Source | Lingshou
Traditional snack profits have stalled. The recently released semi-annual reports from the snack industry reveal not just performance fluctuations, but a collective industry "lament." The financial data is bleak: Liangpin Shop's revenue plummeted 27.21% to 2.829 billion yuan in the first half of the year, with net profit attributable to shareholders turning from profit to loss, recording a loss of approximately -94 million yuan, a year-on-year decrease of 491.59%. Lai Yifen also suffered a loss, with net profit attributable to shareholders of approximately -51 million yuan. Three Squirrels saw a slight revenue increase of 7.94%, but net profit attributable to shareholders halved to 138 million yuan, down 52.22% year-on-year. Qiaqia Food delivered its worst interim performance in nearly a decade, with net profit of approximately 88.642 million yuan, expected to decline 73.68% year-on-year. When the leading players collectively fall into trouble, it is no longer an individual company's operational issue but a red flag for the entire industry. The core of the problem lies in the impact on the snack industry's business logic. Its profit drivers—cost and selling price—are being squeezed from both ends: upstream raw material costs continue to rise, while downstream markets are mired in "price wars" due to homogenization. As a result, profit margins are being significantly compressed. The first layer of industry difficulty, or the first pressure, stems from the rigidity of its cost structure. The past success models of traditional snack brands are now becoming operational burdens. For example, Three Squirrels' financial report shows its sales expenses surged 25.11% year-on-year to 1.119 billion yuan in the first half, accounting for over 20% of revenue. This massive expenditure yielded only 7.94% revenue growth and halved profits. More directly, revenue grew only 7.94% while net profit attributable to shareholders fell about 52.22%, indicating a mismatch between expense growth and revenue growth. Similarly, Lai Yifen's offline direct-sales model faces structural pressure. It once gained market position through rapid store expansion, but now it is constrained by high fixed costs of physical retail. Its financial report shows financial expenses surged 61.09% year-on-year in the first half, mainly due to increased short-term borrowings and higher interest expenses. High store rents and labor costs, coupled with shrinking foot traffic, make its profit model unsustainable. On the supply chain upstream, even Qiaqia Food, known for strong cost control, saw a significant profit decline due to rising procurement costs for core raw materials like sunflower seeds. These data collectively point to a reality: the costs of traditional giants—whether online marketing expenses or offline rents and labor—have become fixed expenditures that are difficult to compress. This cost structure increases their operational risk exposure. The second pressure comes from the weakening of pricing power and external price wars. If rising costs erode the profit base, the loss of pricing power directly impacts revenue. Liangpin Shop is the most typical example of this dilemma. In the past, it achieved long-term brand premium through differentiated positioning as a premium snack brand. However, when market consumption trends shift toward "value for money," this "premium" built on marketing stories appears fragile. At the end of 2023, the company launched a large-scale price reduction, a fundamental strategic adjustment. Liangpin Shop confirmed in its financial report that one of the main reasons for revenue changes was "price reductions on some products." This move essentially admitted the failure of its original brand premium, intending to maintain market share by shifting to price competition. However, financial results show this strategy did not succeed, with a loss of nearly 100 million yuan in the first half. This indicates that the company's existing cost structure cannot support a low-price competition model. Emerging bulk snack channels are different; they rely on efficient supply chain systems to achieve profitability under low gross margins. In contrast, traditional snack companies' price cuts, without corresponding cost advantages, failed to effectively curb competition and instead harmed their own profitability. The conclusion is that when costs continue to rise and selling prices are forced down, profit margins are severely compressed, inevitably leading to declining profitability. This dual pressure from costs and selling prices is the direct cause of the widespread performance decline among major companies in the industry. Channel Battlefield If profit decline is just a result, the root cause is that the channels for selling snacks have changed. Simply put, traditional snack brands are losing their voice. In the past, brands held the upper hand with influence and user base. Three Squirrels led the online snack model, while Lai Yifen set standards in chain stores. Channels needed quality brands to attract consumers, and the initiative in pricing and channel selection was in the hands of brands. But now, the relationship has reversed, and channels are increasingly taking the initiative in the game. The most typical example is the rapid expansion of bulk snack chain stores like "Hao Xiang Lai" (Wan Chen Group) and "Ming Ming Hen Mang." In the first half of 2025, Wan Chen Group added 1,468 stores, bringing the total to 15,365. A large-scale store network becomes an important traffic entry point. Unlike traditional distribution, bulk channels are also branding themselves and gaining more supply chain leverage. By relying on direct procurement, bulk purchasing, and reducing distribution links, they improve efficiency and can source at lower prices or even customize products. Wan Chen's financial report shows its bulk business gross margin is only 11.49%, which impacts traditional brands accustomed to high margins. This puts traditional brands in a dilemma: if they don't enter, they miss a huge market; if they enter, they must accept low-margin pricing, and the profit space is ceded by themselves. Worse, once they accept the channel's low prices, product prices are no longer determined by brand value. The "premium" image and pricing power that brands painstakingly built are weakened. Traditional brands have considered counterattacks. For example, Three Squirrels once wanted to acquire the bulk brand "Ai Lingshi" to take control of the channel, but later terminated the acquisition in 2025 due to failure to reach agreement on core terms. Besides bulk channels, private labels from supermarkets are also a force to be reckoned with. Retailers like Sam's Club and Hema are leveraging their membership data and sales terminals to directly develop private-label snacks and compete. In the first quarter of 2025, Hema's private-label sales accounted for 35% of total sales, while Sam's Club's private-label sales accounted for over 30% of total sales. Private labels have obvious advantages: they save on channel fees and substantial marketing expenses, making prices more competitive; they can quickly iterate products based on first-hand sales data, with market response speed far exceeding traditional brands. More importantly, consumer trust in supermarket platforms directly transfers to their private labels, forming a natural endorsement that traditional brands find hard to replicate. This means traditional snack brands' competitors are no longer just other snack companies, but also the channels themselves that control shelves, data, and consumers. Their market space is being squeezed from multiple directions. At the same time, the core channels they rely on are also weakening. Lai Yifen, mainly offline, saw a significant decline in e-commerce revenue and poor online transformation; Qiaqia's online revenue grew but with low profit margins, limiting profitability. Conversely, Three Squirrels and Liangpin Shop, which started online, have also failed to make breakthroughs in the vast offline market. Facing the impact of new channels and the shrinkage of original channels, traditional giants' offline expansion has basically stalled. They have to close underperforming stores to control costs, and the stagnant or declining store counts in financial reports are a direct reflection of this dilemma. When new channels are hard to enter and original channels continue to lose, the channel itself transforms from a profit source into a high-cost burden. When this key link connecting enterprises and the market becomes both expensive and uncontrollable, profit decline becomes an inevitable result. The Fading Halo When profit models and channel advantages fail one after another, the last trump card left for traditional snack giants seems to be "brand." However, this once-solid defense line is also being eroded: the brand stories they relied on for success are rapidly losing appeal among the new generation of consumers. This is not simply "brand aging." Brands are still using old narrative logic, but the listeners and their environment have changed. First, the definition of "premium" has shifted. Liangpin Shop once defined premium with exquisite packaging and high pricing. But today, the power to define premium has transferred to channels and consumers. New retail channels like Sam's Club and Hema have established "channel-as-brand" trust through their strong global supply chains and strict product selection standards. At the same time, consumers themselves have become unprecedentedly professional. They carefully study ingredient lists, trust ingredient bloggers' reviews, and are highly vigilant about "technology and tricks." In this context, a high-priced product supported only by marketing stories appears hollow and unconvincing. Second, the standard of "convenience" has been reshaped. Three Squirrels' rise benefited from the convenience of e-commerce delivery. When hour-level delivery becomes the norm and bulk stores downstairs are within reach, even next-day delivery has been downgraded from a core advantage to a basic service. Consumers' demand for instant gratification is infinitely amplified, patience is greatly compressed, and the moat brands once built on logistics speed has been filled by new-generation infrastructure. More fundamentally, there is a disconnect between brand and product. This is a sharp but unavoidable question: if all packaging were removed, could consumers clearly distinguish Three Squirrels' nuts, Liangpin Shop's dried fruit, and Lai Yifen's dried meat? The more likely answer is: it's hard to tell at a glance. This reflects a long-standing model problem in the industry: many leading brands are more like "brand operators" and "channel integrators" than true "product creators." They rely on extensive OEM/ODM manufacturing systems, leading to severe product homogenization. Their core competitiveness lies in marketing and channel distribution, not product R&D and innovation. This model may have worked in the era of channel dominance, but it appears unstable in today's environment where product strength is increasingly important. Weilong's semi-annual report shows that vegetable products represented by "Konjac Shuang" saw revenue growth of 44.3% year-on-year, reaching approximately 2.109 billion yuan, with a significantly increased share of company revenue, becoming a core pillar. This clearly proves that the most solid brand moat is ultimately a signature product that defines a category and leaves a deep impression in consumers' minds. From the stalling of profit engines, to the loss of channel voice, to the failure of brand narratives, what we see is not a partial mistake in one link, but a systemic failure of the entire business logic in the current market environment. However, there are still opportunities within the difficulties. Giants have begun difficult self-adjustments: Liangpin Shop is shifting toward healthy formulations and focusing on product health; Lai Yifen has started launching new products like "Chinese-style health water" with medicinal and edible ingredients; Three Squirrels is exploring offline bulk stores, lifestyle stores, and other multi-format pilots. Although these measures have not yet been reflected in financial data, they indicate attempts to find new value anchors in the chaos. The shaking of a commercial building is not achieved overnight. For these former industry definers, there is no smooth road ahead. They must thoroughly re-examine their cost structures, channel relationships, and the connection between products and brands. This quiet and cruel elimination game has begun. Whether they can complete self-innovation amidst the pain will be the key to survival.