Click to read the original text for details On the evening of August 18, the snack food brand Qiaqia Food disclosed its 2022 half-year report. The financial report shows that in the first half of 2022, Qiaqia achieved revenue of 2.678 billion yuan, a year-on-year increase of 12.49%, net profit attributable to shareholders of listed companies of 351 million yuan, a year-on-year increase of 7.25%, and non-GAAP net profit of 272 million yuan, a year-on-year increase of 3.3%. 01 Classic Products Steady Progress The financial report mentioned that the rapid performance improvement mainly stems from the company's channel refinement, county and township breakthroughs, and expansion of new scenarios and channels, continuously expanding market share and thus increasing sales penetration. As of the end of the reporting period, the company's channel digital platform controlled over 170,000 terminal outlets. By business segment, Qiaqia Food's main revenue source remains the sunflower seed business. In the first half of the year, Qiaqia Food's sunflower seed business revenue was 1.844 billion yuan, a year-on-year increase of 14.29%, accounting for 67.77% of total revenue. Nut product revenue was 525 million yuan, a year-on-year increase of 13.77%, accounting for 19.59% of total revenue. By region, the South, North, and East achieved revenues of 838 million, 546 million, and 768 million yuan respectively, with year-on-year increases of 0.32%, 23.52%, and 42.64%. The East region's revenue increased by 42.64% year-on-year, mainly due to rapid revenue growth in Shanghai, Shandong, Anhui, and other regions. In addition, the company's e-commerce achieved revenue of 286 million yuan, a year-on-year increase of 23.15%. Undoubtedly, sunflower seeds remain Qiaqia's core business. In October last year, Qiaqia Food announced price adjustments for its sunflower seed series and pumpkin seeds products, based on the upgrade of sunflower seed series products and rising raw material costs, with price increases ranging from 8% to 18% for various categories. The price implementation began on October 22, 2021. The company stated that after the price adjustment of sunflower seeds last year, the transmission was relatively smooth, and the gross margin of the sunflower seed segment improved slightly in the first quarter of this year; however, due to the simultaneous increase in raw materials and packaging auxiliary materials, the overall gross margin of sunflower seeds in the first half of the year still declined year-on-year. In terms of products, the classic red bag series sunflower seed products achieved sustained sales growth through raw material upgrades and intensive cultivation in third- and fourth-tier cities and county and township markets. The blue bag series sunflower seed products continued to break through in flavor, continuously enriching the product matrix. Through channel expansion, brand co-branding, and product customization, sales achieved sustained growth. The high-end sunflower seed product "Kuizhen" achieved rapid sales growth through raw material and product strength enhancement, focusing on circle penetration. According to distributors, in the strong market of the East region, Qiaqia's distribution rate is very high. The distribution rate of red bag and blue bag products even reaches over 95%. A distributor said that in the second quarter of this year, "benefiting" from the epidemic, classic product growth accelerated, but nut products were affected to some extent. Many distributors completed their full-year growth targets ahead of schedule. Among them, some larger distributors still achieved 30%-40% growth in April and May when the epidemic was severe. In addition to products, in the upstream sunflower seed raw material supply, Qiaqia mainly adopts a centralized procurement model of "company + contract farming + growers." Another part is the procurement model of agents and cooperatives. Other materials mainly use annual bidding to determine suppliers and material prices, and implement order-based procurement according to production orders, effectively reducing capital occupation and improving procurement quality. In addition, Qiaqia continuously strengthened brand building and communication in the first half of the year, promoting brand rejuvenation. During the 2022 Spring Festival, Qiaqia, with the theme "China Qiaqia, New Year Flavor at Home," focused on high-frequency Spring Festival scenarios, and refreshed the New Year packaging through illustration interpretation. It also carried out activities such as clearing shopping carts, sunflower seed puzzles, and Chinese New Year flavor in nut plates, getting along with young consumers. Not only that, Qiaqia also co-branded with Bloomage Biotech's Mibei to launch "sunflower seed face mask," attracting many young consumers to check in on social platforms such as Weibo and Xiaohongshu, achieving secondary dissemination of topics. On the "526" JD Super IP Day, it officially launched cross-border cooperation with the popular game "Honor of Kings," proposing the activity theme "Weekend Qiaqia, One More Game," linking game scenarios with eating sunflower seeds, creating a new weekend play for young people. In 2020, Qiaqia Food founder Chen Xianbao set the company a "Chongbai" goal: by 2023, achieve total revenue of 10 billion yuan including tax. Among them, sunflower seeds revenue of 6 billion yuan including tax, nuts revenue of 3 billion yuan including tax, and leisure food revenue of 1 billion yuan including tax. Now, by actively embracing market changes, this plan is proceeding in an orderly manner. 02 Second Curve Counter-trend Growth As mentioned earlier, Qiaqia's revenue mainly comes from two business segments: sunflower seeds and nuts. Among them, nut product revenue was 525 million yuan, a year-on-year increase of 13.77%, accounting for 19.59% of total revenue. At present, the domestic leisure food market scale has exceeded one trillion yuan. From the trend of market size changes, China's leisure food industry will show a long-term stable growth trend. From the category structure, leisure food includes candy chocolate, nuts and roasted seeds, puffed food, braised products, etc., with a wide variety. With the expansion of consumer health needs, "healthy food" represented by nuts has become the object of consumer pursuit. At present, the market concentration of the domestic nuts and roasted seeds food market is relatively low, and the overall competitive landscape is relatively fragmented, with large room for improvement in the future. So whoever can occupy consumer minds in the nut market will have the future in the leisure food field. In 2016, founder Chen Xianbao returned, and Qiaqia refocused on the nuts and roasted seeds track. It began to focus on the development and layout of the nut business. In addition to the well-known small yellow bag daily nuts, Qiaqia's new nut oatmeal entered the breakfast scenario; probiotic daily nuts are positioned for students, children, pregnant women, and other segmented groups. Since the launch of the two products, sales have both exceeded 100 million yuan. The nut business also grew from a revenue scale of 108 million yuan in 2016 to a giant of 1.366 billion yuan by the end of last year. Moreover, the gross margin also increased from 16% to 29.3%. Nuts have clearly become Qiaqia's second curve business. Different from the OEM asset-light model of internet snack brands, Qiaqia has established scale advantages through self-built factories. Qiaqia currently has production bases in Hefei, Harbin, Baotou, Fuyang, Chongqing, Changsha, Chuzhou, and Thailand, a total of 10 locations. This fully guarantees product supply. In addition, Qiaqia covers 7 major platforms including Weibo, WeChat, Douyin, Bilibili, Video Account, and Xiaohongshu through its brand self-media matrix, continuously empowering the brand and category with high-quality content, and rejuvenating the company's brand image through creative videos. It also linked with the Capital Health Nutrition and Food Society to establish the "Qiaqia Hundred Experts Nutritionist Alliance," allowing professionals to speak for the company's nut nutrition science, and carried out nut science popularization in various forms such as graphics, videos, and live broadcasts around the topic #Tree Foodism#, increasing consumer awareness of the nut category. According to data from Qianzhan Industry Research Institute, before 2019, Wolong Food had the highest market share in the mixed nuts industry. In 2019, its market share reached 13%, ranking first in the industry; in 2020, Three Squirrels had a market share of 10.2%, ranking first; in 2021, Qiaqia Food's market share was 9.7%, ranking first. In the first half of 2022, affected by the sporadic epidemic, consumers had more home scenarios, and the frequency of leisure food consumption increased significantly. The epidemic made the decentralization of sales channels more obvious, differentiating into offline channels, B2C e-commerce, B2B retail, community group buying, live streaming, communities, etc. In the future, the sales channels of China's leisure food industry will show a diversified and integrated development trend, and omni-channel integration will become increasingly obvious. Regarding future product planning, Qiaqia Food has stated that in sunflower seeds, it will continue to consolidate its category leadership position, create "Kuizhen" as the first high-end brand of sunflower seeds, and enhance sinking in weak markets and third- and fourth-tier cities; the goal for the nut category is to achieve the absolute first place in the daily nuts segment within the next 2-3 years. [Guo Zhihai, Head of Sales, Greater China, Mondelez] Pay tribute to channel partners, meet in Chengdu, August 31 - September 2, 2022 (7th) China FMCG Channel Innovation Conference. __-END-**_