China Business Daily (reporter Ma Jiawen / photo) The "home economy" dividend brought about by the new crown pneumonia epidemic has passed, and the frozen food in the first half of this year may no longer be "fragrant". The performance growth rate of the four major enterprises of Sanquan Food, Yasui Food, Haixin Food and Huifa Food has declined. In addition, in addition to the slight increase in the net profit of Anjing Food, the performance of the other three companies has declined, and Haixin Food and Huifa Food have also handed over a report card of loss. In the first half of this year, why is the frozen food industry no longer hot?
The "home economy" dividend is no longer there, and the growth rate of the performance of quick-frozen food enterprises has dropped significantly.
"One increase, one decrease, two losses"
In the first half of this year, the frozen food companies that fell from last year's performance highs were somewhat "sad". In the same period last year, the doubling of net profits was only the "passing line" for the four listed companies of Sanquan Food, Yasui Food, Haixin Food and Huifa Food; in the first half of this year, the enterprises that could maintain a slight increase in net profit and did not lose money were already the leaders in the industry.
According to the financial reports of the four listed companies, in the first half of this year, Anjing Food led the way with a net profit increase of more than 30%; the operating income of the industry's recognized "quick-frozen food brother" three whole foods decreased by 2.44% year-on-year, and the net profit decreased by 38.55% year-on-year; Haixin Food and Huifa Food lost 24.0215 million yuan and 65.6508 million yuan respectively, and the net profit fell by 156.4% and 1060.09% respectively year-on-year. It is worth noting that among the four head enterprises, only Yasui Food has achieved performance growth, and the net profit growth rate of Yasui Food has also decreased by nearly 24 percentage points compared with the same period last year.
In the first half of this year, the gross profit margin of Sanquan Foods declined all the way, and the gross profit margin of quick-frozen noodle rice products that also triggered a rush to buy last year decreased significantly, especially the decline in dim sum and pastry categories was the most serious, a year-on-year decrease of 13.35%. Huifa Food said that the performance loss was due to the amortization of the company's equity incentive expenses in the current period, the increase in the salaries paid by employees, and the company's significant increase in advertising and publicity fees and consulting services in response to market competition. Haixin Food said that the sales revenue of modern channels has dropped sharply, and under the impact of new consumption formats such as community group buying, the market share and sales unit price of the company's high-end products have declined, while the cost of raw materials and other costs has increased, which has affected the company's operating performance.
In the eyes of industry insiders, the overall decline in the performance of the quick-frozen food industry is expected. Food industry analyst Zhu Danpeng told China Business Daily reporter that the "home economy" dividend period brought by the new crown pneumonia epidemic last year has ended, and the decline in the performance of quick-frozen food companies is inevitable. In the second half of the year, the profitability of the frozen food industry may not change significantly, and at the same time, with the intensification of competition, the net profit of related companies will continue to decline.
Low-price competition is not a problem
In the semi-annual report of frozen food enterprises, low-price competition has become a major factor in the shrinkage of profits of frozen food enterprises. Haixin Food said that new consumption formats such as community group buying have seized the market with low-priced products in the competition in the first half of the year. The proportion of the company's high-end products decreased from 33.90% in the same period of the previous year to 30.65% in the current period, and the average unit price per ton fell by 9.64%.
"The price of new sales channels such as community group buying is much lower than the purchase price of community supermarkets." A quick-frozen food distributor in Shandong told the China Business Daily reporter: "If the enterprise supplies the goods to the community group purchase, the price is low, the enterprise will get a certain channel subsidy, but the frozen food mainly relies on distribution, low-cost products will reduce the profits obtained by dealers, we are not willing to go through the low-cost channels." If you supply traditional channels such as supermarkets, they do not sell well, and eventually affect the sales of the brand. ”
In the current situation of shrinking net profits, do quick-frozen food companies have to participate in low-price competition? Anjing Food told the China Business Daily reporter that at present, the impact of community group buying on the profits of the company's products is limited. Frozen food on the logistics, storage conditions are relatively high requirements, if you want to buy frozen food in the community group, the pick-up point and warehouse must have a large number of freezers. This creates certain restrictions on participation. Haixin Food said that at present, the company and some of the head community group buying enterprises directly cooperate, and product sales account for a small proportion of total revenue. The company actively adapts to and embraces new consumer formats, but will not overly participate in low-price competition, and actively participates in ensuring product quality, brand image and not disrupting the normal sales price system of the market.
It is worth noting that in the first half of this year, Huifa Food's terminal direct sales model and supply chain model revenue increased by 74.26% and 438.03% respectively, and the company said that it would provide one-stop all-category food supply chain services for terminal consumer groups such as group meals, school meals, and communities through various channels such as community group purchase, fresh food distribution, group meal delivery, and online live broadcast.
However, Zhu Danpeng believes that "quick-frozen food enterprises can go to the layout of community group buying, but the frozen food industry as a whole cannot take community group buying as the main sales channel." For quick-frozen food companies, low-price competition is not the key to the problem, and what affects the profits of quick-frozen food companies in the first half of this year is the decline in people's demand for frozen food consumption. ”
Sales on the retail side decreased
"Fewer people buy at the retail end" is the situation faced by quick-frozen food companies in the first half of this year. Judging from the semi-annual reports released by quick-frozen food companies, the decline in sales of traditional supermarket channels is the main reason for the shrinkage of performance. Sanquan Foods' operating income in the retail and innovation markets decreased by 8.2% year-on-year, and gross profit margin decreased by 11.59%. Anjing Food's operating income in the supermarket channel decreased by 1.43% year-on-year.
Haixin Food said in the semi-annual report that the terminal consumption channels and structure of quick-frozen food have undergone great changes, and the number of modern channel shopping trips represented by supermarkets and BC (regional medium-sized supermarkets and convenience chains) has decreased, and the company's sales revenue in modern channels has dropped sharply by 36.79%, and the proportion of related revenue has dropped from 32.18% in the same period last year to 19.72% in the current period.
Last year, affected by the new crown pneumonia epidemic, quick-frozen food was once a rush to buy. This year, consumers' enthusiasm for frozen food companies has declined. Ms. Sui, who lives in Beijing's Chaoyang District, who hoarded a lot of quick-frozen food during her home quarantine, told the China Business Daily reporter: "Last year, I bought all the tricks I should have bought, and there were no fresh products." Now it is very convenient to buy anything, and there is no need to buy a quick-frozen one. ”
In addition, in the case of low sales, the cost of channels such as supermarkets has also pulled down the profits of frozen food companies to a certain extent. Sanquan Foods said in its earnings report that the cost of the supermarket channel hedged the operating income. Quick-frozen food companies are also making efforts to face new sales channels. Haixin Food said that the special channel customers are high quality and sticky, and have grown rapidly in the past two years, which is the channel that the company will focus on digging deep in the future. Sanquan Foods, on the other hand, focused on convenience stores, saying that the convenience store business in Henan, where the company cooperated with 7-ELEVEN, is expected to reach about 20 stores in June, and the daily sales of stores remain at a high level, and the franchise business will soon be launched.
How to face the problem of overcapacity
On the one hand, the reduction of retail sales volume, on the other hand, the increase in production capacity, how do frozen food companies face the problem of overcapacity? Due to the sharp increase in performance last year, quick-frozen food companies have expanded their production capacity. According to the incomplete statistics of the China Business Daily reporter, including this year's fundraising project, Anjing Food will add 993,000 tons of new production capacity; Sanquan Food has built production bases in Zhengzhou, Chengdu, Tianjin, Taicang, Foshan and other places, and has reserved reserves for new production capacity; Haixin Food has built a new project with an annual output of 100,000 tons of quick-frozen fish meat products in Lianjiang, a new raw material fish pulp factory project in Zhoushan, an expansion project for the second phase of Dongshan Tengxin's new factory, and a new joint venture company in Shandong; Huifa Food" The 80,000 tons-per-year frozen food processing project is also under construction. Among them, Yasui Foods' capacity expansion is the most aggressive.
In the semi-annual report of quick-frozen food enterprises, the lack of capacity utilization rate is also a major reason affecting performance growth. Haixin Food said in the financial report that the first half of the year is the off-season of the industry, and the company added some new production capacity last year, resulting in overcapacity this year, insufficient capacity utilization, and rising costs.
In the current situation, can the new capacity be digested? Anjing Food told the China Business Daily reporter that the capacity utilization rate is based on the annual design capacity, and finally the actual annual output, calculated out of a utilization rate data, because the future capacity construction is not now built, there is no way to publish the relevant data of capacity utilization, but the capacity under construction will be used in the future.
It is worth noting that at present, quick-frozen food companies are also actively laying out new tracks. Haixin Food said that there is a lot of room for development of quick-frozen prefabricated dishes, and it has also become a track for frozen food leading enterprises to begin to compete to enter. The company is optimistic about the market prospects of quick-frozen pre-made dishes, and is currently selling some products through collaborative superposition. In the first half of the year, the sales revenue of the company's quick-frozen dish products was 4.6538 million yuan, accounting for 0.68% of the operating income. The relevant person in charge of Yasui Food also said that the company will continue to work hard in the direction of prefabricated dishes, and will continue to look for suitable products and sales channels in the future to open up business models.