Original Wang Yan Time Finance APP
Source: Thumb worm
Author | Wang Yan
Editor | Li Qian
If we want to find the most eye-catching category in the catering industry in the past few years, chain pasta must have a place. During this period, the financing amount of many "noodle shops" exceeded 100 million yuan, and the valuation of some brands even increased several times in the initial stage, which became the investment target that the market rushed to grab.
Nowadays, these brands have begun to sprint the capital market.
On January 15th, IFR, a subsidiary of Reuters, quoted a person familiar with the matter as saying that the noodle chain enterprise is currently discussing with the bank and considering an initial public offering (IPO) in Hong Kong, with an estimated fundraising scale of about 100 million US dollars. In addition, another pasta brand and Fu Lao Mian are also planning to go public in Hong Kong, raising 100-200 million US dollars.
For the news of listing IPO, the two brands are quite low-key. The person in charge who met Xiao Mian told Time Finance that the above information was not exact and there was no specific listing plan at present. Su Xuxiang, its co-founder, directly called the IPO news a rumor. The person in charge related to the government fishing noodles did not respond.
The founders of the two major brands are ambitious. They met Song Qi, the founder of Noodles, and Li Xuelin, the founder of Hefu Fishing Noodles, who both promised to be "McDonald’s in China".
Selling noodles to "migrant workers" is the most expensive 108 yuan per bowl.
Hefu Fishing Noodles and Meeting Noodles are early new consumer catering brands, which were founded in 2013, the night before the traditional catering turned to new catering. At that time, Hefu Laomian opened its first store in Shanghai, and when it met Xiaomian, it was established in Guangzhou in 2014.
Capital also favors it. In July, 2021, Hefu Fishing Noodles received nearly 800 million yuan in financing in the E round, setting a record for the highest financing of the noodle track in the domestic catering industry. The investors included CMC Capital, Tencent Investment, LFC, etc. In July, 2021, after completing the fifth round of financing, Met Xiaomian’s valuation tripled to 3 billion yuan in just three months. It was led by Country Garden Venture Capital and followed by Xijiade. The investment lineup included well-known giants such as Baifu Holdings and Jiumaojiu Group.
As a bowl of noodles sold to "migrant workers", it is different from the brand positioning of Fu Lao Mian and Xiao Mian. Hefulao noodles take the high-end catering route, aiming at the price of 50-60 yuan per capita consumption, and the highest price is the old-fashioned crab noodles with the original price of 108 yuan. As of January 16, its stores are basically located in first-tier and provincial capitals, and more than 73% are located in high-end shopping centers and transportation hubs.
When you meet Xiao Mian, it’s a cheap culture, which focuses on fast and simple meals around 30 yuan per capita, but the target consumer group is also white-collar workers. At present, the vast majority of stores that meet Xiaomian are also located in first-tier cities, but they are wider than Hefu, covering shopping malls, airports, high-speed railway station, communities, business districts and other places. At the same time, some second-and third-tier cities also have stores.
Source: Photo by Time Finance
However, whether it is the per capita consumption of more than 60 yuan for fishing with the government or the pricing for meeting 30 yuan, it is still on the high side for non-commercial areas and sinking markets in some cities.
Wang Hongdong, the founder and catering analyst of Dining Baodian, told Time Finance that from the perspective of brand positioning and product pricing, the audience of Hefu noodles and noodles are located in first-and second-tier cities, but in these areas, the market is limited. Even if mature brands are built early, it may be difficult to copy them to the sinking market in the future due to the high price of their products.
On the other hand, the product structure that is mainly based on food from the south has once limited the expansion of Hefu noodles and small noodles to the northern regional market.
Subsequently, Hefulao noodles began to explore beef noodles, hot pot, bistro and other stores, and constantly expanded the scene and brand. Although no multi-brand strategy has been launched, Met Noodles is also under the main brand, and diversified products such as kebabs, hot and sour powder and braised pork rice have been launched one after another.
Put down your posture and impact the sinking market.
With the high cost performance of catering consumption becoming the mainstream demand, people choose to let go of their bodies and start to consciously lower the overall customer unit price in various ways.
Since the end of last year, Hefu Fishing Noodles has launched low-priced products, and the products below 30 yuan account for more than 50% of its menu. In addition, the proportion of products from 20-30 yuan has increased, and snacks, drinks and other categories have been launched, and the promotion of "selected workers" has also been adopted.
However, the explanation given by Li Xuelin, the founder of Hefu noodles, is not "price reduction" but "price stratification". On January 9th, Li Xuelin said in an interview with 21st century business herald that the overall decline of brand prices was about 30%, which was not a price reduction across the board, but a polishing of the product matrix with high quality and wide price band according to the needs of users, which increased the proportion of 25 yuan -30 yuan products with price band and improved the quality.
Met Xiao Mian also made an article on the price. The working meal they launched in September 2023 fell to 20 yuan, and at the same time, they successively launched 11.1 yuan noodle coupons, 9.9 yuan afternoon tea and other promotional activities.
Wang Hongdong told Time Finance that at present, the competition in the industry is fierce, so he chose to "reduce the price" in the same way, on the one hand, to broaden the audience, and at the same time, to lay the foundation for future expansion to low-tier cities.
At least from the perspective of fishing with the government, it seems that the advantages of reducing prices outweigh the disadvantages. In an exclusive interview with 21st century business herald, Li Xuelin said that the sales of noodles in Hefu increased by more than 50% compared with 2022. The overall market scale is growing by a large margin, the passenger flow is increasing year-on-year, and the customer unit price is declining.
Source: Unsplash
In July 2023, an announcement of Juewei Food (603517.SH) unveiled the performance "veil" of Jiangsu Hefu Catering Management Co., Ltd. (hereinafter referred to as "Hefu Catering"), the main body of Hefu Fishing Noodles. At that time, when Juewei Food replied to the supervision letter of Shanghai Stock Exchange, it explained the revenue of its investment projects. Among them, the revenue of Hefu Catering in 2020-2022 was 1.107 billion yuan, 1.732 billion yuan and 1.456 billion yuan respectively, and the net profit was-206 million yuan,-211 million yuan and-299 million yuan respectively. In the past three years, the accumulated loss of Hefu catering exceeded 700 million yuan.
However, in an internal letter issued at the end of July 2023, Hefu Fishing said that it had turned losses into profits in the first half of 2023.
Open to join, make money with supply chain
For a long time before, both Hefulao Noodles, which was born in Shanghai, and Encounter Noodles, which was established in Guangzhou, seemed to have concerns about the rapid expansion of stores and the sinking of layout. Over the years, their expansion rate is not fast.
Narrow-door dining eyes show that as of January 16, Met Noodles has 250 stores in China, distributed in Guangdong, Beijing, Fujian, Hubei and other places. Guangdong market is the home base for meeting Xiao Mian, with 170 local stores.
When he won over 100 million yuan in financing in July 2021, he met Xiao Mian and revealed that store expansion is the focus of his future development. It is planned that the number of stores will increase to 1,000 within three years. But obviously, I met Xiao mian and failed to complete the plan as scheduled. In July 2023, Met Faces revised its target, and it is expected to add 100 stores in the next year, focusing on the Yangtze River Delta region.
Hefu Fishing Noodles has always insisted on direct sales before. As of January 16th, it had 532 stores. In July 2023, the number of stores in Hefu Fishing Noodles was 441.
Source: Unsplash
At the same time of price reduction, Hefu Fishing Noodles and Encountering Noodles also choose to join in, so as to reduce business risks and quickly occupy a larger market.
In 2019, it met Faces and opened its franchise. Since then, its opening speed has accelerated. Narrow-door dining eyes show that from 2021 to 2023, there were 55, 43 and 91 newly opened stores that met Xiaomian respectively. At the end of 2023, Hefu Fishing Noodles also opened its franchise mode, and said that it would open 20,000 stores in the next 10 years.
At the same time, the supply chain has also become an important driving force for noodle restaurant brands to achieve expansion and profitability. Self-built factory is one of the most mentioned projects in the use of financing funds for Hefu Fishing. According to its disclosure, the company will fully implement the new model and open cooperation at the B end. In more than 80 cities across the country, the pattern of daily distribution, two-day distribution and three-day distribution is basically implemented in Hefu fishing noodles. The current logistics network planning is enough to support the local market, and the cost of the new model will also drop.
Met Xiao mian did not take the asset-oriented route in the supply chain, and chose to cooperate with mature supply chain enterprises such as Yihai Kerry, New Hope and Shuhai.
Wang Hongdong said that compared with the franchise model, the direct marketing model is expanding slowly and facing greater financial pressure. The purpose of opening to join is to ease the financial pressure and to expand the scale. In addition, with the continuous accumulation of supply chain, Hefu noodles are also expected to make money by charging franchise fees and management fees, and selling raw materials to franchisees, just like Honey Snow Ice City.
Nowadays, in the new consumer noodle restaurant track, Hefu Fishing Noodles and Meet Noodles have become the head brands in their respective segments, but they are not the only players in this track. Ma Jiyong, Chen Xianggui and Zhang Lala, the "three treasures" of Lanzhou beef noodles born in Shanghai, have begun to emerge in recent years, and Wuye Noodles, which has expanded hundreds of stores, has also obtained financing and continued to expand.
In this country with vast territory and abundant resources and obvious differences in food culture, the catering market is scattered enough, and any category and brand has the opportunity to find their own way of life. However, it is not easy for Hefu, who aims to become "China McDonald’s", to get noodles and meet small noodles.
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