Original title: Interim News Observation | The reform of leading snack food translocation channels breeds new opportunities
21st Century Business Herald reporter Ye Bihua and intern Wang Keyi reported from Guangzhou
In the first half of the year, the slowdown in macroeconomic growth and the repeated epidemics led to a decrease in offline store passenger flow. Coupled with the rising costs of raw materials, energy, and transportation, the overall casual snack industry was under pressure.
From the perspective of revenue scale, the six major casual snack companies in A-shares are ranked from high to low, in order: BESTORE, THREE SQUIRRELS, QIAQIA FOOD, Laiyifen, Yanjinpuzi, I miss you. Compared with the same period last year, the ranking changes mainly occurred between BESTORE and Three Squirrels.
According to the interim report, in the first half of the year, BESTORE (603719) achieved a total operating income of 4.895 billion yuan, a year-on-year increase of 10.72%; net profit attributable to the parent was 193 million yuan, a year-on-year increase of 0.67%. The revenue of Three Squirrels (300783) was 4.114 billion yuan, a year-on-year decrease of 21.8%; the net profit attributable to the parent was 82.1343 million yuan, a year-on-year decrease of 76.65%. The revenue and net profit of the three squirrels dropped both. Since their listing in 2019, the revenue scale was overtaken by BESTORE for the first time.
In the first half of the year, Qiaqia Foods (002557) achieved operating income of 2.678 billion yuan, a year-on-year increase of 12.49%; net profit attributable to the parent was 351 million yuan, a year-on-year increase of 7.25%. Laiyifen (603777) achieved revenue of 2.312 billion yuan, a year-on-year increase of 10.12%; net profit attributable to the parent was 111 million yuan, a year-on-year increase of 2.02%.
In the first half of the year, Yanjin Shop (002847) achieved an operating income of 1.21 billion yuan, a year-on-year increase of 13.73%, and a net profit attributable to the parent of 129 million yuan, a year-on-year increase of 164.97%. Miss You (002582) in the first half of the year achieved a total operating income of 616 million yuan, a year-on-year increase of 22.9%; net profit attributable to the parent was 2.36 million yuan, a year-on-year decrease of 95.7%.
Gross profit margins generally decline
On the whole, snack food has faced higher-than-expected cost increases since the second half of last year. In addition, the epidemic has led to pressure on demand. In the first half of the year, the gross profit margin of listed snack snack companies has been affected to varying degrees.
The data shows that the gross profit margin of Qiaqia Foods in the first half of 2022 was 29.3%, a year-on-year decrease of 1.2 percentage points, of which the gross profit margin in the second quarter of 2022 was 27.5%, a year-on-year decrease of 2.8 percentage points. Qiaqia Foods said that the increase in the cost of oil, sugar, salt, packaging materials, etc. was obviously the main reason for the decline in gross profit margins in the second quarter. In addition, the increase in logistics costs in East China and Northeast China during the epidemic is also one of the main reasons.
From the financial report of Qiaqia Foods, the gross profit margin of melon seeds, nuts and other products decreased by 0.4 percentage points, increased by 0.2 percentage points, and decreased by 4.4 percentage points year-on-year respectively. Other categories (peanuts, beans, potato chips, etc.) were affected by palm oil. Cost increases have a greater impact and gross profit margins drop more.
The three squirrels said in the interim report that due to the rising prices of raw materials such as grease and packaging materials, and the significant increase in logistics costs during the epidemic in the second quarter, the company’s gross profit margin in the first half of the year was 31.6%, down 3.3 percentage points year-on-year.
BESTORE also pointed out that the increase in logistics costs during the epidemic had a greater impact on gross profit. The single-quarter gross profit margin was 29.2%, down 0.8 percentage points year-on-year. In addition, due to the impact of multiple outbreaks on logistics and transportation, inventory losses increased.
It is understood that in the first half of the year, the gross profit margin of Laiyifen was 44.33%, up 1.53 percentage points year-on-year; the net profit margin was 4.78%, down 0.38 percentage points from the same period last year. From the perspective of single-quarter indicators, the company’s gross profit margin in the second quarter was 43.31%, an increase of 3.78 percentage points year-on-year, and a month-on-month decrease of 1.79 percentage points; the net profit margin was 1.8%, a decrease of 1.37 percentage points from the same period last year and a decrease of 5.24 percentage points from the previous quarter. percent.
Expert analysis believes that the price of raw materials such as palm oil has continued to rise since the third quarter of last year, which has caused great pressure on the gross and net profit margins of casual snack companies. Demand has a short-term impact. However, in the medium and long term, roasted nuts, braised products, bakery and other foods have rigidity in the process of consumption structure iteration at the demand level, and the overall growth trend remains unchanged.
Channel change continues
In the first half of the year, the performance of casual snack companies was differentiated, and there was a change in revenue ranking for the first time. BESTORE replaced three squirrels with a revenue of 4.895 billion yuan and became the leader of casual snacks. Regarding the performance growth, BESTORE said that it is mainly due to the “two-wheel drive” transformation that will be strengthened and implemented in the second half of 2021, which is the result of further optimization of products and channels.
It is reported that at present, BESTORE has formed a business model of “offline retail stores + online mainstream e-commerce”, supplemented by social e-commerce, major customer group purchases, circulation, and community group purchases. Respond to the impact of the epidemic on offline passenger flow and enhance the ability to resist risks.
The CITIC Securities Research Report pointed out that in the first half of the year, the sales revenue of BESTORE’s subsidiary offline channels (direct sales + franchise) was 2.38 billion yuan, an increase of 8.4% year-on-year, of which the first quarter increased by 8% and the second quarter by 9%; online channels Half-year revenue was 2.83 billion yuan, a year-on-year increase of 12.5%, of which the first quarter increased by 20% and the second quarter by 1.7%; the group purchase channel revenue in the first half of the year was 230 million yuan, a year-on-year increase of 63.1%, of which the first quarter increased by 79.7% and the second quarter. The quarterly increase was 31.8%. In the second quarter, due to the repeated interruption of logistics due to local epidemics, the growth of e-commerce revenue of BESTORE slowed down, but the company’s major customers group purchases and distribution channels expanded rapidly.
BESTORE stated in the interim report that in the first half of the year, the company accelerated the layout and penetration of key cities, focused on the intensive opening of stores in new first-tier cities, and further accelerated the depth and density of the layout in key markets in South China, Southwest China and Central China. It opened 302 new stores, including 93 directly-operated stores. , 209 franchise stores. As of June 30 this year, the company had 3,078 offline stores.
In recent years, the marginal increase in the traffic of mainstream e-commerce platforms has been slowing down and showing a trend of decentralization, which has brought a lot of impact to the three squirrels whose main sales channels are e-commerce platforms such as JD.com and Tmall. In the first half of the year, the operating income of the three squirrels third-party e-commerce platform was 3.013 billion yuan, accounting for 73.25% of the total revenue. Among them, the revenue of Tmall platform was 1.197 billion yuan, and the revenue of Jingdong platform was 1.119 billion yuan, down 25.56% and 21.64% respectively.
Although the three squirrels have already started to expand offline channels, the results have not been as ideal. The data shows that in the first half of the year, the three squirrel food stores opened 1 new store and closed 56 stores. As of the end of the period, a total of 85 stores achieved revenue of 339 million yuan; 37 new alliance stores were opened and 182 stores were closed, with a total of 780 million as of the end of the period. home, and realized revenue of 298 million yuan; new distribution realized revenue of 432 million yuan. As the three squirrels also said in the interim report, offline retail channels have many advantages such as convenience and on-site experience, and will remain the main channel in the casual snack market. However, compared with BESTORE and Laiyifen, the current layout of the three squirrel offline stores is obviously not an order of magnitude.
According to the Laiyi Interim Report, as of the end of June this year, the company had a total of 3,583 stores across the country, including 2,170 directly-operated stores and 1,413 franchise stores, an increase of 119 year-on-year, and franchise accounts for nearly 40%; new openings in the first half of 2022 There are 209 stores, including 33 directly-operated stores and 176 franchised stores.
After years of development, online and offline omni-channel development has become a consensus among casual snack companies. Companies that started offline, such as Qiaqia Foods and Yanjin Shop, have also begun to increase their efforts to develop online channels. The data shows that the proportion of online revenue of the two companies is increasing. Among them, the e-commerce revenue of Qiaqia Foods in the first half of the year was 286 million yuan, a year-on-year increase of 23.15%, accounting for 10.71% of revenue, and the proportion continued to increase.
The channel structure of Yanjin Shop has also undergone further changes. In the past, the proportion of revenue from the direct-sellers and supermarkets that they relied on continued to decline. In the first half of the year, the revenue was 227 million yuan, and the revenue ratio dropped from 28.9% in the previous year to 18.79%. The revenue share of distribution and e-commerce channels continued to increase. Among them, the distribution channel achieved revenue of 829 million yuan in the first half of the year, accounting for 68.55% of the total revenue; the e-commerce channel achieved revenue of 153 million yuan in the first half of the year, a year-on-year increase of 331.08%, and the revenue ratio rose to 12.66%, more than doubled.
At present, the sales channels of casual snacks are constantly upgrading and innovating, and showing a diversified development trend. It is expected that in the future, offline channels will still maintain their status as mainstream channels, but modern channels such as snack specialty stores and convenience stores continue to squeeze the market share of traditional mom-and-pop stores, and the trend of channel upgrading is obvious. At the same time, traditional e-commerce dividends are gradually disappearing, e-commerce sales forms continue to innovate, and the epidemic has accelerated the development of live broadcast e-commerce, and the penetration rate of online channels will further increase.
Seize Structural Opportunities
In fact, in addition to channel changes, the domestic casual snack industry has also accelerated in recent years towards healthy, segmented and high-end development.
According to the financial report, in the first half of the year, BESTORE invested more than 25 million yuan in research and development, a year-on-year increase of 32%. During the reporting period, the company independently developed and launched 56 products in the fields of medicine and food homology, cheese, high-protein snacks, etc., focusing on the special needs of women, children and other sub-groups. At the same time, it promoted technological innovation projects, developed and mastered meat Food nutrition and health processing technology such as candied production automation, three reduction technology and sugar-free technology, low GI and low carbohydrates.
In the first half of the year, BESTORE completed the development of a total of 57 reserve products, and some reserve products are ready for the market. For the segmented market, the company’s children’s snack brand “Xiao Shi Xian” achieved omni-channel terminal sales of 219 million yuan in the first half of the year, a year-on-year increase of 21.33%. A total of 29 new products will be launched in 2022.
The research and development expenses of the three squirrels in the first half of the year were 22.8894 million yuan, a year-on-year decrease of 12.42%. After being frequently exposed to product quality problems, the three squirrels announced a strategic transformation in April this year, building the first factory with Daily Nuts as a pilot project, and construction started in April this year. At present, the first two production lines planned by the Daily Nut Factory have entered trial operation in July this year, and were officially put into operation in August.
In order to further expand its business, the three squirrels launched a sub-brand “Xiaolu Lanlan” focusing on baby food, but the data shows that “Xiaolu Lanlan” in the first half of the year earned 261 million yuan, and the company’s main source of income is still “Three Squirrels” “Main brand.
In contrast, Laiyifen had the least R&D expenses in the first half of the year, at 6.9158 million yuan. During the same period, Qiaqia Foods invested 19.5102 million yuan in research and development, Yanjin Shop invested 29.5194 million yuan in research and development, and I miss you 18.981 million yuan in research and development.
Last year, Yanjinpu fully launched its strategic transformation and upgrading, changing from channel-driven growth to product and channel-driven growth. According to the semi-annual report, although Yanjin Shop’s traditional casual bakery snacks are still the “main force” of performance contribution, the gross profit margin of such products is declining, which was 37.67% in the first half of the year, a year-on-year decrease of 5.81 percentage points. And some new products such as leisure deep-sea snacks (fish tofu, fish intestines, crab sticks, etc.), the gross profit margin is more than 50%.
Qiaqia Foods believes that from the perspective of category structure, snack foods include candy chocolates, nuts roasted seeds and nuts, puffed foods, braised products, etc., and there are many kinds. Driven by changes in consumption habits, “healthy food” represented by nuts will be more and more sought after. Data show that in the first half of the year, the revenue of Qiaqia nut products was about 525 million yuan, a year-on-year increase of 13.77%, accounting for 19.59% of the total revenue.
At present, although the snack industry has been greatly affected by the epidemic, costs have increased, and short-term performance is under pressure, the prospects for industry growth in the long run still exist.
According to Euromonitor International data, the overall size of China’s packaged casual snack market has grown from 384.9 billion yuan in 2017 to 457.8 billion yuan in 2021, with a compound annual growth rate of 4.4%. The overall growth rate of the industry is stable. It is expected that with the continuous innovation of snack products, the market structure of snacks will continue to change, and structural opportunities will continue to emerge. Enterprises need to face the new industry situation of retail channel transformation in the post-epidemic era, actively carry out business transformation, start with online and offline dual channels, strengthen channel sinking, tap supply chain potential, and simultaneously carry out structural optimization of products, channels and regions.
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