Spicy strips set off a "national trend" revolution

Some contemporary young people may not know about Luohe, but they must have tasted the salty, sweet and spicy Weilong spicy strips. Weilong’s position as the “leader” in the spicy noodle industry is unshakable. Even in the marketing circle, Weilong has created a unique marketing phenomenon. He has worked closely with Baozou Comics and Weibo joke makers, and has created a series of marketing projects every now and then. Can create a hot search on Weibo.

During the epidemic, Weilong announced through its official Weibo account that it would donate a batch of spicy strips and konjac snacks to Wuhan and distribute them to frontline medical staff. Not only that, Weilong announced an average salary increase of 30% for returning employees during the epidemic, and also planned to recruit 1,000 more people, once again attracting attention.

What few people know is that the birthplace of Weilong Hot Tiao is Luohe City, Henan Province. This is the main spicy strip production area in China. Luohe's annual spicy strip output value can reach one-seventh of the country's.

In Luohe, if locals want to eat spicy strips, they don’t buy them in bulk in supermarkets. They have to buy by the pound and by the land. They buy two or three pounds of spicy strips at a time and put them home and eat them slowly. The eating methods are also flexible. Whether it is sesame seed pancakes, eggs, steamed buns or pancakes, spicy strips are indispensable. The eating style of spicy noodles for everything has been spread in Luohe more than ten years ago.

If gatherings in other places are indispensable with wine, Luohe people often have spicy strips on their dining tables. During festivals, a box of spicy strips can become a gift for them when visiting relatives and friends.

The food culture of Luohe spicy strips has given Weilong a soil for development and growth. No matter from the canteen next to the school to the specialty store in a large mall, you can see Weilong Spicy Tiao. This popular snack - spicy strips has become the "national snack" in the new era.

Picture/Visual China

No one thought that this 50-cent street snack would also be on the American luxury food list and become the successor to the American luxury food list. Another representative of "domestic products" after godmother. In November 2015, Weilong Hot Tiao appeared on the Amazon website in the United States, with a unit price of up to US$14, equivalent to more than 90 yuan.

Weilong’s internal employees attribute the key to the above-mentioned success to the success of product taste, “Weilong spicy strips have more than 60 food categories, but they all have one characteristic: they are not too spicy. This is because our research found that except for people in Hunan and Sichuan who prefer spicy food, people in more areas have less spicy eating habits. Therefore, Weilong also lowered the spiciness of the original spicy strips from spicy to sweet and spicy, which is more in line with the situation. Popular taste. ”

Weilong began to continuously enrich its condiment categories, not only in seasoned noodles, but also expanded spicy strips into five categories: soy products, konjac products, vegetarian products, and meat products. Ten products. But as the product library continues to expand, people have also discovered that this previously spicy snack has begun to turn into a sweet snack.

"Guangdong is our largest sales area. Although they are closer to Hunan, Cantonese people have a lighter taste and do not like spicy food."

"Blue Ocean" becomes "Red Sea"

Walking in the streets and alleys of Luohe, you can hardly feel the unique atmosphere of Luohe as the hometown of spicy noodles. You can only see those in some community supermarkets, shopping malls, etc. Spicy strips with colorful packaging. Before the rise of Weilong, the streets of Luohe City were filled with vendors selling beef tendon noodles. Walking on the streets, the smell of handmade spicy strips made people unable to hide.

The people of Luohe have grown up under the "moisture" of spicy strips. Compared with the familiar fragrance in the streets and alleys in the past, the hometown of spicy strips now has a more industrial atmosphere.

Weilong headquarters is located in the private industrial park of the Economic Development Zone east of Luohe. When you walk into the industrial park area, you can see the conspicuous Weilong Food Industrial Park logo. In August this year, employees at Weilong's headquarters moved into the new park, and multiple production lines in the second phase of Weilong Food Industrial Park were put into operation one after another, becoming the main production base of Weilong Food. In the original Weilong Food Industrial Park Phase I, some buildings were labeled "Weilong College" and were only open to internal employees.

Compared with the previous park, the newly moved park building has more food production workshops, but in the view of internal employee Zhang Long, these outputs are not enough to support the long-term development of Weilong. "We are currently building a third-phase industrial park with a total investment of 3 billion yuan." Officials from the Luohe Municipal Government once stated that the completion of the Weilong Phase III Industrial Park project carries the goal of "the annual output value exceeds 20 billion yuan and will become the city's second food company exceeding 10 billion yuan."

In fact, taking advantage of the market downturn to continuously improve production technology to expand spicy strip production capacity is a key factor in Weilong's development. For example, in 2004, spicy strips were labeled as "junk food" and sales were bleak. However, Weilong Chairman Liu Weiping invested a lot of money in the supply chain and gradually changed the original semi-automatic operation to automation; in 2017, Weilong went a step further Build a R&D center equipped with various professional testing instruments.

Picture/Visual China (Spicy Tiao Processing Factory)

A Luohe local commented that these operations were unprecedented in the spicy stick industry and even among local snack manufacturers at that time. A relatively advanced approach. It not only increases production capacity and ensures food safety, but also consolidates brand advantages to some extent.

Through a series of technological iterations, the output value of Weilong Spicy Tiao has increased year by year in the spicy tiao market. But competitors are also coming. Zhu Danpeng, a Chinese food industry analyst, once said, "The scale of China's spicy strips industry in 2018 was 58 billion yuan, and the average gross profit margin of spicy strips was close to 50%. High gross profits naturally attracted capital to join." At present, Three Squirrels and Bestore , Baicaowei, Yanjinpuzi and other Internet celebrity snack brands have included spicy strips as a member of their product matrix.

Weilong, aware of the competitive landscape, also began to gradually change its strategy towards dealers. According to an internal employee of Weilong, “Weilong now has three main requirements for dealers: first, it must be a distribution-type dealer with certain vehicle transportation capabilities; second, the dealer bears the risk of overstocking, such as a With an annual order volume of 1 million, dealers must ensure a certain coverage capacity and undertake after-sales services independently; thirdly, if the volume exceeds a certain level, other types of spicy food cannot be sold at the same time.”

And in In terms of channel layout, Weilong has also made adjustments. Dealers can only act as terminal sales agents and will not do wholesale in the future. "In the past, our company had wholesale, but now the company is restructuring and starting to implement a partnership model, so we will pay more attention to terminal stores."

Such strategic adjustments have dampened the enthusiasm of some dealers, "Wei Long La Tiao has already experienced a round of price increases after the epidemic this year. Coupled with the inability to resell channels and certain sales category restrictions, this is too harsh for us."

Another Luohe local. The dealers also expressed their incomprehension about this. They believed that the characteristics of snack products determine that its performance contribution pool is mainly offline, and online mainly serves as a platform. Currently, nearly 90% of Weilong Spicy Tiao’s sales come from offline terminal stores, and the remaining 10% comes from e-commerce.

Picture/Photo taken by author Li Dou

However, in the disordered spicy strip market, there are also people who are willing to pay for its brand premium. Several store sales staff told AI Financial News that compared with other similar spicy strips, the wholesale price of Weilong spicy strips is the most expensive. The average purchase price of each pack of Weilong spicy strips is 3-5 cents more. "Although Weilong spicy strips have the highest price, they sell the fastest. Compared with similar spicy strips, Weilong spicy strips can sell 500 pieces a month, while others can only sell 50 pieces."

Luohe Manufacturing, waiting for rebirth

Guangming Road, not far from Luohe Economic Development Industrial Zone, is a leisure street that integrates department stores, supermarkets, food and other wholesale properties. Most of the customers who come here often come here to purchase in bulk, and Weilong's food flagship store in Luohe, which is also the only flagship store in the country, is opened here.

“We opened here because we hope to reach out to merchants we have not come into contact with before and provide them with some small-volume purchasing services. This will make business easier in the future.” Marketing staff of Weilong flagship store Chen Ying said. However, within half an hour, only one customer came to the store. He bought 20 packs of different types of Weilong spicy strips and left quickly.

Compared with other stores in the wholesale market, this result can be considered optimistic.

In the entire huge wholesale market, there were only two or three pedestrians passing by in a hurry.

In recent years, with the rise of the food industry in various places, Luohe’s food industry, which mainly focuses on traditional snacks such as spicy strips and ham sausages, is facing impact. For example, county-level food industry parks have sprung up in major agricultural provinces such as Hebei, Shandong, and Fujian, gradually forming an obvious phenomenon of food industry agglomeration.

The rise of the spicy tiao industry once gave Luohe confidence in its development. The maturity of the spicy strip supply chain has brought about the development of related upstream and downstream industries, such as the upstream peppercorns, chili peppers, and rapeseed, the midstream food industry, packaging and printing, machinery manufacturing, and the downstream logistics, e-commerce and other industries, all benefiting from it. More importantly, it also plays an important role in boosting GDP. At the 2020 Partner Conference, Weilong Chairman Liu Weiping also revealed that Weilong's overall revenue in 2019 was 4.909 billion yuan, and it contributed 400 million yuan in tax revenue a year.

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In addition to the spicy strip industry, the most shining food pearls in Luohe include Shuanghui, Nanjiecun, etc.

Another undeniable fact is that as a famous food city, Luohe, Henan Province has an annual food industry output value of 200 billion yuan and has more than 7,000 related companies, but most of them are small and medium-sized enterprises with weak innovation and research and development capabilities and the same products. Serious qualitativeization has become a bottleneck restricting the transformation and upgrading of Luohe's food industry.

According to official news from Luohe City, the added value of the food industry above designated size increased by 7% in 2019, accounting for 47.3% of the industry above designated size. Although the food industry still accounts for half of the city's economy, compared with 2018 Year-on-year, both growth rate and proportion have declined slightly.

Some people in the Luohe food industry pointed out, “At a time when the food industry is focusing on health strategies, the products launched by local food companies in Luohe are still the same as they were more than ten years ago. Compared with many new foods now, In other words, the changes are not big. ”

“The food industry has shifted from survival-oriented consumption to healthy and enjoyable consumption. Whoever creates a clear differentiation will be able to break into a new blue ocean.” Liu Zhi, executive vice president of the China Food Industry Association, said in a speech at the Food Expo.

Affected by the epidemic, the Luohe Food Expo, originally scheduled to be held in May, was postponed to November this year. The upcoming 18th Food Expo carries the glory and dream of this famous food city. Since the first Food Festival, Luohe City has regarded investment promotion as an important symbol to measure the success or failure of the festival. However, under the trend of declining output value of the food industry, the investment promotion task in 2020 will be more arduous than in previous years.