Bulk Food Distributors: Time to Recalculate the Exclusive-Area Math
In the past two years, if there's one category where distributors have had the hardest time, it's bulk snack food.
📝 Discount snack stores have pulled a large number of bulk items down to price points like 9.9 yuan and 12.8 yuan, while bulk sections in traditional supermarkets still carry costs such as exclusive-area fees, labor, display cabinets, and shrinkage.
If the price is set too high, consumers compare; if it follows the price down, the distributor's own profits can hardly cover the investment.
Recently, I spoke with General Manager Jia of Baiyuanbao, and he did the math for me: for many products under the traditional exclusive-area model, a 9.9-yuan price would "definitely lose money," and only at 13.8 or 15.8 yuan would there be enough margin to cover costs.
Now that snack stores have already driven prices down, how much longer can the traditional exclusive-area model hold up?
💡 In Xi'an, Baiyuanbao offers a new solution.
The company entered bulk food in 2019, and in seven years reached 200 million yuan in sales, covering more than 4,000 retail outlets. It started with fresh food stores, fruit stores, and community stores, growing from small shops of around 100 square meters to large stores of over 2,000 square meters. About 85% of bulk food sales come from directly operated outlets.
⭕️ In 2024, after entering large stores, it innovated a model called "Exclusive Zone."
On the surface, it looks very similar to exclusive-area: Baiyuanbao still manages the entire bulk food section—investing in display cabinets, curating products, designing price bands, and participating in staffing and promotions.
But the most critical accounting has changed.
The supermarket no longer takes a large fixed fee upfront; instead, it earns from product price differences. Inventory management now involves the store again; procurement participates in product selection; and store managers and owners have begun to care about how well this bulk section actually performs.
While taking charge of products and operations, it also re-engages in the business outcomes.
Baiyuanbao's own responsibilities have also become heavier.
Because it can no longer rely on high prices to cover fixed costs, it must actually sell products. So the team began managing price bands, product assortments, weekly sell-through, and per-bin efficiency.
If a display cabinet originally sold 5,000 yuan per month, they find ways to get it to 10,000 yuan within two months; among 100 bins, any bin that isn't efficient gets constant adjustments in product, placement, and price until they find products that better suit consumers.
This case makes us think: as fixed costs can no longer sustain the traditional exclusive-area model, how should supermarkets and distributors reallocate profits, inventory, and responsibilities?
🎈 On August 25, "New Distribution" will organize an in-depth study tour of a benchmark bulk food distributor, visiting Baiyuanbao in Xi'an.
- On-site breakdown of the "Exclusive Zone" model and store presentation;
- See how different trade areas assemble product assortments and set price bands;
- How "one store, one assortment; one bin, one efficiency" is implemented;
- Recalculate investments in labor, display cabinets, promotions, and inventory as part of a single business equation.
⬇️ If you are currently doing bulk food cabinet contracting or exclusive-area operations and hope to go further in large-store cooperation negotiations while also refining small-store operations, you are welcome to pre-register for the "Bulk Food Distributor Contracting Model Discussion Community."
On August 25, we go to Xi'an to break down this math face to face.
In the past two years, if there's one category where distributors have had the hardest time, it's bulk snack food.
📝 Discount snack stores have pulled a large number of bulk items down to price points like 9.9 yuan and 12.8 yuan, while bulk sections in traditional supermarkets still carry costs such as exclusive-area fees, labor, display cabinets, and shrinkage.
If the price is set too high, consumers compare; if it follows the price down, the distributor's own profits can hardly cover the investment.
Recently, I spoke with General Manager Jia of Baiyuanbao, and he did the math for me: for many products under the traditional exclusive-area model, a 9.9-yuan price would "definitely lose money," and only at 13.8 or 15.8 yuan would there be enough margin to cover costs.
Now that snack stores have already driven prices down, how much longer can the traditional exclusive-area model hold up?
💡 In Xi'an, Baiyuanbao offers a new solution.
The company entered bulk food in 2019, and in seven years reached 200 million yuan in sales, covering more than 4,000 retail outlets. It started with fresh food stores, fruit stores, and community stores, growing from small shops of around 100 square meters to large stores of over 2,000 square meters. About 85% of bulk food sales come from directly operated outlets.
⭕️ In 2024, after entering large stores, it innovated a model called "Exclusive Zone."
On the surface, it looks very similar to exclusive-area: Baiyuanbao still manages the entire bulk food section—investing in display cabinets, curating products, designing price bands, and participating in staffing and promotions.
But the most critical accounting has changed.
The supermarket no longer takes a large fixed fee upfront; instead, it earns from product price differences. Inventory management now involves the store again; procurement participates in product selection; and store managers and owners have begun to care about how well this bulk section actually performs.
While taking charge of products and operations, it also re-engages in the business outcomes.
Baiyuanbao's own responsibilities have also become heavier.
Because it can no longer rely on high prices to cover fixed costs, it must actually sell products. So the team began managing price bands, product assortments, weekly sell-through, and per-bin efficiency.
If a display cabinet originally sold 5,000 yuan per month, they find ways to get it to 10,000 yuan within two months; among 100 bins, any bin that isn't efficient gets constant adjustments in product, placement, and price until they find products that better suit consumers.
This case makes us think: as fixed costs can no longer sustain the traditional exclusive-area model, how should supermarkets and distributors reallocate profits, inventory, and responsibilities?
🎈 On August 25, "New Distribution" will organize an in-depth study tour of a benchmark bulk food distributor, visiting Baiyuanbao in Xi'an.
On-site breakdown of the "Exclusive Zone" model and store presentation;
See how different trade areas assemble product assortments and set price bands;
How "one store, one assortment; one bin, one efficiency" is implemented;
Recalculate investments in labor, display cabinets, promotions, and inventory as part of a single business equation.
⬇️ If you are currently doing bulk food cabinet contracting or exclusive-area operations and hope to go further in large-store cooperation negotiations while also refining small-store operations, you are welcome to pre-register for the "Bulk Food Distributor Contracting Model Discussion Community."
On August 25, we go to Xi'an to break down this math face to face.
