How to cut this big cake in China?
Editor’s note: This article comes from the WeChat public account “FBIF Food and Beverage Innovation” (ID: FoodInnovation) , author : Momo (Wenky), Kiki (DQ), editor Bobo. Released with authorization.
How often do you go to the bakery? How much do you spend on baked goods?
Did you find that as there are more and more bakeries near your home, the variety of choices has increased and consumption has gradually increased? But in fact, the consumption of baked goods you eat may be much lower than the world average. According to statistics from Euromonitor International, the per capita consumption of baked goods in Mainland China in 2017 was 6.9 kg, which is far lower than the world average per capita consumption of baked goods of 18.7 kg.
Although per capita consumption is lower than other countries, in recent years, the market size of China’s baking industry is growing at a fairly rapid rate. According to Euromonitor International statistics, the average annual compound growth rate of the domestic baked food market in 2014-2018 reached 10.6%, and the Chinese Bakers Consumer Association predicted that the average annual compound growth rate of the baking industry could reach 45% by 2025.
At the same time as the rapid growth of the baking industry, we found that a group of data from the “China Food and Beverage Report 2019” released by Meituan Dianping, the joint catering owner, showed that 80,000 bakeries were closed in 2018.
According to Euromonitor International, the scale of China’s baking industry has reached 238.4 billion yuan, and we found that the bread market in Japan next door exceeded 100 billion yuan in 2017.
One side is going all the way, one side is a large number of closed stores, China’s 100 billion baking industry needs to think cold. This article will analyze the pain points and opportunities of Chinese baking, and try to use Japanese baking to explore the future of Chinese baking.
01 Behind the rapid growth, China ’s baking industry has many worries
1. Internet celebrity brands and categories come and go quickly
By mentioning the popular celebrities in the food industry, baked goods are absolutely indispensable. Master Bao Rousong Xiaobei, LadyM Melaleuca Cake, Uncle Chess Cheese Cake, these brands that have swiped the screen or caused a long queue, some of them have faded out of view, and some have disappeared. For example, Uncle Chess has withdrawn from the Chinese University Some markets.
The short life cycle of explosion models is an indisputable fact.
Taking Uncle Chess as an example, although the initial product of cheesecake has a good reputation, but consumer preferences have changedExcessive consumption of the body (continuous exposure of social media), low barriers to entry, and lack of core barriers are the reasons for the unfavorable ending of Uncle Chesi. The explosion of red attracted batches of followers, such as Uncle Chesi, Grandpa Rick, Uncle Cheese, etc., which intensified the homogenous competition and accelerated the swallowing of Uncle Chesi.
On the one hand, Internet celebrity products can indeed help brands quickly gain attention. For example, Hollyland Co-branded Tea launched the grape snow melting cheese cake, etc., which has harvested attention across the border. However, how to meet consumer demand with stable quality and appropriate product lines is also a brand that needs to be considered and continuously invested, and it is also the foundation of Changhong.
Holly Lai Xi Tea Joint Name Photo Source: Weibo @ Holiland
2. The length is the same, so many brands are too silly to distinguish.
We searched Taobao for the more popular lactic acid bacteria bread, purple rice bread, and shredded bread. The products on the full screen seem to be almost the same.
However, there are several brands that consumers remember clearly, and it is elusive which one to place an order. For example, many brands of lactic acid bacteria bread have launched similar products, but the well-known brands are limited. The reason is that few brands have outstanding product power. As a pioneer in the bread category of lactic acid bacteria, Xiaobai Xinranli maintains his head position.
Little White HeartLisoft Source: Weibo @ 小白 心里 软
The head status is mainly due to their leading development of lactic acid bacteria baking products, and they are used for packaging in the IP image of young people. Together with upstream high-quality suppliers to polish product characteristics and processes, quickly open the stuffed bread category and obtain The consumer’s favorite. It is understood that they are also very careful about the choice of suppliers, and they also cooperate with many world-renowned raw material suppliers. For example, the oil and fat of this product chose Cargill to provide products and technical solutions to ensure the safety and stability of food. Supply chain.
Signature products that stand out from many brands are indispensable.
When it comes to peach and plum bread, many consumers will think of mellow toast, mentioning that friends will think of meat muffins, and that Hongrong will think of Hongrong steamed cakes. Although Meibeichen launched 28 products in one go to enter the short-term bread market, it was not impressive.
In addition, from the perspective of potential competitors’ entry ability, the entry threshold for the baking industry is low and it is easy to enter, and it is difficult to have product barriers. From the perspective of investment in product research and development, Chinese baking companies are far from enough. Take the short-term leading Taoli bread of listed companies as an example. According to its 2019 annual report, although R & D expenses increased by 56.49% year-on-year, R & D expenditures accounted for only 0.16% of operating income.
3. The baking market is full of loose sand, with fewer leaders and crowded tracks
Baking products entered China in the 1980s. The overall market is still relatively young, and the industry concentration is not high. At the same time, baking products are also greatly affected by regional influence. For example, in the northwest with fixed pasta eating habits, bread market education needs to invest more, and East China is the earliest area for bakery companies to settle in, and the quality requirements for bakery products will be higher.
The bakery market in China is like a loose sand, with brands with annual sales of 100 million yuan or more, the market share is less than 10%, and the remaining brands with annual revenue of about 20 million account for more than 90% of the market. [1].
According to the data from the “Research on the Status Quo of China’s Baking Industry Development and Market Prospects from 2020 to 2026” released by Zhiyan Consulting, the industry concentration of CR5 (the market share of the top five companies in the industry) of the Chinese baking industry is 10.6 %, Significantly lower than Japan ’s 43%, Japan ’s Yamazaki bread market share has reached 23.7%.
Second, the baking circuit is getting more crowded. Despite the closure of bakery stores, in recent years, new tea brands such as Xicha and Nexue’s tea, coffee brands such as Starbucks and Ruixing, as well as cross-border “players” such as Guangming, Sinopec and JD convenience stores have joined Baking track.
