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Thinking on the development of condiment industry under the
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本文作者:中国调味品协会秘书长白燕 2020年春节,一场突然其来的疫情迅速笼罩了全国。 本该举家团圆欢聚的日子,却被迫叫停。所有人以最小的家庭单元形式 ,各自在家隔离。没有了拜年、...

Author: Secretary-General of China Association of spices Bai

 

 

 

In the Spring Festival of 2020, a sudden epidemic quickly enveloped the country.
 
 
 
The days when the whole family should be reunited and reunited, were forced to stop. Everyone is isolated at home in the smallest family unit. There is no New Year's greetings, no dinners, no going out, no social activities of any kind. There is only one life state, and that is the house. Stay at home, do it yourself, get enough food and clothing, adjust yourself, and solve problems.
 
 
 
As a result, the housing economy suddenly became the most popular economic form. As long as the industries that were helpful to housing became popular, such as various fresh food online shopping platforms, game platforms, online education, live video, and takeaway group meals. , Sports fitness App, network office platform, etc. It has become an essential tool for everyone living at home.
 
 
 
Some industries that were supposed to increase their sales during the peak season of the Spring Festival have suffered the most tragic hits in history, including cultural tourism, catering, cinemas, aviation high-speed rail and various offline store formats, and even real estate and Clothing industry and so on.
 
 
 
The butterfly effect of the epidemic has caused China's overall economy and Chinese companies to encounter an unprecedented test in the epidemic. While government departments at all levels are comprehensively preventing and controlling the epidemic, the development and thinking of China's economy has been placed in front of us urgently. Since the outbreak of the epidemic, people from the economic, investment, and various industries have been vocal, analyzing and judging the situation, making suggestions, discussing ideas, and offering suggestions.
 
 
 
So, the condiment industry, as one of the important livelihood products of our country, under the epidemic, especially after the epidemic, what should we do? This is a question that every condiment person of us must think seriously now.
 
 
 
The current situation of the condiment industry
 
The condiment industry is a very important part of my country's food industry. It is a necessity for consumers to eat three meals a day and the soul of Chinese taste. Therefore, the condiment industry has developed rapidly in recent years. In particular, with the improvement of consumers’ quality of life and the pursuit of a delicious life, condiments have moved from behind the scenes to the front stage, becoming an important carrier for the taste of life, and an important part of the investment community. New favorite.
 
 
The condiment industry is divided into seventeen categories of products with tens of thousands of varieties. Although the current sales channel has evolved from the traditional dealer channel to an omni-channel sales system. However, the sales terminals of condiments have not changed. They are still in the catering industry, family kitchens and food processing. Before, when we talked about the sales ratio of these three sales terminals, the conclusion we gave was 4:3:3. However, in recent years, with the rapid development of the catering industry and the birth of new types of catering, the proportion of condiments sold in the catering industry is increasing, reaching 50% of the entire condiment industry, including brand condiments and catering customization Condiments are two types of products.
 
 
In particular, catering customized condiments have become one of the most demanding products in the catering industry. As a result, condiment suppliers who provide customers with flavor solutions, even including designing dishes for restaurants or directly empowering restaurants with brand concepts, have become a new corporate positioning pattern in the condiment industry, which has begun to develop and gradually grow stand up. This type of company is at the forefront of the market, directly understanding customer needs, and working with customers to develop products, providing taste solutions, rather than just selling a single product. Therefore, the profit margin of the company is relatively high, and it develops collaboratively with customers. The relationship is relatively stable, and the room for innovation is relatively large. However, there is also the problem of relatively high management requirements for the production line due to the diverse needs of customers.
 
In 2019, we proposed that the condiment industry has formed three forms of corporate positioning pattern of manufacturers, brand owners and flavor solution providers. The division of labor between enterprises is even more obvious. The three forms of enterprises, each give full play to their advantages, and are refined in their respective professional fields, cooperate and develop together.
 
 
The sales channels of condiments have also undergone great changes in recent years, from traditional offline distributor channels to a new retail system combining online and offline. At the same time, due to the emergence of flavor solution providers in the industry, the catering channel business of some original distributors has also been shared.
 
 
The online sales methods of condiments include self-operated sales at the C-end, companies or self-built e-commerce platforms, or self-built flagship stores on e-commerce platforms such as Tmall and JD, or sales on various fresh food platforms. Such as Daily Youxian, Meituan, etc.; including new retail methods with new retail platforms such as Ali Taoxianda and JD Supermarket; also including to B-end Meicai, Meituan Kuailu and other sales methods.
With the rise of new media communication methods, webcasting, online celebrity delivery and content emotional marketing methods have also been adopted in condiment sales through online forms. The online situational consumer experience model is aimed at young people due to its intuitive, interesting and brought-in-life scenes, and has become one of the ways for condiment companies to seize new consumption and new consumer groups.
 
 
 
Difficulties faced by the condiment industry under the epidemic
 
The raging epidemic quickly swept across the country and caused severe damage to the Chinese economy. The condiment industry is also facing severe tests in this epidemic. The association has recently communicated and exchanged with member companies one by one to understand the current status of each company and the main difficulties faced, and combined with our policy recommendations, formed written materials and submitted them to the higher-level departments for reference. The main difficulties faced by various companies now include:
 
 
1. The catering industry, which is closely related to the condiment industry, has tight cash flow and is facing the test of survival. Especially for the fast-growing restaurant chains in recent years, many restaurants are on the verge of bankruptcy due to the large number of stores, the large staff, and the large fixed costs. And these restaurants are the main customers of the condiment and flavor solution providers we just talked about. This is indeed a big challenge for the newly emerging condiment companies. Faced with difficulties in the collection of accounts receivable, the risk of future orders being greatly reduced.
 
 
2. Brand enterprises that originally focused on retail terminal layouts such as supermarkets and convenience stores will be slightly less affected. However, due to epidemic control, workers cannot resume work in time, logistics cannot flow smoothly, and terminal supply shortages occur from time to time. Similarly, if the condiments sold on various online platforms have not been shipped in advance, or if the company does not have sufficient inventory, there will be a phenomenon that the supply cannot keep up. Farmer's circulation and wholesale markets in various places opened late and were not popular. The sales of the entire condiment industry are relatively slow.
 
 
3. It is difficult to resume work and normal production of enterprises is restricted. It is difficult for non-local employees to return, and the return time is uncertain. Even if they return, they need to be quarantined for 14 days. After the resumption of work, it is difficult to guarantee the protective equipment and materials of the factory, and the protective process is complicated, requiring professional guidance. At the same time, the delay in processing workers’ health certificates in some places makes it difficult for companies to resume normal production in the short term.
 
 
Fourth, the limitation of logistics has hindered the normal logistics between upstream and downstream. Enterprises lack sufficient raw materials for production, and the products produced are difficult to ship. This has caused great inconvenience to the normal production and operation of the enterprise.
 
 
5. The upstream raw material suppliers of condiments are faced with the risk of drastically reduced orders and failure to collect payment in time. However, downstream distributors have stocked a large amount of goods a year ago, resulting in a backlog of goods, unable to sell out, and the problem that funds cannot return in time.
 
 
Although everyone stays at home and the household consumption of condiments is increasing, the increase in household sales cannot make up for this gap compared to the curbed food consumption in the catering and tourism industries. Throughout the Spring Festival holiday, including the first quarter, the decline in production and sales of condiments is certain. As for the percentage of decline, we learned in the process of communicating with companies that some companies are more optimistic, while others are relatively pessimistic. Optimistic companies generally believe that February performance will drop by about 20% year-on-year, and in the first quarter it will drop by about 10% year-on-year. However, most business owners are still full of confidence in the future market, believing that the decline in production and sales during the epidemic is only the result of temporarily curbing demand. If the epidemic is over and the market returns to normal, the production and sales of condiment products will soon return to the normal development speed.
 
 
 
What should companies do after the epidemic?
 
This epidemic has brought a great crisis to the industry, which we all did not expect. This crisis will inevitably bring about changes in the balance of the existing market structure, and a new balance will inevitably occur. Crisis is a turning point and can be further transformed into business opportunities. It depends on who has the strength to survive this crisis and take over the endgame left by others after the crisis.
 
 
 
The thinking that the epidemic has brought us is not only thinking about how to deal with this crisis, but also thinking about how to face future development. What did this crisis tell us? What did it teach us? How should we build our own firewall to deal with other crises that may occur in the future? This is where we can calm down when we are isolated from home these days. Think carefully about the problem. From this perspective, the crisis gave us the opportunity to stop and think.
 
 
 
 
After the epidemic, large brand companies will expand rapidly and carry out a national layout. Products with precise positioning and obvious differentiation will be more popular, the backward production capacity of small and medium-sized enterprises will be cleared out quickly, and the concentration of the condiment industry and the concentration of brands The degree will be further improved. After the baptism of this epidemic, companies should pay more attention to the following aspects:
 
1. The market demand of the housing economy will be further explored. Although quarantine at home for such a long time as this epidemic is not normal, after this epidemic, all people are chefs, and every family publishes recipes, which has become one of the main ways for everyone to talk to relieve boredom and enhance the taste of life, and in the future It will also form part of people's living habits. So, in so many days, everyone's consumption preference and purchase behavior of condiments are the main content we want to study. Is the traditional single condiment more popular, or is it more marketable for compound convenience dishes? When choosing products and brands, do you follow your original buying habits? Or start to pay attention to various live video methods, or through online recipes How about sharing and word-of-mouth communication? This quarantine has caused many young generations to start cooking. Therefore, a variety of compound instant dishes with recipes are more popular with them, and they also pay more attention to online experience such as live broadcast and Internet celebrities. Sales methods. Moreover, because it is done every day, in order to ensure that the recipes are refurbished and not duplicated, the proportion of recipe exchanges and word-of-mouth communication among friends is increasing. These are the directions that condiment companies can focus on when developing household consumption channels in the future.
 
 
2. The establishment of an omni-channel system for the condiment industry has become a trend, especially the improvement of online sales channels and the diversification of online sales methods. The prevention and control of this epidemic is very strict, and each community is strictly managed, with the family as a unit, limiting the frequency and time of individuals going out. Therefore, when placing orders online, express delivery has become the mainstream. Various fresh food website platforms are quickly recognized and adopted by consumers. Among them, it is worth mentioning that Meicai.com, which is mainly based on the to b terminal, launched the to c terminal business on January 31. In just one week, individual users increased by 400% and the number of orders increased by 500%. The Meicai app surpassed Pinduoduo in Apple Store downloads and ranked fourth. This is still the increase in the number of customers achieved without any publicity or subsidies to customers. The enthusiastic netizens have compiled a complete set of grocery shopping apps that have helped many consumers who did not pay attention to buying food online. The food and condiments purchased on these apps are not only reasonably priced and relatively complete in variety, but also timely and convenient for delivery, bringing consumers a good consumption experience. There are also online sales systems in major supermarkets and convenience stores such as box fresh produce, which have become one of the ways for everyone to purchase online. Even if the epidemic passes, some consumers will also retain these buying habits. Therefore, condiment companies should pay attention to the business docking of these e-commerce platforms, analyze the consumption needs of the platform, and provide corresponding products, supplemented by rich online promotion methods, to expand the sales of products in this channel. Of course, the traditional distributor channel of condiments is still the mainstream, and it is the main way to achieve bulk sales of condiments. After the epidemic, the financial pressures and difficulties faced by dealers still need to be resolved together with the enterprise to overcome the difficulties. In addition, traditional distributors should study ways to combine online sales and innovate distribution models. At present, some big businessmen of the China Condiment Distributors Association have already started work in this area.
 
 
3. Intelligent manufacturing and high-quality development of production enterprises have become the direction. The essence of intelligent manufacturing is to use technology to get rid of manpower, thereby reducing the low production efficiency caused by manual errors and the difficult control of product quality. As a traditional manufacturing industry, the condiment industry has begun the pace of intelligent manufacturing while inheriting traditional manufacturing techniques. A number of outstanding brand companies, such as Haitian, Lee Kum Kee, Hengshun, etc., have all realized intelligent manufacturing. In this epidemic, one of the difficulties encountered by condiment companies is that it is difficult for employees to return to work. Not only are employees unable to return in time, but also the isolation and safety protection after returning to work are problems faced by enterprises. But for companies with high levels of intelligence and less manual dependence, this aspect is a lot easier, and the company's strength and competitive advantages are obvious.
 
 
Fourth, brand influence and brand consumer perception are the cornerstones of enterprise development. Today's market is a market with extremely surplus products. What do consumers rely on to determine their buying behavior? The only answer is to rely on the brand and their perception of the brand. This not only allows companies to have a large number of loyal consumer groups, but also enables companies to build their own firewall in the red sea of ​​peer competition. Condiment companies are now paying great attention to the building of their own brands. Many brands have accurate brand positioning and vivid brand images. But compared to liquor, beverages, leisure products and other industries, there is still much room for improvement in brand building.
 
 
5. Product quality and precise positioning are the foundation of enterprise differentiation. There are rich varieties of seasoning products and complete categories. There are both single seasonings and compound seasonings; both regional products and national products; both fermented products and non-fermented products; both western and Chinese foods; There are both terminal-oriented condiments and catering-oriented condiments. Moreover, the homogeneity competition among various products is fierce, and price wars and traffic stations occur from time to time. In the competition, being able to choose their own product positioning and always maintain excellent product quality is the foundation for companies to avoid price wars and avoid being restricted to homogeneous competition. Product positioning includes consumer group positioning, product function positioning, and market channel positioning. Take the positioning of consumer groups as an example. There are now 300 million middle class in China. Their focus on condiments is no longer on price, but on product quality and whether it matches their own tastes of life. Therefore, the consumer positioning of condiments for the middle class and condiments for rural areas or third- and fourth-tier cities will be different. Taking the market channel positioning as an example, the product positioning for the wholesale farmer's market and the product positioning for the e-commerce sales channel will also be different.
 
 
Sixth, the application of the digital economy in the condiment industry is promising. Under the epidemic, online sales have become a hot spot, and the clients of major e-commerce platforms to C have exploded in the short term. In the future, with the further increase in the proportion of online sales, customer sales big data will be easier to obtain than before, and it will have practical reference value. In the future, supplemented by the use of product international QR codes, enterprise customer platform management and other big data acquisition methods, the big data analysis of the condiment industry will be more subdivided and refined.quasi. These big data analyses include market demand analysis of condiments, individual customer preferences, analysis of various channels, and analysis of competing products, etc. These precise digital analysis can help companies accurately research and develop products and formulate corresponding corporate development strategies.
 
 
7. Upstream and downstream companies in the industry may consider group development, mutual ownership or strategic binding. The epidemic has brought severe damage to the entire condiment industry chain. All suppliers of raw materials and packaging equipment, distributors, and catering companies are facing a huge test of cash flow. If you lose it, you will lose it. After the market recovers, how to restore its vitality and ensure the normal operation of the company’s business to meet this late spring? It also requires the discussion and judgment of upstream and downstream partners. You can consider using equity mutual holdings to solve the cash flow problem, or you can Consider the strategic binding between industrial chains and seek the help of supply chain finance. In short, the security of the supply chain is a prerequisite for industrial security. Under the crisis, it is necessary for everyone to develop together.
 
 
8. It is imperative to establish enterprise risk early warning and safety prevention and control mechanisms. The news of the new crown pneumonia actually appeared in early January, but it did not attract the attention of most companies. If the enterprise has a sound risk early warning mechanism, professional information personnel should prompt the enterprise in time. So companies have to be more calm in dealing with this crisis. In addition, how the company conducts risk prevention and control after early warning and whether the corresponding mechanisms and processes are established will also test the level and ability of the company to respond to the crisis. Haidilao's early warning and prevention and control work in this crisis is a good example. Although crises do not happen often, crises are always possible. Forewarned is forearmed, without prejudging the waste. After the epidemic, condiment companies should consider establishing corporate risk warning and safety prevention and control mechanisms to improve their risk resistance capabilities.
 
 
9. Actively embrace capital and improve the company's capital structure. The epidemic has brought pressure and test to all companies' cash flow. It can be said that after this crisis, it is cash flow that determines the survival of a company. Take catering as an example, it is difficult for several large companies in the head to speak up. However, there are a few companies that are not head companies, because they are listed in Hong Kong or other securities markets, or have other capital participation, and it is necessary to be relatively calm in dealing with the cash flow crisis. Not to mention that it is a leading company and a listed company. The condiment industry has now become the focus of the capital market, and a number of outstanding listed companies have emerged, such as Haitian, Hengshun, Anqi, and Qianhe. However, the cooperation between the condiment industry and capital is still at a relatively initial stage, and there is still much room for improvement. As the condiment industry of the traditional manufacturing industry, we can further open our minds, actively embrace capital, and let capital help the development and growth of enterprises.
 
 
 
Looking at the daily decline in the number of new confirmed cases and the number of suspected cases, I feel a lot more at ease. The epidemic should pass soon. This epidemic has forced many people to stop and rethink their lives; it has also allowed many companies to quickly surface their hidden problems and rethink their strategies and development directions. Just like the survivors who can stay on the beach after a big wave has swept, the companies that can survive the epidemic are also lucky.
 
 
I sincerely hope that every lucky condiment company can think more deeply about its own development after experiencing this nirvana rebirth, and cultivate stronger combat effectiveness and brand competitiveness.
 
 
The future development of the condiment industry can be expected, but it must be for companies that are prepared and capable. Companies in the industry, are you all ready?

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