If October 2023 is taken as the dividing line, the snack industry before that could be described as 'heroes rising together, vying for dominance.' With Wanchen Group integrating Haoxianglai, Laiyoupin, Adiadi, and Luxiaochuan into the Haoxianglai brand, followed by the strategic merger of Snacks Busy and Zhao Yiming, the snack track has formed a pattern where two leading brands lead and multiple strong players follow. According to statistics, there are over 110 bulk snack brands nationwide, turning what was a blue ocean two years ago into a red ocean, especially in lower-tier markets such as cities, counties, and townships, where competition is fierce. On a single street, several snack stores of different brands compete: if you offer a 12% discount, I'll offer a 32% discount; there's no lowest, only lower. Brands subsidize costs, franchisees forgo profits, and while customers enjoy great value, franchisee returns are a mess. The frantic expansion driven by capital has even led to behaviors that violate business norms, such as franchisees switching brands. In a business model where brands have no differentiation and can only compete on price, Zhao Yiming has been flagged for product quality issues, and this is unlikely to be the last. So, is there only one path? In fact, multiple brands are planning and testing new breakthroughs. Wang Zening, the actual controller of Wanchen Group, once said, 'We have always been paying attention to cross-format opportunities. Bulk snacks are just the first shot. Wanchen Group will continue to identify new plans for franchisees, stay grounded in the present, and follow the people's livelihood needs.' 'Love Snacks' announced its high-profile entry into the convenience store sector on August 22. Snacks Youming opened 'Snacks Youming Wholesale Supermarket,' Snacks Youxuan opened 'Huizhen Wholesale Supermarket,' and Xixi Snacks opened 'Wuxiaochao Wholesale Department.' Nationwide, snack brands are 'breaking out' with seemingly unstoppable momentum, much like the expansion of snack stores. Can snack brands successfully grab a share of other tracks? From the current direction, snack brands are continuing to vertically capture share of other categories in regional supermarkets in lower-tier markets, and horizontally competing with convenience stores in cities. Will this 'breakout' be as devastating and swift as it was a few years ago? Let's examine the advantages and difficulties. In lower-tier markets, the core advantage snack brands have over regional supermarkets is upstream supply chain cash purchasing and efficient logistics. In areas where they can open stores, warehousing and logistics systems are already in place. The commodity distribution pipeline is smooth, the upstream supply chain advantage for standard products remains, and it's easy to select big single items in high-velocity categories. This is the biggest confidence for snack brands to enter full-category discount stores in lower-tier markets. Using snacks as a traffic driver, they increase categories and SKU counts, creating incremental revenue in existing space. Meanwhile, after the impact of snack stores, regional supermarkets have mostly converted their weighed snacks from joint ventures to self-operation, and purchase in cash from provincial wholesale markets, earning profits not inferior to snack store franchisees (although brands can get lower prices upstream, due to headquarters and logistics costs, franchisees' average gross margin is about 18%-20%; at the same selling price, regional supermarkets' cash purchase gross margin is about 20%-25%). Moreover, supermarket rents are far lower than snack store rents, so the price advantage of snack stores is gradually weakening. In standard product categories, only discounts on first- and second-tier brands have appeal, but regional price controls by these brands mean that even 'Leerle' with annual sales of 40 billion yuan hasn't fully broken through all brands' price controls. Perhaps only leading snack brands have a chance for a comprehensive breakthrough. Additionally, with sales pressure mounting, cross-regional and gray-market goods are frequent, and not all goods obtained in large quantities through formal channels are the lowest priced. Once the price advantage is lost, the appeal of snack brands' full-category discount stores will drop significantly, and franchisees' capital pressure from expanded SKUs will surface, dampening their enthusiasm for transformation. On the horizontal track in cities, snack stores have site selection requirements similar to convenience stores but with larger areas. After expanding product categories, they offer more choices and quantities than convenience stores, while maintaining an absolute price advantage in existing categories, giving customers ample reason to enter. The horizontal entry seems to have no difficulties. However, why has 'Love Snacks,' known for its high-profile style, not disclosed any progress on its convenience store franchise business in the past month? This is puzzling. I initially believe the main reasons slowing down snack brands' convenience store push may include: The establishment and organization of fresh food supply chains are relatively difficult. Fresh food typically accounts for 30% or more of convenience store sales, and it's a key differentiator from mom-and-pop stores. Most convenience store brands self-build or customize production. Without a certain sales volume of fresh food in snack stores, it's unlikely they can obtain a full range of fresh food with cost advantages and distinctive features. Additionally, fresh food products face high short-term spoilage pressure during promotion. Since snack brands operate mostly through franchising, **whether franchisee owners are willing to bear these losses requires solving problems on both the procurement and sales sides.**Obtaining tobacco licenses is difficult. During expansion, snack stores have not included tobacco in their business categories to avoid it becoming a constraint on rapid growth. But tobacco sales account for about 15%-20% of convenience store sales and are high-stickiness products. With current tightening of tobacco licenses, opening new accounts is very difficult. Continuing to increase investment will extend the payback period. Convenience store operations lean more toward instant retail, with more cold-chain products. Even without considering the investment needed by snack brands to build cold-chain logistics, franchisee investment will increase further. In the current intense competition, raising franchise thresholds to slow expansion is not an option for snack brands at this stage. When crossover and breakout become necessary for format breakthroughs, leading snack brands are already actively planning and accumulating energy, while followers have taken the lead, moving quickly and preparing for a curve overtaking. Whether on a national scale or regional leadership, snack brands that break through regional price controls of first- and second-tier brands and secure a stable supply of standard products are likely to gain a positional advantage in the breakout process. I will continue to follow and share the latest industry news with peers.