How to treat the grain and oil giants Arowana and Lu Hua's continuous overweight condiment track?

In fact, it is nothing new to cross the border from the non-condiment field to the condiment track. From the industry point of view, there are delicious food and beverage, Want Want, Master Kong, Uni-President, Shuanghui and three squirrels, as well as Arowana, Longevity Flower, Li Duo and Lu Hua in the grain and oil sector.

In contrast, cross-border condiments in grain and oil fields are more matching, strategic and aggressive, and grain and oil enterprises are more likely to win from the market effect. Among them, Arowana and Lu Hua, as typical cases of cross-border from grain and oil to condiments, are particularly striking.

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Arowana VS Lu Hua

From the perspective of industry attributes, Arowana and Lu Hua have a high degree of similarity, and they are both based on grain, oil and rice. But in terms of scale, Arowana is much bigger than Lu Hua, but they all belong to the head camp in the industry.

According to the financial information of Arowana, in 2020, the company realized operating income of 654.38+094.9 billion yuan; Year-on-year growth14.2%; According to official website Information of Lu Hua Group, the company's sales revenue in 2020 was 39 billion yuan, achieving sustained growth for more than 30 years.

When explaining its business, Arowana said that its main products include kitchen food, feed raw materials and grease technology products. Products cover cooking oil, rice, flour and dried noodles, condiments, food raw materials and other household and industrial kitchen foods; Feed raw materials such as soybean meal, bran and rice bran meal; Oil-based chemicals, oil-derived chemicals, nutrients, daily chemicals and other oil-based technical products produced from palm oil and other oils. Lu Hua Group also said that its business spans many industries, such as edible oil, condiments, rice and flour.

However, from the perspective of revenue scale, small packaged edible oil is still an important source for the two major enterprises.

According to an analysis report, China's current edible oil market is 26 million tons, of which small packaged edible oil accounts for less than 20% and bulk oil accounts for more than 80%. In the field of small packaged edible oil, Yihai Kerry, represented by Arowana, occupies 45% market share, ranking first in the industry, and Lu Hua ranks third with 7%-8% market share.

However, as we all know, both edible oil and rice flour industries are mature and highly concentrated industries, and both win by scale effect. Generally speaking, the grain and oil industry is already a very transparent subdivision.

Taking 2020 as an example, the overall gross profit margin of Arowana is only 12.33%, while that of Haitian Ye Wei is as high as 43.52% in the same period. This is also the fundamental reason why Arowana's revenue in 2020 is close to 200 billion, but its net profit is only 6 billion, while Haitian Ye Wei can reap 6.403 billion net profit with its revenue of 22.792 billion.

In the field of edible oil, although there is still market space for extruded bulk products, the promotion effect is not ideal from the perspective of consumption habits and market difficulty. Therefore, whether Arowana or Lu Hua, their right to speak in this field has basically reached the "ceiling" and has never been cut off.

Therefore, it is particularly important for Arowana and Luhua to find new business growth points in terms of income and profit. From the perspective of industry attributes, condiments that match their original business have become the same track.

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The "game" of the new track

In the past, Arowana and Lu Hua were similar in track and product matrix, but after entering the condiment track, they gradually embarked on a similar path.

At present, the layout of Arowana in condiment plate includes seasoning oil, soy sauce, vinegar, oyster sauce, cooking wine and so on. Its brands include Arowana, Seafood, Marubeni, Fen Liang and Wheels. In contrast, the brand of condiments in Lu Hua is more single, but its categories are still rich, covering soy sauce, cooking wine, vinegar, oyster sauce, seasoning oil and so on.

In fact, Arowana and Luhuadu coveted condiment track for many years, and related industries were laid out many years ago.

As early as 20 15, Arowana introduced the old-fashioned soy sauce brand "Maruko" from Taiwan Province Province, and invested 65,438+25 million US dollars to establish Maruko Yihai Kerry (Taizhou) Food Industry Co., Ltd. in Jiangsu, integrating the advantages of both parties in raw materials, technology and sales channels, with an annual output of 6,543,806 tons of high-quality soy sauce, including black bean soy sauce. 2065 438+09- 10, Maruzhuang soy sauce products were officially listed.

From 2065438 to September 2009, Arowana acquired Shanxi Fen Liang Vinegar Co., Ltd. and changed its name to Shanxi Fen Liang Arowana Vinegar Co., Ltd. According to the recruitment publicity materials of this enterprise, the acquisition of Yihai Kerry will give full play to the solid-state intelligent brewing technology of Fen Liang Vinegar Industry through Yihai Kerry Group, and form the production capacity and annual output of 300,000 tons of solid-state brewed vinegar within five years.

But strangely, after the merger, Arowana did not rush to bring its products to market quickly. Maruzhuang soy sauce was not listed until June 20 19, while Fen Liang vinegar industry was officially listed until 2020.

In June this year, Arowana also gained the actual control right of Guangweiyuan by increasing its capital by nearly 450 million yuan.

Like Arowana, Lu Hua Group also laid out the condiment field early.

Lu Hua Group official website information shows that in 20 12, the company invested in the construction of "Shandong Lu Hua Biotechnology Co., Ltd.". Using advanced biological fermentation technology and non-transgenic raw materials, the natural fresh maotai-flavor soy sauce was refined through three steps: maotai-flavor strain koji-making, four-season pure fermentation and physical pressing. In 20 19, the group company launched a series of Luhua whole black bean soy sauce products with upgraded raw materials and quality, which added nutrition, health and delicacy to consumers' tables. ...

The picture shows the pure brewing hut in Lu Hua soy sauce production base in Laiyang, Shandong.

For the company's condiment sector, Lu Hua Group publicized in official website: "Using unique bio-fermentation technology, it will produce high-end natural fresh sauce soy sauce, whole black bean soy sauce, natural fresh fried soy sauce, dipped fresh premium soy sauce, brewed black glutinous rice balsamic vinegar, cooking wine, oyster sauce, seasoning sauce and other categories of condiment industry chain."

Combined with the current situation of condiment market, whether it is soy sauce, vinegar, cooking wine or oyster sauce, or even the hot pot bottom material recently launched by Arowana, there are relatively powerful professional condiment leading enterprises, so the market pressure is not small. But generally speaking, for the grain and oil enterprises that are not short of money, as long as they have enough patience and confidence in the highly dispersed condiment industry, the future is still full of opportunities.

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Who can ride the condiment track?

"It's all bad!"

I am discussing with a condiment industry insider that "Arowana and Lu Hua are better condiments?" At that time, the person bluntly said: "It's all strategic layout, and market share and channel strategy are still in the exploration stage."

Zhang Ji, strategic consultant of Seasons and chief consultant of Shanghai Zhihui Strategic Marketing Agency, said: "Both have their own strengths. In contrast, Arowana seasoning oil is well done, and Lu Hua soy sauce is relatively better. "

Because the condiment sector accounts for a relatively small proportion in the overall revenue of Arowana, the relevant data are not disclosed separately. As a non-listed enterprise, the specific category income of Lu Hua can only be known within the enterprise. Therefore, we have no specific figures to support the views of the above-mentioned guests.

However, according to the "China Brand Power Index (C-BPI) Brand Ranking and Analysis Report" issued by CHN Brand 202 1 (No.1/), Arowana ranks first in the edible oil brand ranking, followed by Lu Hua. But in the flour and rice rankings, Arowana is on the list, but Lu Hua is not on the list. However, in the field of condiments, Lu Hua ranked fourth in the oyster sauce list and ninth in the soy sauce list, while Arowana was not on the list.

It is not difficult to see that Lu Hua is ahead of Arowana in condiment track at present.

According to official website of Lu Hua Group, the company has an annual output of 300,000 tons of condiments. He also said that during the Tenth Five-Year Plan period, we will strive to make the annual production capacity of condiments exceed 500,000 tons ... According to the production capacity of condiments, we estimate that the industrial scale of Lu Hua should be equivalent to that of Ye Wei, He Qian.

According to a marketer from a city in Lu Hua, Sichuan, Lu Hua's annual sales in the local area are around 40 million, and condiments are also doing well in the local area. Soy sauce, cooking wine, black vinegar, white vinegar, oyster sauce and sesame oil are all available, supermarkets and circulation are moving, and cooking wine is the best seller.

Regarding Lu Hua's success in soy sauce category, Zhang Ji said that it was mainly due to the company's adherence to the middle and high-end healthy condiment route, choosing black bean series soy sauce as the main product, conforming to the fresh-keeping trend of soy sauce industry, and continuing systematic operation in the core market.

Actually, it doesn't matter who runs in front. Most importantly, both Arowana and Green Flower "run through" the condiment track, and the final result is to see who can by going up one flight of stairs.

At present, the most difficult thing for grain and oil enterprises to enter the condiment field is the lack of consumer brand awareness, just as soy sauce brands are difficult to impress consumers. Even if the Maruko and bean jelly owned by Arowana are professional brands of soy sauce and vinegar, it is difficult for consumers to be impressed when the brand awareness has not reached a certain level.

In addition, although it seems that grain and oil condiments have a strong matching at the channel level, it may not be the case in fact. For example, in terms of channel power, except Haitian, it is difficult for condiment companies to compete with Arowana, but the distribution rate of its condiments is far less solid than that of its edible oil and rice noodles. At first, in order to open the market and make it acceptable to consumers and terminals, Lu Hua had to adopt the strategy of bundling edible oil.

According to another insider, the reason why Lu Hua temporarily ran ahead of Arowana in the condiment sector is that Lu Hua has a strong brand (compared with Maruzuang and bean jelly), a large number of people, a long product line and many specifications. It has a certain kind of moat. The most important thing is that the profit of soy sauce, vinegar, oyster sauce, cooking wine and sesame oil is higher than that of edible oil. Sub-business team operation, dealers have a high degree of cooperation. In addition, the channel is sinking.

Therefore, the cross-border condiment of grain and oil enterprises tests not only the financial strength, but also the comprehensive ability of operation mode and profit distribution in all links.

Author: Maoshi (Sanshao 520875)

Design: Goubuli

Audit: Meng Qi

Disclaimer: The article only represents the author's personal views and does not represent the position of this platform; Part of the information in this paper is arranged according to the enterprise announcement or public information. The data in this article is for industry exchange only, and no investment advice is given.