The snack industry is very busy and is constantly "changing its business", so how did it enter the era of tens of thousands of stores?

As a snack chain brand that is good at "making things happen", Snacks is Busy has more than 10,000 stores across the country, ranking first in the snack chain industry, demonstrating strong growth potential and market leadership.

The era of 10,000 stores is not the end, but a new starting point.

On June 12, the merged Snacks Henmang and Zhao Yiming Snacks announced that the total number of stores nationwide has exceeded 10,000. At the same time, the group name was changed to Mingming Henmang Group. According to the certification of third-party agency Frost & Sullivan, Mingming Henmang Group ranks first in the snack chain industry in terms of the number of stores nationwide.

Before this, although Snacks is already well-known, most people's impression of it this year is still that it is a snack chain brand that is good at "playing with memes", including its interesting brand name, the "Big Snacks" that is popular both at home and abroad, and the recently opened "spicy" theme store "Snacks is Spicy".

The concept of mass-market snack shops has only been around for a few years, but the first enterprise with 10,000 stores was born so quickly. This not only demonstrates the strong endogenous power of the two major brands of Mingminghenmang Group, but also highlights the huge potential of snack consumption.

It is worth mentioning that regarding the number of stores exceeding 10,000, Yan Zhou, founder and CEO of Snacks, and Zhao Ding, founder and CEO of Zhao Yiming Snacks, jointly issued a joint letter, once again emphasizing the corporate vision of "becoming the people's snack brand."

As for the “people’s snacks”, my understanding is that Mingming is busy hoping to create a “national-level” consumer brand, just like Japan’s Uniqlo, the United States’ Costco and other brands that have super high brand reputations in their respective fields and are capable of crossing economic cycles.

This also means that the era of 10,000 stores is not the end, but a new starting point.

1. What is the secret of consumer brands rising in the era of stock economy?

my country has entered an era dominated by the stock economy, with the economy shifting from high-speed growth to high-quality development. Adapting to the new development logic is a top priority for domestic consumer brands.

Against this backdrop, Snacks Mang and Zhao Yiming Snacks announced data at this year's "All Things Growth Partner Conference" that the group's national store turnover will reach 20 billion yuan in 2023, and it is expected to maintain rapid growth in 2024, demonstrating the group's strong confidence in growth. The number of stores exceeding 10,000 in the middle of the year also seems to prove the company's growth potential.

Interestingly, looking around the world, many well-known brands have emerged during the economic development and transformation period of their respective countries. For example, Uniqlo in Japan, Costco in the United States, and Lidl, a German discount retailer. The success stories of these brands prove that even in the changing economic environment, if you find the right development direction, opportunities from mass consumption will never end.

In this regard, Cinda Securities pointed out that we have found that the market share of discount formats will further increase after each economic downturn, but in the economic upturn, the market share of discount formats will not decline. We believe that the core reason behind this is that the underlying driving force of the discount format is the change in the relationship between supply and demand factors and consumers becoming more rational.

The mass-market snack shop is a typical hard-discount retail format, which relies on centralized procurement and optimized operational efficiency to achieve price advantages, pass on benefits to consumers and leave profits for brands and franchisees. This means that the growth power of the brand comes from scale and supply-side efficiency.

In terms of scale, the consumer industry has always been a strong one. As a leading brand with first-mover advantage, Snacks is Busy has identified the incremental opportunities in the snack food market and consumers' pursuit of "more, faster, better and cheaper". By targeting the ordinary consumer group, relying on its rich variety, high cost-effectiveness, and efficient supply chain, it quickly divides traffic and establishes scale advantages in the national market.

During the same period, no matter whether it is a newbie who chooses to start a business due to the environment, or an old player with high-quality locations, they are all looking for suitable brands. With a larger scale, Snacks is very busy and has built the ability to integrate high-quality supply chain resources, providing franchisees with competitive products and mature management models, thus achieving the Matthew effect and maintaining a high monthly compound growth rate under a high base.

Source: Huatai Securities "Snack Channel Transformation 2.0: The momentum continues to rise"

In addition, in terms of supply-side efficiency, from the digital transformation of the entire business process to the display of bulk goods on the shelves, Snacks is Busy has demonstrated its innovation compared to traditional retail brands. We have previously written (Snacks is Busy: Why are snack stores near your home so popular?), summarizing the "four standardizations and one digitalization" strategy of Snacks is Busy, including standardized product selection and new products, standardized supply chain system, standardized whole-store output, standardized management and operation, as well as digitalization and supply chain construction.

With the advantages of scale and efficiency, Snacks is Busy has achieved high-density regional coverage and gradually penetrated outward along the supply chain system, ultimately creating a dense store network with a short logistics transportation radius and low fulfillment costs, maintaining strong competitiveness in various regions.

At present, the national stores of Busy Snacks and Zhao Yiming Snacks cover more than 20 provinces and cities including Hunan, Hubei, Guangdong, Jiangxi, Henan, Guizhou, Sichuan, and Chongqing.

However, the brand's growth path is far from reaching the industry ceiling. According to a report released by TouBao Research Institute in March, the market size of snack foods will grow from 1232.31 billion yuan to 1671.58 billion yuan from 2018 to 2022, and it is predicted that the market size of snack foods in China will reach 2385.99 billion yuan in 2027. In this regard, relevant industry insiders analyzed: "Based on the scale of 'one thousand stores in one province', there is still huge room for development for the brand and even the industry in the future."

So, how can busy snacking take things to the next level?

II. National Consumer Brand Roadmap: Scale and Innovation in Parallel

At present, the transformation of snack channels has entered the 2.0 stage. The development of the mass-market snack industry has shifted from rapid store expansion to continued momentum, and the market competition landscape has shifted from the "entropy increase" stage to the "entropy reduction" stage, with the degree of order greatly improved.

During this stage, brands need to tap into more endogenous driving forces to achieve both incremental and existing growth.

In this regard, we believe that whether from the changes in consumption concepts or the characteristics of snack consumption, we can see that there is still broad room for innovation within the mass-market snack industry.

On the one hand, consumers’ pursuit of “more, faster, better, cheaper” is not simply a downgrade in consumption, but a desire to enjoy a better consumption experience at a suitable price; on the other hand, snack consumption itself is a higher-level demand after the basic needs of food, clothing, housing and transportation are met.

Therefore, brands should continue to promote innovation in consumer experience based on "people, goods and places".

First, we start with "people" and discover new opportunities based on accurate insights into consumer needs. As the main consumer force of snack retail stores, this generation of young people has a clear curiosity label and is willing to consume for emotional value. According to a report by Guotai Junan Securities, China has gradually moved from a production-oriented society to a consumption-oriented society, and the "emotional value", "emotional connection" and "self-identity" of consumption are more important.

In other words, brands must constantly refresh existing perceptions, create a "sense of conflict," give consumers novel experiences, and attract their attention.

To this end, from "Super Snacks Are Busy", "Snacks Are Big" to "Snacks Are Spicy", Snacks Are Busy has been constantly innovating around consumer emotional value. For example, at the beginning of the year, "Super Snacks Are Busy" quickly became popular with the novel form of "Big Snack Shop". The over 170 square meters of large signboards and IP sculptures of multiple food brands in the store have become the objects of young people to check in and take photos.

At the same time, the XXXL snacks sold by "Super Snacks Are Busy" and "Snacks Are Big" have attracted billions of views on social platforms. They have been popular since the Qingming Festival, not only gathering brand awareness, but also becoming a part of cultural tourism consumption. According to official company data, from May 1 to May 5, "Super Snacks Are Busy" had a total revenue of 3.97 million yuan, with the highest single-day revenue exceeding 910,000 yuan. After the relocation and upgrade, "Snacks Are Big" set an industry record of more than 1.02 million yuan in single-store single-day revenue.

The phenomenal shopping trend of "big snacks" shows that snacks are very busy and have created stronger product power through the reorganization of "goods". The one-person-high Lay's potato chips, the one-meter-long Shuangzai spicy chips, and the 1.5-meter-long Wanglaoji have reorganized the appearance of the snack "gift pack", which not only satisfies consumers' sense of freshness, but also demonstrates the supply chain strength of the brand.

This is more clearly reflected in the subsequent new formats of "Snacks Are Spicy". On Children's Day, Snacks Are Busy once again launched the country's first "spicy" themed casual snack store based on the original "Snacks Are Big" on Jiefang West Road in Changsha. It is reported that "Snacks Are Busy" has more than 2,200 "spicy" snacks, making it the most comprehensive snack collection store in China in terms of "spicy" snacks. The single theme further demonstrates Snacks Are Busy's strength in integrating supply chain resources.

Finally, all the above innovations are based on the "scene". Snacks is busy constantly subverting the store format around the "Innovation Laboratory" on Jiefang West Road, which has a more far-reaching significance for the long-term development of the brand.

In an era where you can have food delivered to your home with just a tap of your fingers, the on-site consumer experience is the key to the long-term success of offline retail brands. Snacks is very busy first opened up a one-stop "shopping, playing, and shopping" consumption scene, allowing consumers to have a stronger sense of gain, and then explored new possibilities for the snack industry by inheriting and spreading Hunan's "spicy culture". For example, regarding the launch of "Snacks are very spicy", the relevant person in charge of Snacks is very busy mentioned that he hopes to attract more and better "spicy" product manufacturers from all over the country to cooperate with the brand in the future.

This reveals that behind the innovation of the business format, the brand has two major goals. In addition to attracting consumers, it also hopes to attract potential supply chain partners and franchisees. The premise for achieving this goal is that the brand maintains its growth momentum and the output of a single store is promising. Therefore, the snack consumption boom brought about by the new business format is also a booster for the company to continue its growth.

In short, Snacks is busy achieving both innovation and scale, which not only gathers brand recognition but also accumulates more potential for the long-term development of the brand.

This indicates that the road to reform of China's snack retail is still a "long season". Snacks are very busy and are expected to repeat the story of the counter-cyclical growth of well-known hard discount brands in various countries, once again proving the characteristics of mass consumption of "long slopes and thick snow, crossing cycles".

Author | Manjusaka
This article is written by the author of Operation Party [Songguo Finance], WeChat public account: [Songguo Finance], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

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