Lao Ganma or will rise 1-2 yuan per bottle

Lao Ganma or will rise 1-2 yuan per bottle, Lao Ganma's price increase, both cost pressure, but also its own development of a consideration, which is an internal and external comprehensive consideration, the future listing will be his ultimate goal. Lao Ganma or will increase 1-2 yuan per bottle.

Lao Ganma or will increase 1-2 yuan per bottle 1

According to the media "seasoning home" news media "seasoning home" news, seasoning brand "Lao Ganma" issued a price adjustment official letter to dealers. A price adjustment letter, from March 1, 2022 onwards, the sales price of some products to re-adjust.

Interfaces News confirmed the price increase from several distributors. Although Lao Ganma did not specify the specific increase, according to the dealers, the price increase is about 1-2 yuan per bottle and 20-30 yuan per piece of goods.

The price adjustment letter released by Lao Ganma said the reason for the price increase is that the cost of raw materials, labor costs, freight and other annual into a rising trend, the company's part of the production of the product and the preparation of the goods has caused a serious impact.

"Most of the condiment brands have increased prices, not only Lao Ganma." A dealer in Zhongshan, Guangdong, told Interface News that seasonings have risen once at the end of last year, and now it is the second time.2021 Since then, soybeans, soybean meal, soybean oil and other commodities have risen in price, Haitian Taste, Golden Dragon Fish, Hengshun Vinegar and other companies have announced price increases. Haitian flavor industry, gold dragon fish, Hengshun vinegar industry and other enterprises have announced price increases one after another.

However, based on Lao Ganma's brand influence and market share, the price increase has not yet affected the dealers to go goods. "Some people only recognize the brand of Lao Ganma, and some other brands, although cheaper, are not selling well." The said distributor said that Lao Gan Ma's sales are still at the forefront of similar brands now. A dealer in Kunming, Yunnan even feels that it is still difficult to get goods for Lao Gan Ma. "As long as you can get the goods, there is no worry about selling, the circulation is very fast." The dealer said.

Lao Ganma dealer strategy is different from the traditional FMCG play, only choose large regional dealers, and is responsible for logistics and transportation. In order to achieve sales, regional distributors must carry out the development of the second batch of the layout, and gradually formed a distribution network throughout the major regions. As a result, Lao Gan Ma's products can be found everywhere in convenience stores, superstores and other places.

For dealers, Lao Ganma's profit margin is not high, and a bottle is even only a few cents. But the strong ability to spread the goods allowed Lao Ganma to occupy the market very early, turning the product into hard currency, and the relatively stable shipments also guaranteed the dealers stable profits.

In the field of hot sauce, Lao Ganma's jianghu status is beyond doubt, but from last year onwards, the new wave of consumerism is raging to crush the traditional brands in the industry, Tiger State, plus a little taste, Chuan Wazi, and other new consumer brands in the capital support, to give a certain degree of pressure on Lao Ganma.

In the past, Lao Ganma has never advertised, but in the past two years, it has begun to make a lot of marketing moves. 2019, Lao Ganma launched a magical video, "Unscrewing Ganma"; 2020, Lao Ganma's official flagship store cooperated with Taobao to launch the "Lao Ganma Love Story Bottle". A variety of attempts have also been made on the product side, the channel side and the terminal.

In addition to continuing to produce traditional products, Lao Gan Ma has also launched new products such as tomato chili sauce, spicy dishes and hot pot base. These attempts have also allowed Lao Gan Ma to continue to maintain growth momentum. in 2019, Lao Gan Ma completed sales revenue of 5.023 billion yuan, an increase of 14.43%. in 2020, Lao Gan Ma sales reached 5.3 billion yuan.

Lao Ganma may increase 1-2 yuan per bottle2

"National goddess" Lao Ganma is going to increase the price.

Recently, there is news that, a drop Guiyang Nanming Lao Ganma flavor food limited liability company's "price adjustment letter" shows that, due to the cost of raw materials, labor costs, freight and so on every year is rising trend, rising costs have been part of the company's product production and preparation for a serious impact. After careful consideration, the company decided from March 1, 2022 onwards, the sales price of some products to re-adjust.

The implication is that due to the annual climb in raw materials, labor costs, freight, etc., Lao Ganma has decided to increase prices.

Once upon a time, as a dry rice people must Lao Ganma once inexpensive and tasty reputation, but with the rise of Tiger State, rice masters, Zoda Lion and other emerging dipping sauce brands, originally belonged to the Lao Ganma's hot sauce market began to be eaten. At the same time, young people and other groups are beginning to abandon Lao Ganma.

Under the crisis, can the price increase really save Lao Gan Ma?

Raise the price by 15%!

Lao Ganma price is no longer friendly

According to the enterprise search data, Guiyang Nanming Lao Ganma flavor food limited liability company, is 51% by Li Miao Xing, Li Guishan shareholding 49% of the family joint venture, which Li Miao Xing and Li Guishan two people, are Lao Ganma founder Tao Huabi's son.

And in the Lao Ganma official website, Guiyang Nanming Lao Ganma flavor food limited liability company, but also the main body of the company's main filing registration. Some industry analysts pointed out that with the Guiyang Nanming Lao Ganma flavor food limited liability company sent a letter announcing the price increase, the national Lao Ganma sales price increase, will also soon be noticed by consumers.

In fact, before Guiyang Nanming Lao Ganma flavor food limited liability company related customer service personnel in response to outside inquiries, has acknowledged the matter, said that because of the product raw materials such as chili peppers and other ingredients prices rising costs, the recent Lao Ganma to the dealers to issue a price adjustment letter from March 1 to implement the price increase.

From Yunnan Kunming and other places of the Lao Gan Ma dealers, has captured the price increase and sales of products for the price adjustment. In addition, a number of dealers have also revealed that a (24 bottles) of hot sauce at present about 20 yuan, and the price of this adjustment rose between 5% and 15%.

With the appearance of Lao Ganma price increase, more and more people began to complain, "(Lao Ganma) now the taste is not as good as before", "is not the old Lao Ganma". Once popular for its great taste and low price, Lao Gan Ma is no longer as cost-effective as it used to be.

Discarded by young people

Lao Gan Ma panic?

In 2014, the founder of Lao Gan Ma handed over the company she founded to her youngest son Li Miao Xing to take care of, and began to take a backseat herself, but it was not expected that after she delegated her authority, Lao Gan Ma's performance began to go from a steady rise to a decline due to the fact that Li Miao Xing had replaced the raw materials of Guizhou chili peppers with Henan chili peppers, which resulted in a lesser taste than before.

The data show that in 2014, Lao Ganma's revenue was 4 billion yuan, and in 2016 it reached 4.549 billion yuan. However, in 2017, as Lao Ganma founder Tao Huabi stepped down, the company began to see a decline in revenue, from 4.447 billion yuan in revenue that year to 4.389 billion yuan in revenue in 2018.

As a result of the downturn, Tao Huabi, the founder of Lao Gan Ma, returned in 2019, changing the seasoning of Lao Gan Ma to the original ingredients, as well as reformulating the formula of Lao Gan Ma. The company then returned to the growth channel, and in 2019 Lao Ganma completed sales revenue of 5.023 billion yuan, an increase of 14.43% year on year, hitting a new record high, and sales in 2020 reached 5.3 billion yuan.

But in those years of low performance, a number of domestic netflix brands saw the opportunity, Tiger State, Master Rice, Zodashi and many other new brands came into being, these brands through capital operation, financing, etc., to quickly grab the user's mind, and try to find ways to seize the market share in the hot sauce market, the Lao Ganma's faults, so that the coveted domestic hot sauce market of the new brands to have a chance to take advantage of the opportunity.

In the statistics of Enterprise Search, there are more than 5,000 enterprises related to chili sauce, the vast majority of which were established in the last decade. Under the siege of many brands, consumers have more choices, a single flavor . Lao Gan Ma seems to be less "flavorful". Most of the post-90s and post-00s groups have begun to switch to the new Netflix brand.

In Tmall and Jingdong respectively, search mixing hot sauce, mixing rice sauce and other keywords found that the current ranking in front of more than Haitian recruitment mixing rice sauce, Li Ziqi, Jixiangju and other brands, if you do not directly search for the Lao Ganma, it is difficult to find its trail.

In the Internet world, where the new generation of Internet users is highly concentrated, the figure of Lao Ganma has been submerged by the new Netflix brands, making it difficult to find traces.

According to China's food industry analyst Zhu Danpeng told Sina Science and Technology, "Because the new generation of consumer groups thinking and consumption behavior is different from the old generation, they are more new and old, like some high value at the same time innovation and upgrading iteration of the brand is relatively fast, which led to the beginning of they will consider trying some new flavors and brands. And this, also forced the traditional enterprises to innovate and upgrade the iteration speed and quality."

In addition, in addition to online stores, the current sales of Lao Gan Ma in some offline stores have also begun to decline. According to the industry media recently visited a number of supermarkets in Beijing found that the current production date of Lao Ganma almost no 2022, most of them are produced in October 2021 or so, the date of the longest is the production of June last year, and Lao Ganma 18 months of shelf life compared to only half of the shelf life.

Even in the vegetable market to sell 5 years of condiment dealers to the outside world, said, "obviously feel the Lao Gan Ma is getting worse and worse, although there are still people recognize this brand, but the sales are obviously not as good as before. Now the face of want to buy hot sauce customers, has been no longer will give priority to recommend Lao Gan Ma."

Rising prices to save Lao Ganma?

With both online and offline sales facing challenges, can a price hike really help Lao Gan Ma break the deadlock and overcome the difficulties at hand?

As China's spicy population continues to rise, the number of people who eat spicy food in China will exceed 650 million in 2021, with an annual growth rate of 10 percent. Under this node, more players will enter the overall Chinese hot sauce market in the future, and capital and the industry's embrace and welcome of new brands will be further enhanced.

"Lao Ganma's price increase, both the pressure of the cost, but also its own development of a consideration, which is an internal and external comprehensive consideration. In the future, with the continuous development of Lao Ganma, the future listing will be his ultimate goal. But now the problem, first to its internal factions and interests to sort out the balance." Zhu Danpeng said.

In Zhu Danpeng's view, at present, Lao Ganma has a market share of nearly 5 billion, similar to the rice master, tiger gangs and other emerging brands share is still very small, in the short term, it is still unable to shake the Lao Ganma's position. But with the entry of new brands, the future structure of the entire domestic hot sauce industry will enter an all-round, multi-dimensional blooming state. The old dry mother needs to do a good job as soon as possible to design the problem of the top, to avoid the follow-up of the family business internal relationship is too complex to appear chaotic.

Lao Ganma may increase 1-2 yuan per bottle3

On March 9, the Red Star Capital Bureau found that a recent media report said that Lao Ganma in February 28 to the dealers issued a "price adjustment official letter". The content of the official letter shows: "Due to the cost of raw materials, labor costs, freight and other annual into the rising trend, rising costs have been on the company's part of the production of products and the preparation of goods has caused a serious impact. After careful consideration of various aspects, now the company decided from March 1, 2022, to determine the sales price of some products to be readjusted."

In this regard, the Red Star Capital Bureau called Lao Ganma Chengdu general distributor, was confirmed to be true. "All series have increased prices. One (24 bottles) went up ten or twenty dollars." At the same time, the distributor said they received the news of the price increase on March 1, after not hearing any relevant wind.

Red Star Capital Bureau also contacted the official website of Lao Ganma phone in this regard, but there has been no answer. Lao Ganma Tmall flagship store customer service on March 9 to the Red Star Capital Bureau responded, there is no price increase notice. On that day, the price of a bottle of Lao Ganma's flavored black beans 280g at the Tmall flagship store remained at the previous pricing of 9.9 yuan.

Screenshot from Lao Gan Ma's official Tmall flagship store on the morning of March 9

"The competition in the market is too fierce now." The distributor lamented to Red Star Capital Bureau. Although the official letter said that the reason for this price increase is rising costs, but some media reports, some dealers said that the price increase is more likely to come from the pressure of sales, in 2019 when Lao Ganma also faced a sharp rise in costs, when the price of raw materials of fresh and dried pepper in Guizhou rose sharply by about 50%, Lao Ganma chose the practice of replacing chili peppers, rather than price increases. However, it also faced the public pressure of "replacing chili peppers, taste deterioration", and then Lao Gan Ma changed back to Guizhou chili peppers, and the price still didn't go up.

And now there is not only rising costs, the hot sauce track is also a fact of rising competition. Since 2016, new brands of hot sauce have come on strong and been favored by users and capital.

The Tiger State Hot Sauce, a benchmark for Lao Ganma, took advantage of the former's weaker online shopping and takeaway channels to kill a way out - the cumulative sales of 6.9 million jars during the "Double 11" in 2021, becoming the first online sales of hot sauce category on the whole platform. And only in the last year, plus a little flavor will be two financing, Chuan Wazi financing nearly 300 million yuan.

Lao Ganma obviously also felt the pressure. Red Star Capital Bureau found that Lao Ganma currently in its flagship store on Tmall to promote the new tomato hot sauce. And Lao Gan Ma has also expanded its hot pot base, similar to the squash "spicy dishes" and other categories. But consumer awareness of these new categories is not high, which is related to Lao Ganma's reluctance to advertise, especially for specific categories.

Food industry analyst Zhu Danpeng believes that Lao Ganma's advantages in the product side, channel side and terminal are declining, and the next need to layout from multi-scene, multi-channel, multi-category.