Referring to the definition of Hongzhang capital, delicious track is divided into catering chain, catering supply chain, food, condiment, beverage and wine. This report will answer four questions about the delicious track:
I. why are there ten thousand store chains?
The chain rate in China is low, but it is developing rapidly. Driving force: on the supply side, technological progress has driven the development of food chains. Among them, the popularization of cold chain logistics provides the basis for the standardization of chain enterprises, the information system provides the possibility for national operation, and takeout improves the profitability of single stores. From the demand side, urbanization improves the survival possibility of stores, and the improvement of urbanization rate is conducive to the chain of stores across the country. Delicious track has the characteristics of large space, low concentration, short life cycle and large market space. The track has great potential.
Second, what is suitable for chain? First, there should be a profitable single store model, followed by standardization and nationalization.
The business model of chain business is to realize expansion on the premise of single store profit. The single store model is the basis. Standardization determines the expansion speed, and nationalization determines the expansion height, that is, “one foundation and two degrees”. 1) The necessary condition for the profitability of stores is the high frequency of selling products. If the products have the properties of rigid demand and addiction, they naturally have a high consumption frequency. 2) Expansion includes two levels: one is the ability of single store replication, that is, standardization, and the other is the ability of remote expansion, that is, nationalization. After expansion, chain enterprises can reduce costs through scale effect, establish brands and further win the favor of target consumer groups. Among the food and beverage tracks, the categories that are easy to standardize, nationalize and consume frequently are snacks, breakfast, tea, etc. it is suggested to choose companies from these tracks.
III. which companies will win? In terms of hard power, we should have strong supply chain ability; In terms of soft power, we should have strong internal and external management ability.
After the single store model of chain stores runs through, the enterprise development is the process of remote replication of stores. However, not every enterprise in the advantage track can achieve good expansion, which requires two capabilities. On the one hand, standardization requires companies in the track to have strong supply chain management ability (hard power) and be able to optimize and improve the efficiency of all links in the supply chain; On the other hand, offsite requires companies in the track to have strong management (soft power) capabilities, including internal and external management capabilities. Internally, it is the ability to respond to changes when stores expand in different places, and externally, it is the ability to remain unchanged when stores expand rapidly. When selecting companies in the preferred track, consider the two strengths of supply chain and management ability, one soft and one hard.
IV. different development stages of the company? According to the product life cycle theory, the development of chain enterprises can be divided into four stages: introduction period, growth period, maturity period and recession period. Different companies are in different stages of development, facing different core problems, and have different investment opportunities. This part will be described in detail in series 2 and series 3.
Investment suggestion: give the “overweight” rating to the food and beverage chain industry. It is suggested that investors choose to invest in the early stage of growth (the period of remote expansion) and the middle and late stage of growth (the period of continuous ceiling exploration). Key recommendations: A shares: Juewei Food Co.Ltd(603517) , Zhongyin Babi Food Co.Ltd(605338) ; Hong Kong stocks: Zhou Heiya, Naixue’s tea.
1) Juewei Food Co.Ltd(603517) : from the track point of view, brine is addictive, which brings a high repurchase rate and ensures a good single store model. From the perspective of the company’s ability, on the one hand, the company has built an all-round supply chain system of “close to sales outlets, fast supply and maximum preservation”, and continuously increased the production capacity layout to create the hard strength of the supply chain; On the other hand, in terms of internal management, the company established juewe Management College to practice the 4 + 2 talent echelon training mode; in terms of external management, the franchisee Management Committee was established to ensure the unity of stores.
2) Zhongyin Babi Food Co.Ltd(605338) : from the point of view of the track, the required attributes bring the store high unit time conversion rate and repurchase rate, ensuring the single store model of the category. From the perspective of the company’s ability, on the one hand, the company constructs an all-round daily distribution to store system of “close to stores, unified management, fast supply and maximizing quality and freshness”; On the other hand, the company has established a complete training system inside, and set up hierarchical management and incentive policies for franchisees outside the company, so as to realize the efficient management of franchisees through store supervision and communication mechanism and information system construction.
3) Zhou Heiya: from the point of view of the track, the addiction of brine brings a high repurchase rate and ensures the single store model of the category. In November, 19, the company opened its franchise, de familiarization and opened a new wave of store expansion. In terms of the company’s ability, on the one hand, the company continued to strengthen the hard power of supply chain management and arranged factories in five regions of the country; On the other hand, in terms of internal management, the company strengthens personnel training and improves the ability to deal with changes. In terms of external management, it pays attention to franchisee management, and gives all-round and all chain assistance to franchisees in terms of personnel training, engineering construction and system support, so as to advance and retreat together with franchisees.
4) Naixue’s tea: from the point of view of the track, tea drinks are addictive, which makes the re purchase rate of products high and ensures that the store model is good. From the perspective of the company’s ability, on the one hand, the company strengthens the construction of supply chain, establishes exclusive cooperative tea gardens and orchards, goes deep into the upstream supply chain, and ensures product quality through effective supply chain hard power; On the other hand, the company has strengthened training in internal management and strengthened customer stickiness by building member communities in external management, so as to realize fine operation and consumer services.
Risk tip: the industry is highly competitive, and the performance of listed companies is affected by factors such as repeated epidemics. In particular, food safety issues are highly concerned by the society, and the risks should be paid full attention to.
