How can a snack brand change in 30 years? For Hsu Fu Chi, it has been a long rally.
This process is a process of studying changes in consumer preferences, a process of tirelessly innovating raw materials, products, production processes and advanced technologies, and a process of proving the value of Hsu Fu Chi’s own brand. Looking back on the past, the past three years have been characterized by market uncertainty. Diffuse three years, but it is the three years in which Hsu Fu Chi has maintained continuous growth.
Behind the growth is the torrent of the market. The cries of "consumer demand is changing with each passing day" and "the upgrading of the food industry is imperative" have never stopped. This is a test for the brand. Through the 30-year market cycle, Hsu Fu Chi has always attached great importance to research and development, and "build high walls and accumulate food widely" for its core competitiveness. Today, Hsu Fu Chi is ready for the next journey.
Behind the continuous increase in performance, Hsu Fu Chi's product innovation is surging
"In the confectionary business, thanks to the launch of a series of product innovations such as salty snacks, Hsu Fu Chi has achieved high-digit growth."
This glimpse in Nestlé’s 2022 financial report reflects the growth that Xu Fuji has quietly accumulated strength. But 2022 is still only a small part of the story: Looking forward, in the first nine months of 2021, supported by KitKat’s strong sales development, Hsu Fu Chi’s candy business also achieved high-digit growth; According to the quarterly financial report, the candy business represented by Xu Fuji performed strongly.
In fact, if we "decompose" this growth in more detail, we will find that the driving force of Hsu Fu Chi's growth is the endless and continuous product innovation.
When it comes to the specific market level, the scale of China's broad snack market has already exceeded the trillion yuan mark. In contrast, Hsu Fu Chi's products currently cover more than 1,400 SKUs, and can maintain more than 100 new products every year. Compared with the huge market opportunities, it is still a fish entering the sea and waiting for Jackie Chan.
The brand history of more than 30 years has indeed accumulated a solid family background for Hsu Fu Chi, but apart from those long-red brands in the market, the most important thing is the ability to gain insight into the market and keep up with industry needs for product innovation. This is the most "able" brand for a brand Assure. Recently, two products of Hsu Fu Ji Shaqima Nut Bar and Qumanguo were listed on the "iSEE Top 100 Global Food Innovation Brands List" in 2023, which is a microcosm. This is an important indicator of innovation in the food industry, and Hsu Fu Chi's innovation strength has been recognized.
In fact, summing up the market trend and Hsu Fu Chi's coping strategies, the addition of nutrition, the subtraction of ingredients, and the innovation of healthier processing technology have become the growth rules that Hsu Fu Chi has tempered from the market. The reason is that the snack food market has undergone significant changes in recent years.
Although the snack food market is large, there are differences in growth potential from a structural perspective, among which healthy snacks deserve special attention. Market agency Mintel predicts that by 2025, the scale of China's healthy snacks market will reach 240 billion yuan, with a compound annual growth rate of 7.9%, which is higher than that of large-cap categories.
Therefore, with the support of research and development, Hsu Fu Chi successfully "felt the pulse" of the market and tapped growth opportunities.
The addition of nutrition mainly comes from the emphasis on health at the levels of raw materials, formulas, and craftsmanship. For example, use healthy nuts, lactic acid bacteria and other raw materials to launch new products, adopt low-temperature baking to reduce the release of undesirable substances from food nutrition loss, and find a balance between health and taste to meet consumer needs. The concept of subtraction of ingredients, reasonable sugar control, fat reduction, and low salt has also been applied in many categories of Hsu Fu Chi, including but not limited to national snacks such as Shaqima, pineapple cake, chocolate, and crunchy candy.
Facing up to innovation and emphasizing innovation has allowed Hsu Fu Chi to continue to increase investment. On April 10, 2023, Xu Fuji and South China University of Technology held a meeting to jointly establish the first joint research center for healthy snacks in China jointly operated by a school and an enterprise.
At the meeting, Sun Keke, head of Hsu Fu Chi's R&D and application department, revealed that its annual R&D investment has exceeded 200 million yuan for 11 consecutive years. If there are any measures to ensure that a 30-year-old snack brand will become more and more courageous in the market competition, this kind of innovation consciousness that does not hesitate to invest must be the greatest confidence.
It is worth mentioning that Hsu Fu Chi also has industry-leading high-quality production capacity, which provides a foundation for its research and development and food quality assurance. It is easy to build a production line, but it is difficult to build a production system that will stand for decades. Hsu Fu Chi's strong self-production and intelligent manufacturing capabilities will still lead the food industry in the foreseeable future.
All in all, in the process of transforming from a candy family to a national classic snack brand, Hsu Fu Chi has always firmly held the strategic initiative in its own hands through its innovation ability and control of the industrial chain. Correspondingly, the growth of a brand always comes from the "golden triangle" of product + channel + brand. Xu Fuji is still an "all-around player".
Product sales and brand renewal are "paired", and the dual advantages help the brand "blossom"
Good products need good channels to flow to the society, and a good brand image needs to be continuous, active and close to the minds of users. If R&D is the "internal force" that shapes products in terms of branding, then sales and brand building are the "external forces" that shape the outward extension.
In this regard, the first thing I have to mention is Hsu Fu Chi's highly mature channel capabilities. While many brands in the same industry are still pursuing the establishment of corresponding channel systems or the number of terminals, the number of terminals of Hsu Fu Chi has already exceeded one million. But in front of this accumulation, there is still room for improvement.
CITIC Securities pointed out in a recent research report on the snack industry that the snack industry has entered the omni-channel era, and channel dividends are constantly being released. Caixin Securities believes that the snack food customer base has a breadth and a deep category, and it is necessary to pursue "big business penetration". To penetrate, we must go deep into the market. The development history of Hsu Fu Chi is exactly the history of expansion with increasingly close connection with market channels and wider layout.
On the one hand, Hsu Fu Chi has brand loyalty and reputation reflected in its 30-year history, which has always been a gold-lettered signboard for offline physical stores. Through more than 3,000 distributors and more than 20,000 wholesalers, Hsu Fu Chi's products can directly reach millions of terminal outlets, leading the industry.
Among them, Hsu Fu Chi's product portfolio and product forms are sufficiently rich, which is a major advantage of its penetration channels. Bulk products can help dealers' scene marketing, and it is easy to deepen the impression of consumers at the door. Packaging products can not only enhance the brand image, but also guide consumers to pay attention to new categories. Relying on the characteristic brand image of "delicious food gathers blessings every day, Hsu Fu Ji" also has a unique attraction in terms of group buying gifts.
It is precisely because of the existence of a large number of distribution channels like "capillaries" that Hsu Fu Chi can always gain insight into the latest consumption trends and move towards a vast sinking market.
In counties, towns and villages, Hsu Fu Chi has carried out a large-scale distribution operation, joined hands with partners to promote terminal intensive farming, and created "model stores" in counties and towns. This is also the process of Hsu Fu Chi to continue to strengthen its brand image in sinking markets.
This is true offline as well as online. The difference is that the trend of online traffic distribution is always changing dynamically, while Hsu Fu Chi chose a multi-channel layout and combined it with brand renewal to improve both product and sales.
For example, on the short video platform, Xu Fuji has built a circular matrix of product announcement-grass planting-live broadcast. The ability to implant diversified products based on scenarios continues to be integrated into digital links such as store self-broadcasting, talent live broadcasting, and Xiaohongshu marketing, thereby forming a comprehensive and three-dimensional brand image on the consumer side.
Hsu Fu Chi simultaneously upgraded its slogan and product packaging, and "showed its face" to the outside world with a renewed attitude. From the same DODO lollipop in Hurricane, to the official supply of nut bars for the Chengdu Shuangyi Marathon, Xu Fuji appeared more and more frequently, and entered the daily life of consumers in a "moisturizing and silent" way.
It can be seen that with the blessing of traffic, sales channels are also channels for establishing in-depth connections with consumers, especially young consumers. With a reasonable combination of visual display and product marketing, instant retail, near-field business and other channels are deployed in an all-round way, a trendy Hsu Fu Chi brand is becoming more and more vivid and accessible to consumers.
epilogue
"Ten billion and one hundred years" (revenue exceeding ten billion and building a century-old brand) is Hsu Fu Chi's latest goal. To achieve this, Hsu Fu Chi needs to continue to maintain high growth, which means continuing to establish a leading edge in the industry.
"If you want to take it, you must first give it." It is impossible to see the future situation clearly only by standing in the present. Hsu Fu Chi's success comes from the courage to step forward, explore all possible measures that may bring growth opportunities, and devote time, energy and resources to them. The growth of these three years is the recognition of Hsu Fu Chi by the market. We have reason to believe that this evergreen tree will continue to spread its branches and leaves.
Source: Songuo Finance