From the "darling" of the times to the "outcast", fragrance cannot open the mouths of young people?

Once upon a time, the fragrant slogan of "cups connected and circled the earth three times" often lingered in our ears.

Now, it seems to fade out of people's sight.

In fact, "fragrance does not advertise" is a widely recognized illusion, in terms of marketing, fragrance has never stopped.

However, with the popularity of new tea shops in the streets, it seems not so easy for Xiang Piaopiao to rely on advertising to "get out of the circle" again.

Xiangpiao recently released a report for the first three quarters of 2021, with cumulative revenue of 1.974 billion yuan during the reporting period, an increase of 4.29% over the same period last year, but net profit fell 11.45% to 39.3955 million yuan.

Of this total, the revenue from the dealer channel was 1.766 billion yuan, an increase of 2.57% over the same period last year.

The performance of increasing income without increasing profits has aroused concern about the development prospects of fragrance.

The China Science and Technology News Network visited a number of merchants and found that Xiangpiao has a strong ability to shop goods. When asked if it is selling well, most bosses answer "OK", but its seasonal attribute is obvious, and winter is the peak season.

Some staff members also told that since the beginning of the epidemic, fragrance has not sold very well, and even "has not been new for a long time."

In addition, the China Science and Technology News Network found that the new categories and channels it has expanded in recent years are still in the period of cultivation.

The gross margin of ready-to-drink products needs to be improved.

In order to solve the problems of seasonality and singleness of products, Xiangpiao launched ready-to-drink products, including fruit juice tea, liquid milk tea, etc., hoping to balance the overall product structure and supplement off-season sales. Complement its solid brewing products in time.

Xiangpiaopiao liquid milk tea entered the market in 2017, with an operating income of 217 million yuan that year. In 2018, the product's operating income was only 218 million yuan, a slight increase of 0.55% over the same period last year, and a sharp decline of 37.33% in 2019.

Since then, Xiangpiao has not separately disclosed the revenue of liquid milk tea.

On the other hand, as a new product launched in 2018, the revenue of fruit juice tea reached 827 million yuan in the next year, which is 6 times that of liquid milk tea in the same period.

However, in the first three quarters of this year, the revenue of fragrant ready-to-drink products was 531 million yuan, accounting for about 27% of the total revenue. Brewing milk tea is still the main product of fragrant tea, and the customer service staff of the flagship store also told China Science and Technology News that the brewed "Niuniu Milk Tea" in the store has a better reputation and takes it as the preferred recommended product.

Product matrix for the first half of 2021 source: corporate financial report for the first half of the year.

Wu Daiqi, CEO of Shenzhen Siqisheng Company, told China Science and Technology News: "before that, Xiang Piaopiao promoted the 'leader of cup milk tea' for many years, which was an impressive brewing milk tea.

As far as consumers are concerned, after the development of new-style tea, it will bring more taste experience, general milk tea, especially the taste of mixed milk tea, has been very difficult to compare with new-style tea, based on the impact of the original brand positioning, it is inevitable to think that fragrant liquid milk tea is a blending product, lack of willingness to try. "

The China Science and Technology News website found that the price of fragrant liquid milk tea is too high and its positioning is higher, while after the launch of MECO juice tea, a series of promotional activities have been carried out on university campuses and in 10 core and major cities across the country, and the price is also cheaper.

Different product positioning may lead to different product development trends.

Xiang Piaopiao hopes to "promote" the brand image of liquid milk tea, while the profit side is pinning its hopes on the development of fruit juice tea and brewing drinks.

However, compared with brewing drinks with a gross profit margin of more than 40%, the gross profit margin of the instant drink sector where fruit juice tea is located seems to need to be improved.

In 2018, the gross profit margin of juice tea was 23.37%, and that of liquid milk tea was 31.53%; in 2019, the gross profit margin of liquid milk tea was 37.95%, and that of fruit juice tea was 29.73%; and the gross profit margin of the overall ready-to-drink business in 2020 was only 18.35%. During the same period, the gross profit margin of Kang Shifu beverage business (that is, drinking tea + fruit juice + packaged water + carbonated beverages) was 35.94%.

In 2020, the cooking cost of fragrant beverage products decreased, so the reduction of gross profit margin should not be a factor in the increase in operating costs, perhaps a reduction in product prices.

China Science and Technology News sent a letter to the company about the changes in product prices in recent years, but there was no reply as of the press release.

The cooking fee for fragrant instant beverage products is 536 million yuan in 2020 and 695 million yuan in 2019.

Data source: Xiang Piaopiao Annual report 2020.

According to flush iFinD, operating costs in the first three quarters of this year were higher than those in the same period last year, and the comprehensive gross profit margin fell to 32.23% from 37.32% in the same period last year.

As a result, although Xiangpiao's operating income has increased compared with the same period in previous years, the net profit has decreased compared with the same period in previous years.

Source of chart: Oriental Wealth Network.

Xiang Piaopiao has said that when it reaches a certain economies of scale, the gross profit margin is bound to increase.

Xiangpiao went public in 2017 to raise funds for the expansion of the plant, but by 2020, its annual report showed that the actual production capacity of the three liquid plants was far less than the designed capacity.

The fragrance of "fixed production by sales" does not seem to be able to reach the expected capacity scale.

Source: fragrant Annual report 2020.

At the same time, after the liquid production line was gradually converted to fixed assets in the second half of 2019, the depreciation expense increased, which increased the operating cost of ready-to-drink products.

In the first three quarters of 2021, Xiangpiao's return on net assets (weighted) was 1.39%, compared with 23.53%, 19.58%, 15.26%, 14.70% and 13.33% from 2016 to 2020, respectively. The ability of Xiangpiao's own assets to obtain net income is weakening.

From the perspective of horizontal comparison, the median ROE (return on equity) of the soft drinks industry in the past 12 months is 15.4%, and the current ROE of Xiang Piao is lower than the median of the industry.

High advertising fees for online marketing.

In terms of channels, Xiangpiao products are sold.