Local convenience store brands are rapidly exploring a development model that suits Chinese consumers.
Author: Li Mengran Editor: RBF Content Group
出品：零售商业财经 ID：Retail-Finance
Affordable craft beer has become a new product that has recently been the focus of regional convenience store brands represented by Every Day and Today convenience stores. "Retail Business Finance" observed that from the beginning of August to the National Day, every day, Today convenience stores have announced and created momentum for new craft beer products, and affordable craft beer seems to have become a new direction for local convenience store brands to bet on next.
Picture: Every day convenience stores and Today convenience stores have officially announced the launch of craft beer Picture: Every day convenience stores and Today convenience stores have officially announced the launch of craft beer
Craft beer has been developing for more than 10 years since it first landed in China in 2008, and its price has also undergone changes from high to low, from 30 yuan a cup of craft beer in the past, to now it has been pressed to below 10 yuan. From niche to popular, from high price to affordable, from professional stores to supermarkets, convenience stores, etc., craft beer has gradually occupied a place in the domestic liquor industry.
In the past, retail companies such as Fat Donglai, Wumart, and Hema increased their own craft beer products and increased their sales volume, and then convenience stores, which are the capillaries of the terminal retail market, began to launch new craft beer, entering the "craft beer era", which further proves that craft beer has good development prospects.
Throughout the development history of domestic convenience stores, from following the three Japanese brands in the past to the same frequency and even taking the lead in craft beer, it also reflects the gradual return of local convenience stores to the "local", taking the national needs and characteristics as the first in the change, and exploring a development model and innovation path that is more suitable for domestic consumers.
01 Craft brewing is on the top, where is the magic?
According to the 2023 Craft Beer Industry Research Report of Burning Ding Consulting, China's craft beer consumption in 2022 was 143,000 kiloliters, and it is expected to reach 230,000 kiloliters in 2025, with a compound growth rate of 17%. The consumer side drives the supply side, and the data of Qichacha shows that the annual registration of craft beer-related enterprises in mainland China has increased year by year in the past decade, and a total of 1,836 craft beer-related enterprises will be registered in 2023, setting a new high in the past ten years.
Source: Qichacha
In the promising craft beer track, many channel providers have also entered the game. This summer, in addition to "ice cups", craft beer has also become a big item for many convenience store owners.
Convenience stores represented by Today and Every Day have also officially announced the launch of craft beer. In terms of price, the original price of the two convenience stores is 5.8 yuan/can, the difference is that the tasting price is 9.9 yuan/two cans today, 10 yuan/3 cans on Friday and Saturday, and there are different discounts of 3.9 yuan/can and 10 yuan/3 cans every day.
It is reported that the specification of the craft beer is 500ml/can, and the shelf life is 12 months. From the point of view of the brewing process, the wine has undergone an ultra-long fermentation of 30 days. Compared with ordinary beer, German-style craft beer not only has sufficient fermentation period and 0 added accessories, but also has a slightly higher nutritional value.
Source: TODAY convenience store
Coincidentally, before Today and Everyday launched craft beer, there were also many convenience stores that entered the craft beer market in the form of collaborations. For example, PetroChina's Kunlun Hospitality Convenience Store has reached a cooperation with Zebra Craft Beer, and the craft beer brewed by Daisu has officially entered the Lawson convenience store recently...... The collaboration between convenience stores and craft beer is by no means unique, especially local convenience stores are beginning to try on the craft beer track, and adding more craft beer seems to have become a convenience store trend.
From the perspective of large categories, water drink is a high-frequency rigid demand product in the convenience store format, while fresh food is a leading product with high gross profit, which plays an important role in driving daily sales and increasing gross profit. Thinking about this, craft beer can not only meet the characteristics of water drinking, but also occupy a place in the FMCG category due to its short-term nature.
In fact, craft beer can become an important category that the convenience store format has begun to promote, in addition to the prerequisite advantages of water and fresh food, there are also multiple factors to boost:
First, the convenience store channel has a high degree of matching with the craft beer consumption scene.
Previously, the China Chain Store & Franchise Association conducted a questionnaire survey on 84 convenience store enterprises (including petroleum departments), and the report believes that full-scene consumption, refined operation and intelligent management will become a new direction for the development of convenience stores. In more detail, the whole scene, five meals a day (breakfast, lunch, afternoon tea, dinner, and supper) has become the evolution direction of convenience stores, for supper, craft beer is often an indispensable "necessity" in this scene, convenience stores are one of the fastest and most convenient channels to lock in beer purchase, whether it is "home for supper" or when supper.
Source: 2023 CCFA Convenience Store Survey, KPMG analysis
Second, the rapid development of ice drinks in instant retail has provided an opportunity for convenience stores to launch new craft beers.
In recent years, the field of summer ice drinks has become a competition field for many platforms, and instant e-commerce platforms represented by Meituan Flash Sale and JD Hourda have also continued to increase this category. The "2023 Instant Retail Ice Drink Consumption Trend White Paper" jointly released by Meituan Flash Sale and Oliver Wyman predicts that the growth rate of ice drinks in the instant retail channel is expected to reach 39% in the next three years, far exceeding the 8% growth rate of all channels, and is expected to exceed 63 billion yuan in 2026.
Further, in the field of craft beer, the "2024 Craft Beer Trend Insights" released by Meituan Flash Sale and Wine Industry Entrepreneur disclosed the relevant data of craft beer in 2023: on the Meituan flash sale platform, the user search volume of craft beer increased by 180% year-on-year, and the sales growth rate was twice the overall growth rate of the beer category.
The above data shows that convenience stores are not a matter of course for craft beer.
Third, platforms such as Freshippo, Pupu Supermarket, and Dingdong Grocery have deployed their own craft beer products, expanding and enriching diversified fresh beer consumption scenarios.
As early as 2017, Hema began to deploy its own brand craft beer, and in 2023, it will launch mung bean refreshing flavor wheat beer, and the sales of this product increased by 224% year-on-year in July this year. In addition to Freshippo, Pupu Supermarket Youci Craft Beer, Huanmiao Craft Brewing Puree Wheat White Beer, etc., have also become highly recommended and widely praised products on the platform. Previously, Pupu Supermarket brought its own brand Youci Fresh Beer & Huanmiao Fresh Beer to innovate the flash mob form of fresh beer buses, giving away more than 10 tons of fresh beer for free to drink, building momentum for its own brand.
It can be seen that the adaptability of convenience stores to their own scenes, the cultivation of craft beer consumption habits, the rapid development of instant retail, and the entry of leading retail brands have provided opportunities for convenience stores to enter the craft beer market.
02 From fresh food to craft brewing, a new road for convenience stores is explored
From ignorance to following the trend of Japanese brands, and now gradually stepping out of their own path, the growth and rise of local convenience store brands is also condensed in the transformation from betting on fresh food to increasing craft brewing.
Previously, the Ministry of Commerce proposed to build a "quarter-hour convenient living circle", including convenience stores. Food is the key to competition in the convenient life circle, and from the perspective of subsequent development, most convenience stores will focus on the development of the FF area, and gradually evolve into a key development area of convenience stores.
In terms of betting on fresh food, the top 10 convenience store players have increased their own brand products on the basis of digital infrastructure in recent years to consolidate the fresh food supply chain.
For example, Tangjiu convenience store built its own modern logistics center in 2006, built its own cold chain distribution center in 2009, and the following year, Xi'an Tangjiu Convenience Chain Co., Ltd. was officially established; Through the establishment of fresh food factories and baking factories, Jianfu convenience store has developed stews, sugar-free bread and other products, increased fresh food manufacturing, invested in the establishment of industrial parks, and improved distribution efficiency through the establishment of a multi-temperature cold chain distribution system; Xinjiayi, which has just entered Hubei, also invested about 300 million yuan in a heavy warehouse in May this year to build a large-scale logistics industrial park to create a high-standard warehousing supply chain, and its own full-temperature distribution system can meet the daily distribution needs of more than 4,000 stores......
Figure: See the cold chain logistics distribution box (above); Blueprint of New Jiayi Logistics Park (II)
The development of fresh food and the increase in the fresh supply chain have become the development direction that many convenience store brands know in recent years. The reason for this is that the fresh food package represented by oden and steamed buns is the result of studying three Japanese companies (Lawson, 7-Eleven, and FamilyMart).
Blue out of the blue, and strive to be better than the blue. In the fresh food track, in addition to continuously consolidating the fresh supply chain, digital intelligence also provides a solution to the problem of fresh food replenishment in convenience stores.
According to the "2024 CCFA Chain Convenience Store Innovation Case Collection", cases such as the Golden Tiger Convenience Member Middle Platform + Data Middle Platform, the AI Recommendation and Ordering System for Lawson's own products, and the Diansansan Intelligent Supply Chain to help Qianhui solve the problem of fresh food replenishment are all corroborations of the results of digital intelligence in convenience stores.
Whether it is the imitation of the three Japanese companies, or the follow-up efforts to build their own supply chains, it proves that fresh food is the core position of convenience stores. Nowadays, the exploration of fresh food and craft beer is also an exploration of local convenience stores gradually forming their own style on the same footsteps. This will not only be the difference between the three Japanese companies, but also the result of a deep insight into the domestic convenience store customer base.
Thinking about this, why do local convenience stores increase the number of craft beers, while the well-established Japanese convenience stores are shallow about craft beer?
In terms of consumer habits, although Japanese convenience stores can quickly gain ground in the domestic market based on their deep resources and experience, local convenience stores are more able to gain insight into the preferences of domestic consumers in terms of consumption habits, consumption scenarios and consumption preferences.
Take fresh food as an example, oden is the standard configuration of brand chain convenience stores, and the C position of the fresh food area, but now most of the stores of Xinjiayi no longer do oden. For no other reason, Wu Minyi, the founder of Xinjiayi, believes that oden does not meet the taste of mainstream domestic consumers. Correspondingly, coffee, fresh milk, fresh beer, ice cups and other products have become the main items. The follow-up excellent results of Xinjiayi also verified the correctness of this decision: the sales of fresh milk accounted for more than 20% of the sales in all channels in Hunan, and the repurchase rate exceeded 40%. It is reported that at present, the average daily sales of a single store of Xinjiayi have exceeded 8,000 yuan, much higher than the industry average of 4,600 yuan.
Source: New Jiayi convenience store chain
It is not difficult to see that increasing the size of craft beer, adapting to consumption habits, and playing local differentiation are also the inevitable results of the development of convenience stores to a certain stage. The difference in wine culture also causes China and Japan to choose different drinking scenes, which will inevitably affect the sales scene.
03 Can craft catfish reshuffle the pattern of the wine industry?
One of the most striking features is that most of the craft beers launched by local convenience stores are kept at affordable or even low prices, breaking the stereotype that craft beer is "expensive" in the past.
Convenience store affordable craft beer is undoubtedly a huge shock to craft and industrial beers that used to be expensive. Budweiser APAC, China Resources Beer and Tsingtao Beer, which recently announced their semi-annual reports and ranked the top three in terms of market share, all experienced sales declines without exception, among them, the total sales volume of Budweiser APAC beer was 465.73 billion kiloliters, down 6.2% year-on-year, of which China fell 8.5% year-on-year. China Resources Beer's beer sales in the first half of the year were 6.348 million kiloliters, down 4.3% year-on-year. Tsingtao Beer's beer sales in the first half of the year were 4.63 million kiloliters, a year-on-year decrease of 7.82%.
According to the "2023 China Craft Beer Bar White Paper" issued by the Beer Affairs Bureau, more than seventy percent of bar operators reported that the industry competition this year is extremely fierce, and the market is showing a high degree of involution, with more than half of the bars operating in a weaker state than last year, and more than half of the bars saying that the average consumption unit price this year has decreased compared with previous years.
Picture: Excerpt from the 2023 China Craft Brewery Bar White Paper
Behind the decline in industrial beer sales and the operating pressure of craft beer bars, these phenomena are inseparable from the continuous heating up of craft beer in the market. More and more entrants also reflect that there will be lower and lower prices. The low price of craft beer and the large-scale distribution of beer in the future will make the mentality of "high quality and low price" of beer gradually take root in the subconscious of consumers. Craft beer is more like a catfish, stirring up the liquor industry that has been frozen for too long, and perhaps it can also stimulate internal rebirth.
The perspective reunited on convenience store craft beer, and the strong price power is also based on the strength of the convenience store brand's own supply chain. And this will not be a one-time test for convenience stores themselves.
Taking Today and Everyday Craft Beer as an example, it can be seen from the canned product information that its distributor is Shaanxi Fubixing Liquor Co., Ltd., and the manufacturer is Baoji Wushi Xian Youth Liquor Co., Ltd., and the enterprise check shows that its executive director is also the same person. Today and Everyday have not yet created a unique private label in craft beer, and there is still a gap in terms of building their own supply chain.
And at this level, most of the goods need to rely on scale in exchange for low prices. According to public data, Today convenience stores have opened about 700 stores, and the number of convenience store stores has exceeded 1,300 every day. In terms of quantity, if we want to achieve a sustained low price of craft beer, we need to be prepared for danger in times of peace and continue to make efforts in the supply chain.
Today, every day convenience stores on the new affordable craft beer indicates that local convenience stores begin to seek more innovative products in terms of scene adaptation, and see the whole picture from a corner, which is a move for local convenience stores to return to the "local", and it is also a reason to expand differentiation and more diversification. Of course, this is not only a test of innovation ability, but also a supply chain system and a deep insight into consumer needs.