Recently, Ximai Food, "China's No. 1 Oats Stock", has been involved in a product safety turmoil.
In the recent notice issued by the Shanxi Provincial Administration for Market Regulation on the 25th food safety supervision and sampling inspection in 2024, 1 batch of high-calcium milk oatmeal of Hebei Ximai Food was detected with excessive mold.
In fact, this is not the first time that Ximai Food's products have failed to pass random inspections. Experts said that there were management flaws in the process of dealer audit.
It is worth noting that in order to exchange for a larger market scale, Ximai Food has spent a lot of money on marketing in recent years, and the high sales expenses have further "eaten" the company's profits. With the failure of the layout of the "second spring" business, the future development space of Ximai Food is becoming more and more severe.
The product was exposed to excessive mold
According to the notice of the Shanxi Provincial Market Supervision and Administration Bureau on the 25th food safety supervision and sampling inspection in 2024, it is said that the high-calcium milk oatmeal (specification 315 grams (35 grams×9) / bag, production date 2024/6/22) produced by Hebei Ximai Food Co., Ltd. was detected with excessive mold. According to public information, Hebei Ximai Food Co., Ltd. is a wholly-owned subsidiary of Ximai Food, an A-share listed company.
The unqualified information table shows that the mold inspection standard value of the sampling product is n=5, c=2, m=50, M=100CFU/g. where M is the highest safety limit value of microbial indicators, that is, the maximum safety limit value of microbial indicators of tested products is 100CFU/g.
The test results of the five samples of this Ximai high-calcium milk oatmeal were 3.6×1000, 1.0×1000, 1.4×1000, 1.2×1000, 1.7×1000 CFU/g, all of which showed mold exceedance.
If the mold in the food is seriously exceeded, it will destroy the nutritional content of the food, make the food lose its edible value, and may also produce mycotoxins; Long-term consumption of food with excessive mold may be harmful to human health.
In an interview with the media, the relevant person in charge of Ximai Food said that the sampling products were mainly contaminated in the storage of distributors after they were shipped and circulated. After the verification of the distribution link by the Baoding Market Supervision and Administration Bureau where the products are produced, it was confirmed that the company's distributor, a trading company in Hebei, was improperly managed in the warehousing and transportation links, which made the products contaminated in the storage process, resulting in the unqualified sampling, and the company's production process met the relevant health control requirements.
"It is not difficult to see from this incident that there are management flaws in the process of dealer audit of Ximai Food." Zhu Danpeng, an analyst of China's food industry, said that there are many food safety accidents in the storage and circulation links in the industry, which reflects the relatively large audit problems in the selection of distributors of Ximai Food. When choosing distributors, food companies must conduct a comprehensive and multi-dimensional review and consideration of the dealer's reputation, strength, storage conditions and food safety awareness.
Food safety controversies have arisen repeatedly
In fact, this is not the first time that Ximai has failed to pass the product inspection due to problems in the distribution link.
In December 2020, the Beijing Municipal Administration for Market Regulation announced that among the 2,113 batches of samples of 19 types of food sampled recently, there were 17 batches of unqualified samples, including Ximai oatmeal, which still exceeded the mold standard; In December 2019, the Guangxi Zhuang Autonomous Region Market Supervision and Administration Bureau issued a sampling inspection announcement saying that the "oat walnut powder" produced by Ximai in Hezhou, Guangxi Province was on the list due to excessive mold.
About ninety percent of the company's revenue comes from oat products, and the outside world is also concerned about whether this incident will have an impact on Ximai's performance, and at the same time, in response to how to prevent food safety hazards in the storage of dealers and other issues in the future, on October 15, the relevant staff of Ximai Food said in an interview with the financial reporter that there will be a special person to reply to the reporter as soon as possible. As of press time, no reply has been received.
Source: Black Cat Complaint Website
At the same time, as an industry leader, the food safety of Ximai Food has always been concerned by the market. On the black cat complaint platform, there are consumer complaints about "eating foreign objects", "moldy eating bad stomach", "missing goods", etc.
The net profit attributable to the parent company is less than a fraction of the sales expenses
As the leader of the oatmeal industry in mainland China, data shows that in China's oatmeal market in 2023, Ximai ranks first with a market share of 22.4%.
In the first half of this year, Ximai Food achieved revenue of 973 million yuan, a year-on-year increase of 38.83%, and the net profit attributable to the parent company was 66.5419 million yuan, a year-on-year increase of 1.84%, and the net profit growth rate was much lower than the revenue growth.
It is not difficult to see from the financial report that the high sales expenses have become the driving force for the revenue growth of Ximai Food. During the reporting period, the sales expenses of Ximai food were 285 million yuan, a year-on-year increase of nearly 50%, and the sales expense rate reached 29.32%, in other words, for every 100 yuan of products sold by Ximai, 29.32 yuan was taken out for sales expenses. In the sales expenses, publicity and promotion expenses accounted for the majority, reaching 174 million yuan.
Source: Company financial report
From 2021 to the first half of 2024, the sales expenses of Ximai Food will be 365 million yuan, 394 million yuan, 497 million yuan, and 285 million yuan respectively, with a total of 1.541 billion yuan in three and a half years.
In contrast, the R&D expenses of Ximai Foods are only a fraction of its sales expenses. During the same period, the company's R&D expenses were 4.7364 million yuan, 5.7147 million yuan, 7.3302 million yuan and 4.2358 million yuan respectively.
It should be noted that in recent years, there has been a bottleneck in the development of the oatmeal market. Euromonitor data shows that from 2009 to 2021, the market size of the mainland oatmeal industry continued to grow from 2.611 billion yuan to 9.618 billion yuan, but the growth rate of the oatmeal market scale slowed down significantly from 2020 to 2023, and even showed negative growth in 2022.
It is understood that Ximai Food has entered the cold oats market in a big way, hoping to obtain a "second spring". However, the annual report shows that in the first half of this year, pure oatmeal and compound oatmeal were still "carrying the banner", and cold oatmeal only contributed 68 million yuan in revenue, accounting for less than 7%, while the revenue of this product accounted for 8.09% in the same period last year.
Source: the company's official website
There was a bottleneck in the development of the industry, and the cold oats that were bet on were Waterloo again, and Ximai had to change direction. In the first half of the year, the company launched high-calcium probiotic protein powder, probiotic plant protein powder, collagen peptide protein powder, red ginseng peptide drink and other products.
However, in the view of Zhu Danpeng, an analyst in China's food industry, "rebuilding a new Ximai" may be just a slogan, and it is unlikely from the perspective of the company's revenue, profit, brand effect, scale effect and the integrity of the supply chain.
(Popular News · Fengkou Financial Reporter Zhao Chong)