(Red Food Network Beijing report) On September 23-24, the "3rd China Catering Marketing Power Summit" was held in Beijing International Trade Center. The summit was jointly sponsored by the World Catering Federation, CCTV and Red Food Network, hosted by Red Food Brand Research Institute and CCTV Catering Channel, and provided strategic support by Weimob Smart Catering, Focus Media, Bancheng Cloud and Chuanwazi Food.
The two-day "3rd China Catering Marketing Power Summit", more than 30 heavyweight guests, including well-known catering company founders, investors, marketing mentors, catering game breakers, and 1,000+ catering practitioners and relevant people present shared valuable experience in marketing, branding and changing operations, and deeply discussed the changes and future trends facing the catering market.
Among them, in response to the topic of "Entrepreneurship and Investment Opportunities in the Catering Segment", the summit set up a roundtable forum, and invited Mr. Hu Qihao, Managing Director of CICC Qianhai, Mr. Tang Minglei, Partner of Shengjing Jiacheng Fund of Funds, Mr. Wang Xiaolong, Managing Director of Hony Capital & Baifu Holdings, Mr. Liu Lijian, Partner of NetJu Capital, Mr. Chen Zhipeng, Founder of Hezhi Investment, and Mr. Huang He, Founder of 30,000 Capital (Moderator of the Roundtable Forum), for in-depth discussions.
The following is a compilation of the forum content:
Huang He: In the past, every opening session was to introduce ourselves, but today we open in a slightly different way. I recently attended Shao Yibo's event, which posted an opening form of if you know me, with a sentence called "If you really know me, you will know...".
This can also be used when building a company team, do you really know your colleagues? And do you really know your institution? If you really know me, you will know that 30,000 Capital was the first bank to participate in the investment, serving thirty or forty food and catering enterprises, and only focusing on food and catering.
△ Huang He, founder of Sanwan Capital
Hu Qihao: If you really know us, we are CICC Qianhai under CICC Capital. If you really know us, we are also the largest single social shareholder of Sinopec Convenience Store, with an investment of 11 billion yuan in a single product.
At the same time, we also have investment in Baiguoyuan. Baiguoyuan opened 5,000 stores, and we were deeply involved in all strategies and mergers and acquisitions. We have also invested in express delivery companies like SF and Daily Express. Of course, what is more important is that we entered the catering on the basis of the Hundred Fruit Garden.
From fresh food to catering, we see that the pain point of fresh food is fresh and fresh. Catering solves some of the pain points of fresh food, so we have also entered the catering field very smoothly. At present, we have also invested in many projects in the field of catering, most of which have completed the AB round of financing.
My background is CICC Capital, we have a preliminary layout for catering, but also have a very strong love, maybe to contribute some strength to some of the entrepreneurs in the middle, thank you.
△ Hu Qihao, Managing Director of CICC Qianhai
Tang Minglei: Hello everyone! I am Tang Minglei of Shengjing Jiacheng. If you really know me, Shengjing mainly does two businesses, one is the fund of funds business and the other is the direct investment business.
We have invested more than RMB 10 billion in the past five years. We are more familiar with domestic and foreign first-line funds such as Sequoia, Hillhouse, Jinshajiang and other institutions, and we are the investors behind them. In the direct investment business, we focus on two directions, one is new consumption; the other is the digitization of the industrial Internet. In the past five years, we have invested a total of 13 billion yuan in foreign companies, and as of today, we have harvested a total of 183 IPO companies.
We focus on catering and have always been passionate and confident in this area. When we were the first college student entrepreneurship incubator in China, the first industry vertical incubator chose the catering track. My first fund investment project was also a food and beverage track. At that time, the leading enterprise that invested in China's shared kitchen was called geek alliance, and it received a 50-fold return in less than a year.
We have also recently been involved in two catering projects. One is three bowls of noodles from Shanghai, and the other is Zhang Lala. We also invested in a 20 million trumpet on the Douyin platform called "I don't eat in vain", and have been paying close attention to catering, hoping to learn with all the big coffee.
△ Tang Minglei, partner of Shengjing Jiacheng Fund of Funds
Wang Xiaolong: In the catering, we have invested more, about 20 billion yuan. I am currently the chairman of four companies and the vice chairman of eight companies. In fact, I am not a complete investor, I belong to the field to work, so I hope that everyone will not put me in the group of investors.
I now have two identities, one is a partner of Hony, which is the investment category. The other is the CEO of Momofuku Holdings, which falls under the operational category. Baifuku itself is not an investment company, but an operating platform for entities. Although Momofuku has invested in many brands, there are almost a dozen.
The catering industry needs to have a global mindset, which is a difficult road. I don't know why the catering track is so "hot", I think this industry is very difficult, of course, this is not a big splash of cool water. However, if the catering thing is done well, there is still a great opportunity, and I hope to discuss with you how to do this well.
△ Hongyi Investment Managing Director & Baifu Holdings CEO Wang Xiaolong
Liu Lijian: Speaking of brine, people will definitely talk about the taste of our major shareholders. With a total of 14,000 stores nationwide, Absolute Taste is one of the four major Diamond Kings in the number of franchised stores in China. At present, there are 3500 franchisees in Absolute Taste, maintaining an annual growth of more than 15%.
In 2015, Wangju Capital has begun to explore the catering supply chain and the investment in condiments behind it, and has invested in almost 50 companies. For example, Hefu Lao noodles, NetJu is one of the important shareholders; for example, Beijing's Fengmao Kebabs, we are also involved. Other restaurant chains, we have also invested in more than a dozen.
In addition, there are many catering supply chain enterprises, especially condiment companies, and Wangju has participated in the investment. Wangju has always adhered to the exploration of the catering supply chain field, acting as an accelerator for enterprises and empowering the industry.
△ Chen Zhipeng, partner of NetJu Capital
Chen Zhipeng: I am Chen Zhipeng, the founder of Hezhi Investment. We didn't have many direct catering projects before, and the catering supply chain currently invested in two unicorn companies, one is Lehe Food, and we have invested three rounds in a row. The other is the No. 1 earth pig, which is the first pork brand in the country. In terms of food and beverage brands, we have just subscribed to the investment in green tea restaurants.
Hezhi has always focused on investment in the food and beverage sector, including the establishment of the Financial Committee of the China Cuisine Association last year, which we are also involved in, which mainly promotes the capitalization and listing of catering enterprises. I am currently secretary-general of this committee. Hezhi has been deeply cultivating in the field of catering and food, and hopes to cooperate and communicate with everyone.
△ Liu Lijian, founder of Hezhi Investment
Huang He: Charlie Munger said that the best investors are entrepreneurs, and the best entrepreneurs are investors. All of you have a deep industrial background. In the past, catering was a highly differentiated industry, from the perspective of investment, please share with you next, catering investment, why is it now?
Hu Qihao: In April last year, he participated in the industry's "Spring Wind Action". At that time, the topic was "to live". At that time, I proposed a very controversial "golden decade of food and beverage investment". In fact, here we have the basis for analysis.
Before 2013, the total market value of listed companies in the entire A-share plus Hong Kong stock market may be about 20 billion. In the next few years, catering in the capital market, not a great development.
Over the years, from the perspective of investment banks, the catering 4 trillion market, the players here are getting bigger. Especially for listed companies, the speed is 10 times faster. China's catering market may also emerge trillion-level listed companies, because of the size of China's catering market, it is not difficult to produce a McDonald's, and even two are possible.
Standing on the analysis of macro data, the trillion-dollar catering market should be able to appear many enterprises with a market value of more than 10 billion. From another perspective, I think the investors in the industry think very deeply. Sitting here are not follower investors, is the red food network selected, should see the catering can do big the underlying logic has undergone a huge change.
Tang Minglei: Any time is a good time for entrepreneurs. But at present, the catering industry is indeed very favorable to the time and place.
Tianshi mainly refers to digitalization. In the past few years, digitalization has gained a good popularity in the catering industry. Especially after the epidemic, the promotion of the digital process has made the catering industry develop well in standardization.
Geographical advantage refers to the standardization of supply chains. At present, the supply of ingredients is from the field to the catering store, and it is making standards. Originating from the development of supply chain standardization and supply chain digitalization, this is the embodiment of geographical advantages.
Finally, people and people. Gen Z young people are more willing to pay for brands. In the next three to five years, the differentiation of catering consumer groups and scene differentiation will continue to appear. The original restaurant industry did not have so many people and brand concepts.
Catering consumption from the original unified scene, unified crowd, unified standards, unified dining atmosphere to the current division of various types of crowds, resulting in completely different consumption capabilities, experience, preferences are not the same. The differentiation of these groups of people and the differentiation of the scenes behind them are very meaningful.
Wang Xiaolong: I think that the present should be the most difficult time for catering entrepreneurship. The Chinese catering market used to look at small fish and shrimp ten years ago. The scale is very small, and the volume is only tens or hundreds. Now many brands have broken thousands of stores, which was unimaginable at the time.
But at that time, most of the catering enterprises were OKAY, although it was more complicated to do. The current catering market environment is more mature, and the competition in the stock market has intensified, which is the time for capital to sell.
In the stock competition market, the strong can be strong, and those who can win can have the value of investment. In the stock market competition, we can know who is strong and who is following the trend. The competition in the stock market is not the growth story of the industry. The industry growth story is more than ten or twenty years ago, and no one has achieved anything in this, which is my understanding.
Liu Lijian: Catering is a very good industry, which is also the reason why we have insisted on it for so many years. People take food as the sky, China's catering market of more than 4 trillion yuan, there is a huge consumption capacity here.
Ten years ago, Chinese dining was lagging behind. When we studied this industry in 2012, the chain rate of Chinese catering was only 2 points, and now it has reached the level of 15%, but there is still a big gap compared with the United States and Japan. The chain rate in the United States is close to 50%, Japan is close to 40%, and China still has a lot of room for development. In addition, the securitization rate of catering is very low. The overall securitization rate of Chinese catering is about 5%.
In the past ten years, China's catering industry has changed significantly, the quality of practitioners has been greatly improved, they have been well educated, and there are many cross-industry people, with a different vitality of the catering industry.
In addition, the infrastructure of Chinese catering has also made rapid progress. Large-scale food processing enterprises and logistics and distribution enterprises provide a good supply chain foundation for enterprise operation. In addition, the informatization and digital development of catering, SaaS software, payment platform system, etc., make it easier to open a store. From store location to management, including various types of marketing software and means, there have been significant improvements.
In the capital market, there are actually very few listed enterprises in the catering market, and there is still a lot of room for development. Over the years, we have also clearly seen more and more catering food enterprises, and their processing capacity is getting stronger and stronger.
To sum up, China's catering industry has taken off a lot.
Chen Zhipeng: The epidemic has catalyzed the development of the catering industry. For example, before founding Hezhi Investment, I was the founder of Greenhouse Investment, the largest pig farming enterprise in the country. The pig industry encountered African swine fever in the first two years, and during the epidemic period, 500,000 heads a year can be ranked in the top 20. However, after several years of great leap forward, the current pig breeding enterprises do not have 5 million heads and basically cannot be on the table.
The impact of COVID-19 on the restaurant industry is similar to the impact of African swine fever on the pig industry. In the past, 100 stores could be ranked in the top 3 of the category, but now if you can't open 1,000 stores, it is estimated that you are not embarrassed to say it. A harsh environment is always more beneficial than harmful for head enterprises and brands.
Then there is the intervention of capital. In the past, it was difficult for restaurant companies to go public, mainly because they were not standardized, and many things could not be standardized. Now, catering informatization and digitalization have solved many standard problems, and catering has ushered in a round of capital boom.
Under the acceleration of capital, the industry pattern that may have taken ten or twenty years to run out may now be determined in less than five years, and the catering industry has indeed entered an era of accelerated development in these two years.
Huang He: In the era of financial acceleration, what categories are everyone optimistic about?
Chen Zhipeng: There are still many categories that can be invested in the catering industry, but there are basic conditions: one is relatively easy to standardize and copy; the other is to make large categories first in the category, and then do small categories.
Hot pot alone is a large category, like Haidilao, sipping out several listed companies, here but also to ensure the balance between profit margins and thresholds, similar to like nine mao nine, flavor thousand, both conducive to standardization, but also to maintain a relatively high profit margin, this is the balance of the two.
This year's hottest flour category is definitely a big category. Including some big items such as rice and fast food in the future, there are still many opportunities in the future, and they have more say in Netju and Hony here.
Liu Lijian: We have always focused on investment in light catering. Light catering, we explain here as a category where the unit price of the customer is acceptable to the public. For example, in the category of 50 to 100 yuan, this market is definitely the largest. Secondly, light catering is relatively easy to standardize and can be copied.
Chinese dining culture is not exactly the same as that of the United States and Japan. The United States is a minimalist country, and their catering is simply a word "fried". Japan, on the other hand, is picky about knife techniques and ingredients, and cooking is not as complicated as ours.
Chinese catering culture is very rich, and consumers have high requirements for Shangxin. Taking Haidilao as an example, when Haidilao's expansion of stores encounters a bottleneck, it still has the ability to do multiple brands? However, this can be seen in the shadow of Jiu Maojiu, who successfully made the Tai'er sauerkraut fish.
Huang He: There will still be a ceiling for a single category, and the growth curve will be achieved through category entry, how do you see the category problem?
Wang Xiaolong: I think the category is important, but it is not so important. We must distinguish what the difference between category, brand and format is.
Categories are similar to tracks, it is easy to use track theory to make investments, which is an effective theory in the process of Internet practice, which is unlikely to be successful in the catering industry, or depends on the brand and format. For example, what is the type of three-juice stew pot? What brands can open 700 or 800 stores in China? Therefore, we should pay more attention to the format, pay attention to whether the model is expandable, whether the ability to shape the brand is ok, whether the whole team can do it, and so on.
Today the milk tea market has done so big, everyone thinks that milk tea is a big track. But five years ago, ten years ago, would you dare to say that it was a race track?
Tang Minglei: Categories still have their core elements. We can't completely deny the value of the category, otherwise why can fried chicken open 10,000 stores, and it is difficult for salads to open 100? Category can be understood as a ceiling, can be understood as a large track.
Categories are distinguished between large market categories and chain categories. What is the big market category? There are a total of 30 million stores in China, a variety of stores, convenience stores, beauty stores, retail stores, KTV, etc. are counted, and catering accounts for more than 9 million. We roughly divide the 9 million stores into fast food, light food, Chinese food and so on. In fact, if you refine it, you will find that these 9 million houses include a lot of sequences.
Lanzhou ramen has less than 50,000 so far, but this track has been hyped up. There are 88,000 snacks in Shaxian County, and in fact we can have more. I think the next three to five years, or even ten years, will be a decade of the stock economy. So fast food, staple food tracks, and customized categories may receive more attention.
Huang He: The ranks of large stocks, fast growth rates, just demand, and high categories are more likely to attract the attention of capital.
Hu Qihao: High frequency, just demand, low customer unit price, including investment opportunities with low concentration in large categories, are what we pay more attention to.
Categories have a life cycle, wenheyou aggregates multiple categories into a space, in line with the current aesthetic needs and consumer environment needs. In my opinion, this model was not invented by Wen Heyou, because in the past, there was also a snack street and a snack complex on the pedestrian street.
With the development of the times, everyone's aesthetic needs are getting higher and higher, and Wen Heyou has come out of nowhere to meet this demand, and this format has a lot of space in China. Catering complex, this direction is correct. McDonald's actually ended up doing commercial real estate operations. Wen Heyou may also evolve into a commercial real estate operator, with Chinese characteristics. This is an opportunity, of course, not an opportunity for wen and you.
Others say our consumption has downgraded. In fact, I think consumption has always been upgraded, and it is differentiated. And China's wealth has not been wiped out, but people are more cautious in their consumption.
Huang He: Speaking of which, let's talk about what are the criteria for judging whether to invest in a project or not? What is the decision framework?
Hu Qihao: This question is particularly simple, I am a particularly conservative person, and there are two requirements for the projects I have invested, one is that it is very profitable, and the other is that it develops very quickly.
Tang Minglei: Whether it is a brand or a founder, there are many abilities that can be presented. For example, our theme today is called marketing power, and the general good founders will have very strong marketing capabilities, whether it is for individuals or for catering brands.
In my opinion, there are two types of models that run very well in the catering field. One type is the shopping mall direct chain store with high customer order, and the other type is the street franchise chain store with low customer order. In fact, the core of these two types of stores is actually the ability to open stores, and in addition to marketing, more attention is paid to the founder's understanding of the supply chain and store operation.
In the next decade I think food and beverage stores will change from limited stores to unlimited stores. A limited store is a limited set of scenes, time, space, staff, and SKUs. Core store opening capabilities We summarized one store and six openings, each store is a retail field, each store is a takeaway station, each store is a traffic pool, each store is an idle warehouse, each store is an experience area, and each store is a live broadcast room. We can achieve six stores in one store, a team with rapid expansion capabilities and store operation capabilities, which is what we value most.
Wang Xiaolong: Our sample size is relatively large, and we have a lot of experience in this. Let me give you an example. Recently, there was a brand in the process of raising funds, and many investors have seen it. During the period, everyone talked about nothing more than two topics: one is how big the brand can do this; the other is that the team's development is a bit slow, and it is worth the investment.
I think the original intention of the enterprise is to understand. Doing catering is a very difficult thing, no matter how much ability you have, how high your education, halfway to give up more.
But if your original intention is to do such a thing, no matter how difficult it is, you must continue to do it, or if you are about to collapse, you must continue to do it. If the founder has this idea, I think he has a higher probability of success.
In addition, of course, he must also have the ability to learn and know how to make a brand. It is also necessary to have organizational capacity, whether internal or external. Internal brands and direct sales must find ways to organize well, and those who join must handle external partnerships well, and they must form a joint force.
Huang He: Entrepreneurs invest in entrepreneurs are different perspectives, what does Wangju Liu think? How does the netjutou snack chain judge the project standard?
Liu Lijian: Companies in any industry are inseparable from core competitiveness. The consumer industry is not like the technology industry, there is a technical threshold, and consumption is distributed in all aspects. The supply chain, store management, customer operation, store location selection, etc., determine how far the company can go.
When the evaluation meets the standards, it depends on consumer satisfaction, whether food safety is guaranteed, whether the supply chain is valued, how effective the revenue of a single store is, how the leader's strategy is, and whether it has its own reserves.
There are many details to consider in judging project criteria. The company's sharing spirit, operation ability, team management ability, research and development ability, marketing ability, founder learning ability, team learning ability, etc., are all details. Especially the ability to learn, in our opinion, if the enterprise does not have the ability to learn, their ceiling will also arrive. Because how big a company can do depends on the ability of the leading founder to learn and the ability to break the game.
Huang He: Looking at investment as an ecology, what does Mr. Chen think?
Chen Zhipeng: I would like to add three points simply: First, the single-store model. For example, site selection (including shopping malls, community stores, roadside stores, etc.). The positioning of stores, customer unit prices, categories, the number of stores that can be opened nationwide, and so on. If this is a mature single-store model, it has already run through, and it is better to copy it directly later.
The second is the supply chain. Because of the rapid expansion that follows, it is very important that the supply chain can keep up.
The third is financing capacity. With the intervention of capital, this ability was not so prominent in the past, but in the future this ability is very important. For example, this year's hot noodle track, and FuLao noodles, meet small noodles, Ajisen ramen and several other categories we have seen in previous years, but then did not invest, their companies and founders are very good, but the valuation is expensive. This year, conservatively missed, and did not dare to chase.
Therefore, financing ability will also become a competition between different brands under the category. Whoever has the ability to sell their company at a better price and can get more financing may occupy a great active advantage in this competition in the future.