Article | AI Finance and Economics Shao Lanjie

Editor | Sun Jing

H?agen-Dazs has been squeezed out by Hi-Tea.

Puxi Wanda is the busiest place in Quanzhou, Fujian province, and one of the few 5A stores in the Wanda system. During the peak season for ice cream sales, H?agen-Dazs in Puxi Wanda has shrunk its operation, leaving only one-third of its previous size.

This is not the worst result, "This store everything for two, it is equivalent to give it a chance, if it does not do well again to be pulled out." Wang Guoping, a commercial real estate veteran, told AI Financial News.

Figure / Visual China

"H?agen-Dazs and Starbucks, the same as the cooperation with the mall is generally used in the form of deductions, H?agen-Dazs sales have been going down, there is no way to give the mall enough revenue, and the mall will be assessed on the brand, to meet the expectations in order to continue to keep the position, not to reach the direct return, for other brands. " Wang Guoping revealed the mystery, "Haagen-Dazs also have to measure, if you can not pay this premium, you have to clear."

Split H?agen-Dazs stores 2 / 3 is hi tea. Pictures and news have been circulating on Weibo during the renovation huddle period, and the most recent date this H?agen-Dazs store has been hit by consumers on Weibo is - 2014.

Since when did this generation of young people stop loving H?agen-Dazs?

Abandoned by shopping centers, H?agen-Dazs has lost the "McCity"

At one time, H?agen-Dazs and Starbucks were both guests of honor at shopping centers.

For example, the above H?agen-Dazs store was introduced by Wanda in 2012. "At that time, the brand power was very high, and it belonged to the same A-class as Starbucks. But now it doesn't rate H?agen-Dazs anymore.

But in recent years, he found that shopping centers rarely take H?agen-Dazs as a gimmick, the brand has become dispensable, and now there is basically no points, "because it is not enough appeal to the market, follow it, can not bring traffic and business."

Photo/Screenshot of H?agen-Dazs promotional video

This is not alarmist talk. In the past two or three years, H?agen-Dazs new stores have made little progress, and the old stores are difficult to maintain. 2019 when the core business district of Zhengzhou City - China World Trade Center 360 H?agen-Dazs, has been moved from the first floor of the prime location of the street, moved to the first floor, and replaced by the same Hi-Tea.

From the investment perspective of commercial real estate, H?agen-Dazs belongs to the light drink category. In this category, the shopping center investment will tend to look at the new tea drinks such as tea, Neshe's tea, "know that H?agen-Dazs is more after 80 and 70, 95 know and go to consume, really not much." Wang Guoping believes that H?agen-Dazs itself pricing on the expensive side, the product over the years and no major improvements, but in recent years the market has emerged a lot of new brands, the product is good, the pricing is also low.

If you look at the pricing, H?agen-Dazs is indeed still the early high and arrogant look - single ball cup, 85g 35 yuan, plus a topping another 5 yuan; waffle cone, single ball 43 yuan.

Photo / Shao Lanjie shot

Ice cream "aristocrat", is the first impression of H?agen-Dazs since 1996 into China. At the beginning of its entry into China, H?agen-Dazs focused on high-end business districts with the most expensive rents in Shanghai, Beijing and Guangzhou, and placed a plasma TV in each store to match its high-quality positioning.

When the money leopard in Beijing was known as "the most expensive buffet restaurant", one of the promotional points is "H?agen-Dazs unlimited food", which is absolutely luxury consumption in the year. Unfortunately, the money leopard closed down in 2017, unlimited Haagen-Dazs has become a memory of Beijing people.

Xiaoye, an 80-year-old advertising practitioner, told AI Financial News that H?agen-Dazs appeared as a classic case in the advertising classroom in college. When she started working seven or eight years ago, H?agen-Dazs still had a halo in her eyes, but now the brand has become what she calls "average".

Ms. Tang, a 90-year-old media practitioner, remembers that when she was in junior high school, she used to buy ice cream with her mother at the ice cream wholesaler near her school, for example, 0.5 yuan for a small pudding, 1 yuan for a green mood ...... mother and daughter would buy a big bag and go home to eat slowly. Once the checkout is not right, the boss opened his mouth to 80 dollars, and usually a bag of cold drinks will cost up to 30 dollars.

After arriving home, the mother and daughter of the ice-cream into the refrigerator one by one, and then found a small box of very strange, with a delicate red packaging of ice-cream.

Ms. Tang tasted the first bite, "is a never eaten, with a strong milky green tea flavor, and 1 yuan of green mood is completely different, the taste reveals a kind of expensive." Then she glanced at the box and realized it was the legendary Haagen-Dazs. She and her mom shared the small box of ice-cream with one spoon each, chewing and swallowing, and vowing never to look away next time.

Expensive has always been the label for H?agen-Dazs, and even comparing the price of H?agen-Dazs at home and abroad has become an enduring hot topic on social media.

Sina VLOG blogger "Oops Chen", who lives in Japan, recently did a review of 21 H?agen-Dazs ice cream flavors in Japan, and his fans came up and asked, "Does it hurt the money?" The fan first asked, "Does it hurt the money?" and the fan replied, "It's not bad."

The 21 products used in the blogger's review cost 4,478 yen, or about 296 yuan, or an average of 10 dollars a box or one, which is about one-third of the domestic price.

According to the results of the survey published by the Ministry of Health, Labor and Welfare of Japan, the country's per capita monthly income in 2019 was about 322,700 yen, or about 20,000 yuan, taking into account the income differences between the two countries, the price of this Japanese Haagen-Dazs is more than okay? Simply too okay.

"Oops Chen" told AI Finance, in Japan, H?agen-Dazs compared with the local ice cream, just a little more expensive, but the difference will not be as outrageous as in the country, "H?agen-Dazs more than 200 yen, a boxed Japanese ice cream more than a hundred yen, not much of a difference. " In his view, Japanese consumers do not have a special perception of H?agen-Dazs, Japanese people also like their own domestic brands, and many Japanese ice cream flavor, price, novelty, really more friendly than H?agen-Dazs.

In contrast, young consumers are actually not shy about paying for high-priced Netflix consumer products. For example, Zhong Xuegao launched a 66 yuan "Ecuadorian pink diamond" ice cream, sold 20,000 copies on the day of the 2018 Double Eleven. The average price of Zhong Xuegao's regular ice-cream is 13-25 yuan a piece, which is actually much higher than the price of popular ice-cream, but it has sold 17 million pieces in two years. As for the new tea drink Xicha, young people don't even mind queuing outside the store for half an hour just to have a sip.

But H?agen-Dazs, with its lack of variety, is not on young people's pay-what-you-want and punch-list.

The power of the noble brand

As a high-end brand, H?agen-Dazs is "disliked" by shopping centers for another reason - it's also sold in supermarket freezers.

It turns out that H?agen-Dazs in the retail channel is very widely spread, supermarkets, convenience stores can be found everywhere. In Wang Guoping's view, "there is no way to **** with supermarket brands in shopping centers, it is natural to exclude it, because people will feel that they are more high-end than the supermarket."

Photo/Screenshot of H?agen-Dazs promotional video

In China, H?agen-Dazs stores and retail channels are operated by General Mills. General Mills, a world-class food company with more than 100 brands, operates H?agen-Dazs in China, in addition to Wanchai Terminal. But in the U.S., those inexpensive Haagen-Dazs are not produced by General Mills, but are owned by Nestle.

Nestlé is planning a popular route for H?agen-Dazs, but General Mills' H?agen-Dazs is a high-end route, defined as super-premium ice cream.

But whatever the route, H?agen-Dazs is a little out of its depth as a veteran of the ice cream world.

That's something that General Mills is well aware of, and in the first quarter of fiscal 2020, in response to analysts' questions, Jeff Harmening, chief executive of General Mills, mentioned that in China, H?agen-Dazs sales were down, due to lower traffic in its stores. He believes that the key to returning the business to growth is to attract consumers to patronize H?agen-Dazs stores.

In fact, H?agen-Dazs' woes are not just in the stores, but in the retail channel as well. ai Finance learned from several mainstream convenience stores in Beijing that the ice cream category hasn't been affected much by the outbreak this year, and that sales haven't changed much from year to year, which means that once a new brand enters the picture, it can make the freezer and market space even more crowded.

"This year, especially for Netflix products are recommended. When choosing products, convenience stores mainly consider popularity and price." A convenience store practitioner said that from the final performance, and Lu Xue and Zhong Xue Gao two brands sales are good, the former more categories, price band rich, the latter because it is a net red brand, its own traffic is very large.

As for H?agen-Dazs, the practitioner said that because it is more expensive, it can be counted on to bring with it sales, but it is not selling well.

Photo by Shao Lanjie

One intuitive response is the disappearance of "small freezers". In Beijing, according to the business district and purchase volume, some convenience stores have H?agen-Dazs exclusive small freezers, but in recent years, these small freezers were removed more and more.

"If there are still in the store, it's the ones left that haven't had time to be removed, and they will be removed soon." The above convenience store people explained that the convenience store needs to update the goods in a timely manner, will mainly consider three factors: product and brand tone, gross margin, customer recognition. Before H?agen-Dazs sold well, before acquiescing to the small freezer such a cooperative model. Now the withdrawal is a comprehensive consideration, how to sell is only one of the aspects.

The source also mentioned that in earlier years, on the eve of the Mid-Autumn Festival, H?agen-Dazs pre-sale of mooncake coupons sold well, but the convenience store has not sold for years, "we sell 20%, 10%, but the online discounts are lower, but the sale of the network, they (H?agen-Dazs) have too many agents."

H?agen-Dazs in specialty stores, the price is high; but a variety of coupons on the Internet has long been full of flying. On Taobao, countless merchants selling H?agen-Dazs coupons. According to the introduction of one of the merchants, a single ball cup of Haagen-Dazs as long as 24 yuan, equivalent to 70% off the original price; and 50 yuan of coupons, 37.5 yuan to buy.

A staff member engaged in the sale of prepaid cards revealed, "Our family is the first-class agent of H?agen-Dazs, ordinary vouchers can be discounted by 7.8 percent, and the mooncake group purchase is discounted by 7 percent, and if it is larger than 1,000 boxes, it can be discounted by 6.9 percent."

According to the information provided by the above person, his company's agent of 26 companies in the prepaid card, the partners are both Jingdong, Tmall, but also Starbucks, KFC, Pizza Hut, Walmart, etc., commodity prepaid card most of the discounts in the 9.6-9.9% discounts, H?agen-Dazs discounts is the largest, between 6.9-7.8% discounts, and hi tea almost no discounts, 9.9% discounts.

"Now most of the company welfare purchases are Jingdong card, Starbucks card. H?agen-Dazs summer to buy some more, but basically only ice cream, a little single." The staff bluntly said that Haagen-Dazs is not very competitive.

H?agen-Dazs also tried to please young people

H?agen-Dazs sales cold situation is not unique to China, but a kind of global **** vibration.

Data from General Mills' fiscal year 2020 earnings report shows that as of May 31, 2020, H?agen-Dazs had more than 840 stores in 90 countries around the world, and sales of Super-premium ice cream Super-premium ice cream decreased from $803 million in fiscal year 2018 to $718 million in fiscal year 2020.

Chart/General Mills earnings report

Nestlé is also looking for a new way out for its Haagen-Dazs. Nestle's share of the U.S. ice cream and frozen dessert market fell to 15 percent in 2018, a figure that was 19.3 percent in 2010, according to market research firm Euromonitor.

Late last year Nestlé announced plans to sell its U.S. ice cream business, which includes Haagen-Dazs, to ice cream company Froneri in a deal worth $4 billion. H?agen-Dazs became a pariah in Nestle's food empire.

In 2015, H?agen-Dazs opened the world's first coffee shop at the entrance to Nanjing Road Pedestrian Street in Shanghai. The store was remodeled on the original ice cream store, focusing on coffee, ice cream products will only account for 20% to 30% of the store's total merchandise. These coffees with ice cream attributes were seen by H?agen-Dazs as the key to attracting young consumers in their 20s and 30s in the Chinese market.

At the time, H?agen-Dazs brand executives told the media that the company wanted to use its coffee strategy to change the image of H?agen-Dazs as a single dessert and ice cream store into a "social space where people want to spend time".

It is clear that H?agen-Dazs is also approaching the Starbucks "third space" concept. But the coffee shop was a flash in the pan. H?agen-Dazs has been in China for more than 24 years, and currently has only 290 stores. Starbucks, which entered China three years later than H?agen-Dazs, now has more than 4,200 stores. If H?agen-Dazs develops as expected, the pattern of the domestic coffee market is estimated to be different.

In 2017, H?agen-Dazs also underwent a major transformation from aristocratic to trendy. Its brand logo changed from the original black, white and gold combination to red, and the color looks brighter. The rustic gold color, while looking expensive and in line with H?agen-Dazs' positioning of itself, is not a look that young people like.

Photo/Visual China (Dili Reba at the H?agen-Dazs endorsement event)

Jennifer Jorgensen, vice president and director of marketing for H?agen-Dazs, said quite honestly in an interview, "The H?agen-Dazs brand doesn't stand for what the consumer wants anymore, and we need to become more trendy. "

Also changing was the slogan. Previously, "love her, take her to eat Haagen-Dazs" was y popular. But with the awakening of women's self-awareness and changing consumer attitudes, looking back at previous spots, the camera's representation of women's bodies and metaphors for male-female relationships have always left people with a sense of discomfort.

Unlike the previous promotional strategy of focusing on love, in 2017, H?agen-Dazs slogan was upgraded to Everyday Made Extraordinary, positioning itself completely out of the dating scene and towards daily life. This summer H?agen-Dazs has come up with a new marketing proposition - Don't Hold Back (spoil yourself to your heart's content).

Kotler Consulting Group senior consultant Wang Wenjun analysis, from the change of slogan can be seen, H?agen-Dazs customer attributes, from the buyer and user separation to the same, from the couple economy to the single economy, she economy, the values expressed are also changing. The consumption scenario has shifted from a luxury scenario to a mass scenario, and from a private scenario for couples to a more inclusive social scenario, such as treating oneself, a small gathering of girlfriends, and a gathering of friends.

You can see that H?agen-Dazs is trying hard to please young people.

You can see that H?agen-Dazs is trying hard to please young people, but it's embarrassing that these efforts are not as effective as the "promotion" of the "younger generation".

This summer, the seven points of sweet, ancient tea, tour tea, Rui Xing and other brands have launched a similar product - in their own tea drink products with a H?agen-Dazs ice cream ball. For example, Seven Minute Sweet's Yang Zhi Ganluo with a whole H?agen-Dazs honeydew melon flavored ice cream ball is priced at $26, which is only $4 more expensive than the standard Yang Zhi Ganluo. Add a H?agen-Dazs vanilla ball to a Rachel's Latte Ice or Mocha Ice for just $9. Consumers are saying it's a good deal, and while they're drinking it, they're letting other people "plant the grass" on social media platforms.

AI Finance learned from one of the partner brands that H?agen-Dazs was chosen because it is a well-known brand, and that the addition of the H?agen-Dazs ball to the range of products brings a pure incremental increase in the summer drinks, complementing the high price band.

This partnership you can understand as the co-branding side sourcing ingredients from H?agen-Dazs and adding their own products. This way they can adjust the price of the goods upward a bit, and consumers will rush to the cheaper H?agen-Dazs, to taste. A flexible operation later, sales, word of mouth, marketing all in place.

From this dimension, H?agen-Dazs is still a good diversion tool, but what can H?agen-Dazs itself gain from it?

In 2019, General Mills sold Uno Yogurt's China business to Tiantu Capital. On a conference call afterward, Wall Street analysts asked, "What lessons has the company learned from the yogurt business so far?"

Now, let's hope H?agen-Dazs doesn't repeat that mistake.