"Look again? Look again and I'll drink you!" This advertising slogan for Want Want milk has accompanied many people as they grew up. Want Want Group completed the registration of the "Want Want" trademark in China in 1989. Want Want milk, Want Want snow crackers, and Want Want small steamed buns are snacks that many people secretly ate as children, hiding from their parents. But as we grew up, Want Want also grew old, and even in recent years, it hasn't been as "prosperous" as before. From 2014 to 2016, Want Want's revenue and net profit declined for three consecutive years, with cumulative revenue decreasing by 16.63%. In October 2018, the rating for China Want Want on the Hong Kong stock exchange was downgraded to "neutral," and the target price was adjusted from 8.86 yuan to 6.2 yuan. However, starting in 2018, Want Want resumed growth, with net profit increasing by 11.6% year-on-year. This year, as it celebrates its 30th birthday, Want Want launched a new brand, Fix XBody, in September, focusing on healthy low-carb foods tailored for body management and sports enthusiasts, suitable for snacking or meal replacement. In the past two years, Want Want has used its brand IP to upgrade products and launch new brands, seemingly telling consumers that the 30-year-old Want Want refuses to grow old. They even have the courage to start from zero. So, where does Want Want get the courage to start from age 0 and grow up again with consumers? Will its journey of growing together with the new brand be smooth sailing? Let's first look at how the 30-year-old Want Want returned to age 0. -01- Riding the Healthy Snack Express, 30-Year-Old Want Want Starts from Zero Tearing off the label of "guilty snack," this time Want Want hopes consumers will be rational foodies. According to data from market research firm Grand View Research, the global healthy snack market reached $23.05 billion in 2018. Looking at the data, you can see that although people are becoming more particular and health-conscious about their diets, consumers' bodies are far more honest than their minds. Can't give up snacks? No problem, eat healthy snacks. According to the "2018 China Online Snack Consumption Trend Report" released by CBNData, in 2017, the concept of healthy snacks online shifted from natural and non-fried to additive-free, whole grain, and sugar-free. Consumer attitudes changed, snacks became healthier, and Want Want, which had seen revenue slowdown for several years, spotted this healthy snack express. Want Want Senbei Snow Crackers Image Source: Want Want Food Flagship Store Under the trend of healthier snacks, consumers have become more cautious in their snack choices, moving from "delicious and not afraid of gaining weight" to being full of concerns. Want Want saw these concerns and, to meet consumer needs, the new products follow a low-sugar, low-calorie route. Fix XBody Snack Series Image Source: Want Want In September this year, Want Want launched its new brand Fix XBody, releasing four major series: "Morning, Noon, and Evening Series," "Snack Series," "Craving Series," and "Beverage Series." It is understood that this new product took Want Want two years to develop and is a "rational" snack food specifically designed for body management and sports enthusiasts. According to consumption needs in different scenarios, the brand offers customized product services: "Three-Day Breakfast," "Morning, Noon, and Evening Meal" combo packs, and "Afternoon Snack" combo packs. This means Want Want's new products cover your three meals a day. Fix XBody Snack Series Image Source: Want Want But that's not enough; Want Want wants consumers to think of Fix XBody first when their mouths crave something. The four series are differentiated by calorie content, with the top two being the Morning, Noon, and Evening Series and the Snack Series. Among them, the Craving Series, launched in the current season, features trendy snacks like "small jelly, whole grain biscuits, enzyme jelly, chia seed jelly, cod fish strips, and seaweed." The Snack Series also includes brown rice crisps, grain bars, and other varieties. "Chia seed jelly, whole grain biscuits, grain bars, potato rice chips," "kumquat lemon flavor, kiwi apple, cranberry flavor" - are these snacks with such variety and flavors really healthy? Perhaps Want Want anticipated consumer doubts. At the new product launch, Ms. Zhuang Yaru, brand manager of Fix XBody, introduced that this series uses low-calorie, healthy formulas. Among them, the seaweed snacks are rich in iron, non-fried, free of trans fatty acids, and low in calories. Even the jelly products claim to be sugar-free and aid digestion. Moreover, Want Want is very confident this time, with each product clearly displaying its calorie content in prominent numbers on the front. Fix XBody Beverage Series Image Source: Want Want Unlike the previous simple, plain, and bright red packaging style, the Fix XBody series adopts a blue-gold color scheme, matte printing effects, and high-end eco-friendly packaging, giving the overall packaging a high-tech industrial feel. Without the iconic "little Want Want" in memory, you might not recognize it as the Want Want from childhood. This Fix XBody brand series is completely different from Want Want's existing brands. Starting from zero, we can see Want Want's courage. -02- Who Gives Want Want the Courage to Grow Up Again with Consumers What do old brands fear most? The brand only living in consumers' memories. It's good for consumers to have brand nostalgia, but if everyone only remembers "childhood snacks" in their spare time, then for the brand, it's hard to say whether it's good or bad. Good because consumers once remembered; bad because consumers are about to forget. What do old brands fear even more? New products failing. Consumers' fond memories of the old brand would disappear. From the launch and layout of this new brand, the boldly transforming Want Want is indeed "courageous" and confident. Where does this courage and confidence come from?
1. Consumers Don't Buy It, Transformation Is Imperative
From 2014 to 2016, Want Want, once called the "leading snack enterprise in China," was not as popular in the snack market as before. In addition to the company's annual revenue declining year after year, the sales performance of its categories was also poor. Want Want 2014-2016 Financial Report Image Source: Want Want Financial Report Category Gross Margin Image Source: Want Want Financial Report In 2017, Want Want's rice crackers and leisure foods together accounted for 52% of total revenue, while dairy and beverages accounted for 47.2%. The gross margins of all three main products declined significantly. As the largest portion of Want Want's sales, dairy products saw the largest decline in gross margin, with dairy and beverages, rice crackers, and leisure foods falling by 5.2%, 4%, and 2%, respectively. At the same time, the new retail of leisure snacks was coming on strong. Online leisure snack brands such as Three Squirrels, Baicaowei, and Liangpin Shop emerged in 2010, continuously taking away market share in leisure foods. Want Want's situation can be described as "internal and external troubles." Against this market backdrop, healthier snacks are not just a trend but a direction. According to the "Development Report on the Snack Industry under Consumption Upgrade" released by the Ministry of Commerce at the end of 2018, processed vegetables, fruits, and nuts currently rank first in the overall scale of China's snack industry, accounting for nearly 26.5%, and showing strong growth momentum. Whether it's the formula, ingredients, or the product's process and packaging, consumers are becoming increasingly picky in their snack choices, preferring low-sugar, low-salt, low-fat, and low-calorie snacks. Want Want, once a snack giant but now in "internal and external troubles," sees this market trend. How could it not be tempted? It can be said that one-third of the courage for transformation comes from the brand's "burning the boats," and another third comes from the market.
2. Three Parts Courage, Seven Parts Hard Work
So, where does the remaining courage come from? Want Want 56 Ethnic Groups Milk Blind Box Image Source: Want Want Club Official Weibo Want Want itself. In the past two years, whether it's joint promotions with major brands or products extending from brand IP, we can see Want Want's "efforts." From Want Want's "Made Bigger" in 2018 to this year's "56 Ethnic Groups Cans," in fact, while doing IP marketing, Want Want is also using its own advantages to test new markets. While continuously interacting with consumers, Want Want's new rice cracker products and gift packs have driven growth in original products. 2018/2019 Financial Report Image Source: Want Want Financial Report In 2018, Want Want's revenue was 20.71 billion yuan, up 2.8% from the previous year. In terms of sub-categories, rice crackers, dairy and beverages, and leisure foods all achieved growth. Among them, driven by new frozen products, Want Want's ice cream business grew by 8.1%. Revenue from Want Want gift packs increased by 6.9%. These all demonstrate the courage and determination behind Want Want Group's "second entrepreneurship." Mr. Cai Wangjia, Director and Chief Operating Officer of Want Want Company, mentioned in an interview that yesterday's achievements are in the past. Facing changes in market space, consumer and terminal demand, Want Want's "second entrepreneurship" has the courage to break without establishing and the determination to reform. Fix XBody Series Image Source: Want Want This time, from the launch of Fix XBody's new products, we can also feel this determination. At the launch event, technology and fashion coexisted. Want Want combined new products with technological elements, using various tech experiences to interpret the new brand's layout for the future era of food. The AI interactive area and laboratory scenes displaying new products all aim to let users feel the tech and fashion sense of the Fix XBody series. These three parts of courage, besides those given by the market and consumers, come from the "hard work" of the old brand itself. Whether it's the brand IP that interacts with consumers in a high-profile manner or the new brand Fix XBody, the 30-year-old Want Want uses the courage to start from zero to break consumers' fixed impressions of old brands, telling consumers: Want Want will grow up once more with everyone. -03- Returning to Zero Is Courage, Going from 0 to 1 Depends on Strength However, as everyone in society knows, courage and effort alone are not enough; the market still competes on brand strength. In terms of brand strength, Want Want has advantages and potential. Image Source: Want Want Club Weibo Want Want is a household name, and judging from consumers' willingness to pay for brand IP and new products in recent years, consumers recognize the quality of Want Want. This is Want Want's brand advantage. Want Want's potential lies in recognizing the power of technology and digitalization to create user services. The just-passed Double 11, as well as Jack Ma's mention of "new retail, new manufacturing, new finance, new technology, and new energy" at the Hangzhou Yunqi Conference, may be sending a message to brands: New retail will lead new models and new trends. The benefit of the new retail business model is that as long as there is internet in the village, you don't have to worry about not finding consumers. The difficulty lies in persuading the village grandfather to place an order—understanding consumers and creating experiential, personalized services for them. Image Source: Screenshot of the "Body Fix Body" Mini Program Along with Want Want's new brand, the WeChat mini program "Body Fix Body" was also launched. The "Body Fix Body" mini program has four sections. Users can click on product introductions to directly link to the "Want Want Shop" mini program for purchase, or record calorie intake to help with body management. There is also a "pig-raising mini-game" for interacting with friends. This Double 11, Want Want fulfilled the joke it made with fans on April Fools' Day by launching a limited-edition small steamed bun sofa, which even made it to the hot search. Previously, Want Want also launched the "Want Want Big Steamed Bun, Want Want Big Bowl of Beans, Big Snow Cake Big Senbei" simulation soft squeeze series of peripheral toys, attracting widespread consumer attention. Small Steamed Bun Sofa Image Source: Want Want Club Weibo Some say Want Want has been doing "bigger" marketing and pushing brand IP peripherals, but this process is also a way for the brand to maintain interaction with consumers. A brand cannot accurately predict at the beginning what consumers like and dislike, but interaction with consumers can. The mini program setup, various limited-time and limited-quantity product peripherals, consumers who record and play games on the mini program, and those waiting for the Double 11 Want Want small steamed bun sofa can actually be classified as "the same group of users," because they are all enjoying Want Want's "experiential, customized" services. But going from 0 to 1, adding just one number is not enough, because persisting in adding another number will make the value greater and greater. The healthy snack market cake is indeed large, but the larger the scale, the more people come, and the more intense the competition. According to the "2019 Nut and Dried Fruit Industry Consumption Insight Trend White Paper" released by Tmall and CBNData, nuts and dried fruits have become mainstream snacks. Last Double 11, Three Squirrels achieved over 100 million yuan in just 10 minutes. In the future, categories such as nuts and roasted seeds will remain strong competitors for the Want Want brand in the snack market. In addition, according to the "New Trends in Health Food Products" released by CBNData on October 11, "new health" food products show trends toward snackification, ready-to-eat, zero fat and zero sugar, and functionality. That is to say, the snack market may face challenges from the entry of health snack categories. This shows that healthier snacks can no longer be a 100% advantage, and functional health foods may trigger a new round of consumption trends. How to gain consumer favor in this new trend? The Fix XBody brand still needs to think about more new products. -04- Conclusion The courage for brand innovation is like personal growth; as long as you have the courage to start innovating, it's never too late. The 30-year-old Want Want launched the Fix XBody brand at the age of 30, entering the healthy snack market with 21 new products at once, completely different from its old brands. After two years of IP battles, Want Want began to innovate, showing the courage to restart the brand and the determination to do so. But the market is like life; it won't favor a brand just because you have courage and determination. The market scale will continue to grow, but gaining market share will only become harder. To maintain its current brand advantage and set sail in the fiercely competitive snack market of the future, it still needs certain hard strength to create products that consumers truly need under market trends. We believe that Want Want, which refuses to grow old and has the courage to return to zero, must have the confidence to grow up once more with consumers. Source: FBIF Food & Beverage Innovation (ID: FoodInnovation) Tips will be paid 400-2000 yuan upon adoption.