Sanquan Food didn't lose _ Sina Finance

Transfer from: financial sector

Source: Securities Star

Recently, the public account of Yuanchuan Research Institute discussed an article entitled "Civil War of Prefabricated Vegetables: Competitive Race between Sanquan and Anjing".

The article first reviews that Sanquan, as a pioneer in the field of prefabricated dishes, once led the market trend with star products such as frozen dumplings and dumplings, and firmly held the leading position in the industry. However, with the passage of time, the growth momentum of Sanquan has become increasingly weak. The core reason behind this is that its income structure is relatively single, and it relies too heavily on traditional supermarket channels.

meanwhile, Anjing Food Through the implementation of diversified product strategies, keen market insight and the active layout of e-commerce channels, the company has achieved rapid growth in business, and finally succeeded in surpassing the "three guarantees" in 2020.

However, in my opinion, this article may focus too much on the "tactical" aspect of enterprise competitive strategy, and fail to fully consider the shaping of consumer brand demand side competitive advantage. The market leading position that Anjing has shown at present may not be as stable as described in the article; However, the brand strategy of Sanquan does not mean that it has gone astray.

Different roads, how to talk about the birth of the "new king"?

Anjing Food and Sanquan Food Although they have their own places in the food industry, their business models and market positioning are significantly different.

The rise of Anjing Food highlights the strategic advantage of rapidly seizing the food segment. The company focuses on the B-end and sinking market promotion of popular foods such as meatballs, hot pot ingredients and crayfish, thus achieving significant business growth. However, this strategy also has limitations, especially when the size of the selected market segment is small, the ceiling of growth is correspondingly low. Take the crawfish market as an example. After it was once popular, its growth momentum has slowed down as market competition intensifies and consumer tastes change.

This phenomenon is not unique. Prefabricated dish brands are generally facing "big item anxiety". For example, pickled cabbage fish, a large prefabricated dish, once led the market boom, but then many brands followed suit and the market competition intensified. This has also led many prefabricated vegetable brands to rethink their own strategies and realize that they cannot rely too much on large market items.

Zhenwei Xiaomeiyuan is an obvious example. Their signature dishes have excellent taste and excellent daily sales. However, they are not the main consumers of crayfish, a non daily consumer product. In an interview, Pu Wenming, the founder of the company, clearly pointed out that they would not over invest in the research and development of big dishes and hard dishes, because the marketing period of such dishes is very short.

A large number of "follow the trend" products in the market do have an impact on the sales of original products, but the deeper reason for the poor sales of some products may be that the brand does not match the products with the sales channels. For example, Yinshi has caused an inventory loss of about 3 million yuan, which further proves that brands need to understand market demand more accurately and match products and sales channels reasonably to achieve sustainable growth.

In contrast, Sanquan Food has chosen a more stable development path, and deeply cultivated the staple food field of rice and flour. As an important part of daily consumption, staple food has a huge consumer group and high-frequency consumption characteristics. This makes the ceiling of the staple food market extremely high, and almost no one doubts its market potential.

However, compared with hot pot ingredients, balls and other FMCG products, the branding speed of staple food is significantly slower. For example, traditional staple food businesses such as dumplings and dumplings have only begun to show an increase in their performance in the past decade. Nevertheless, with the irreversible rise of labor prices, the trend of branding and industrialization of staple foods has become more and more obvious.

The income scale of Sanquan Food increased from 580 million yuan in 2004 to 7.056 billion yuan in 2023; The profit scale has increased from 10 million yuan in 2017 to 958 million yuan in 2023. As a model enterprise, it has witnessed the whole development process of the prefabricated rice flour industry. The company's net profit rate on sales will rise from 1.74% in 2004 to 10.19% in 2024. By improving the added value of products and saving operating costs, the company will achieve low profitability agriculture products The processing industry is operated as a consumer track with brand premium and high added value.

In this way, it seems that Sanquan and Andi are not competitors on the same track, but a repeat of the story of the tortoise and rabbit race. From the time dimension, it seems that the victory is still on the side of Sanquan.

What should I think of prepared dishes?

When doing consumer industry research, we should not only focus on the cold data on the green screen, but also discuss the psychological changes of consumer groups, so as to grasp the general direction.

In today's society, with the accelerated pace of life, the demand for convenient and delicious industrial food is also growing. This can be seen from the rapid development of B-end industrial food. It can be said that with the modernization of human society, the income of industrial food shows a trend of accelerated growth. In this context, whether supermarkets, e-commerce, agricultural batch markets or large B-end customers, will become an important service platform for the rise of brands.

The operating costs of catering enterprises include many aspects, such as labor costs, raw material costs, rent, energy and related taxes. Among them, the cost of raw material purchase alone accounts for nearly 40% of the restaurant's turnover, which is based on the statistics of the 2019 Annual Report of China's Catering Industry.

The emergence of prefabricated dishes has brought significant cost reduction and efficiency increase effects to catering enterprises. By reducing the dependence on chefs, reducing the demand for kitchen space and reducing the purchase of various raw ingredients, prefabricated dishes have become a "magic weapon" in the catering industry.

Taking the estimation of China Chain Store Association as an example, if the prepared dishes (food bags) are used for a takeout of braised pork rice with a price of 17.5 yuan, the net profit can be increased from 50 cents for on-site production to 3 yuan, an increase of up to five times. At the same time, the use of prefabricated dishes has also greatly shortened the waiting time for meals and customers, and improved the operating efficiency of the restaurant.

In the catering industry, which is highly competitive and has a high elimination rate, prepared dishes, with its advantages of high profits, high efficiency, low space and human demand, have a great attraction for catering practitioners. Especially for chain brands, the unified preparation of prefabricated dishes through the central kitchen not only realizes the standardization of taste, but also further improves the profit space, which helps enterprises to become bigger and stronger.

With the continuous rise of the chain rate of Chinese food, prefabricated dishes are increasingly widely used in the catering industry. Especially in large shopping malls, many restaurants choose to use prefabricated dishes due to the restrictions of fire regulations and other factors. This makes consumers have a high probability of eating prepared dishes when dining in the mall.

However, the wide application of prefabricated dishes has also triggered consumers' nostalgia for traditional catering. Although prefabricated dishes bring efficiency and convenience, they also change our view of "eating". The emotion and ingenuity of the people behind the food are weakened. Food is no longer an emotional connection between the chef and the diner, but an industrialized assembly line product. This may cause the food in the restaurant to become less important, and external factors such as service, environment and dish setting become more concerned.

Moreover, takeaway platforms such as Meituan and Enlema will not subvert the business model of Sanquan, but may become an important force to promote the popularity of prefabricated dishes. With the increasing proportion of distribution and catering store marketing costs in the takeaway business, we may no longer need to go to the restaurant to eat in person in the future, but can easily enjoy the prefabricated food bags purchased at home. This change is bound to have a profound impact on the pattern of the catering industry and the way consumers eat.

San Quan Food "not eager to fight"

In industries with barriers, the price war between the two giants often makes it difficult for small practitioners to survive, but this competition has brought a lot of joy to consumers.

Taking the food processing industry where Sanquan Food is located as an example, when Anjing Food expanded with the help of its scale advantage and created a "seemingly victorious" situation, Sanquan did not choose direct confrontation, but decided to further consolidate and enhance its core competitiveness.

Chen Zemin, the founder of Sanquan, once profoundly pointed out that "many enterprises fail not because of lack of resources, but because of excessive expansion. As long as we act within our capabilities, enterprises can develop steadily. Therefore, I have always been dedicated, dedicated and professional for decades, and committed to doing one thing to the extreme."

It can be predicted that Sanquan will occupy an important position in the future giants of China's food industry as long as it continues to work hard in the field of pasta and firmly grasp the hearts of consumers.

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