The market space is large enough, adhere to differentiation, do not be greedy, not curious

In the new year, in order to promote more condiment enterprises to find the right direction, rapid and orderly development, and establish the basic consensus of the condiment industry, the China Condiment Association recently summarized the core points of the development of the industry, and put forward specific suggestions
for the future development of enterprises in terms of strategic awareness establishment, development thinking change, and social responsibility fulfillment.

Six core points are worth paying attention to

Benefiting from the recovery of the consumer market, the growth rate of the industry is expected to return to before the epidemic The catering market is an important scene
for condiment sales.
During the epidemic, the total revenue of the catering industry plummeted, which also had an impact
on the development of the condiment industry.
At present, with the optimization and adjustment of epidemic prevention and control measures, the unfavorable factors restricting catering consumption, such as lockdown and silence, have been eliminated, and the catering market is gradually returning to normal levels
.
This is undoubtedly a major benefit
for condiment companies.
In addition, in December 2022, the Central Committee of the Communist Party of China and the State Council issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), and promoting consumption will be the focus of
expanding domestic demand in 2023.
With the implementation of various specific policies and measures, the current situation of weak consumer market is expected to be fundamentally reversed
.

The cost pressure of enterprises, especially the middle and downstream production enterprises, is expected to ease In recent years, the rising cost of raw materials has been one of the most important factors restricting the efficiency of
enterprises.
Since the second half of 2022, some turning points have begun: some corrections in commodity prices, including crude oil, and the collective decline of nearly 30% from highs in the prices of staple foods such as wheat, corn and soybeans, is a short- to medium-term positive
for easing rising costs and inflation.
In addition, condiment enterprises have enhanced their ability to
resolve rising costs by establishing stable procurement channels, appropriately increasing raw material inventory, and carrying out capital hedging.
It can be expected that the negative impact of rising costs based on raw materials on the industry will gradually weaken
.

Market competition pressure will further increase, and the phenomenon of involution will be more serious First of all, although the development prospects of the condiment market are optimistic, the situation of oversupply in the market will be more prominent
.
On the one hand, the stable development of the condiment industry has attracted many new entrants
.
According to the statistics of the Big Data Information Center of the China Condiment Association, in 2022, enterprises including Yuanqi Forest, Fujian Seven Wolf Group, Panhua Group, Shanxi Jinyao Group and other enterprises will enter the field of condiment production through direct investment, mergers and acquisitions; On the other hand, new production capacity has been put into operation one after another, forming a phased high point
of production capacity launch.
According to incomplete statistics, in the first half of 2022, the planned investment scale of only 12 condiment companies has exceeded 10 billion yuan, and after completion and operation, the new condiment production capacity will exceed 2 million tons
.
Secondly, the resilience of the condiment market is still strong, according to the data of the top 100 of the China Condiment Association in 2022, the year-on-year growth rate of sales and output of the top 100 enterprises has maintained positive growth
for four consecutive years.
However, competition within the market is fierce, and the increase in concentration continues
.
Among them, the market concentration of edible oil, oyster sauce, monosodium glutamate and other sub-categories is high, the market concentration of soy sauce, chicken essence (chicken powder), seasoning wine, hot pot seasoning, curd milk and other sub-categories continues to increase, the concentration of compound seasonings, vinegar, sauce is relatively low, and the space for differentiated innovation still exists
.
The dislocation between the gradual recovery of the consumer market and the concentrated release of production capacity in the supply market will inevitably have a huge impact on the operation of existing enterprises, and the competitive pressure faced by enterprises, especially small and medium-sized enterprises, will continue to increase
in the next few years.

Omni-channel market awareness has been fully established First of all, with the changes in consumer behavior and consumption patterns, the channel system of the condiment industry is also rapidly iteratively updated, but the three major consumer terminals of condiments remain unchanged and the structure is stable, and it is still the catering end, the home retail end and the food processing end, accounting for 5:3:2
.
Condiment companies have formed a professional division of labor pattern in which manufacturers, brand owners and third-party flavor solution service providers coexist, including To B and To C channels, as well as online and offline methods
.
Secondly, starting from "Internet +", the condiment industry's awareness of the combination of traditional industries and the Internet has begun to cultivate
.
After several years of industry leadership and market exploration, condiment companies have fully established their market awareness of new retail and omni-channel, and have begun to implement it in the construction of market channel system, and a number of brand enterprises
with Internet genes have also been born.
The industry's network access rate and online channel penetration rate are gradually increasing
.
In the first three quarters of 2022, Haitian Flavor's online sales revenue increased by more than 87.
47%, and Qianhe Flavor's online sales accounted for more than 15%.

A large number of cutting-edge brands use online as the main sales channel to achieve overtaking of traditional brands
.
Third, the adjustment and optimization of traditional distribution channels is imperative
.
Although the overall market contribution rate of traditional distribution channels is still about 90%, the company's concept of channel expansion has changed
.
According to the statistics of the Big Data Information Center of China Condiment Association on the change in the number of distributors of condiment listed companies in the first half of 2022, among the 12 condiment listed companies, 5 had negative growth in the number of distributors, accounting for 41.
7%.

Differentiated competition and price competition coexist, making up for shortcomings and strong long boards are indispensable Condiment companies hope to establish their own differentiated advantages in market positioning, category innovation and technological progress, so as to avoid the red ocean and open up their own blue ocean
.
But whether these differentiations are effective or not needs to be tested by the market
.
At the same time, price competition is widespread, especially the new retail changes brought about by Internet innovation in recent years, which has also objectively increased price transparency, intensified competition in the condiment industry, and further lowered the price of the
condiment industry.
However, this kind of price competition is different from the previous low-price dumping, to a large extent, behind it is the comprehensive strength, platform effect and scale efficiency of enterprises, which also requires enterprises to establish a multi-functional competitiveness
.

The replacement of new and old personnel has entered a critical period, bringing a series of new topics The condiment industry has achieved rapid development
after a critical period of nearly 30 years.
With the development of the industry, it has also achieved a group of entrepreneurs and practitioners, who know the industry, understand the profession and know the boundaries
.
At present, the condiment industry is in a period of the turn of the times and the handover of new and old personnel, and the understanding and cognition of the industry by practitioners are uneven, which has brought new topics
to industry management and the popularization of industry knowledge.

The four-point recommendation points the way

In view of the above phenomena and judgments, it is urgent to establish a basic consensus of the condiment industry, and take this as an important reference
for the future development of the industry.

Establish a strategic awareness of differentiated positioning The condiment market space is large enough and belongs to the sunrise industry
with a long track.
There are many
unmet condiment needs of consumers.
Enterprises should start from a long-term perspective, find a market positioning suitable for themselves, and meet the high-quality needs
of consumers.
The changes of the times will inevitably bring about the restructuring of the industry, enterprises should seize this opportunity, position themselves in the field of advantage, and dig deeply, turn the advantage into a strong, in order to form an irreplaceable and difficult to replicate competitive pattern
.

Abandon the traditional thinking that the bigger the better, the new variables in the industry will always exist, and the qualitative improvement is greater than the quantitative expansion
.
It may be relatively easy to be big, but it's hard
to be big without failing.
How big a company can be fundamentally depends on the era
.
Large scale certainly has the advantages of strong anti-risk ability and significant scale effect, but small scale also has the characteristics of
high market flexibility and strong adaptability.
Condiment enterprises should start from their own reality, scientifically estimate the market capacity, and do
what they can.
The fundamental survival of enterprises is profit, and only profitable enterprises can survive
for a long time.
Enterprises should shift from focusing on the expansion of revenue scale to focusing on the improvement
of enterprise efficiency.

Avoid the misunderstanding that the more curious the better, and pay attention to the brand effect Innovation is not the more curious the better, and it is difficult to achieve results in differentiation for differentiation
.
In the condiment market in recent years, new concepts and terms have emerged one after another, some of which are somewhat innovative, but some of which are not worthy of the name
.
Most of the listed condiment companies are leading enterprises with significant brand effects, but there are still unlisted brand enterprises such as Lee Kum Kee, Tataile, Zhujiangqiao, Donggu, Xinhe, Shounong Weiye, Tianjin Limin, McCormick, Yongyi Food and Zilin Vinegar Industry, East Lake, Water Tower, Baoning, Tianli Duliu and other unlisted brand enterprises occupy a relatively important position in the condiment market and have a high market share
.
Qualified condiment listed enterprises can join forces or complement each other to achieve strategic restructuring
.

Establish a sense of social responsibility The condiment industry has developed to today, and a large number of enterprises and brands
with social influence and popularity have emerged.
Their every move has a huge impact
on the industry and on social and economic development.
During the epidemic, condiment companies have taken on responsibilities and made outstanding contributions
to protecting people's livelihood and promoting development.
More and more enterprises have assumed more social responsibilities in the process of development, and some excellent condiment companies have even set up special departments to coordinate corporate public welfare undertakings, making corporate public welfare activities more systematic and standardized
.
In the future, condiment enterprises should do their best to assume more social responsibilities and play a greater role
in cultural dissemination, scientific popularization, technology research and development, and advanced standard formulation.

(Source: China Condiment Association)

China Food News(2023.
01.
12.
04)

(Responsible editor: Gao Jiaodi).