CITIC Construction Investment: The fresh snack circuit is in a period of store explosion, and dominant brands are expected to stand out from the competition

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the fresh snack circuit is another channel innovation and transformation after mass snack sales channels. It focuses on fresh short-term insurance and is committed to finding a balance between short-term insurance, scale, and price. Currently, it is in a period of store explosion. Leading brands are accelerating nationalization. In the future, brands with a good supply chain foundation, extreme supply chain management capabilities, and deep channel resources may stand out from the competition. Focus on future supply chain investment opportunities for upstream brands to enter the fresh snack channel & channel investment opportunities under store integration.

CITIC Construction Investment's main views are as follows:

What aspects of fresh snacks should I pay attention to?

1) Development history: The efficiency revolution and the quality revolution have gone hand in hand. In recent years, new business formats such as mass sales of snacks and fresh snacks have emerged; 2) Competition pattern: the industry concentration is low, the four leaders are beginning to appear, and the three major factions coexist; 3) Single store model and business model: Fresh snacks currently present the characteristics of shopping mall influencer stores, focusing on fresh and short term insurance.

What's new in the current order fresh snack circuit?

1) Since this year, leading brands represented by upstream snack brands, downstream mass sales channel brands, tea brands, convenience store channels, etc. have all crossed borders into the fresh snack circuit, showing an intensive trend of opening stores in July-August; 2) Fresh snack stores have further accelerated in June-August of this year, leading brands have accelerated nationalization, and several major brands have all opened and expanded stores across the country.

What are the winners and losers of the future fresh snack circuit competition?

1) The supply chain is the foundation for expansion, and the ability to continuously build explosives is the key to maintaining popularity, and food safety is the line of life and death; 2) Channel resources are endowment barriers, and fresh snacks are locked in shopping malls on the 1st floor/B1, and locations are scarce.

What are the potential opportunities for fresh snack tracks from an investment perspective?

1) New supply chain channels have significant dividends. Focus on supply chain investment opportunities for upstream brands to enter the fresh snack channel: ① Fresh marinated food: covering duck products, chicken claws, beef, pork side, seafood, vegetables, soy products, etc. Related targets: ST Premium, Jinzai Food, and Yanjin Store. ② Short-term baking: covers products such as egg tarts, mochi, Swiss rolls, toast, steamed cakes, pork floss, etc., related targets: Licao Foods. ③ Dried fruit freeze-dried: Biased towards products such as raw fruit processing, freeze-drying, and VF fruit and vegetable crisps. ④ Roasted nuts: Mainly including nut processing, dried fruit blending, and gift box development. Related targets: Qiaqia Food and Ganyuan Food. ⑤ Fresh drinks and chilled desserts: including NFC juice, yogurt cups, fresh milk drinks, refrigerated desserts, etc. Related target: New dairy industry. ⑥ Healthy functional snacks: focusing on concepts such as prebiotics, low GI, high protein, collagen, medicinal food homology, etc., related targets: wheat food.

2) Seize store positions in the first half, look at mergers and acquisitions in the second half, and focus on channel investment opportunities under store integration. The bank believes it can focus on several types of companies: 1) Mingming is very busy and Wanchen Group, which has channel resources and ultimate supply chain management capabilities; 2) exquisite food with supply chain infrastructure and the ability to operate franchised stores; 3) giants with deep channel resources, such as China Resources. According to Sina Finance, almost all of the locations for the nationwide expansion of Jinpelmen are currently in Vientiane shopping malls (Vientiane Hui, Vientiane Tiandi, Vientiane City) under China Resources.

Risk Alerts

Demand recovery falls short of expectations; economic recovery falls short of expectations; food safety risks.