Capital hunts the noodle restaurant business, and the catering industry has begun to change its taste

The capital’s landing on the beach has once again aimed at the catering industry.

The catering industry has not been favored by capital for a long time, but now it has turned around and is very popular.

Not long ago, on June 24, Wuye Noodles announced the completion of 300 million yuan A round of financing. Publicly available information shows that this is the largest A round of financing in the catering market so far. Immediately afterwards, Hillhouse Capital also quickly ended, completing the A+ round of investment in Wuye Noodles.

In just a few months, Wuye noodles won the favor of many leading organizations. Founded less than three years, by “self-+ join” mode of operation, Heilongjiang and Jilin provinces in Northeast Liaoning as a starting point, fast speed Tinto exhibition to Beijing and Tianjin, Jiangsu, Zhejiang, the Pearl River Delta, Shandong, Inner Mongolia and other provinces and cities, Achieved standardized, large-scale and high-speed expansion. It even announced that by 2023, the number of Wuye noodles nationwide is expected to exceed 7,000.

In addition, encountering noodle shop brands such as Xiaomian, Ma Jiyong, Chen Xianggui, and Zhang Lala, have also become popular for capital grabs.

Although historically, the influx of capital will inevitably promote the accelerated development of the industry, “but this is only capital-driven development, not market demand.” Yuan Ye, the founder of Houtang, commented on the current capital events in the catering industry. Brand management and store expansion are things that require long-term efforts. Obtaining financing is only the first step, not the end.

At the same time, after winning the favor of capital, “if the company itself does not have the leading self-growth and store development speed, in the future, new and more innovative brands will surpass the old catering companies, and the speed will become faster and faster.” Qing Yong, founder of Tomato Capital of Dao Investment, has also emphasized this.

With the help of capital and the fact that the pasta track catering brand is racing to enclose the land, consumers have questioned and complained. On social networks, for example, “a bowl of noodles is more than 40, the price is too low”, “good cooking restaurants are becoming more and more difficult to find, because capital likes convenient and fast hot pot, fried, barbecue, spicy, and now noodles are not Let it go”, “Eat food must be quantified, mechanized, and efficient” and so on.

Capital hunts the noodle restaurant business, and the catering industry has begun to change its taste

Regarding the influx of capital into the catering industry, the current performance is more about accelerating store expansion and increasing the price of more expensive dishes. Looking back in the past, there are not many companies that are in line with capital and intend to develop with capital, but it is not uncommon for them to lose to capital. For some time to come, after the catering industry has gone through the inevitable path of rapid store opening and fierce competition, it is not known whether it will reshuffle, but at least, the current development of the catering industry has “changed”.

Capital influx

As a traditional Chinese delicacy, noodles not only have a long history, but have also evolved into a series of well-known categories such as Lanzhou beef noodles and Chongqing noodles.

During this period, the people of Hualong in Qinghai made the name of Lanzhou beef noodles, with as many as 40,000 stores nationwide. A few days ago the latest brand to get financing Ma Kee Yong, Chen Xiang Gui Zhang Lara are Lanzhou noodles brand. Chongqing Xiaonian, driven by cultural tourism and film and television arts, is not only well-known to the people all over the country, but also became a new entrepreneurial project of Lu Zhengyao, the former chairman of Ruixing Coffee .

But no matter what, the current Lanzhou ramen, or other Chinese fast food snacks, are basically still in the development stage of street shops. Not only is the scale and standardization low, but it is difficult to ensure hygiene and food safety, which is not conducive to large-scale development. These traditional old shops can hardly be neutralized and transformed by capital.

With the increasing popularity of food delivery platforms, SaaS services, and front-, middle- and back-office information services, data based on logistics, capital flow, and information flow have been fully linked. The transparency of data leads to an increase in the dimension of competition, and consumer demand, behavior, and trends can be predicted.

In other words, offline catering business entities already have the attributes of Internet digitization, so its development speed will be closer to the Internet model. The emergence of high-quality entrepreneurs and entrepreneurial models will achieve rapid development and form a super scale. When a category such as pasta is large enough, it will also form the upper reaches of the supply chain’s purchasing control, the benefits of large-scale production, and brand premiums.

According to market data, Wuye Noodles has set the goal of opening stores nationwide at 7,000 stores in the future, and Met Xiaomian also set the goal of opening stores for the next three years at 1,000 after receiving tens of millions of yuan in Series B financing in March this year. .

Such development goals and store scales were unimaginable in the past. Chain brands such as Oriental Palace Lanzhou Ramen have only opened more than 500 stores in 8 years since their development in 2013. Many top catering brands have developed for more than ten years or even decades before they have their current status and scale. After 25 years of development, Chongqing’s local fast-food company Village Base has achieved the scale of development of more than 1,000 stores.

All these are more reasons for the many changes that have taken place in the catering industry. China today is very similar to the United States in the 1950s and 1960s, and Japan before the 2000s. Food processing technology is basically mature, fresh-keeping technology, cold chain distribution and warehousing capabilities are basically perfect, the door to capitalization has been opened, and the value of efficiency, quality and cultural individual needs The three stages of the pursuit of a healthy life almost broke out in the same era.

In the next ten years, China will also have more world-class super-mass catering brands, and it may also determine the pattern of Chinese catering in the next century. The next 10 years will be the best 10 years for diners, and the last 10 years. It is a 10 years that cannot be lost or missed.

Capital re-examines the catering industry

In the past, the capital market was not optimistic about the catering industry for a long time. Because there are many problems in the traditional catering industry, such as heavy asset models, traffic reliance on store locations, difficulty in transparency of financial data, and non-standard products. But with the development of mobile Internet and the chain mode, there are four young creators starting Zhao Gang, who believe that these problems can get a good solution. “As catering becomes more and more like a consumer product, the capital risk is correspondingly much smaller.”

In addition, the epidemic is also a turning point. “Many catering companies that did not feel short of money or financing in the past have also increased their risk awareness and have begun to have a deeper understanding of capital, and even actively embrace the capital market.” Zhao Gang said.

Among them, Xibei has always insisted on publicity, “Xibei will never go public.” However, the epidemic prompted it to discover Xibei’s own problems and cash flow problems, and also recognized the strength and power of capital. After the epidemic, Xibei founder Jia Guolong said at the China Catering Brand Festival that Xibei has decided to go public and is currently looking for suitable time and capital.

According to previous reports from China Securities Network, the relevant person in charge of Xibei revealed that it is entering the listing cultivation period, and the listing time and location have not been fully determined. “We are constantly learning and exploring the way to go public, and we are also looking for suitable high-quality capital. After the listing, on the one hand, we can release some equity and motivate employees; on the other hand, we can alleviate the capital faced in a crisis like an epidemic. Risk.” Xibei Vice President Yu Xin also emphasized before.

In fact, since 2019, based on the listing of companies such as Haidilao , Jiumaojiu , Juewei , etc., some subtle changes have taken place in the catering investment and financing market.

In Qing Yong’s view, on the one hand, in the A-share market for more than ten years, new catering companies have finally gone public, which is different from the large state-owned catering companies in the past. On the other hand, the market value of catering companies listed on the Hong Kong stock market used to be very low, at 8-10 times the PE for a long time. However, the listing of companies such as Jiu Maojiu and Haidilao has increased the PE by nearly a hundred times. The solution of various problems such as the chain and the slowdown in the growth of online user traffic have caused some established investment institutions across the country , including Tencent and Ali, to pay attention to investment in offline catering and compete for traffic IP.

In 2020, catering investment and financing events will begin to rise gradually, and there will be nearly 140 investment and financing events in the catering industry alone, with a single financing amount even as high as billions. It is no exaggeration for some top high-power brands to use the word “grab” when financing. Dozens of capital chasing the same project abound, and many unknown and incapable small institutions can hardly grab the share.

Entering 2021, the number and amount of investment and financing events in the catering industry will be more exciting for competition. Among these, the most obvious is that the financing amount is getting bigger and bigger.

The changing catering industry

The long-term goal of capital is to pursue profit. Compared with the technology and Internet industries, the catering industry is extremely variable.

According to Zhao Gang, the founder of Siyou Youth, “Capital will only choose to enter at the right time, such as the start-up period and the mature growth period of a company. It is possible for the company and capital to achieve a win-win situation quickly. But most of the time, how Spending money is much more difficult than making money. “How to use capital well is more of an ability. The prerequisite to avoid being manipulated by capital is that the company has a clear understanding of its own brand strategy.

In the early development of China’s catering industry, there have been many negative cases, such as South Beauty and Da Niang dumplings , including the early capitalization, which did not succeed, such as Xiaonanguo and Hunan, Hubei, etc. These unpleasant capital experiences in the catering industry have led many companies to imagine capital terribly and resist capital. The founder of Laoganma has publicly stated on many occasions that he will not raise funds or go public.

However, today, more and more companies are constantly embracing capital, and through capital, they continue to expand scale, optimize corporate governance, build brands, and build moats, and they have become very remarkable brands. Whether it’s hi tea for high-end fruit teas , Michelle’s ice city that focuses on sinking the market, Haidilao hot pot based on service doctrine, or Banu hot pot based on product doctrine, these excellent brands are making capital for their own use. , Are striving to make themselves a great company with sustainable profitability, sustainable growth, and a moat.

It is true that with the help of capital power, “financing, expansion, and listing”, this is a fast-rising development path for the catering industry, but there are also many bubbles and crises. Among them, there are many complaints on the consumer side about the entry of pasta from catering. “There are more than 40 noodles in a bowl, and the price-performance ratio is too low.” “Good cooking restaurants are getting harder and harder to find, because capital likes convenient and fast hot pot, deep-fried, barbecued, and spicy, and now noodles are not spared.

In response to such market voices, Zhao Gang retorted that products are important, but dining is a comprehensive experience, and taste has never been the only factor in dining. “The quality of the ingredients, the safety of the product, the stability of the taste, the exquisite packaging… and other factors will affect the customer’s consumption decision. Even if the taste difference is not large, the consumer will pay for other factors, after all, the overall consumption The experience must be upgraded.”

Nowadays, with the help of capital, a large number of stores are becoming more and more common. Zhao Gang reminded that many new catering people have failed in rent. The same problem is the increase in labor costs, and this trend will not see signs of improvement in the next ten years. In the future, the money of catering companies will not be earned, but will be saved through refined management. The industry frequently mentions the term “total cost leading strategy”. No matter how rent increases, there will always be companies making money. You can’t control the rise and fall of the rent market. You can only control yourself to do better than others.

Capital is just the icing on the cake. How to achieve sustainability of the brand and establish barriers to competition determines to a certain extent whether the brand can continue to grow. But judging from the current development, a large number of stores will undoubtedly pose a huge challenge to the ability of chain management. A little carelessness may fall into the opposite side-a large number of store closures.

Reference materials:

  1. “Interview with Qing Yong, founder of Tomato Capital: Dozens of capitals chased the same catering project last year, and the secondary market has a significant head effect” Daily Economic News
  2. “Qing Yong, founder of Tomato Capital: Interpretation of 2020 Chinese Catering, Insights into the Big Trend” Entrepreneur Daily

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