We believe that the birth of new brands is inseparable from the emergence of new channels, the establishment of the single store model of noodle shops in shopping centers is the premise of obtaining investment, the maturity of the supply chain and the standardization of products ensure this model; when the online dividend of investment institutions peaks, the attention to the offline formats represented by shopping malls makes the importance of the catering industry rise, and the opening of the listing window of catering enterprises is the last key to connecting capital and industry.
Author | Xiao Chao
In 2018, Xu Xin, the founder of Today Capital, took a look at the case that was recommended at hand, turned to the person in charge of the catering consumption industry under him, and said: "Are you still not dead hearted about catering investment?" ”
This represents the perception of capital on the food and beverage industry for a long time. Highly immature supply chain management and operation management, coupled with a low degree of standardization that is difficult to replicate, have jointly created a market pattern of low chain rate and high elimination rate of catering stores.
For investment institutions that pursue the return cycle and rate of return, investing in the catering industry is really a thankless business.
Two years later, capital's attitude towards catering began to loosen, and even showed a trend of increasing heat. The data shows that in the first 8 months of 2019, there were only 4 fast food snack companies in China that received financing, compared with 11 in the same period of 2020, with a significant growth rate.
Entering 2021, catering projects such as the fried skewer chain brand "Kwafu Fried Skewers", the Lanzhou ramen chain brand "Ma Jiyong", the local snack online brand "Hungry Bandit", the Chinese pastry chain brands "Hutou Bureau" and "Mo Mo Dim Sum Bureau", the Chongqing small noodle chain brand "Meet Small Noodles", and the spicy hot chain brand "Xiao Man Pepper" have also received financing.
Most of them belong to the Chinese fast food category and transaction standardization are the common characteristics of these projects, but from the brand gene division, they can be divided into two categories: through the opportunity of direct operation and capital, the site selection is mostly shopping malls, intended to strengthen the brand; and through the franchise fission and the ultimate cost performance, the main store type is the street store, which is intended to do large-scale and create a model of ten thousand stores.
Judging from the current development status, the investment in the ramen track that is in the limelight belongs to the former classification. Ma Jiyong (Sequoia Capital China, Gaorong Capital, Jianfeng K2VC, Challenger Capital), Chen Xianggui (Source Code Capital), Zhang Lala (Shunwei Capital, GSR Venture Capital), and Xi Maxiang (unfunded or undisclosed) in the investment circle can get a billion valuation with 20 or 30 noodle restaurants, or it is inseparable from the branding potential seen by investment institutions in them.
We believe that in this model, the birth of new brands can not be separated from the emergence of new channels, the establishment of noodle shops in shopping malls single store model is the premise of investment, the maturity of the supply chain and product standardization to ensure this model; when the online dividend of investment institutions peaks, the attention to the offline format represented by shopping malls makes the importance of the catering industry rise, and the opening of the listing window of catering enterprises is the last key to connecting capital and industry.
<h1 class="pgc-h-center-line" data-track="23" >01 single store model</h1>
The running of the single-store model of noodle shops in shopping malls is the direct reason for attracting the attention of capital.
In between, ramen restaurants are usually small fly restaurants distributed in the streets and alleys, often opened by Qinghai people's husband and wife stalls or family-style stores, with a limited store area, in addition to a bowl of noodles of more than ten yuan, there are usually a variety of cold dishes and stir-fried noodles. Although the price is low, due to the negligible labor costs of husband and wife stores, coupled with the universal taste of Lanzhou ramen noodles regardless of the north and south, these noodle shops often have strong vitality.
Opening in a shopping mall is a different scene, and the brand concept, customer positioning, price range, and cost structure will change dramatically. Hefu Lao noodles and Songhe Tower are positioned at a relatively high-end level, focusing on the study scene and the Su's garden scene respectively, with a unit price of 45 yuan and 62 yuan respectively. Although the decoration style of the "Four Little Dragons" is also bright and unified, it is often more concise and Japanese, and the store of about 200 square meters, the ming file kitchen, blue and white porcelain bowls, wooden trays, compact tables and chairs, and the number of SKUs in the store are also relatively streamlined.
In the case of Ma Jiyong, there is only one option for ramen that costs 26 yuan, plus three or four barbecues, four or five flavored snacks, eight or nine special cold dishes and other alcoholic beverages.
Compared with small street shops, although the upfront investment is higher, the cost of manpower and rent is higher, but the high unit price and high turnover rate of customers support the single store model of these noodle shops in the shopping center.
So far, Hefu Noodles has a total of about 317 stores nationwide, and is expected to open to 450 by the end of the year, and complete the goal of 1,000 by 2023. According to the data disclosed by the official in May 2021, after 7 years of polishing, the turnover of the national store of Hefu Fish noodles is 550,000 yuan / month, the ping effect (the turnover of each square area output of a single store) is 4800 yuan / month, and the human effect is 55,000 / month.
Songhe Tower, which regards Hefu Lao noodles as the benchmark, was acquired by the listed company Yuyuan Shares, and in 2019, it independently came out of the noodle restaurant format from the original long-established brand, and the first three stores ran out of the single store performance of 4 times at noon, 2-3 times at night, daily turnover of more than 30,000 yuan, net profit margin of more than 15%, and investment return cycle for half a year.
Due to its relatively light, replicable model and high standardization rate, Yuyuan Co., Ltd. has begun to implement its chain since 2020, aiming to achieve 100 stores by the end of 2021.
The "four little dragons" who are positioned more affordable are more likely to queue up at meal times, and there is no lack of comfort that accompanies the service staff to "eat a table in 10 minutes". It is understood that the performance of the "four little dragons" who opened more than 20 stores is currently better than that of Hefu Fishing Noodles, with a monthly turnover of 500,000-600,000 yuan and a ping effect of 5,000 yuan.
The reason for the transformation of channels, from the perspective of consequential theory, the key factor that can pay for high customer unit prices and high turnover rates is first of all consumers. Hong Lei, the founder of Ma Jiyong, once explained the reason for the location: "Many roadside shops were favored by many people, but as more and more people began to change from home to shopping malls, roadside shops like these are no longer in the consumption scene of these people." ”
Therefore, in his view, even if the roadside shops are delicious, they do not form a competitive relationship with the restaurants in the shopping malls. Indeed, the formation of this non-competitive relationship is an important factor in the ability of ramen restaurants to price a bowl of ramen noodles to 26 yuan or more. There have been failure cases before, around 2018, Xibei once tried the "super meat sandwich steamed bun" with a unit price of 36 yuan, but it was opened in the community, completely unable to withstand the low-price squeeze of the surrounding husband and wife shops.
In the bidding process of horizontal comparison with other restaurants in shopping malls, the price advantage of noodle fast food stores is obvious. Due to the existence of natural takeaway incivility and other issues, on the basis of stable product quality, the passenger flow aggregation effect is more likely to occur.
In addition, in the more than 1,000 consumer evaluations of many stores of the "Four Little Dragons", "taste praise", "good service" and "willing to come again" have become the top three evaluation labels, followed by "good health conditions", "fast serving" and "high cost performance", which also represents the sustainability of this model.
At a deeper level, the noodle restaurant represented by the "Four Little Dragons" can have large-scale replication while ensuring the taste, and it is inseparable from the evolution and evolution of the supply chain, especially in the integration of the central supply chain and the construction capacity of the central kitchen.
<h1 class="pgc-h-center-line" data-track="141" >02 Supply chain maturity</h1>
QingYong, the founder of Tomato Capital, once divided the development stage of catering brands into five periods: product verification period, growth verification period, high-speed growth period, mature aging period and decline period. Among them, between the growth verification period and the high-speed growth period, there is a "medium-sized death valley", which means that after reaching a certain scale (usually after dozens of stores), because catering enterprises cannot appear comparable to the marginal effect and scale effect of the Internet, while facing many problems such as operation management, food safety, talent and supply chain, the vast majority of catering brands will stagnate here.
These difficulties have also been reflected in the last batch of food and beverage star projects. Around 2013, due to the rise of the mobile Internet, along with the concept of "Internet +" and "catering O2O", the catering industry gave birth to star projects such as Huang Taiji, West Young Master, Eagle Beef Brisket, Xiaoheng Dumplings and other star projects, which attracted the attention of capital.
Due to factors such as the stronger marketing color than the product force, the lack of maturity or focus of the founders themselves, and the high comprehensive cost of building a central factory and information system in the market environment at that time, most of these projects died or the highlights were no longer there. However, while catering brands absorb capital, other links in the industrial chain also benefit, Yao Zhe, founder of the catering planning and service company United, believes that there are more and more comprehensive supporting units and the ecological mechanism of professional companies to cooperate with the collaboration has gradually developed and formed, all of which appear in about 14-20 years.
Among these integrated supporting units, the increasing maturity of third-party supply chain companies and central kitchen models that are directly related to the solution of medium-scale problems such as operation management, food safety, talent and supply chain is still directly related.
With Sysco, the world's largest catering supply chain company (established in 1969, with sales of more than US$60 billion in fiscal 2019, and ranked 179th in the world's top 500 in 2020), China's third-party supply chain enterprises have also emerged, providing upstream food standardization production, midstream food procurement and processing, logistics distribution and information construction services.
According to the classification method of Dolphin Investment Research, there are four common models for domestic catering supply chain services: the first type is the upstream extension supply chain enterprises of catering enterprises, such as the Shuhai supply chain of Haidilao; the second type is B2B Internet e-commerce platform, which represents meicai.com and Meituan fast donkey; the third type is the vertical catering supply chain platform, such as Yunong, which focuses on the supply of clean vegetables, and the Kung Fu fresh food hui under the Chinese fast food brand Zhen Kung Fu; the fourth type is the single product explosive supply chain platform, such as focusing on crayfish, Bullfrog and other food and beverage explosives of the letter of good memories.
On the one hand, the financing continues to be fierce, such as the food B2B platform Wangjiahuan has obtained 4 rounds of financing since 2020, and only the specific figures have announced two rounds of financing amount of more than 1.4 billion yuan; on the other hand, with the maturity of the supply chain and the improvement of online infrastructure, this part of the supply chain enterprises have been able to provide strong support for catering chains, and have also promoted the birth of benchmarking cases.
Jiumaojiu Group, a chain restaurant brand that first established a cooperative relationship with Shuhai in 2011, expanded from the initial Shanxi noodle restaurant to a northwest cuisine restaurant, and then founded sub-brands such as Taier Sauerkraut Fish and Chongqing Hot Pot Factory, which have been listed on the Hong Kong stock market in early 2020; Hefu Lao noodles, which has accumulated 845 million yuan in financing in 6 years, has also accessed the open supply chain system of one of the capital parties and listed companies' absolutely delicious food; meet small noodles invested by Jiumaojiu, and also reached cooperation with Kung Fu Fresh Food Hui early.
The model of the central kitchen is also gradually extended in these benchmark cases. Since the end of 2015, jiumaojiu's central kitchens in Hubei, Guangdong and Hainan have been put into operation to achieve standardized production and unified distribution. Taking pasta as an example, Jiumaojiu requires the R&D department to make a standard ingredient card for each product, covering the specific information of the raw material varieties, portions, cooking time, temperature and other specific information used in cooking, and specially customized kitchen utensils with standard scales for these standard ingredient cards to further ensure standardized production and improve production efficiency.
Before the opening of the first store, Hefu Fish noodles also set up a central kitchen, and gradually continued to expand and develop to today's 15,000 square meters, and provide full cold chain distribution. Although these enterprises have not announced the content and proportion of semi-finished materials provided by the central kitchen, another data that can be referred to is that Tan Zai Sange, a well-known Hong Kong restaurant specializing in rice noodles and its Hong Kong-style car noodles, disclosed in its prospectus that the food processing undertaken by its central kitchen mainly includes the preparation and processing of meat, offal, vegetables, soup bases, sauces and marinades, and as of the end of 2020, 51.6% of the ingredients used in the restaurant are supplied by the central kitchen.
Third-party supply chain companies and central kitchens work together to ensure the consistency of semi-finished products, and at the same time, by putting some complex processing processes in front, the operation of store employees is more streamlined and simplified, reducing the dependence on chefs' experience, and jointly ensuring the stability of large-scale replication of stores. For example, Ma Jiyong's soup base is produced by the central factory, and the transportation, warehousing and manpower management are all service providers of the Haidilao system.
The various factors of "man-cargo-field" are dynamically and slowly moving forward, and there is a possibility that capital will continue to be optimistic, but such an intensive investment is also due to the transformation of the internal perspective of the capital.
<h1 class="pgc-h-center-line" data-track="142" >03 Shopping center nuggets</h1>
Under the background of the peak of the online traffic dividend and the intensive financing of various online new consumer brands stimulated by the epidemic, the natural shift of investors' perspective from online to offline is also taking place.
In the offline scenario, the channel force carried by the shopping mall is the most prominent, and it is eventually possible to form a strong brand force together with the product force. Qian Kun, a partner at N5Capital of Wuyue Capital, who has invested in KK Group and HARMAY, believes that compared with online, chain shopping malls are more likely to give birth to large companies.
In his view, the game relationship between channels and brands always exists, and the stronger the channel, the weaker the brand. Taking Taobao Tmall, the country's largest channel, for example, the strongest brands contributed less than 1% of the total transaction volume of 5 trillion yuan, and few brands contributed more than 0.1% of the transaction volume. Today's online e-commerce platform supports such new brands, tomorrow can turn to others, therefore, these platforms as the main channel of new brands, in the long run, there is no bargaining power for the platform, the ceiling is more obvious.
By the end of 2019, there are more than 7,000 shopping malls in the country, each shopping center can undertake more than 300 brands, and the annual traffic of a single shopping center is 10 to 30 million to 40 million, because the number of shopping centers is large and there is competition between each other, so high-quality stores have certain bargaining power for shopping centers and can prevail in the channel game.
And once this channel is occupied, the offline traffic obtained by the store is relatively stable, and the risk of site selection errors of different shopping center stores can be shared through the chain format, so Qian Kun believes that "only the categories required by the shopping center need to be invested" can be.
Catering is precisely the category that has become more and more important in shopping malls in recent years. According to the data, the F&B area now accounts for 20% of the total area of traditional shopping malls, and the shopping mall in the commercial district has further expanded to about one-third. In most newly established shopping malls, in order to obtain a greater flow of customers, there is usually a greater focus on food and beverage services.
Among the many catering stores, the situation of ramen is even more special, due to the semi-monopolistic nature of the previous "Qinghai Gang", even if it belongs to the staple food of the north and south, but the ramen shops opened in shopping malls are actually very few. Therefore, when the shopping mall store runs through at this time, the ramen restaurant is equivalent to opening this completely incremental market, and the convenience of entering the shopping center from scratch is not comparable to other existing catering categories. From this point of view, the preference of capital is also understandable.
However, as a traditional offline restaurant chain enterprise, the "Four Little Dragons" still have to face problems such as the ceiling of offline passenger flow in shopping malls and the linear growth of profit models, and are also trying to solve them. For example, this part of the emerging chain brands are referring to the usual marketing methods of new consumer brands, and on the basis of the upgrading of offline experience services, they are stimulating users to punch in and share and spontaneously disseminate to achieve the purpose of drainage.
More exquisite decoration environment and tableware is naturally one of the essential links, other ways such as Chen Xianggui also launched a four-person oversized bowl, and on this basis set up a "half an hour to eat and enjoy free orders" time-limited activities; the joint name has also been transplanted on the promotion of the noodle shop, Chen Xianggui and Put Ha Sweet Embryo Pickle Milk Tea, Osmanthus Flavor Pepsi Cola, Wangshan Hawthorn, Most Favorite Apricot Peel Tea and other drinks have launched related activities.
The current trend of catering retailing is also an opportunity to break the linear growth model of catering enterprises, and it is also one of the reasonable directions of the "Four Little Dragons" after gaining a firm foothold.
In the past, the profitability of a catering enterprise basically depended on the number of stores opened, and the rent cost, labor cost and raw material cost of each store were basically fixed, and the return that could be obtained was also stable. Nowadays, Ruhefu Lao noodles have launched more than 20 retail products, including instant noodles, microwave rice, prepared dishes, etc., and some star products have sold more than 10,000 yuan a month on the e-commerce platform, and the growth space has been significantly enlarged.
<h1 class="pgc-h-center-line" data-track="143" >04 The listing window opens</h1>
Theoretically, there is always a space of opportunity. In 2019, the scale of China's catering market has exceeded 4.6 trillion yuan, which is the second largest catering market in the world, but the per capita catering consumption is only 18% of the largest market in the United States. This means that if the future reaches flat, China's theoretical catering space will reach a super volume of 26 trillion yuan; in terms of industrial concentration, the market share of the TOP10 catering enterprises in the United States will reach 28%, while China's Top 40 will account for only 5%, and the brand is extremely dispersed.
From the perspective of the relationship between the number of listed companies and the country's population, according to the comparative data given by Qingyong at the end of 2017, if the number of people in the United States is compared, China should have about 240 listed catering companies; if you refer to European data, China should have about 52 listed catering companies; and according to the proportion of neighboring Japan, China should have 1,000 listed catering companies. At that time, the number of real listed catering enterprises in China was only 15.
In the past, because the operating cash flow of catering enterprises was often greater than the profits, the feeling of "no shortage of money" made the founders lack the subjective initiative to embrace capital, coupled with the fact that the cultural level of the catering industry practitioners was generally not high, the labor force was intensive and the liquidity was large, which was prone to financial opacity, labor risks, tax supervision and other issues, which was also the objective reason why catering companies were difficult to list.
For investment institutions, the way out of high returns they pursue is always the capital market. Therefore, in the objective environment where A-share enterprises have not been listed for pure catering enterprises in ten years, the participation of capital in catering enterprises is also very limited.
This confinement was gradually opened, according to Qing Yong's words, after the listing of Meituan and Haidilao in 2018, some capitals concerned about the consumption field began to actively contact Tomato Capital, and in September 2019, the CSRC issued new guidelines for the listing of catering enterprises, "the heart of all capital has moved". Soon, Tongqinglou, a long-established brand of Huicai, as a representative, finally landed on the long-lost A shares.
The capital chain challenges brought about by the epidemic in 2020 have also made catering brands realize the importance of the capital market, and Xibei, Rural Ji, and Wang Jiadu, a subsidiary of Meizhou Dongpo, have all reported the news of seeking listing. Such emerging restaurant chain brands, store investment, central kitchen construction, supply chain structure also need heavy asset investment.
The two sides met, and the heat of catering investment has been ignited.
Putting aside business models, cost calculations, and theoretical space, catering companies as labor-intensive industries still need to control the balance between organizational management and expansion speed at all times in the development process, which is why this round of financing prefers to invest in catering veterans.
For example, Hong Lei, the founder of Ma Jiyong, was first engaged in the production and sales of kitchen utensils, experienced the development and decline of many restaurants, and invested in a catering brand, Ma Jiyong is his second catering venture. Industrial and commercial information also shows that Hong Lei also serves as a supervisor of Shanghai Miyou Restaurant Management Co., Ltd., which is a chain brand of meat sandwich steamed buns, cool skins, noodles and other northwest foods, and the company registered trademarks such as "Ma Jiyong", "Chen Jiyong" and "Shen Jiyong" at the end of 2018.
Chen Xianggui's founder Jiang Peijun worked in Dingxin Group at the earliest, and after starting his business, he also tried projects such as "Sin Chew Chu Yan Fruit Bird's Nest", "Small Shell Hot Pot", "Small Pot of Sauerkraut Fish Outside". Among them, the small pot of sauerkraut fish outside the number has opened 12 stores in Shanghai.
According to the narrow door restaurant eye, Ma Jiyong, Chen Xianggui, Zhang Lala, Xi Ma Xiang have 22, 31, 6 and 8 stores respectively, and the first three have about 40 stores each about to open.
Rapid development in the front, fierce competition in the back, new product research and development capabilities, operation and management capabilities, corporate culture construction, and even how to deal with the relationship with capital, will still test the companies buried in the soup refreshing, radish white, spicy oil red, coriander emerald green, noodle yellow bright ramen behind the company. It is worth looking forward to that the prelude to the upgrading of China's restaurant chain has just begun.
© New Business Intelligence NBT Original Content Reprint Please contact the authorization