The cost of international raw milk has been raised, the fluctuation of oil, sugar, flour and other bulk materials is frequent, and the production and operation costs of enterprises are under pressure. How to decompress?
Recently, a number of food, beverage and catering enterprises have successively released the latest financial reports. Through these financial reports, let’s see what good tricks they have——
product innovation and application innovation
“In the first half of the fiscal year, the average cost of raw milk increased by nearly 30% year-on-year. We still made a profit despite the significant increase in input costs.” On March 17, Fonterra, a New Zealand dairy giant, released the interim results of fiscal year 2022. From July 2021 to January 31, 2022, the total revenue during the period was NZ $10.797 billion, a year-on-year increase of 9%; The adjusted after tax profit was NZ $364 million, a year-on-year decrease of 13%. Among them, the revenue of Greater China was NZ $3.452 billion (about RMB 14.987 billion), a year-on-year increase of 13%, and the performance of Greater China accounted for 32% of the group’s total performance.
“Even if the purchase price of raw milk is high, we can ensure good performance.” Miles Hurrell, chief executive of Fonterra, said that on this basis, it is expected to achieve the 2030 goal set by the group.
Taking Fonterra Greater China as an example, the company’s business in China includes three sectors: raw materials, catering services and consumer brands, of which the revenue of raw materials business increased to NZ $2.234 billion (about RMB 9.699 billion); The revenue of catering service business increased to NZ $1006 million (about RMB 4.367 billion); Revenue from consumer brand business fell to NZ $212 million.
“The raw material business increased due to rising prices and increased sales of high profit products, especially casein products.” “In Greater China, we see that the demand for dairy products continues to remain stable, and our team is also looking for new drivers to drive demand growth. The raw materials business is still stable, benefiting from strong demand and good profit margins,” Hurrell said
In catering service and consumer brand business, innovation is carried out in products and services. For example, in terms of catering services, efforts are made in coffee and tea tracks. It is reported that at present, the series of snow top applications developed around the new product “Anja cheese cream” have entered more than 1500 tea stores in China; The newly launched Anja spray cream has also been successfully applied to the products of head tea customers. In addition, through the innovative application of special coffee, the catering service team has achieved a “historic breakthrough” in cooperation with head chain customers and medium-sized boutique cafes.
In the first half of the fiscal year, Fonterra China’s strategic customer department team also launched a variety of innovative applications including cream and cheese in hamburgers, pizza, coffee and tea. “We will continue to work with our customers to explore market trend products and seek potential cooperation opportunities for local R & D and production.”
In addition, the consumer brand business focuses on differentiated innovation such as dairy products, milk powder and other categories. Diversified channels are developed, and new businesses such as new retail and electricity providers are continuously deepened, including a lot of jigsaw platforms and further expansion of tiktok members’ clubs to expand brand awareness.
price increase + Shangxin
Danone also mentioned the impact of inflation on its company in its 2021 financial report recently, and offset some of the pressure by raising prices.
According to its 2021 fourth quarter report and annual financial report, it achieved a revenue of 24.281 billion euros, and the growth rate of similar sales revenue was 3.4%, of which the price factor contributed 4 percentage points, while the sales volume decreased by 0.6 percentage points year-on-year. Danone CFO Juergen Esser said that the company needs to find a balance between pricing against inflation and consumer demand, which will also be the theme of 2022.
In addition, the company also improves production efficiency and efficient product portfolio management.
Recently, Danone launched a brand-new Zero sugar bubble beverage brand “Lingqi” in China, and also intended to build the brand into a new pop after pulsating vitamin beverage. This move is regarded as one of its actions to implement the new strategy of “actively cultivating future growth opportunities and actively promoting product portfolio rotation”.
“Nowadays, young consumers pursue beverage products extremely. Besides Zero sugar, they also pursue health. At the same time, they also want to drink well, look good and have fun.” Danone officials said that the new category can meet the health demands of young people and is expected to bring sustainable growth to the beverage business with the help of the beverage.
According to Nielsen’s data, carbonated drinks have maintained a rapid growth rate in the past three years, while Zero sugar carbonated drinks will usher in the tuyere in 2021, with sales growth of up to 85%.
In addition, Starbucks, Ruixing, TIMS and other coffee catering chain enterprises, Riqing, Kangshifu, uni president and other instant noodle enterprises have adopted the strategy of raising prices and accelerating the introduction of high-end products.
catering industry: batch closing of stores with poor performance
The catering market is also greatly affected by the epidemic situation, cost and other factors.
According to the performance warning of Haidilao, by the end of 2021, the pre operating revenue will reach 40 billion yuan, and the net profit is expected to face a pre loss of as little as 3.8 billion yuan and as much as 4.5 billion yuan. The reasons for the loss include the closure of more than 300 restaurants in 2021 and the impact of the epidemic on restaurants at home and abroad.
Xiabu Xiabu also released a performance forecast. In 2021, the company achieved a revenue of 6.15 billion yuan, a year-on-year increase of about 13%; The net profit loss was 275 million yuan to 295 million yuan, with a profit of 11.49 million yuan in the same period of last year. The company explained that the net loss was mainly due to the one-time loss of long-term assets caused by the closure of about 230 restaurants throughout the year and the provision of impairment losses caused by the decline in the operating performance of some restaurants, totaling about 220 million yuan.
Naixue’s tea is expected to have a revenue of 4.28 billion yuan to 4.32 billion yuan and a net loss of 135 million yuan to 165 million yuan in 2021.
According to the statistics of China Hotel Association, the total cost of enterprises increased by an average of 7.5% in 2021, with a significant increase in basic raw materials, decoration costs and labor costs. In this situation, the Association believes that, on the one hand, the policy is precise and the national policy gives corresponding support in the development of all aspects of the catering industry; On the other hand, catering enterprises should also strengthen their confidence and take the initiative to seize new opportunities in the industry.
In order to tide over the difficulties, many catering enterprises have taken the initiative to take measures such as shrinking the front, adjusting the organizational structure and business strategy, fine management and controlling operating costs.
For example, Xiabu Xiabu has set up two management headquarters in Beijing and Shanghai to provide strategic layout for expansion to the south. At present, the Shanghai management headquarters of Xiabu group has started operation in early March; Haidilao implements the “woodpecker plan” and takes measures to integrate stores with poor business performance; We will rebuild and strengthen some functional departments and restore the regional management system Guangzhou Restaurant Group Company Limited(603043) continue to promote the high-quality coordinated development of the dual main industries of “catering + food”, continue to carry out technological transformation in various production bases, tap potential, improve production capacity, reduce cost and increase efficiency, and strictly control costs.
