What is the outlook for the snack food industry?

Snacks industry is the main tone of China's catering industry. According to incomplete statistics, there are about 5 million snack merchants in the country, and it is currently the largest category track in the catering industry.2020 epidemic on the development of China's catering industry has a greater impact, snacks recovery is better than the catering industry as a whole. Snacks are rich in categories, and the top three order shares of the snack industry in 2019 are fast food simple food, spicy hot, noodles; the top five brands in order volume are Fujian Sha Xian specialty snacks, KFC, McDonald's, Zhang Liang spicy hot, Zheng Xin Chicken Fillet. From the point of view of geographical distribution, first-tier, new first-tier and second-tier cities with large order size of snacks, Guangdong, Jiangsu, Zhejiang snacks ranked the top three in terms of order size.

Epidemic on the development of China's catering industry has a greater impact, snacks fast food recovery faster

The outbreak and normalization of the new crown pneumonia epidemic has a greater impact on the development of China's catering industry. National Bureau of Statistics data show that in 2019 China's catering revenue reached 4,672.1 billion yuan, an increase of 9.4% over the previous year, maintaining a good trend of steady progress, but in 2020, the national catering revenue from January to September was only 2,522.6 billion yuan, a year-on-year decline of 23.9%, a greater impact of the epidemic, and the catering industry is still facing a greater pressure to make up for consumption. Snack industry as the largest track of the catering industry, with a large number of merchants, large scale of transactions, many employees, people's livelihood and other characteristics of the tight connection, in promoting consumption, stabilizing employment and benefiting the people's livelihood and so on plays a huge role in the epidemic during the period of the epidemic has shown a stronger resilience, the recovery situation is better than the catering industry as a whole.

Snacks are rich in categories, and brands are accelerating chainization

The catering industry is rich in categories, but the concentration is not high, and snacks are even more so. The big data of the Meituan platform shows that in 2019, the top orders in the snack food industry are fast food simple food, spicy hot, noodles, rice noodles, congee, buns, cassoulet, fried chicken and fried skewers. Fast food simple food has become consumers' favorite because of its features of immediate need, fast, convenient, affordable, and adaptable to a variety of consumption scenarios, etc. In 2019, the order volume of fast food simple food in the snack food category accounted for 43.7%, and the order volume of hot and spicy, noodles, rice noodles, and congee accounted for 6.0%, 5.8%, 5.6%, and 5.6%, respectively. Meanwhile, consumers' demand for fried chicken kebabs, buns, Korean snacks, Hong Kong-style snacks, marinated duck necks, rice noodles, and other categories increased significantly, with the order volume of these categories increasing by 146.9%, 92.9%, 90.6%, 90.1%, 67.8%, and 62.1% year-on-year in 2019, respectively.

Meituan platform big data shows that the top five brands in the number of stores in the snack category in 2019 are Fujian Shaxian Specialty Snacks, Zhengxin Chicken Fillet, Wallace, Jelly Duck Neck, KFC; the fastest-growing brands of new merchants are Wallace, Zhengxin Chicken Fillet, KFC, McDonald's, and Fujian Shaxian Specialty Snacks; and the top five brands in the order volume rankings are Fujian Shaxian Specialty Snacks, KFC, McDonald's The top five brands in terms of order volume are Fujian Sha Xian Specialty Snacks, KFC, McDonald's, Zhang Liang Spicy Hot Pot, and Zheng Xin Chicken Fillet. From the brand TOP list can be seen, snacks category of foreign brands mainly to KFC, McDonald's and other fast-food brands as a representative of the domestic snack brand is more diverse.

The scale of snacks in first and second-tier cities is large, and the growth rate of snacks in fourth and fifth-tier cities is fast

Meituan platform data show that the scale of snacks orders in first-tier, new first-tier, and second-tier cities is large, and the proportion of order volume is 20.1%, 27.6%, and 22.1%, respectively. With the growth of consumer demand for snacks in the sinking market, the demand for snacks in third-tier, fourth-tier and fifth-tier cities is growing faster, with the growth rate of snack orders reaching 37.7%, 43.5% and 45.5% respectively.

Snack merchants are mostly concentrated in populous or economic provinces, Guangdong and Jiangsu snack orders are the most

Snack merchants are mostly concentrated in populous provinces, and the provinces with the most snack merchants in the country are Guangdong Province, Shandong Province, and Jiangsu Province, of which the number of snack merchants in Guangdong Province accounted for 10.6% in the country, also for the first largest province in terms of population in 2019; and the number of snack merchants in Shandong Province accounted for 7.7% in the country. of 7.7%, the second most populous province in 2019; and Jiangsu Province, with 7.4% of the country's snack food merchants, the fifth most populous province in 2019.

From the perspective of snack consumption in various cities, Guangdong Province is also a large snack consumption province, topping the list of snack consumption orders in the country, with a 14.6% share in the country, far exceeding that of other provinces, with Guangzhou City and Shenzhen City contributing significantly to consumption. Jiangsu, Zhejiang and Beijing ranked second, third and fourth on the snack order list, with order shares of 8.4%, 6.6% and 6.1%, respectively.

For more data to please refer to the Prospect Industry Research Institute China Catering Industry Development Outlook and Investment Forecast Analysis Report.