Holding Huang Jihuang and setting up the Chinese Food Division, KFC’s parent company Yum China really wants to make Chinese food.
Editor’s note: This article is from the micro-channel public number “electricity suppliers Online” (ID: dianshangmj) , Author: Cui Hengyu.
Author | Cui Hengyu
Edit | Si Wen
On April 8, Yum China issued an announcement of the acquisition of Huang Jihuang. This acquisition, which had been issued in advance in August 2019, was finally finalized.
This is the third Chinese food brand owned by Yum China. Prior to this, Yum China created its own Chinese food brand, Dongfang Yibai, in 2005, which specializes in Chinese fast food. In 2012, it bought HK $ 4.6 billion for the “first hot pot” Little Sheep.
At this point, in addition to KFC and Pizza Hut, Yum China also has the Chinese restaurant Iron Triangle. According to its acquisition announcement, after completion of the acquisition, Yum China will establish a Chinese food business unit, which will be composed of three core Chinese food brands: Little Sheep, Dongfang Jiubai and Huang Jihuang.
Huang Jihuang has these tags: Founded in 2004, he mainly cooks stewed dishes, failed the sprint IPO in 2017, and currently has more than 640 stores. The business model includes direct sales and franchise.
Yum China has not disclosed the price and more details of this acquisition. “E-commerce Online” contacted Yum China in this regard and has not yet received a response. Previously, Yum had publicly stated, “With the addition of Huang Jihuang, Yum China hopes to have a stronger foothold in the Chinese catering field and enhance its expertise in this field, because Chinese catering has a considerable size in China’s catering market. Share. “
Interestingly, when the post-epidemic food and beverage industry is in vain, and Haidilao ’s quiet price increase is intensifying, the Chinese food business is backhanded. What kind of calculation does Yum China use?
Huang Jihuang of “Hundreds of Sores and Hundred Holes” Marries into the Giants
100China ’s vision is very high. The Little Sheep acquired in 2012 was taken out of the stock market. What about Huang Jihuang?
Huang Jihuang did not have a dream of going public. He originally had the possibility of becoming the first stock of Braised Pot. In August 2017, his parent company, Huangtian International, submitted a listing application to the Hong Kong Stock Exchange, but it ended in failure.
The prospectus shows that Huang Jihuang’s revenue from 2014 to 2016 was 417 million yuan, 499 million yuan, and 400 million yuan, respectively. In addition, there are only 6 self-operated stores, 99% of which are franchise stores.
What is strange is that in 2013, Huang Ghuang, the founder of Huang Jihuang, told the media, “Huang Jihuang has more than 200 franchised stores and more than 200 directly-operated stores in China. The annual revenue of the entire Huang Jihuang system exceeds 2 billion, of which the revenue of the direct system Over 1 billion. “
According to the above information, within three years, Huang Jihuang’s direct stores have shrunk from more than 200 to six, and revenue has jumped from 2 billion to 400 million. It is unknown whether the founder Huang Geng is exaggerating or operating problems. . But the Hong Kong Stock Exchange’s denial of its listing application may explain some of the problems.
Huang Geng had a public development voice last year. He mentioned that in recent years, the performance of the Huang Jihuang brand itself has declined, but the overall injection of new brands (three points, etc.), so the performance of the past four years is basically Flat. In 2018, the distribution of year-end awards has been stopped.
The support of franchisees constitutes Huang Jihuang’s main income. Its revenue is mainly divided into self-operated store income, franchise expenses, and commission to franchisees. According to its official website, joining Huang Jihuang needs to pay: 100,000 yuan in the first phase of the brand usage fee, 100,000 yuan store operating deposit, 100,000 yuan opening deposit, and 6% of the turnover.
However, Huang Jihuang’s appeal to join is losing. “E-commerce Online” found that Huang Jihuang had 10 branches in Tianjin, Shenzhen, Shanghai, Wuhan and other places according to a company survey, but more than half of them have been cancelled. According to incomplete statistics, there are already as many as 80 restaurants cancelled in various places.
The control of direct stores and franchised stores is a serious problem that exists in Huang Jihuang. In recent years of development, Huang Jihuang has repeatedly been exposed to hidden dangers such as health and safety, and these problems all come from franchisees.
Not only was he stuck in a franchise crisis, but in 2015, Huang Jihuang acquired the dessert brand Xu Liushan with a wholly-owned investment of 500 million Hong Kong dollars, and dragged the latter into the siege. Statistics show that after the acquisition of Xu Liushan, the proportion of franchise is getting heavier and heavier.There are only 52 stores; in 2018, there were 161 self-operated stores and 112 franchise stores.
Let’s look at Yum China again. As of the end of 2019, Yum China has 9200 restaurants. Among them, the number of KFC stores reached 6,534, the number of Pizza Hut stores was 2,281, and the number of other restaurant stores was 385.
Huang Jihuang was acquired by Yum China, which is considered to be “marrying into a giant.”
Established Chinese food business department
From these years, Yum China’s layout of Chinese food is not difficult to discover its ambitions.
However, as a foreign fast food brand, how to make Chinese food is actually not clear. It is a testament to making the little fat sheep almost disappear in the public eye.
However, there is a common feature between the stewed pot Huang Jihuang and the hot pot Xiaofeiyang: no chef is required.
“Huang Jihuang three-simmered saucepan, no oil fume, no frying (low oiliness), no cook at all, extremely easy to copy.” Huang Geng once mentioned.
Huang Jihuang’s main product is braised pan dishes. The method is to put all the dishes directly into the pan, pour the special sauce, and boil it directly on the table. The essence is the sauce.
This mode provides convenience for joining and copying. The central kitchen only needs to send the specially-made “seasoning package” to its restaurant, and the employees can complete it according to the relevant standards. The rest of the work will be left to cut vegetables and prepare vegetables.
Getting rid of the heavy reliance on the kitchen is a standard that Yum!
“E-commerce Online” found that Huang Jihuang sauce was sold on multiple platforms such as Tmall and Applet. Not only can consumers buy, but also can be used by catering companies.
According to data from the National Bureau of Statistics, the total scale of China ’s catering market is 4.67 trillion yuan, accounting for 11.3% of the total retail sales of consumer goods. The huge cake of Chinese food is surprisingly large.
After the acquisition of Huang Jihuang, plus the previous Little Sheep and Dongfang Baibai, Yum China already has three core Chinese food brands.
According to Yum! China ’s 2019 financial report, Western food is still the bulk of its revenue, of which KFC ’s revenue contribution in the financial statements is 69%, Pizza Hut is 23%, and the remaining brands such as Little Sheep and Dongfang Jiubai only contribute 2 %.
In its acquisition announcement, Yum China stated that it would establish a Chinese food business unit. Chinese food is a cake that Yum cannot give up.
How does Yum China make Chinese food?
Over the years, Yum China has already realized the importance of new retail under the education of the market. In addition to the offline restaurant scene, it has been thinking about how to do more scenes of business? The new retail model that Huang Jihuang can bring is exactly what Yum is expecting.
Similarly, Yum China has launched a new retail layout for Little Sheep, launching hot pot takeout, retail hot pot base, self-heating hot pot and other products.
Yuming China said to the outside world, “Huang Jihuang brand hopes to accelerate the digital transformation in product development, brand digital marketing and store operation, further improve operational efficiency and improve customer experience. Yum China also hopes to use the Huang Jihuang brand to deepen Chinese food Understanding, and further applied to the operating system of its other Chinese restaurant brands. “
In addition, Yum China has always been obsessed with the takeaway territory.
“Yexit Express, a subsidiary of Yum !, has a vertically independent logistics and distribution team, which is a shortcoming for many Chinese catering companies and one of Yum’s competitive barriers.” An analyst once told e-commerce online.
How can Yum ’s logistics team play a bigger role? More stores under the service is a better choice. In fiscal 2019, Yum China opened 1,006 new stores, of which 742 were KFC’s new stores. Huang Jihuang brought more than 640 stores into the group and may be able to divert some of the food delivery resources in the future.
“E-commerce Online” found that Huang Jihuang is also deploying its own logistics and opened “Huang Jihuang is great to deliver the whole city”, but so far only one store has this service.
In addition, from the perspective of Huang Jihuang’s products, there is a large demand for chicken, fish and other food ingredients. In the future, it may be possible to coordinate with KFC in the chicken supply chain.
In addition, before November 2016, Yum China and Yum Catering Group split their listings. Alibaba Ant Financial took US $ 50 million in Yum China. As a shareholder, Ant Financial has more than 900 million users in China, which can provide Yum China with richer consumer data and support a series of digital improvements such as Yum ’s marketing and menu updates.
Going to sea with Chinese food
Yumo China has been working hard on making Chinese food. Selling soy milk, fritters, or even hot pot in KFC stores, but these can only be regarded as small attempts.
In 2005, the self-made Chinese food brand Dongfang Baibai was a big breakthrough. The first store was opened in Xujiahui, the most prosperous business district in Shanghai.The amount is still in more than 10 homes.
Since then, Yum China has acquired Little Sheep for nearly HK $ 4.6 billion in 2012. But the little fat sheep after the acquisition is “increasingly thin.” The market size of the Little Sheep in the domestic market has shrunk dramatically, from more than 700 at its peak to about 200 now.
Yuming is not satisfied with the integration of Little Sheep.
The loose system, lack of standardized management, and continued expansion of bottlenecks. Su Jingshi, the former CEO of Yum China, once publicly pointed out the problems of Little Sheep, and said that the workload during the process of docking Yum and Little Sheep is huge, including logistics, employees, menus, etc problem.
But the little fat sheep that has been connected for many years has released another signal. According to a report from the Beijing Business Daily, the Little Sheep owned by Yum! Has opened more than 300 branches overseas.
From the situation of the Little Sheep going to sea, you may be able to see the fate of Huang Jihuang. In fact, Huang Jihuang’s current layout already has the genes for going abroad. According to the official website, it has opened more than 13 stores in Australia, Canada, the United States, Indonesia, Thailand, Malaysia and other countries.
Whether you ca n’t make good Chinese food, or take the Little Sheep and Huang Jihuang to sail, Yum China may give a surprising answer.