Editor/Yang Jie
Fuling mustard tuber spent 240 million yuan a year on brand marketing to raise product prices. After selling "high-priced mustard tuber", it still fell into the situation of "increasing income without increasing profit".
Fuling mustard tuber, that is, "mustard tuber", has not been easy recently.
On the same day, Zhujiang Economic Channel and Consumer Report magazine also published a list of "Top Ten Products Not Recommended in 2002/kloc-0", among which Wujiang mustard tuber, the main product of Fuling mustard tuber, was among them because of its high sodium content, and the topic even rushed to Weibo for hot search. Fuling mustard tuber had to be clarified quickly, saying that the named products met the national food safety standards. Later, Fuling mustard tuber also urgently launched a new light salt version.
As the landing plan of its "healthy route", Zhou Binquan, the chairman of Fuling mustard tuber group, put forward the "double extension" strategy at the press conference of Wujiang light salt mustard tuber on March 22, and started the "double extension" strategy of expanding products and markets with mustard tuber as the starting point, thus realizing the development from "Little Wujiang River" to "Big Wujiang River". Strive to build Fuling mustard tuber company into an industrial group with an output value of over/kloc-0.0 billion yuan and a profit and tax of over 2 billion yuan in 3-5 years. "
However, it is not easy to achieve the goal of "10 billion" in Fuling mustard tuber with an annual income of less than 3 billion yuan.
Fuling mustard tuber has always been willing to invest in brand marketing. As early as 2007, in order to open the market, it spent tens of millions of yuan to put advertisements in prime time after CCTV news broadcast, and signed a famous actor Zhang Tie-Lin as its spokesperson. With an advertising slogan "China mustard tuber is Fuling, Fuling mustard tuber is Wujiang", the popularity of Fuling brand and its Wujiang mustard tuber products has expanded rapidly.
In 20021year, the sales expenses of Fuling mustard tuber increased from 368 million yuan in 2020 to 475 million yuan, a year-on-year increase of 29.08%; Among them, the brand publicity expenses increased from 265,438+10,000 yuan in 2020 to 240 million yuan and 5438+0 in 2026, accounting for 50.57% of the sales expenses, with a year-on-year increase of 1 13 times.
However, the brand of Fuling mustard tuber, which cost a lot of money to maintain, was severely hit because of a "3 15" list.
On March 15, Fuling mustard tuber suffered the lowest price this year, closing at 28.87 yuan/share, down 9.87%. From March 16, its share price began to pick up. By the close of March 26th, the price of Fuling mustard tuber was 3 1.40 yuan/share, down by 2.03%, with a total market value of 27.872 billion yuan. Compared with the high point of its total market value of 4 1 billion yuan in February 20021year, it has evaporated by more than1300 million yuan.
Shortly after the dispute over sodium content was clarified, the light salt products of Fuling mustard tuber also appeared rapidly.
On March 22, Fuling mustard tuber held a new product launch conference at the group headquarters, and officially launched Wujiang light salt mustard tuber with a salt reduction of more than 30%. Zhao Ping, general manager of Fuling mustard tuber group, said that the new products can not only meet consumers' demand for healthy eating products, but also lead the industry to enter the era of healthy and light salt. "After the Spring Festival this year, the upgraded Wujiang light salt mustard tuber began trial sale, and the city was pre-sold at 16, and 200 million packages were sold in a short time."
Previously, according to Caijing Tianxia Weekly, the same 80g mustard tuber and Wujiang mustard tuber have different sodium contents according to different tastes, but most of them are higher than other brands. For example, the sodium content of the sauce-flavored, fragrant, sour and spicy taste of Wujiang mustard tuber is 2 165 mg/100 g, and the spicy taste is 2558 mg/100g; The original sodium content of Jixiang Ju is 1492 mg/100 g, and that of Yuquan mustard tuber is 2 120 mg/100 g.
After the launch of light salt products, according to the official flagship store of Taobao, the sodium content of old Wujiang mustard tuber with the same weight is 2558 mg/100 g, while the sodium content of Wujiang light salt mustard tuber in 70 g bagged Fuling mustard tuber has dropped to 700 mg /35 g.
(Photo/Fuling mustard Taobao official flagship store screenshot)
More crucially, the diversification strategy of Fuling mustard tuber should be further branded with light salt mustard tuber. Zhou Binquan said at the press conference that the "extension category" in the "double extension" strategy is the coordinated development from mustard tuber to Wujiang seasoning vegetables, Wujiang pickles, leisure snacks and bean paste; "Expanding the market" means expanding from the household consumption market to the catering market and the food industry consumption market, forming a cross-border between mustard tuber and food, leisure snacks and sauces.
However, only by these, can Fuling mustard tuber capture the "appetite" of consumers?
According to the Recommended Intake of Dietary Nutrients for China Residents (version 20 13), the daily intake of sodium for healthy adults is 2200mg, which is about 5g of salt. Generally speaking, foods with sodium content exceeding 600 mg/100 g in solid foods and 300 mg/100 g in liquid foods are all high-sodium foods. According to this calculation, the new Wujiang mustard tuber after salt reduction still belongs to the category of high sodium.
"I have always felt that the snack mustard tuber is not very healthy, and there may be too many additives with heavy taste. Many times it is a flavor enhancer, and it is eaten with vegetarian dishes and porridge. I don't eat much, but I buy it once a month at most. The new product of salt reduction may be a new taste for me. " Yang, a 95-year-old man who is losing weight, told Caijing Tianxia Weekly.
Zhu, a food industry analyst in China, also believes that "the mustard tuber track itself has no big health label, and its future growth has touched the ceiling. The new salt-reducing products launched by Fuling mustard tuber have little significance for health, but will greatly affect the taste."
Fuling mustard tuber, as the only listed company in the mustard tuber industry, has long relied on price increases. Since 2008, the price of Fuling mustard tuber has increased by 12 times. Last year, some netizens found that in some online stores, Fuling mustard tuber launched a "five-year agarwood gift box" mustard tuber with a net content of 900g, but the price was as high as 152 1 yuan, comparable to Maotai. However, with the decline of the company's profit growth rate, the "price increase" strategy of Fuling mustard tuber seems to have touched the ceiling.
The financial report shows that in 20021year, Fuling mustard tuber increased its income without increasing its profit, and its income increased by 10.82% year-on-year to 25190,000 yuan. The net profit attributable to its mother decreased by 452% year-on-year to 742 million yuan, and the non-net profit deducted decreased by 8.49% year-on-year to 694 million yuan. 202 1, the revenue of mustard tuber products accounted for 88.39%, but the cost increased by 26.8 1% and the gross profit margin decreased by 5.0 1%.
In this regard, the company explained that it was because the purchase price of the main raw materials of Fuling mustard tuber soared at the beginning of 20021year, and the raw material price was abnormally high. In the middle of the year, the fluctuation of commodity prices led to a sharp rise in the prices of packaging and accessories, and the consumer goods industry was under pressure at the production end. At the sales end, the challenges of the distribution system increased, and it also faced a greater impact from new channels such as community group buying.
Fuling mustard tuber said in the financial report that the prices of green vegetable head and mustard tuber semi-finished products were affected by market supply and demand, and the price of 202 1 year increased by about 80% and 42% respectively, which led to the increase of the company's main business cost by about 13% last year.
The business model of Fuling mustard tuber is very simple, that is, the company buys green vegetable heads, processes them into bagged mustard tuber, and then sells them to dealers for cash recovery. Chongqing Fuling area produces more than half of the country's green vegetable heads, which has become a unique moat for Fuling mustard tuber. Fuling mustard tuber, which was listed on Shenzhen Stock Exchange on 20 10, has been the undisputed industry leader in China for many years and was once called "mustard tuber" by the capital market.
From 20 10 to 202 1, the company's revenue increased from 545 million yuan to 25190,000 yuan, an increase of 362%; The net profit of returning to the mother increased from 56 million yuan to 742 million yuan, an increase of 1225%. In 202 1, the gross profit margin of Fuling mustard tuber reached 54.80%, and in February of the same year 19, Fuling mustard tuber reached a maximum of 53.90 yuan, and its total market value also exceeded 4 1 100 million yuan.
However, in the first three quarters of 20021,Fuling mustard tuber has been "increasing revenue without increasing profit", and the revenue in the first three quarters increased by 8.73% year-on-year, but the net profit attributable to the mother and the non-net profit deducted decreased by 17.92% and 19.22% year-on-year. It is worth noting that the inventory balance of Fuling mustard tuber at the end of 20 18 was 330 million yuan; By the first three quarters of 20021,it had grown to 482 million yuan. The increase in inventory seems to indicate that Fuling mustard tuber began to "sell badly".
In order to increase income, Fuling mustard tuber decided to raise prices. Last June165438+1October 14, Fuling mustard tuber announced that it would adjust the ex-factory price of some products, with the price increase ranging from 3% to 19%. After the price increase, the revenue of Fuling mustard tuber decreased in the fourth quarter of last year, but the net profit increased from 654.38+0.27 billion yuan in the third quarter to 238 million yuan.
According to the announcement and the report of Sichuan Financial Securities Research Institute, among the two price increases of Fuling mustard tuber 12 since 2008, four were direct price increases, that is, the ex-factory price and retail price of mustard tuber products were directly increased, with the highest price increase of19%; The remaining 8 times were indirect price increases such as weight adjustment or packaging.
With the rising price of raw materials and the pressure of cost, the domestic packaged mustard tuber market is close to the ceiling. The data shows that from 20 13 to 20 19, the domestic packaged mustard tuber market grew from 3.779 billion yuan to 6.688 billion yuan, with a compound annual growth rate of 9.98%, but some institutions predict that its compound annual growth rate will drop to 8.23% from 2020 to 2024. Fuling mustard tuber, as the absolute leader of the industry, has very limited room for market share growth.
Under multiple pressures, "price increase" masked the cost pressure and became a helpless move for Fuling mustard tuber. At that time, many people had the impression that the price of bagged Wujiang mustard tuber, which cost only a few cents, had risen all the way to 4 yuan. Even last year, high-end "high-priced mustard tuber" products appeared.
According to the weekly observation of Caijing Tianxia, in the traditional supermarket channel in Beijing, the price of Wujiang mustard tuber products under Fuling mustard tuber is generally higher than other brands. Although Wujiang mustard tuber, Jixiangju mustard tuber and Yuquan mustard tuber all have 80g mustard tuber from 3.5 yuan/bag, Wujiang mustard tuber divides different tastes and grams more finely and has different pricing.
For example, the same bag of 70g original mustard tuber, Wujiang mustard tuber sells 3.2 yuan, while Yuquan mustard tuber sells 2.5 yuan; The price of canned 300g Wujiang mustard tuber powder is 13.8 yuan, and the price of 266g Jixiang ju powder plus 40g(***306g) is 13.8 yuan.
"At the beginning of last year 1, I bought two packs 150g of Wujiang Fuling mustard tuber in Tmall Supermarket, the original price was 3.5 yuan/bag, and the actual payment discount was 3.33 yuan/bag. But now click on the same link, the same product has become the original price of 5.5 yuan/bag, and after the discount, 4.4 yuan/bag 130g mustard tuber. " After 90, consumer Bao said.
(Photo: provided by the interviewee)
When the price of Fuling mustard tuber was raised at the end of last year, Zhu also bluntly told Caijing Tianxia that the price increase may be helpful for the staged profit growth of Fuling mustard tuber, but it may not be useful for the performance in 2022 and the longer-term improvement.
According to the report of Everbright Securities, with the price rising, the sales of Fuling mustard tuber showed a downward trend. The data shows that in 20 19, the price of Fuling mustard tuber increased by 8% year-on-year, and the sales volume decreased by 4%. In 2020, after digesting the market price of 20 19, the sales performance was not obvious, but in the case of 202 1 and the price increase of 13%, the sales volume decreased by 2%.
Bai Wenxi, chief economist of IPG China, also told Caijing Tianxia Weekly, "Excessive price increase will trigger and enhance the substitution effect of products. Now the price increase space of Fuling mustard tuber is gradually narrowing, and the means of price adjustment should be used with caution. Moreover, due to the existence of price rigidity, even if the price adjustment is affected by the cost, enterprises are not willing to cut prices after the cost drops. "
But Fuling mustard tuber is still "not bad money."
According to Euromonitor data, from the perspective of retail sales, the market concentration of packaged mustard tuber maintained a steady growth from 2008 to 20 19, from 46. 15% in 2008 to 72.2% in 20 19. The market share of Fuling mustard tuber was 2 1.28% in 2008, which was more than twice as high as the 9.56% of the second-place Yuquan mustard tuber. By 20 19, it was 36.4 1%, which was more than twice as high as that of the second Yuquan mustard tuber.
Fuling mustard tuber can not become a giant in mustard tuber industry without the State-owned Assets Supervision and Administration Commission of Fuling District, Chongqing, and the State-owned Assets Supervision and Administration Commission is the major shareholder behind it. According to the survey data, Chongqing Fuling State-owned Assets Investment and Management Group Co., Ltd. currently holds 35.26% of the shares and is the actual controller of Fuling mustard tuber.
(Photo/Financial World Weekly for the picture)
At the same time, Fuling mustard tuber also has a high gross profit margin that many snacks can't match. Its main products, mustard tuber and radish, are as high as 54.80% and 49.05% respectively. Even after the gross profit margin of 20021year decreased by more than 5% year-on-year, it was much higher than that of Kangshifu instant noodles, whose gross profit margin decreased by 6.46% to 23.89% in the first half of 20021year.
"Fuling mustard tuber is definitely not bad money. The company's own distribution model is to make money first and then deliver it. And its leading position and market share are there, and it may be no problem to eat for ten years. It's just that it needs to break through its ceiling and invest a lot of manpower and financial resources to make the layout of other projects. " Zhu said to:
According to the financial data, at the end of 20021,the company had an asset-liability ratio of 7.5 1%, total assets of 7.749 billion yuan, liabilities of 5.81billion yuan, and monetary funds in the account of 3.086 billion yuan. There are no short-term loans and long-term loans. According to the interface news report, the annual dividend of Fuling mustard tuber in 20021has reached 577 million yuan, accounting for 77.76% of the net profit of that year. Moreover, in 20021,Fuling mustard tuber also raised 3.28 billion yuan, increasing the mustard tuber production capacity by 200,000 tons.
"Fuling mustard tuber continues to expand its production capacity to consolidate its market share without increasing profits and peaking its main business. This is a necessary move for enterprises to maintain their market position and a basic action for sustainable development. To a certain extent, dividend financing is to safeguard investors' concerns about supporting stock prices and improving profitability. " Bai Wenxi said.
In fact, before the story of light salt products and "healthy catering" was launched, Fuling mustard tuber had been trying to develop a second growth curve in order to get rid of the shackles of a single category on the company's performance. In 20 14, the company began to diversify its layout and launched products such as radish and kelp. In 20 15, it invested 65438+29 million yuan to acquire Sichuan Huitong Food Co., Ltd. and announced its entry into the field of kimchi. However, in 20021year, the revenue from pickled mustard tuber products still reached 88.47%, and the contribution of kimchi and other products in the company's total revenue was still negligible.
At that time, Fuling mustard tuber replied that a small amount of radish was not added to hedge the cost, but to study and test the market to meet the needs of consumers for fuller taste; The radish used by the company is the radish of origin in Linghai, Liaoning Province, Northeast China, and its main quality indicators are far superior to those of the general vegetable market. Linghai radish is transported to Fuling, Chongqing, and the cost is not lower than mustard tuber. But from the point of view, it seems that the addition of "radish" into Fuling mustard tuber is not recognized by consumers.
It is worth noting that Fuling mustard tuber shows in the 20021annual financial report that in 2022, the company faces the contradiction between high-quality rapid development and sales bottleneck. In order to solve the current predicament, the company regards "sales breakthrough and growth" as its primary strategic task, and its key tasks include paying close attention to three growth points of mustard tuber, health and innovation, and implementing three key actions: terminal price adjustment, upgrading and edition change, national tide and health promotion.
Fuling "squeezed wool", can you tell a new story besides the price increase?
(At the request of the interviewee, Yang and Bao are pseudonyms. )