Zhouhei duck, the “Spicy Spike Assassin”, was stabbed on his back

Whether Zhouhei duck is free to join or Juewei is far ahead in the store, it is an undeniable fact that the store controls the lifeblood of braised meat. And if you want to become the next “king of stores”, the community is an inseparable link.
Zhouhei duck’s recent experience can be described as house leakage, but it rains all night.
On the evening of February 13, Zhouhei duck issued a profit warning that it is expected that the revenue in 2022 will decline by about 20% year on year, and the net profit will be even worse. It is expected that the net profit in 2022 will be no less than RMB 20 million, down more than 94% compared with the net profit of RMB 342 million in 2021.
On February 14, the term “Zhouhei duck’s performance dropped by more than 90%” appeared on the hot search. A group of netizens did not have sympathy for Zhouhei duck. The voices of “too expensive!” and “can’t afford to eat” occupied the mainstream of the comment area.
The other two of the “three giants of bittersweet” are not much better. According to the forecast of the company’s performance, the company’s net profit is expected to be 220 million to 260 million yuan in 2022, a year-on-year decrease of 73.49% to 77.57%; Huang Shanghuang also said in the performance forecast that the company is expected to make profits of 30 million to 40 million yuan in 2022, down 72% to 79% from the same period last year.
When the “three giants of braised food” fell out of favor, the new style of braised food represented by Wang Xiaoyan, Ma Claw and Sheng Xiangting took over the stick and became the new love of young people.
The giants are in the front and the waves are coming back. The duck’s neck can’t move, but young people have more choices.

1、 10-year low

As a matter of fact, Zhouhei duck’s performance has already been threatened.
The Zhouhei duck semi annual report shows that in the first half of 2022, Zhouhei duck’s revenue will be 1.185 billion yuan, down 18.8% year on year; The net profit was 18.377 million yuan, down nearly 92% year on year.
If Zhouhei duck’s performance forecast of “2022 net profit of 20 million yuan” is used, the company’s net profit in the second half of 2022 will be less than 2 million yuan.
Except for the outbreak of the epidemic in 2020, the above data is almost the trough of Zhouhei duck’s performance in the past 10 years.
Despite the three years of the epidemic, Zhouhei duck’s performance declined as early as six years ago.
From 2017 to 2020, the total revenue of Zhouhei duck dropped from 3.249 billion yuan to 2.182 billion yuan, with a three-year decline of more than 32.84%; Net profit decreased from 762 million yuan to 151 million yuan, leaving less than 20% of the previous one.

Under the pressure of performance, Zhouhei duck began to save himself.

In 2019, Zhouhei duck officially announced that he would open his franchise and use the business model of “direct marketing+franchise” to save the decline. After more than a year of model reform and store expansion, Zhouhei duck has achieved “rejuvenation” of various financial data in 2021——
The financial report shows that the revenue and profit of Zhouhei duck in 2021 will be 2.87 billion yuan and 342 million yuan respectively, up 31.53% and 126.49% year on year; Among them, the number of franchise stores increased from 937 to 1535, an increase of nearly 257% year on year, and the revenue reached 592 million yuan, an increase of 322.4% year on year.
However, the rise boosted by franchise stores did not continue. According to Zhouhei duck’s 2022 midterm report, as of June 30, 2022, the number of franchise stores has increased to 1818, with a significant slowdown in growth; The franchise sales increased to 334 million yuan, only 39.9% higher than the same period in 2021.

Also ineffective is Zhouhei duck’s channel marketing strategy.

Under the catalysis of the rising trend of the “housing economy” in the post epidemic era, Zhouhei duck actively laid out new online channels, especially in the fresh food e-commerce and live broadcast fields. Data shows that by the first half of 2022, Zhouhei duck’s community fresh food channels have covered more than 170 cities, with more than 4000 front warehouses; In the first half of the year, the number of live broadcast hours exceeded 5000 hours, reaching more than 500 million people.
At the same time, Zhouhei duck, centering on the strategy of “individualization, diversification and rejuvenation”, promoted brand renewal by means of new product development and new marketing. However, after a series of actions, Zhouhei duck’s sales expenses gradually increased, but profitability declined instead of rising.
Data shows that by the first half of 2022, the sales expenses of Zhouhei duck have accounted for nearly 43% of the total revenue, almost equal to the sum of Huangshanhuang and Juewei in the same period.

Even in 2023 after the liberalization, the bad news has not stopped.

In January this year, it was said that “Zhouhei duck’s net profit in 2023 is expected to be only 150 million to 200 million yuan”, about half of the net profit in 2021. Affected by this news, Zhouhei duck’s share price plunged on January 11, with a one-day decline of more than 22%.
The next day, Zhouhei duck released a rather “ambiguous” clarification announcement, saying that “all business operations are normal and the senior management team is stable”, but at the same time, he acknowledged that the company’s performance is facing the impact of various adverse factors. According to the announcement, Zhouhei duck will strive to achieve a profit of 200 million yuan or more in 2023.
However, the market knows that “this is the goal rather than the forecast”, and Zhouhei duck is still cautious about its own growth.

2、 Why is it difficult to live a duck

Zhouhei duck said that the main reasons for the decline in profits came from three aspects:
First, in 2022, the domestic COVID-19 epidemic was repeated. According to the epidemic prevention and control requirements, some stores of the company were temporarily closed, resulting in a sharp decline in consumer traffic;
Second, the rising price of raw materials leads to increased pressure on the cost side;
Third, exchange rate changes lead to exchange losses.
To sum up, although the epidemic of being “top” has brought negative impacts to offline businesses, such as reduced passenger flow and closure of some stores, it is not enough to explain Zhouhei duck’s declining performance in the past five years.
At least the performance of Ziyan Baiwei chicken, which is also made with braised meat, is not significantly affected by the epidemic; In addition, the decline of Zhouhei duck is not commensurate with the rapid growth of the domestic braised meat market.
According to the data, the compound growth rate of the sales volume of the bittern market in China has remained above 15% all the year round. During the three years of the epidemic, the scale of the domestic bittern market has also increased from 303.3 billion yuan to more than 360 billion yuan.
The crux may be “high-end”.
Different from the parity characteristics of Juewei and Huangshanghuang, Zhouhei duck has adhered to the high-end route for many years, which is also known as “Hermes in Duck”.
The public data in 2021 shows that the price of Zhouhei duck’s neck and feet is 64 yuan/500g and 78 yuan/500g respectively. Under the same specification, the price of Juewei is 40 yuan and 55 yuan respectively, and the price of Huangshanghuang is 54 yuan and 60 yuan respectively.
Zhouhei duck’s ability to become one of the “three stewed flavor giants” by virtue of high-end layout is partly due to the dividend of the times.
In the early years, the bittern market was mainly operated by small workshops, with low market concentration, and was also the outbreak place of “junk food”, which was difficult to meet the dual demands of consumers for delicacy and health.
Zhouhei duck, in the scattered low-end braised meat market, took the lead in playing the high-end flag, which not only won the favor of consumers, but also became a companion gift for sending relatives and friends.
In order to maintain the business of high customer price, Zhouhei duck began to use MAP packaging technology that is more advanced than bulk packaging and vacuum packaging many years ago, so as to better retain the freshness of braised food. When it was not launched in 2015, Zhouhei duck’s MAP packaging product revenue had reached 85.6%, and it has maintained a share of nearly 90% these years.
The staffing of “high-end duck” is also reflected in the store layout. The store layout of Zhouhei duck in its early years is different from that of Juewei. Juewei’s stores are mostly around the communities along the street, while Zhouhei duck focuses on the transportation hub. The high-speed railway station and airport are the permanent residence of Zhouhei duck.
Now, the per customer price of Zhouhei duck has exceeded 60 yuan. For their positioning of “leisure snacks”, this price is undoubtedly the “unbearable burden” for young people’s consumption during the economic downturn.
Today, the “high-end” of the panacea has become a curse for today’s Zhouhei duck. As the battle line grows, the high-end layout will increasingly become a constraint for Zhouhei duck.

The most typical is the expansion of stores.

At present, Zhouhei duck’s stores are still concentrated in the first and second tier cities, unlike Juewei, which takes the sinking route, and can expand stores in a large area in a short time. Data shows that by the end of 2021, the number of stores of Juewei will have reached 13700, more than four times that of Zhouhei duck, and the number of stores in Huangshang is almost twice that of Zhouhei duck.
“It is difficult for Zhouhei duck to make high-end products, and sometimes mixing and cross-border products can make a difference. Customers who are difficult to be loyal naturally flow to competitors.” Lin Yue, an analyst in the catering industry, is not optimistic about the high-end positioning of Zhou Heiya compared with the other two halogen giants.
Moreover, the rise in raw materials is further pushing up the operating costs of enterprises.
Public information shows that in 2022, the number of domestic meat ducks sold will be about 4 billion, a decrease of about 70 million compared with 2021. In addition, affected by the external environment, the price of soybean meal and corn used as feed also continued to rise.
The reduction of production capacity and the increase of breeding costs led to the peak of meat duck prices in the past five years in the second half of 2022. The announcement of the listed company also shows that the purchase price of duck neck and feet rose by about 20% in the first half of 2022, and the direct price of duck head rose by more than 160%.
The internal cost pressure is still increasing, and the fierce external competition situation has not weakened.
From 2021 to 2022 alone, 17 brands in the national bittern market were financed, with a single financing scale of hundreds of millions of yuan. This has directly led to the serious sales volume of each braised flavor company. In order to cope with the competition, the braised flavor giants represented by Zhouhei duck can only continue to increase the support at the sales level.
For quite a long time in the future, the doom cycle of soaring expenses, declining revenue and consumer persuasion will still squeeze Zhouhei duck’s already difficult duck.

3、 How to solve the problem, only the community?

Generally speaking, price increases usually lead to price increases. But in fact, product prices and raw material prices do not increase in the same proportion. Therefore, consumer enterprises cannot transfer the rising costs to the consumer market without hesitation. At least, the price increase cannot completely transfer the cost pressure caused by the rising raw material prices.
In the face of the profit crisis, open franchise has been the most breakthrough strategy Zhouhei duck can come up with; Another accompanying turn is the structural transformation of Zhouhei duck’s offline stores – from stores centered on transportation hubs to more “grounded” community stores.
Xie Jun, the head of Zhouhei duck Retail Business Center, once said that through the continuous encryption of the first and second tier advantageous markets, the development and output of community store models, and the expansion of the third, fourth and fifth tier markets, it is estimated that there will be 5000 stores in 2023, and “10000” stores in the future.
Whether Zhouhei duck is free to join or Juewei is far ahead in the store, it is an undeniable fact that the store controls the lifeblood of braised meat.

And if you want to become the next “king of stores”, the community is an inseparable link.

According to the data of AIMedia Consulting, 74.7% of consumers choose instant food when purchasing leisure halogen products; 78.9% of consumers will choose community stores when purchasing halogen food products. Therefore, community stores that can meet the needs of consumers in the first time, whether for leisure or with meals, are a must for brands.
The community has covered the last mile of consumer life, and the advantaged distance advantage has made the arrival rate of community businesses higher. Especially under the influence of the epidemic, community consumption has become particularly hot.
According to the data of Huachuang Securities, there are 150000 large communities in more than three tier cities across the country. The large scale of consumer groups and higher consumption frequency have attracted many halogen brands to open their stores in the community and compete for the favor of consumers in the form of “stalls”.
With regard to the effect of community stores, many new and cutting-edge marinated brands have made verification.
For example, the founder of Jaw, Yu Xuehang, which was founded in 2012, mentioned that in the early three businesses of Jaw (technology franchise, e-commerce, and community direct marketing), the community direct marketing has the most investment and complex management, but the profit is also the most stable and lasting.
After several years of intensive cultivation, the claw has found a complete set of standardized processes in R&D, distribution, operation and other links. Public information shows that in 2021, the revenue of Jaw reached 220 million yuan, and the survival rate of franchisees was close to 98%.
The Wuonly bittern goose, which started in Guangdong, also follows the community store model. In the view of founder Lin Jianbing, community stores have a better single store profit model. “From the perspective of cost, the rent of the community store is low, and the human efficiency and flat efficiency are higher; from the perspective of income, the effective operation time of the community store is long, which can not only meet the needs of purchasing family dishes, but also meet the needs of takeout and a small part of the canteen food, and the income is more stable.”
Although most of the stores of hot halogen food light are concentrated in the business circle, the founder Sun Nian once mentioned that the purpose of the store layout in the shopping mall is to open the minds of users. Consumers can have secondary memories when they see them in other places, and then gradually penetrate into life scenes. In his vision, the first echelon is opened in the mall to fight the mind; The second echelon is in CBD; The third tier is in the community.
“It must be community stores that will support the expansion of the category from high to low.”
From the perspective of market scale, according to the Research Report on China’s Halogen Products Industry in 2021, it is estimated that the market scale of China’s halogen products will reach 405.1 billion yuan in 2023.
Big fish in big water. Zhouhei duck, Juewei, Huangshanghuang and other old braised dishes have the same taste for thousands of years, and their categories are relatively single. Compared with “Big Brother”, the new brand can better grasp the new consumption trend. In addition, new technologies, new channels and new capital also provide new players with opportunities to compete and surpass.
Weng Yinuo, founding partner of Hongzhang Capital, who has invested in Ziyan Food, said: “Halogenated products are a super track with long product life cycle, strong consumer stickiness and high repurchase rate. At present, the competition pattern of the industry is scattered, especially in the seasoned stewed food industry, which is mostly regional enterprises. It is the general trend to further increase the chain rate in the future, and large-scale enterprises are expected to run out of more than one 10000 stores.”

4、 Conclusion

The pickled flavor that has been flowing around the streets for thousands of years has now become a frequent customer in Chinese recipes. According to the data of AIMedia Consulting, 96.6% of consumers have bought the pickled flavor, of which only 7.9% said “average” or “dislike” to the pickled flavor.
Although the growth rate is fast, the bittern industry is still dominated by small workshops, with low market concentration. Even if Juewei, Huangshanghuang, Zhouhei duck, Ziyan and Jiujiuya add up, the market share is only 20%.
Whether it is for listed companies or the new players in the primary market, the end of bittersweet is far from over.
On the one hand, China’s consumption structure and consumer preferences are facing a huge iteration. The young generation has become the main force of consumption, pursuing trendy, convenient and cost-effective.
On the other hand, consumer demand is more diversified, stimulating the industry to reform and innovate products. The end of the Internet dividend, the shuffle of the live broadcast business and the rapid rise of the community consumption scene all put forward requirements for FMCG industry participants to rearrange channels and flexibly adjust resource allocation.
In addition to expensive duck necks, young people have a wider choice, and the next “king of thousands of stores” is brewing in their mouths.

By orchioo

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