A New Opportunity Is Emerging in the 30-Billion-Yuan Salt Industry: Are You Ready for This Round of Dividends?

On January 1, 2017, the national salt industry system reform officially began, marking the most special moment in the history of China's salt industry and signaling the formal transition of the 2,600-year-old monopoly mechanism for table salt to marketization.

-01- Current Market Environment for the Salt Industry Disruptive reform and innovation will inevitably bring resistance from tradition, but this cannot stop the pace of salt industry marketization. The opening up of the salt industry system is inevitable, and the industry must go through a painful transition period. Three years have passed, and the first phase of the transition has basically ended.

2020 is also an important new beginning. The salt market has gradually formed a set of benchmarks in the past, and internal restructuring of state-owned enterprises has also formed a basic configuration. Having passed the transition and adaptation periods, the market now enters a differentiation phase, meaning the prelude to formal market competition has begun.

In the past, table salt was priced by the government, and sales were stable. After the reform, pricing of table salt is independently decided by enterprises, and existing designated table salt production enterprises are allowed to enter the circulation field, enabling salt production enterprises to carry out cross-regional operations.

This means that for ordinary people, they can now eat salt from different origins, and for production enterprises, they have greater development opportunities to expand production, enrich product diversity, and build national brands.

Since the salt reform, salt enterprises across the country have faced instability brought about by the changes. Among them, many enterprises still have not undergone significant ideological changes, still using old methods from the monopoly period to manage, passively accepting the changes. However, some enterprises with a higher degree of marketization in the past have recognized changes in the market and consumers in advance and have therefore made early arrangements.

Hubei Salt Industry Group Co., Ltd. (hereinafter referred to as "Hubei Salt Industry Group") is one of the pioneers.

-02- Diversified Development of Hubei Salt Industry Group Hubei is not only a major province in salt resources but also a major province in salt production and sales. Its salt production ranks third among salt-producing provinces nationwide and first among provinces producing well and rock salt. Hubei has abundant salt production, supplying more than 20 provinces, municipalities, and autonomous regions across the country and exporting to multiple countries and regions.

Hubei Salt Industry Group Co., Ltd. is a wholly state-owned enterprise approved by the Hubei Provincial People's Government, restructured on the basis of the former Hubei Provincial Salt Industry Corporation, and supervised by the State-owned Assets Supervision and Administration Commission of the Hubei Provincial People's Government. It is the main entity implementing the national table salt monopoly policy. The group has 104 salt wholesale institutions and 10 wholly-owned and holding subsidiaries in administrative regions above the county level across the province, implementing vertical management of personnel, finance, and materials, forming a marketing network system covering urban and rural areas throughout the province.

In recent years, based on market demand, Hubei Salt Industry Group has developed a variety of salt series products on the basis of its leading product "Yunhe" brand table salt, and this year it has entered the "sugar" business, launching a new white sugar brand named "Xuesha", striving to implement a dual-brand parallel development strategy of "Yunhe" and "Xuesha" to meet the needs of consumers at different levels.

01 Upgrade and Extension of "Yunhe" Brand Salt Series Products Hubei's self-produced salt is mainly mineral salt, and the most distinctive feature of mineral salt taste is "salty." The "Yunhe" brand table salt trademark, registered in 1990, was recognized as a famous trademark of Hubei Province in 2002.

This year, Hubei Salt Industry Group's Yunhe brand table salt has welcomed upgraded products. New products such as "Yunhe" brand Tibetan Qinghai Salt and "Yunhe" brand Daqing Salt from Chaka Salt Lake in Qinghai have been launched. These products have the unique delicious flavor of plateau lake salt, which is fresher than ordinary mineral salt. When cooking, monosodium glutamate is not needed, and it is more natural and healthier.

"Chaka" means "the shore of the salt sea" in Tibetan. The salt lake covers a total area of 105 square kilometers and is a famous natural crystalline salt lake in the Qaidam Basin. The salt crystals here are large and pure, with a mellow salt flavor, making it an ideal edible salt. Because the salt crystals contain minerals, they appear blue-black, hence the name "Qinghai Salt" (blue salt).

The Yunhe brand Tibetan Qinghai Salt is made from natural brine deposited over thousands of years in Chaka Salt Lake, naturally sun-dried under intense ultraviolet radiation at an altitude of 3,100 meters. It is rich in calcium, magnesium, and amino acids needed by the human body, with a total amino acid content of over 100 mg/kg. The crystals are uniform and white, with a salty and fresh taste.

In addition to high-quality lake salt, the Yunhe brand table salt series also includes carefully selected sea salt.

The Yunhe brand refined sea salt comes from Fuzhou Bay, the hometown of sea salt, located at 39° north latitude in the golden sea area, at the confluence of the Yellow Sea and the Bohai Sea. The product does not add anti-caking agents or iodine agents. Using pure, high-quality natural sea salt as raw material, it adopts traditional production processes to maximize the retention of trace elements beneficial to the human body in sea salt. It has natural advantages of rich nutrition, salty and fresh taste, and health benefits, making it easier to enhance freshness and flavor.

Currently, the Yunhe brand edible salt has three major series: well and rock salt, sea salt, and lake salt. At the same time, in response to consumption changes, products are moving toward high-end table salt consumption, and a variety of product types and specifications have been enriched, such as iodized and non-iodized, family packs and portable packs, as well as category expansions such as washing salt and pickling salt.

In recent years, with consumption upgrading and the improvement of residents' living standards, the consumption rate of fresh vegetables and fruits has increased to over 90%, and correspondingly, the sales of fruit and vegetable washing products have grown rapidly.

Especially the sudden outbreak of COVID-19 this year has raised residents' awareness of health and hygiene, leading to a surge in sales of washing products. With the normalization of the epidemic and the formation of residents' habits, products for food safety, cleaning, and disinfection have great market potential.

The Yunhe brand fruit and vegetable soaking and washing salt series includes four products: effervescent washing salt tablets, upgraded stand-up pouches, 350g economy packs, and portable bags. Made with food-grade raw materials and a weak alkaline formula, they effectively remove pesticide residues, safely sterilize, and strongly remove insect eggs. As a product with considerable market potential, it is understood that the profit margin for distributors of this series is relatively high, reaching 40%-50%, far higher than the gross margin of general FMCG products.

02 Layout and Development of "Xuesha" Brand Sugar Series Products Hubei Salt Industry Group has created the first national case of a local salt enterprise selling sugar. The "Xuesha" white sugar brand is the brand of the new white sugar product launched by Hubei Salt Industry Group this year.

It is understood that during the epidemic, the supply of white sugar was once tight. The "Xuesha" brand emerged to ensure supply, so that people under home quarantine across Hubei Province no longer worried about the "sugar jar."

After the epidemic, Hubei Salt Industry Group also plans to develop new products such as brown sugar, black sugar, and yellow rock sugar in addition to white granulated sugar. With overlapping salt and sugar channels and relying on the complete salt distribution and delivery system, the group aims to do a good job in the white sugar business and build a strong Hubei white sugar brand.

Currently, 4 types of "Xuesha" brand small-grain yellow rock sugar, 1 type of "Xuesha" brand yellow rock sugar powder, 1 type of "Xuesha" brand yellow rock sugar frost, and 4 types of "Xuesha" brand single-crystal rock sugar have been launched.

The yellow rock sugar is made from black-skinned sugarcane from Chongzuo, Guangxi, boiled with pure distilled water from boilers, naturally crystallized for 168 hours, with natural crystals. It is easy to store, low in calories, and sweet but not cloying. The materials are carefully selected, pure, and natural, without added pigments or flavors.

Traditional yellow rock sugar is often consumed in large pieces, which is inconvenient to use. Hubei Salt Industry Group's yellow rock sugar products come in small-grain, powder, and frost forms, making them more convenient to use. Nowadays, women prefer healthier rock sugar for stewing nourishing soups or making baked desserts, but they find it troublesome to break it up and difficult to control the amount. Therefore, such convenient and easy-to-dissolve products are increasingly favored.

The powder and frost products are creative rock sugar products targeted at young people. The powder and frost forms are finer and dissolve more easily, making them convenient for baking, desserts, and drinks.

The 4 types of "Xuesha" brand single-crystal rock sugar are selected from high-quality sugarcane in Guangxi, produced through a rigorous refining process and complete quality management monitoring with modern technology, without adding chemical additives. They have the characteristics of being white and pure, uniform in granules, and dry without easy caking.

-03- Where Is the Future of Salt Industry Marketization? Due to the 2,600-year monopoly mechanism for table salt, many people's understanding of "salt" remains at the level of "seasoning." Ninety percent of people cannot judge the quality or authenticity of "table salt" and cannot use "salt" correctly.

The table salt monopoly model has been broken by the new approach of "allowing cross-regional operations," which will inevitably trigger the most intense competition stage in the industry. But behind the danger often lies opportunity, and thereafter, it will inevitably bring huge market space and industrial dividends to the first enterprises to enter this field.

"Salt industry reform" is underway, and 2020 has entered an important moment for market competition. The over 30-billion-yuan salt market is waiting to restart a new model for future development. Hubei Salt Industry Group is also waiting for more outstanding distributors and enterprises across the country to join hands for win-win cooperation!

You can scan the QR code below to fill in a cooperation intention form, and a dedicated person will contact you to discuss cooperation matters.

In addition, from August 24 to 26, 2020, Hubei Salt Industry Group Wuhan Co., Ltd. will bring a series of new products to the 2020 (3rd) China FMCG Conference. We sincerely invite distributors and friends from across the country to come and discuss cooperation. Distributors who fill in the form also have the opportunity to obtain a conference ticket worth 999 yuan (limited to the first 10 distributors who fill in the form)!

Once the tip is adopted, a payment of 400-2000 yuan will be made.