A recent research report highlights that the fresh snack retail sector represents another wave of channel innovation following the bulk snack retail model. This segment focuses on fresh, short-shelf-life products, striving to strike a balance between product freshness, operational scale, and pricing. The industry is currently experiencing a surge in store openings, with leading brands accelerating their national expansion. Looking ahead, brands with robust supply chain foundations, exceptional supply chain management capabilities, and deep channel resources are likely to emerge victorious in this competitive landscape. Investors should monitor supply chain investment opportunities arising from upstream brands entering this channel, as well as channel investment prospects stemming from store consolidation.
Key aspects to consider in the fresh snack sector:
1) Development trajectory: The industry is witnessing parallel progress in efficiency and quality revolutions, with new business models like bulk snacks and fresh snacks emerging in recent years.
2) Competitive landscape: The market remains highly fragmented, with four major players beginning to take shape and three distinct competitive groups coexisting.
3) Store economics and business model: Fresh snack stores currently exhibit characteristics of popular shopping mall outlets, emphasizing fresh, short-shelf-life offerings.
What new developments are occurring in the fresh snack sector at this stage?
1) Since the beginning of this year, leading players from various backgrounds—including upstream snack brands, downstream bulk retail channel brands, tea beverage companies, and convenience store chains—have entered the fresh snack space. July and August saw a particularly dense wave of store openings.
2) Between June and August, the pace of new store openings in the fresh snack sector accelerated further. Leading brands are speeding up their national footprint, with players like Jiduoman and Jinlimen both expanding into new regions across the country.
What will determine the outcome of competition in the fresh snack sector?
1) Supply chain strength forms the foundation for expansion, while the ability to consistently create hit products is crucial for sustaining consumer interest. Food safety remains the industry's lifeline.
2) Channel resources serve as a significant barrier to entry. Fresh snack store locations are typically secured on the first floor or basement level of shopping malls, making prime spots highly scarce.
What potential investment opportunities exist in the fresh snack sector?
1) New channel dividend for supply chains: There are notable investment opportunities in upstream brands entering fresh snack channels:
- Fresh braised foods: Covering duck necks, chicken feet, beef, pork offal, seafood, vegetables, and soy products. Relevant companies include ST Juewei (603517), Jinzai Food Group (003000), and Hunan Yanjinpian (002847).
- Short-shelf-life bakery products: Including egg tarts, mochi, Swiss rolls, toast, steamed cakes, and pork floss rolls. Relevant companies include Guangzhou Liguang Food Co., Ltd. (300973).
- Dried fruit and freeze-dried snacks: Focused on raw fruit processing, freeze-drying, and vegetable and fruit crisp products.
- Nuts and roasted seeds: Primarily involving nut processing, dried fruit blending, and gift box development. Relevant companies include Anhui Qiaqia Food Co., Ltd. (002557) and Jiangxi Ganyuan Food Co., Ltd. (002991).
- Fresh beverages and chilled desserts: Including NFC juices, yogurt cups, fresh milk drinks, and chilled desserts. Relevant companies include New Hope Dairy Co., Ltd. (002946).
- Health-focused functional snacks: Featuring concepts such as prebiotics, low glycemic index, high protein, collagen, and medicinal food homology. Relevant companies include Seamild Foods Co., Ltd. (002956).
2) Store acquisition opportunities: The first phase of competition centers on securing prime store locations, while the next phase will likely involve mergers and acquisitions. Investors should watch for channel consolidation opportunities.
The report suggests focusing on several types of companies: 1) Those with strong channel resources and superior supply chain management capabilities, such as Mingming Henmang and Wanchen Group (300972); 2) Companies with solid supply chain foundations and franchise store operational expertise, such as Juewei Food (603517); 3) Giants with extensive channel resources, such as the China Resources system. According to reports, nearly all of Jinlimen's national expansion locations are within China Resources' Mixc-branded shopping malls (Mixc, MixC World, and The Mixc), suggesting a potential partnership between the two parties.
Risk warnings: Demand recovery may fall short of expectations; economic recovery may be slower than anticipated; food safety risks remain.
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