Just like KFC, there is always a McDonald’s next to it, and there is always a new chicken chop next to Honey Snow Ice City.
This is not a conclusion drawn from observation out of thin air. According to the 2022 Food Franchise Research Report, among various food and beverage brands, the combination with the highest clustering rate (29.9%) is the clustering of Zhengxin chicken chops to Honey Snow Ice City, which means that on average, about one out of every three Honey Snow Ice City restaurants has Zhengxin chicken chops next to them.
Compared to Honey Snow Ice City, which has been doing well in marketing in the past two years, Zhengxin Chicken Steak may be an “invisible giant”: its stores are too small, even a bit rustic, and people’s memories of its advertising mostly remain eight years ago. In “Extreme Challenge”, Huang Bo gobbles up a chicken chop as big as his own face.
But this brand, which started with chicken chops, has opened more than 25000 stores in inconspicuous places and is still growing.
How did Zhengxin Chicken Steak, the “invisible giant in the catering industry,” do it? What are the similarities between its Wandian route and the Honey Snow Ice City? What are the implications for snack brands?
1、 Fried chicken, a good business
A major prerequisite for the success of Zhengxin Chicken Steak: Making fried chicken is a good business in China.
If not included in the beverage category, catering brands with a very large scale are almost all making chicken: from Western fast food KFC and Wallace, to Chinese fast food snacks such as Laoxiang Chicken, Yang Mingyu Yellow Braised Chicken Rice, Ziyan Baiwei Chicken… they all start their business and make their fortune from chicken.
From the perspective of the number of outlets, more than one-third of the top 25 catering brands in the number of outlets are cooking chicken, with fried chicken leading the way: Wallace, Zhengxin Chicken Chop, and KFC ranked among the top three in the number of outlets “cooking chicken catering”.
The most direct reason why fried chicken is so popular is “delicious” and “cheap”.
Chicken releases the unique delicious taste of meat in high temperatures. The process of frying causes the starch coated on the surface of the fried chicken to gelatinize, locking the gravy containing these delicious substances in the chicken. Fried chicken also has a certain degree of “addiction”, which can be difficult to resist – the mixture of starch and oil can activate the nucleus accumbens in the brain, which controls the mechanism of addiction, triggering the secretion of “dopamine” and bringing pleasure.
In addition, chicken is cheaper than pork and beef, and is rich in protein, making it naturally stand out among various categories.
Meituan data shows that in 2021, the top three high-frequency words in the user evaluation of Popular Reviews were delicious, cost-effective, and affordable. In 2021, with a single quantity of over 650 million pieces, fried snacks became the largest category of snacks, with chicken chops being the first.https://www.slw-ele.com/
Identifying fried chicken chops is equivalent to identifying a large and sustained consumer demand, as well as the huge consumer group behind it.
Zhengxin Chicken Chop was originally called Zhengxin Snacks, selling various snacks such as Guandong Boiled Pork, Roasted Sausage, and Fried Chicken. The reason is that the more categories, the more customer groups it attracts.
However, the following problems arise: the more types of snacks, the more complex the procurement, logistics, processing, and storage of raw materials. Not only is the supply of raw materials complex, but also it is difficult to ensure taste. Beginning in 2012, Zhengxin Chicken Chop began to subtract from its products by simplifying the product line, cutting 90% of its product categories, retaining only chicken chops, barbecues, and beverages, and changing its name from “Zhengxin Snacks” to “Zhengxin Chicken Chop.”.
After that, the stores of Zhengxin Chicken Chops have expanded rapidly. In July 2017, Zhengxin Chain Store broke through 10000, becoming the first brand in the fast food snack category to break through 10000.
The catering brands that are also listed as the “Four Heavenly Kings” of the Wandian chain: Wallace’s stores broke 10000 in 2018, Juewei Duck Neck’s stores broke 10000 in 2019, and Honey Snow Ice City’s stores broke 10000 in June 2020.
After choosing the right track for fried chicken chops, how did Zhengxin chicken chops take the lead in opening a 10000 store scale?
2、 Supply chain for making chickens as well as chickens
The reason why the road of “making chicken” can support the scale of ten thousand stores is not only because of the large consumption demand and wide range of consumption scenarios for chicken, but also because of the very complete and mature supply system for chicken.
In 1987, KFC opened its first Chinese store in Beijing, which not only brought fried chicken to China, but also brought a set of world-class white feather chicken breeding standards and the entire industry chain model:
Compared to pork, which only takes half a year to market, a white feather broiler is already large enough to be served on a plate more than forty days after birth.
“A Fried Chicken’s Journey to China: The Business Philosophy of KFC” reads as follows:
“All feed factories, incubators, grandparent chicken farms, commercial broiler farms, and slaughterhouses are owned by the company. Broilers that are fed in a standardized manner, have equal sizes, and weigh between 2300 and 2500 grams can be processed through a fully automated production line. A chicken requires more than 90 processes, and is cut into different categories according to the specific needs of customers. There are strict standards for how long, how wide, how thick, and how many each category is cut.”
Under the influence of KFC’s supply chain, from food safety standards to breeding, production, slaughtering, cutting, and processing; From cold chain transportation, warehousing to stores, to supporting supply service providers, chicken has formed a very mature, complete, and efficient upstream and downstream chain.
After that, “chicken making” catering enterprises have more or less received the dividends of this supply chain, and compared to other meat products, chicken production is more efficient, stable, and cheaper.
Zhengxin Chicken Chop also established its own chicken supply chain early on. In 1999, Zhengxin Chicken Chop established its own logistics brand, Yuangui Logistics; In 2014, the first proprietary processing base for Zhengxin chicken chops was put into operation, and the entire industry chain model was launched in 2015.
Chen Chuanwu, the founder of Zhengxin Chicken Chop, mentioned in a public report: “The reason why Zhengxin can become the king of expanding stores is that various links such as factories, logistics, and decoration have been completed. The expansion of the front end drives the development of the back end, and the development of the back end supports the front end.”
In addition, Zhengxin’s supply chain also serves other catering enterprises. According to the official website of Zhengxin Chicken Chop, Zhengxin Group currently has seven central warehouses and more than 50 front-end warehouse distribution centers throughout the country, providing trade and supply chain support services to a total of more than 20000 catering stores inside and outside the group.
3、 Crazy opening of shop, making fried chicken, honey snow ice city
A solid supply chain is not only the guarantee of the scale of Wandian, but also the result of its rapid expansion.
In Chen Chuanwu’s mind, “Zhengxin is not a chicken chops shop, but an industrial platform connected by chicken chops.” As for “making chicken chops”, it is not a culinary skill or technology, but more like a “process” in a standardized process. As long as everyone can do it step by step, the threshold for opening a Zhengxin chicken chops shop is not high.
The initial investment for joining a Zhengxin chicken chops store is approximately 200000 yuan, which is mainly used for joining expenses, start-up expenses, house rent, decoration fees, product purchase costs, etc. The store owner has a health certificate and is trained to take up the job: from the location and decoration of the store to the supply of raw materials, to the refinement of chicken breast weight, oil temperature, and frying time… Zhengxin City will provide training to the franchisees.
In 2013, Zhengxin Chicken Steak was opened for franchise, and the number of stores increased dramatically. In 2022, the number of stores of Zhengxin Chicken Steak expanded rapidly to more than 25000. In the snack fast food fried chicken category, not only the number of stores is far ahead of other brands, but also the advantage of low prices.
The revenue source of Zhengxin Chicken Chop is not only franchise fees, but also selling raw materials to franchisees to earn a piece of chicken chops.
This is very similar to the tea drink brand, Honey Snow Ice City – the vast majority of its revenue comes from the supply of raw materials, and the category is relatively single. (The menu of Honey Snow Ice City may seem fancy, but it is a combination of several ingredients that are consumed in a row. Compared to other new tea drinks, the fresh fruits used in Honey Snow Ice City are only tangerines that are easy to preserve, while others are all made with jam.)
Their common logic is to reduce the category, reduce the supply cost of raw materials, and then drive the sales of other products by relying on the most cost-effective large items (chicken chops, lemonade, and ice cream).
The location of stores in Zhengxin Chicken Chop and Honey Snow Ice City is also very similar.
According to the big data of red food, there is no significant difference in the proportion of stores at different line levels between Zhengxin Chicken Steak and Honey Snow Ice City – mainly concentrated in third tier cities and fourth tier cities.
Sun Jinyun’s research team from Fudan University conducted a study on 405 chain catering brands with more than 100 stores in the 2022 Restaurant Franchise Research Report. It was found that the combination with the highest clustering rate (29.9%) was the clustering of Zhengxin Chicken Chop and Honey Snow Ice City. That is, approximately every 3 Honey Snow Ice Cities have Zhengxin Chicken Chop next to them.
He further studied brands that like to “cluster with each other” and calculated their average clustering rate. Zhengxin Chicken Chop and Honey Snow Ice City still ranked first.
Zhengxin Chicken Chop and Honey Snow Ice City are like “guerrillas” in the catering industry, and a store is a “stall”. Their consumption scenario is to walk, shop, buy while walking, and then pack and eat while walking: “Lemonade on the left hand, Big Chicken Chop on the right hand.”.
From this perspective, Zhengxin Chicken Steak is also the “Honey Snow Ice City” of the fried chicken festival.
Opening up early to join and making their products “as standard as industry” is the reason for catering chains and the opening of thousands of stores in Zhengxin Chicken Chops and Honey Snow Ice City:
Instead of pursuing ultimate delicacy and high-end quality, as long as they achieve “good taste” and stable output, what they really excel at is using “non picky” options, extreme efficiency, and cost performance to serve the most popular groups.
Meituan data shows that in the category of fast food snacks, the trend of catering chain is inevitable.
However, in the face of store saturation and slow growth, in 2018, Zhengxin Chicken Chop launched the “forest plan” to break through the border and use the method of making chicken chops to make other products. Chen Chuanwu said: “If Zhengxin Chicken Chop can open 10000 more stores in Luosifen, baking or other categories, our story will be successful.”
