Can Hefu Lo mein become the “Haidilao of Noodles”?

By orchioo Mar16,2023

If you can tell us about your favorite noodle restaurant in memory, it is likely to be “thousands of people and thousands of noodles”: the beef noodle restaurant opened downstairs for 20 years, the hand rolling noodle restaurant of an aunt at the school gate, and the peas on the way to work
The various answers reflect the fact that the noodle shop industry is still in the stage of “fighting alone”, and the operation of individual shops is mainly supported by “husband and wife shops”, “apprentice shops”, or the entire family.
Of the 1225 noodle brands included in the Red Food Brand Research Institute, more than 70% of the brand stores are within 50, and few have more than 500 stores.
The broad market for noodles and the market gap of “no brand in category” have attracted the keen attention of capital. In the first half of 2021 alone, the investment and financing events of Lamian Noodles, dried noodles, instant noodles and other noodle brands exceeded the total of the past three years. Noodle brands such as Xiangyue Xiaomian, Wuye Mianmen, Hefu Lo mein, Chen Xianggui, Zhang Lala, Ma Jiyong, etc. have all received multiple rounds of financing.
These new noodle brands are also gradually moving towards large-scale development: more than 700 Wuye noodles, more than 380 Hefu Lo mein, more than 150 small noodles, more than 100 Chen Xianggui, and more than 80 Ma Jiyong Lanzhou beef noodles
Among them, Hefu Marinated Noodles is the most eye-catching: in July last year, it obtained 800 million yuan of E-round financing, breaking the record of pasta track financing, with its own valuation reaching 7 billion yuan, and plans to influence the initial public offering overseas
Moreover, Kimono Lo mein once mentioned the “1000 store plan”. As a new brand in the noodle industry, will Hefu Marinated Noodles be a “underwater industry”?
1、 Running from a low end runway to a “high-end” noodle shop
Hefu Lo mein and Haidilao have similar brand birth genes. Both pasta and hot pot are popular delicacies that are filled with fireworks and filled with streets. However, categories derived from ground gas are moving towards “high-end”.
Since its birth, Haidilao has positioned itself as a high-end customer group, far surpassing its peers in terms of department level service levels. It also distinguishes it from an unknown store and becomes the first choice that relatives and friends can think of when they think of “going out for a good meal.”.
With the slogan “Study Nourishing Noodles”, the shops decorated with Chinese style study are full of light music and Chinese fashion.
New style noodle shops also have image subverters. The new beef noodle brand Chen Xianggui’s log colored storefront and Ma Jiyong’s blue and white signboard feature minimalist Japanese style fun noodles and Zhangla beef noodles, creating a new image style with a bright and bright storefront.
At the same time, with the blessing of new dietary creativity, eating noodles has also become a fashion. In Hefu Lo mein, we met the online red “unfashionable flavor ice powder” launched by Oreo and ice powder, which is different from the traditional impression of simple, dirty, poor and flying small restaurants in ordinary noodle restaurants.
Not only is the brand positioning different from ordinary noodle shops, Hefu Lo mein is also full of “high-end” bow tone in site selection.
It opened its first store in Jiangsu and expanded to Lo mein, a kimono in Shanghai. 83.4% of stores are located in first-tier and new first-tier cities. Shanghai and Beijing account for more than half of the nearly 200 stores in first-tier cities, with nearly 40%.
More specifically, Hefu Lo mein is willing to choose the store address in the core business district and popular shopping centers. It is found in popular shopping malls such as Wangfujing, Huiju, Ginza, and Shanghai New World.
Its target customer base is generally concentrated in white-collar consumers who have certain consumption capabilities and like fashion taste. As brand founder Li Xuelin hoped, he not only wanted to sell noodles, but also managed the brand and advocated a lifestyle.
“High end feeling” lingers in the store of Hefu Marinated Noodles and passes on to the most obvious part of consumer perception – price. “Noodles” made by emerging brands are moving away from low-end fast food and towards exquisite dinners. The average price of Chen Xianggui and Ma Yongji is about 40 yuan, and that of Hefu Lo mein is about 45 yuan.
Noodles and snacks of Hefu Lo mein
Noodles and snacks of Hefu Lo mein
Photo source: official website of Hefu Lo mein
The high price of new consumer noodle shops is still expensive compared to the money that the public is willing to pay for “eating a bowl of noodles.”.
According to a 2021 survey by iMedia, over 40% of respondents spend an average of 16 to 30 yuan per meal of noodles, while over 3 adults spend 31 to 50 yuan per meal. 70% of respondents expect the price of the opposite category to be between 16-50 yuan.
Zhang Yi, president and chief analyst of iMedia Consulting, said that the new Chinese style noodle shop should not overestimate the consumption ability of users. The price acceptance ability of Chinese consumers tends to be at the middle end of noodle shop consumption, while high-end noodle shops above 50 yuan have a lower willingness to consume. Choosing popular pricing strategies is more conducive to the large-scale development of chain operations.
2、 Why can Xinxing Noodle Restaurant encircle the land?
There are reasons why it is difficult to scale up the long-dispersed, category and brandless pasta industry.
Firstly, the “eating methods” of this category are relatively consistent in different regions, which is a prerequisite for the scale of catering brands. In various regions of China, there are at least hundreds of ways to eat pasta. In addition to the Lamian Noodles category in Lanzhou, which has initially formed a number of brands nationwide, few local pasta products go out of the local market and flourish.
Secondly, the production process of chain catering requires high repeatability. Either it is relatively simple and the threshold is not high, such as Yang Guofu or Zhang Liang Spicy Hot Pot; Either there is a standardized and unified standard that can be used by new stores, such as hamburgers, pizza, and other Western fast food. But pasta is typical Chinese food. Its rich taste is bound to have more varieties of raw materials, more complex production processes, and greater difficulty in standardization. Higher demand supply chain support is required.
For the opposite brand, having an exclusive “secret recipe” is also an important prerequisite for making a chain. Li Wenxin, who once served as the regional general manager of a beef noodle company, does not agree with the idea of “making noodles with steamed bags.”. He said that noodle shops need to work hard on toppings or soups to make secret recipes that can both make consumers taste good and control costs.
These natural obstacles have made the pasta market hesitate for a long time on the path of “branding”. But it is precisely this gap that has left room for the emerging noodle shop brand to “open thousands of stores”.
The reason why Xinxing Noodles has become a “traditional category and trendy style” is that Hefu Marinated Noodles, Chen Xianggui, and Xiaomian have recreated the industry with new logic.
Making “chain like” pasta products is the first step.
An executive from Chen Xianggui once said that investors like Chen Xianggui to transform traditional catering with the operational logic of new fast food. Hefu Lo mein has also transformed the way of Chinese noodles into Western food standardization, making more popular and classic popular food. At present, there are more than 30 SKUs of Noodles in soup, mixed noodles, mixed rice, snacks, etc
The reason why we can go out of the way different from traditional noodle shops is largely due to the capital support of emerging noodle shops, which can greatly increase the overall control over the supply chain.
Successful chain brands, such as Haidilao, also firmly hold the core of the supply chain in their own hands. Even though today’s Haidilao announced the closure of 300 stores due to “misjudgment,” its strategy for building a supply chain system remains an industry template: Yihai International, which is responsible for producing hot pot seasoning and seasoning; Shuyun Dongfang is responsible for the location, decoration, and maintenance of the store; Shuhai Supply Chain, which provides food procurement, processing, warehousing and logistics services, and Weihai Consulting, which provides human resource management, are its own brands, providing comprehensive services and support to nearly 1500 Haidilao stores nationwide.
The emerging noodle industry also attaches great importance to the supply chain. “Own factory” and “digitalization” are the consensus for the future development of brands such as Noye Michi, Hefu Lo mein and Meet Xiaomian.
It is said that Sun Lei, the founder of Wuyemian, took the lead in strengthening the supply chain system through self building factories, upgrading information intelligence systems, and expanding the national store network after obtaining financing.
What is more obvious is the importance and investment of the rich in the supply chain. Founder Li Xuelin said in an interview that before the first store opened, the brand had established a supply chain and a central factory that could support 1000 stores. At present, the 15000 square meter central factory is responsible for the unified cold chain distribution from the factory to the store, to maintain the taste and quality of Noodles in soup to a greater extent. The noodle production base put into operation last year can meet the development needs of the next 5-10 years.
The recent next step for Hefu Lemei is to establish a digital system covering supply chain, operations, logistics, etc., to improve the operational efficiency of its stores.
“Chain operation should focus on digitalization,” which is also emphasized by Su Xuxiang, the co founder of Meet Xiaomian, who owns nearly 200 stores. “The taste of the product is updated, but adjustments are only made in the background, and the front desk operation is as simple as ever.” This is the chain catering concept he agrees with.
3、 What are the conditions for a noodle shop to be a thousand stores?
Today, Hefu Lo mein has about 384 stores, and continues to develop sub brands such as “Caishen Rouchuang”, “One Cup Lamian Noodles”, e-commerce retail brand “Hefu Home”. Recently, it has also registered a new coffee and fast food brand “Choose Me” to expand its business footprint.
The increasing number and momentum of the Hefu Lo mein crowd have also expressed doubts about the way to expand stores, expand and develop the sub brand matrix.
Will the noodles cooked by Capital continue to smell good? With the rapid development of Hefu Luomei chain store, is it capable of initially getting through its business model, or is it hiding in the spotlight of capital to burn money?
Judging from the profit data, Hefu Marinated Noodles began to make profits. According to the data of Juewei Food (Hefu Lo mein is a wholly-owned subsidiary of the company), in 2020, Hefu Lo mein had an operating income of 1.1 billion yuan and a net loss of 210 million yuan, but since 2021, it has turned losses into profits: in the first half of the year, it achieved a revenue of 850 million yuan and a net profit of 13.85 million yuan.
“The core appeal of capital is to achieve value-added and returns. For the catering industry, chain expansion can more directly meet the requirements of capital.” Fan Ning, director of the Red Food Brand Research Institute, believes that the restaurant model of the catering brand itself can achieve benign replication, and is also a precursor to good luck.
From the perspective of the number of stores, Hefu Marinated Noodles also grew rapidly. According to the data, December 2020 and 2

By orchioo

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