Consumer upgrades drive product upgrades and price shifts how precisely condiments are priced.

Condiments belong to the category of fast consumer goods, the general pricing logic of this category is the pursuit of cost-effective, that is, the speed of quality improvement is greater than the rate of price increase, that is, low-quality low-cost, medium-quality medium price, high-quality high-priced or high-quality medium price, medium low price.
but the relationship between price and value is not as simple as logical reasoning in practice, what is value? How can value be priced for future free cash flow discounts? For example, casual food, according to the unit price calculation, leisure food head e-commerce channel brand is a medium-quality high-priced strategy. So how do condiments be priced?
market for condiments with rising prices
The condiment industry is a demand-driven growth, non-competitive squeeze growth, pricing correctly can enjoy the golden age of the gold-era price increase dividends.
The outbreak in the first half of 2020, because of the differentiation of category attributes and consumption characteristics, resulting in different sub-categories in the large food industry in the first half of the performance showed a
very different trend———However, the consumption characteristics of condiment enterprises have become the largest "anti-risk umbrella" during the epidemic, combing the sea taste industry, tian flavor food, ST Gaga and other 14 listed companies semi-annual report found: 14 companies only 4 companies revenue, gross profit double down, there is an increase in income and no increase in profits, the rest of the listed companies have maintained a high growth momentum.
Capital market so favors condiment section, indicating that condiments are still in the golden age (volume price rise), relative to the silver era (price rise, volume of this long) leisure food needs to do the conceptual value, bronze age (price increase decrease) high-end liquor financial value, condiments have just needed to use value.
In fact, this just need is also related to the national character, Chinese food world-famous, "the beauty of the dish lies in the taste, the beauty of the taste lies in the tone", the seasoning is the eternal topic of cooking, of course, condiments can also show value.
2001-2010, sales in the condiment industry surged from 27.723 billion yuan to 151.622 billion yuan, doubling again in 2011-2018, and are expected to grow at a compound annual rate of about 7.08 percent over the next five years. With household consumption accounting for 32% of the total size of the condiment industry, it is estimated that by 2023 the total size of the condiment industry will exceed the 500 billion yuan mark.
Data show that the world's annual turnover of condiments accounted for about 10% of the food industry sales, China's total output value of the food industry in 2017 is 10520.45 billion yuan, of which the condiment industry sales revenue accounted for only 3.3%, if the world level, the condiment market will reach 1 trillion yuan, is the current market capacity of condiments about 300%.
Can also be calculated in a way, assuming that each person per meal according to 10 yuan calculation, a person a year to eat more than 10,000 yuan, the total domestic amount of more than 14 trillion yuan, including eating at home, to the restaurant catering and takeaway. In terms of the factory price of condiment enterprises, condiments account for 2.5%-4% of the income of the catering industry, and the trend of consumption upgrading is obvious, so the condiment market has great room for future growth. In the golden age of rising prices, enterprises must grasp the relationship between quality and price, and fully enjoy the dividends of the times.
Pricing should be combined with industry changes
compared to other consumer goods industries, condiments are determined by cooks or buyers in the food and beverage consumption and food processing industries, and by leading or head companies in household consumption, with pricing power largely out of the hands of consumers.
Condiments from the product properties, just need strong, high consumption frequency, many scenes, long shelf life, Haitian soy sauce shelf life of two years, Wujiang juice 16 months, conducive to production, distribution, consumption and other links of orderly turnover.
condiment products, the unit price is relatively low, such as Wujiang brand 80 grams of vegetables sold for 2.5 yuan per bag, consumers are not sensitive to price increases, industry leaders take advantage of this actively promote product structure upgrades, such as Xin and zero add Follow the natural soy sauce and organic soy sauce, kitchen Bang launched a "pure brewing" series, Sichuan Chiyu taste owners hit the "head road original fragrance" zero add, are 20 yuan - 35 yuan, enterprises can smoothly pass the cost pressure to consumers.
This shows the relationship between price and value in pricing strategy, the essence of which is change——— price changes with the overall market environment, changes with the company's operation, changes with the development of the industry, changes with the relevant policies. Find out the unchanged factors of enterprises, seize the opportunity of change, the probability of excess returns in the condiment market may be much greater than other fast-food market.
In addition, future low-line market upgrades will continue to perform at both levels of volume——— volume increases, i.e., excessive demand from non-brand to brand, and innovation, and price increases, i.e. upgrades from mass to high-end products, as well as direct price increases.
so condiment leading enterprises will not block the opponent in the set low price band, the optimal solution to the condiment game is low-quality low-cost, medium-quality high-priced, high-quality super premium.
How to grasp the dividends of the times
The size of condiment enterprises is not only determined by consumers, which results in enterprises spend more effort on channels than the general consumer goods, and price elasticity is not obvious, pricing rules can consider the value of space overlay time value.
Condiments belong to the high-margin industry, and the general consumer goods need to invest a lot of money to advertise to attract consumers, the condiment industry because a large part of the sales revenue from the catering channels, this channel is less affected by advertising, so it will be much less than the general consumer goods required channel costs.
the industry is more dependent on channels, in the distribution of the current dependence on e-commerce sales is relatively small proportion, mainly rely on catering channels and large distribution models.
e.g. Haitian, the same market more than one distributor, the two-track system makes the dealer competition between the two, Haitian in the regional market secondary distribution in a wide range of channels and regions to complete coverage and re-coverage. Haidai's business focus has long been moved from the municipal level to the county level, factories to recruit local industry generation, to assist dealers to develop the external market, and let them develop urban business to become a large urban market.
value of space. Environmental dividends bring a spatial scene dividend that allows the product structure to continue to upgrade. For example, master Kang's rise and the rise of the time stores are closely related to the rise of yogurt and the rise of the convenience store cold chain, spread food by the recent addition of supermarkets scattered area traffic dividends. If time is likened to a river, the space is a floating object on the river, or a landscape on both sides of the river. Time and space complement each other and value is superimposed.
E.g. at present in first- and second-tier cities, many people basically do not go to the vegetable market to buy food, but choose online shopping or one-hour delivery of the store, and the ingredients are healthier, in the face of the price of high-quality ingredients, the price of condiments appears insignificant, the purchase volume also increased.
value of time. At some stage, the pattern of the industry will be clearer. The value of time can accumulate first-in-the-post advantages, resulting in better stability and predictability. Wine, for example, is an emerging category in the condiment industry. In the past, this category is also some traditional soy sauce vinegar production enterprises in a very low-value small category, but the liquor category from 2013 onwards, the volume of prices rose.
, the kitchen wine market size of more than 50 billion yuan, the main use of these kitchen wine cooking, marinating, cleaning and so on. The wine market is growing by about 20% a year, while the high-end wine market is growing at about 40%.
in the wine market, consumer habits have gradually developed. The past use of wine, basically to east China market, southwest market, Beijing market-based, now through the first-line condiment brand's vigorous publicity and education, has been widely recognized by families and restaurants throughout the country, in the past did not use the habit of consumers began to use wine. For example, Lao Henghe's 5-year-old Chen 1.9L, in Shanghai's supermarkets are very widely stocked.
In the past, the production of material wine does not have much technical content, the old production of wine companies have Hengshun, Wang Zhihe, old talent, dragons, etc. , its brand influence, sales network is also very strong. Today, the production of high-quality wine has become the consensus of all condiment enterprises.
not only that, Laohenghe and other enterprises have begun to raise the threshold for wine, increase the technical content and brand publicity, from raw materials, vintage, origin, wine quality, mental and other aspects to affect consumers. There are yellow wine production enterprises also put sales growth expectations on the wine, such as Gu Yuelongshan, Jinfeng wine industry.
of the wine market will certainly replicate the growth path of white vinegar, that is, pure brewing instead of preparation products and low-grade products. In the past 5 years, the average speed of product upgrade of white vinegar is more than 25%, and in many areas it is more than 50%.
To sum up, the condiment industry category expansion and total consumption expansion trend is continuing, consumption upgrade brought about by the price belt shift and product price increases, that is, low-quality low-cost, medium-quality high prices, high-quality super premium is also worthy of enterprise consideration and try.
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