Recently, leading snack brands have collectively released their 2020 financial results. Despite the pandemic's impact, industry giants like Qiaqia, Three Squirrels, and Bestore have surprisingly all reported growth. In 2020, Qiaqia Food's total revenue was 5.289 billion yuan, up 9.35% year-on-year; net profit attributable to shareholders was 790 million yuan, up 30.89%. Bestore's revenue was 7.894 billion yuan, up 2.32%, with net profit of 344 million yuan, up 0.95%. Three Squirrels' total revenue was 9.794 billion yuan, a slight decline of 3.72%, but net profit grew 26.21% to 301 million yuan. Excluding strategic losses from new brands, the growth rate was as high as 43%. In what could be called the bleakest year of 2020, these major brands still achieved growth, partly due to the favorable market prospects for leisure snacks. Public data shows that China's leisure snack market has exceeded one trillion yuan and continues to grow steadily, with an estimated size of 1.1562 trillion yuan in 2021. On the other hand, under the general trend of consumption upgrading, major brands have begun to "cultivate internal strength and showcase their talents" to strengthen their moats. However, while all are "building high walls and storing grain," what exactly enables them to charge into the trillion-yuan leisure snack market? Who can secure the "pass" to the new consumption wave first? -01- All are "building high walls and storing grain," but who can claim the "throne" first? Currently, the leisure snack market has a scale of one trillion yuan, and with the trend of snacks replacing regular meals, it is expected to maintain long-term growth. However, compared to Japan and the United States, China's leisure snack market concentration still has room for improvement. After all, at this stage, major snack giants are collectively "transforming" to fill their "short boards" and gain more market share. At the same time, with the new consumption wave sweeping in and the social context of consumption upgrading, consumers' awareness and pursuit of quality products and excellent brands will also benefit strong leisure snack brands by increasing market share and promoting market concentration. As the veteran king of roasted seeds and nuts, Qiaqia has been catching up with new consumption trends in recent years and has established a wholly-owned subsidiary, "Qiaqia New Consumption Investment Company," to heavily invest in new consumption. Qiaqia's biggest move is its expansion from melon seeds to nuts. In 2017, Qiaqia launched daily nuts to create a "second growth curve" beyond melon seeds. However, in terms of revenue scale, profit contribution, or market share, Qiaqia's nuts cannot match its melon seeds. For example, Qiaqia's packaged melon seeds hold a 54% market share, but its nut products are far from reaching that level. As the only packaged melon seed brand to achieve nationwide distribution, Qiaqia's success lies in the consumer mindset that "packaged melon seeds = Qiaqia." But the difficulty also lies in the fact that this consumer mindset is largely confined to packaged melon seeds. After all, compared to Qiaqia, Three Squirrels, founded in 2012, has been the top seller of nut products on Tmall's Double 11 for eight consecutive years, holding a stronger consumer mindset in the nut category. In this context, the nut category can contribute some revenue growth to Qiaqia, but in the long run, without strong product differentiation, Qiaqia's nuts will find it difficult to break through existing circles, thus lacking broader imagination space. Bestore's differentiated development path lies in implementing its premium strategy. From a consumption trend perspective, consumers are most concerned about the product quality and taste of snack brands. The "2020 Domestic Snack Market Development Status and Trend Research Report" shows that in 2020, the high-end snack market's all-channel year-on-year growth rate exceeded 10%, significantly faster than the overall snack market growth. But the premium strategy relies on sustained R&D investment and product innovation. In this regard, Bestore's premium path may not be easy to achieve in the short term. According to financial reports, in 2020, Bestore's R&D expenses were 33.72 million yuan, while Qiaqia's R&D investment was 22.837 million yuan in the same period. Specifically in Q4, Bestore's revenue turned positive, but R&D expenses accounted for only 0.6% of revenue, lower than Three Squirrels in the same category. Meanwhile, its marketing investment was as high as 407 million yuan, accounting for 22% of revenue. For example, spending heavily on celebrity endorsements is often interpreted as a sign of premium positioning, but high endorsement fees further increase promotion costs without necessarily improving product quality. In this case, even if Bestore pursues balanced development across online and offline channels, its premium moat will be difficult to establish in the short term. Three Squirrels, which started online, has made a key transformation by breaking away from single-channel sales, balancing online layout while continuously increasing offline market presence. According to financial reports, in 2020, Three Squirrels' Tmall flagship store revenue was 2.847 billion yuan, and JD.com platform revenue reached 1.995 billion yuan. Online, it also expanded to platforms like Pinduoduo and Douyin, achieving diversified online channel development. Three Squirrels' increasing offline market efforts have also shown significant results. During the reporting period, Three Squirrels opened 78 new investment stores and 641 new alliance stores, with over 1,000 offline stores in total, all of which were profitable. This is reflected in the financial reports: in 2020, the contribution of offline business revenue to Three Squirrels' total revenue rose from 4.5% in 2017 to 26%, and it is expected to further increase to 33%-35% in 2021. In addition, Three Squirrels is seeking new market growth through multi-category and multi-brand layouts. For example, it incubated sub-brands like Xiaolu Lanlan and Yanglege Maohai, entering tracks such as infant food and pet food. Currently, the four sub-brands of Three Squirrels have achieved cumulative revenue of 76.11 million yuan, with Xiaolu Lanlan contributing 54.9493 million yuan, a performance that even surpasses that of Three Squirrels in its early days. In terms of product matrix, Three Squirrels has also built a rich product portfolio of "nuts + selected snacks" to solidify a more stable revenue model. Overall, although Qiaqia, Bestore, and Three Squirrels each have their own differentiated development paths in the market, Three Squirrels has already taken the lead in finding a healthy development path in the new consumption wave. While maintaining industry-leading revenue, its profit growth of 26.21% year-on-year has already validated this. -02- Quality and brand are the "pass" to the new consumption wave In the trillion-yuan leisure snack market, the core factors driving healthy brand growth must come from product quality control and brand mindset building based on consumer insights. From Three Squirrels' leading advantage, we can glimpse the general path to securing the "pass" to the new consumption wave. Undoubtedly, in any era and any industry, whoever can more accurately understand user needs and provide precise products and services will obtain the "pass" to charge into the consumer market. In this regard, as a representative of new consumer brands, Three Squirrels, which is closer to young people, has already occupied a unique advantage. After all, Three Squirrels, which started online, not only has over 160 million users nationwide, but its IP-based, personified brand image naturally aligns with young consumers' pursuit of fun experiences. It can continuously interact with consumers, increasing brand influence while gaining insights into young people's consumption trends, bringing greater imagination space for the brand. Moreover, Three Squirrels is further building the foundation of offline retail, constructing a closed-loop ecosystem of omni-channel and omni-scenario, reaching users through richer and more diverse scenarios, providing precise services while enhancing its own consumer insight capabilities. Specifically regarding product quality, R&D investment is a core indicator for measuring quality. Looking at the investments of Qiaqia, Three Squirrels, and Bestore, Three Squirrels has always been at the industry's leading level. To date, Three Squirrels' number of patent authorizations ranks among the top listed Chinese leisure food companies. Of course, beyond R&D, it is also necessary to ensure quality control capabilities at every link of the entire industry chain to ultimately ensure consumers enjoy healthy and nutritious diverse nut snacks. To provide better products, Three Squirrels has established 716 product standards across all categories, of which 93% of nut standards are stricter than national requirements, with strict ratios ranging from 33% to 70%. Furthermore, Three Squirrels uses big data to connect digital systems with upstream food production enterprises, improving quality control and management systems in key links such as raw material supply, food safety testing, product packaging, storage, transportation, and distribution. It also empowers traditional supply chains, shortening the time from factory to consumer, maximizing product freshness, and providing consumers with high-quality, affordable happy snacks. With good user insight and "physical reach" through quality products, consumers will naturally form a "chemical reaction" from awareness to loyalty towards the brand. Since its rise, Three Squirrels has almost become synonymous with nuts, firmly occupying the brand mindset in the nut category, especially in the daily nuts segment. Even though Wolong had a first-mover advantage, Three Squirrels overtook it on Tmall. In 2020, Three Squirrels' nut category sales reached 4.85 billion yuan, with daily nuts sales exceeding 1 billion yuan, ranking first in Tmall's mixed nut category. Leveraging the brand mindset built through nuts, Three Squirrels continues to expand and activate consumer brand awareness through billion-yuan single products like macadamia nuts, pecans, pistachios, dried mango, and hand-torn bread, as well as ten-million-yuan innovative new products like Nainai Sweet and White Peach Dates, moving from single-point breakthroughs to multi-point explosions. In essence, leisure snacks are about serving consumers with products and continuously innovating and upgrading based on consumer needs, ultimately forming deep-rooted brand awareness. In this way, no matter how the tide changes, brand development can remain fresh and enduring. Source: Mantis Finance (ID: TanglangFin) Tips will be paid 400-2000 yuan once adopted.