changed the name of the group to Mingming Busy Group, which took the lead in getting the admission ticket to 10,000 stores.

Such a very Internet-specific style of play is quite similar to the prosperous atmosphere of the tea and coffee chain wars in those years. Under the frequent mergers and acquisitions, the Matthew effect will become more and more obvious.

In addition, the new tea drink with its own traffic has also begun to enter the snack industry, Chayan Yuese officially opened the mass sales snack business, and Heytea and Naixue have extended their brands by providing snack products, further compressing the living space of the industry.

According to the "2023 Blue Book of China's Snack Wholesale Industry", 2017-2022 is the overtaking stage of the snack wholesale model, during which it has developed rapidly at a compound growth rate of 114.6%. From 2022 to 2027, the snack wholesale model is still expected to continue to maintain rapid growth, but the compound growth rate is expected to drop to 27.3%.

In short, the competition in the mass snack industry has transitioned to the Red Sea stage.

The rise of mass sales snacks is based on the low gross profit, high cost performance of the single store business model, and in the chain replication to achieve scale expansion by standardized means, but low prices, has never been the core competitiveness, mass sales snack brands want to develop in the long run, the key is to cultivate internal skills, build their own "moat".

In order not to be eliminated by the times, the "snack Youming" had to change, only through more means to renew, in addition to the price war to seek more growth opportunities and outlets.

At the beginning of this year, the Snack Very Busy Group pioneered the innovative format of "big snack shop", which triggered a consumption boom of large snacks in the industry, with super-large packaged snacks as the highlight, creating Internet celebrity check-in points, upgrading the simple shopping scene to a comprehensive consumption model of "buying + shopping", attracting a large number of consumers to take photos and check in and share.

In June this year, Snack Very Spicy opened in Changsha, meeting the needs of consumers to pursue novelty and sharing, which is the re-innovation of Snack Very Busy Store Format.

Hua Chuang Securities predicts that in 2023, the competition in the mass snack industry will intensify, and there will be a round of adjustment in the core areas of each company from 2024 to 2025.

With the continuous expansion of the brand scale, the business pattern of mass sales snacks will show a significant differentiation trend, and how to innovate in terms of scale, supply chain, product operation and services is the proposition that participants in the mass sales snack track need to continue to pay attention to.