The trend of traffic decentralization continued. In December, the sales of leisure snacks on Alibaba platform continued a year-on-year downward trend, with annual sales of – 13.5% year-on-year. In December, the online sales of leisure snacks reached 5.71 billion yuan, a year-on-year increase of – 22.5% and a month on month increase of – 20.7%. From January to December 2021, the online sales of leisure snacks reached 68.5 billion yuan, a year-on-year increase of – 13.5%. In the fourth quarter alone, the online sales of leisure snacks reached 16.4 billion yuan, a year-on-year increase of – 28%. Tiktok is still the focus of efforts to build sales channels for snack foods companies. With the rise of new channels such as jitter, quick hand and many spells, the diversion of electricity from Kwai Chung, which is represented by Alibaba, continues to cause traffic diversion. The leisure food companies that have achieved multi-channel distribution and create multi-dimensional sales channels have more competitive advantages.
By category, the new year’s festival drives the sales of nuts and fried goods, and the sales of pastries / snacks decreased significantly year-on-year. In December, the sales of pecans / nuts / fried goods, pastries / snacks and biscuits / expanded products took the lead, reaching RMB 1.08 billion, 1.00 billion and 990 million respectively, with a year-on-year ratio of – 23.8%, – 31.1% and – 15.4% respectively, accounting for 19%, 17% and 17% respectively. The proportion of sales of pecans / nuts / fried goods increased month on month. We judge that the annual goods Festival has played a positive role in promoting the sales of nuts fried goods with gifts and hoarding attributes. Compared with the same period last year, the proportion of sales of pecans / nuts / fried goods was stable, the proportion of cakes / snacks decreased by 3PCT, and the proportion of biscuits / puffed and chocolate increased by more than 1PCT.
By brand, Three Squirrels Inc(300783) , Baicao flavor, Bestore Co.Ltd(603719) sales continued to lead, and CR3 decreased month on month. (1) In December, Three Squirrels Inc(300783) , Baicao flavor and Bestore Co.Ltd(603719) achieved sales of 410 million yuan, 350 million yuan and 270 million yuan respectively, with a year-on-year increase of – 31.5%, – 17.6% and – 26.8% respectively. In December, the CR3 of leisure snacks on Alibaba platform was 18.2%, with a year-on-year increase of -0.9pct and a month on month increase of -3.3pct. In December, CR3 decreased significantly month on month. We believe that it is related to the decline of head brand traffic attraction and the contraction of online fee delivery after the double 11 promotion. (2) In terms of other brands, Wang Xiaolu’s sales rose by 37.2% year-on-year, and the sales of bibizan and dove also increased year-on-year. (3) From January to December 2021, Three Squirrels Inc(300783) , Baicao flavor and Bestore Co.Ltd(603719) achieved sales of RMB 4.89 billion, 4.03 billion and 2.91 billion respectively, with a year-on-year increase of – 35.1%, – 19.2% and – 16.6% respectively. From January to December, the CR3 of leisure snacks on Alibaba platform was 17.3%, a year-on-year increase of -3.0pct, and the concentration of head brands further decreased. We judge that under the trend of peak online traffic dividend and traffic decentralization, objectively, the traffic distribution is more balanced. Subjectively, the head brand actively changes the online channel strategy, widely distributes new channels, and realizes the balanced development of all platforms.
Latest industry view: the impact of sales channel reform on snack food is still continuing. In the short term, focus on companies with clear adjustment ideas and initial results, and recommend companies with competitive advantages and clear growth logic in the long term. (1) Looking back at 2021, the change of sales channels has changed the sales mode and customer acquisition mode of leisure food companies. The trend of online traffic decentralization has diverted traditional e-commerce, while offline traditional supermarkets have been impacted by new channels such as community group purchase. (2) We judge that 2022 is a year to test the adjustment and improvement results of leisure food companies, the industry is expected to differentiate, and the adjustment effect is expected to affect the competition pattern of the industry. (3) The first quarter is the traditional peak sales season of leisure food, and the upcoming Spring Festival is the key battle to win. We believe that companies with good channel layout, product matching and marketing promotion have more competitive advantages. (4) Focus on companies with clear adjustment ideas and initial results in the short term, and recommend companies with competitive advantages and clear growth logic in the long term. To sum up, we recommend Chacha Food Company Limited(002557) and focus on Three Squirrels Inc(300783) , Yanker Shop Food Co.Ltd(002847) , Bestore Co.Ltd(603719) , Ganyuan Foods Co.Ltd(002991) .
Risk tips: new product promotion is less than expected, channel expansion is less than expected, epidemic impact is more than expected, raw material price fluctuation, food safety problems.
