New Distribution (Beijing): On June 11 (today), Sichuan Baijia Food Industry Co., Ltd. (hereinafter referred to as Baijia Food) announced a new round of Series B financing, raising nearly RMB 200 million. On June 11, the media meeting for Baijia Food's Series B financing was held in Chengdu, where both investors and the company jointly announced that Baijia Food had reached a strategic cooperation agreement on investment and financing with five investment institutions: Hillhouse Capital, Moutai Fund, Yisan Capital, Cowin Capital, and Binfu Fund. This marks the successful completion of the Series B financing round, following the announcement of the Series A round in February this year. From a locally renowned "time-honored snack brand" to a newly emerging "powerful internet celebrity" across the country, Baijia Food has come a long way over 19 years. It has transformed from "a business card of Chengdu's food industry nationwide" into a model of "selling a bowl of convenient specialty snack to the world." What exactly did Baijia Food do right to take a local brand to the national and even global stage? Let's take a closer look at Baijia Food's journey over the years. -01- Stick to the Core, Seek Breakthroughs, and Define New Convenience Food In 2001, starting with the convenience food of Chengdu's local snack, sour and spicy noodles (suancai fen), Baijia Food became a household name in the local area. At that time, there was no internet or developed distribution network, but Baijia Food achieved over RMB 100 million in sales within three years, making it a star enterprise in Chengdu and securing its leading position as the number one sour and spicy noodle brand nationwide. After becoming the national leader in sour and spicy noodles, Baijia Food realized that this was a niche and segmented market with limited demand, quickly hitting a ceiling. In 2015, Baijia launched the instant noodle brand "Akuan" and officially entered the instant noodle sector. This led to the formation of a brand portfolio supported by two major product lines: "Baijia Chenji" sour and spicy noodles and "Akuan" specialty instant noodles, along with the simultaneous development of various local specialty snacks such as self-heating rice and Luosifen (river snail rice noodles). Chairman Chen Zhaohui defined the development direction for Baijia Food: In the new convenience food category, create convenience foods that are at the level of takeout, fast food, and restaurant quality. Since then, Baijia has officially entered the fast track of development. Chen Zhaohui, Chairman of Baijia Food What is new convenience food? Chen Zhaohui defines it as: restaurant-level flavor and richer ingredient composition. Compared with traditional convenience foods, new convenience foods have made new creations and upgrades in terms of product itself, production technology, packaging, and consumption experience. For example, all Baijia Food products are non-fried, and the taste can basically be indistinguishable from takeout. Baijia's Hakka Soul-Stealing Rice Noodles come with six seasoning packets, offering a fuller flavor. In addition, compared with traditional convenience foods, new convenience foods have the characteristics of "new technology, new products, new models, and new business formats." New Technology: This includes new production and R&D technologies, data-driven product planning technologies, as well as automation and intelligent manufacturing technologies, and new brand IP creation technologies. Product production technologies such as drying and time-processing technology for noodle and rice noodle cakes, freshness preservation and moisture retention technology for fresh noodles and rice noodles, extrusion and gelatinization technology for red oil noodle sheets, flavor-locking and preservation technology for seasoning packets, and self-heating technology for self-heating foods are all key points driving the upgrade of new convenience foods. New Products: Baijia Food has deep research and adherence to product strength. It insists on originality, independent R&D and planning, and self-owned supply chain production and manufacturing to create differentiation. Making takeout-level, fast-food-level, and restaurant-level convenience foods, and competing with traditional convenience foods through industrialized catering food, is a product that did not exist before—this is a new product. For example, the "Akuan" Red Oil Noodle Sheets, an internet-famous product, now achieves annual sales of RMB 300 million for a single SKU. It is a typical new convenience food: dry tossed noodles, packaged in food film, priced around RMB 5, produced using non-fried steaming technology, and prepared by brewing, draining, and mixing seasonings in one go. It retains the characteristics of traditional noodle sheets in form, but surpasses them in flavor and texture—chewy, soft, smooth, and spicy—and has become a main product in both online and offline channels. This product was pioneered by Baijia, and there are many similar products, such as the upgraded Big Boss Sour and Spicy Noodles, Chengdu Sweet Water Noodles, and Hakka Soul-Stealing Rice Noodles. New Models: Previously, sales were mainly offline, but now the entire marketing business model has changed significantly, with online and offline integration. Online channels include Tmall, JD.com, as well as community marketing, B2B platforms, and community group buying. To date, Baijia Food's online channel sales proportion has exceeded offline supermarkets, reaching a ratio of 5.5 to 4.5, basically completing the transformation to an internet marketing model, and this transformation has been achieved while total volume continues to grow. New Business Formats: Based on the above three, a new convenience food track has virtually formed, presenting a new food business format. According to incomplete statistics, although their scale and brands are not yet comparable to Baijia, there are now 50 to 60 enterprises nationwide that have invested in the production and processing of new convenience foods. Chen Zhaohui expressed a welcoming attitude, saying, "As long as everyone sincerely seeks long-term development and benefits for the industry and consumers, I am willing to work together to make this cake bigger." With strong product development and production capabilities, and openness to the industry, Baijia Food has earned the trust of peers, providing strong technical and processing support and OEM services to super-first-line brands such as Three Squirrels, Baicaowei, and Li Ziqi. This also made Chen Zhaohui realize that to grow bigger and stronger in the future, Baijia needs to further strengthen brand operations. The existing product strength, supply chain capabilities, and marketing capabilities are Baijia Food's advantages. With these foundational advantages, it only needs to push the Baijia brand to a larger and farther stage, and Baijia Food can bear a larger market. -02- Seize Opportunities: Persistence and Development During the Pandemic This year's COVID-19 pandemic pushed convenience foods to the forefront. As a representative enterprise brand of "new convenience foods," Baijia Food performed outstandingly. According to Chen Zhaohui, from January to May this year, Baijia Food's sales and profits grew significantly. The company expects overall revenue to exceed RMB 1.2 billion this year, a year-on-year increase of over 70%. Behind these achievements lies Baijia Food's years of persistence, which enabled it to rise to the challenge and become stronger at the critical moment. 1. External Dividends: Rapid Growth of Baijia Food After the Pandemic The pandemic caused a surge in convenience food demand, with consumers panic-buying and companies unable to meet supply. To ensure supply, Baijia Food actively resumed work from February 3, with 500 employees working daily at the Longquan factory, and no suspected cases were reported. In February, the company produced over RMB 70 million worth of products, and in March, it exceeded RMB 100 million. During the pandemic, orders increased at least 3-5 times compared to normal times. Despite going all out to produce, it was impossible to meet the temporary explosive demand, and the absolute safety of employees had to be ensured without any slack. Even under such tight supply, Baijia Food formulated the guideline of "anti-epidemic first," and managed to donate nearly 10,000 boxes of products in four batches to multiple hospitals in Wuhan and the construction site of Huoshenshan Hospital, contributing to the logistics support at the front line of epidemic prevention and control. Another external factor worth noting is the shift in consumer demand due to consumption upgrading in recent years. Consumers do not no longer need convenience foods; we can see that in the past two years, Kangshifu and Uni-President have launched convenience foods, such as Uni-President's Kaixiaozao self-heating rice, which consumers have accepted. As seen during the pandemic, Baijia Food's self-heating rice, self-heating barbecue, sweet water noodles, and Huaxi beef rice noodles were all warmly received and in short supply. 2. Internal Persistence: Correct Strategy Implementation Internal and external environments are inseparable. External dividends, coupled with Baijia Food's continuously iterated strategies over the years, have jointly driven the rapid development of Baijia Food. Baijia Food iterates its strategy about every six months, including adjustments to structure, process mechanisms, product plans, and brand marketing tactics. This ensures that the overall strategy is consistently implemented across all aspects of company operations, including product, marketing, brand, R&D, supply chain, and production manufacturing, while also meeting the needs of consumption upgrading. 3. Future Development of New Convenience Foods Currently, China's takeout food market has a market space of RMB 600 billion. New convenience foods have strong benchmarking and competitiveness with takeout food. If we were to carve out a share of the RMB 600 billion takeout market, conservatively estimating 10% of takeout, there should be a market space of RMB 60 billion, with considerable room for growth. The pandemic further stimulated the boom of "new convenience foods." During the pandemic, convenience foods became a rigid demand choice, with overall good growth. For emerging categories, this is an unprecedented opportunity to educate consumers. Previously, the online penetration rate of convenience foods was only 13%. After the pandemic, its development space will be further opened. A market gap between traditional instant noodles and the takeout market has emerged, with new opportunities concentrated in self-heating foods and flavored snacks. The emergence of these new categories is a substitution and upgrade of traditional instant noodles. Compared with the traditional instant noodle market of RMB 100 billion, "new convenience foods" still have the opportunity to achieve considerable growth. From left to right: Binfu Capital, Hillhouse Capital, Baijia Food, Cowin Capital, Moutai Fund It is understood that Baijia Food's Series B financing amount is nearly RMB 200 million, and the funds will be mainly used for technology R&D, capacity expansion, channel development, and brand promotion. It is worth noting that Cowin Capital and Binfu Fund, the lead investors in the Series A round, increased their investment in the Series B round, demonstrating the capital market's continued optimism and growing confidence in Baijia Food's performance and strategy. In the future, Baijia Food will adhere to its overall strategy: new convenience foods leading, traditional convenience foods supporting; online e-commerce models leading, offline channels refined; domestic market dominant, overseas market complementary, thereby promoting the company's sustained, healthy, and rapid development. Chen Zhaohui, Chairman of Baijia Food, stated: By the end of this year, Baijia Food will complete the final year of its three-year listing plan. Baijia Food will file for an IPO at an appropriate time, and is expected to become the first new convenience food enterprise to be listed on the domestic A-share market. To date, there is not a single truly domestic convenience food listed company in China. Baijia Food's goal is to become the first convenience food enterprise to be listed on the A-share market, and to be the number one in sour and spicy noodles, non-fried instant noodles, and new convenience foods. We believe that with the addition of new capital, Baijia Food will greatly enhance its development speed and quality, bring greater surprises to the market, and achieve its listing goal in the near future. Tips will be paid 400-2000 yuan once adopted.