---
title: "Why Is It Getting Harder to Sell Food and Beverages?"
description: "After entering the food industry, I've felt that selling goods is becoming increasingly difficult, a sentiment shared by many peers. I argue that the food industry is a zero-sum game, where the total stomach capacity of consumers is limited, and the number of sellers, platforms, brands, and service providers has increased, intensifying competition. To succeed, companies must either sell more (brand influence), sell at higher prices (brand pricing power), or sell new products (innovation), all of which require deep consumer insight."
author: "李倩"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-06-24"
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# Why Is It Getting Harder to Sell Food and Beverages?

> After entering the food industry, I've felt that selling goods is becoming increasingly difficult, a sentiment shared by many peers. I argue that the food industry is a zero-sum game, where the total stomach capacity of consumers is limited, and the number of sellers, platforms, brands, and service providers has increased, intensifying competition. To succeed, companies must either sell more (brand influence), sell at higher prices (brand pricing power), or sell new products (innovation), all of which require deep consumer insight.

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After entering the food industry, I have had a particularly strong feeling, and I have exchanged this feeling with many peers: **Why is selling goods becoming more and more difficult?**
And it's not just traditional distributors who sell goods, or traditional offline brand friends, but even some friends who mainly do e-commerce online. Everyone has such a lament, saying that in recent years, especially since last year, it seems that selling goods has become increasingly difficult.
I put forward a viewpoint: **The food industry is not like the internet or other high-tech enterprises; this industry is basically a zero-sum game.**
Zero-sum game means zero-sum play. What is a zero-sum game? If you earn more, others must earn less.
If others are positive five, you are negative five, and together they add up to zero. If you have more, others must have less. Why is the market a zero-sum game? I often say don't use internet thinking to ponder this market. **Is the capacity of the human stomach unlimited? People are limited. If someone eats your yam chips, their stomach cannot eat someone else's chicken feet. The phenomenon produced by zero-sum game is that the number of merchants selling goods has increased, the number of platforms selling goods has increased, the number of brands and categories has increased, and the number of service institutions selling goods has increased. This is the basic phenomenon: more and more people are participating in the game competition.**
The emergence of a large number of service institutions has greatly helped lower the entry barriers and improve service efficiency in this industry, but still, don't forget that the total capacity of consumers' stomachs is limited, so everyone is engaged in a zero-sum game.
What hasn't changed? The essential innovation of goods hasn't changed. Although innovation has been shouted about in recent years, from the generation of consciousness to the emergence of sprouts to the final implementation, it actually takes time.
What do we see emerging in the market? Outer packaging innovation, copywriting innovation, overall structural innovation, but you will find that only the product itself rarely innovates. No matter how fancy the packaging, inside it may still be the same thing. Consumption upgrade does not mean everyone can eat twice as much; the total capacity of the stomach is still the same, and the total capacity has not changed.
The gross margin of goods has not changed; it has even become lower. Once when e-commerce just had dividends, everyone said gross margins were high, and you could get higher gross margins on e-commerce platforms than offline. But now e-commerce costs are also high. Society is like a communicating vessel; in the end, it will level out, so the total gross profit space is about the same.
As an enterprise, what should we do? Actually, our solutions, according to normal logic, are only three:
**First, sell more.** Find ways to sell more. This involves brand influence. If your influence is greater, you occupy more things, occupy more resources, and hug thicker thighs in channels than others, so you sell more goods than others.
**Second, sell more expensively.** Because our essence is to make money. If it is to make money, you need to measure the final net profit, how much money falls into your hands. If the quantity cannot be increased, can you increase the price of a single food item? The stomach capacity has not changed, but you can sell more expensively. Price is also an important function of brand. The issue of brand pricing: eating the same thing, in the past, two carrots might fill you up for two yuan; now I give one carrot for two hundred yuan, and the stomach capacity has not changed.
What kind of brand is called a good brand? Recently, I communicated with investor friends, and everyone formed a consistent conclusion: What is a good brand? In one sentence, it's simple: a good brand is a brand with its own pricing power, can raise prices at will. You can talk about many fancy concepts about brands, but if you dare to raise prices, this is a good brand.
What is a bad brand? Or even if you haven't formed a brand? You sell at the same price as your peers; if your peers lower prices, you must lower prices. You don't dare to raise the price by a cent; if you raise it, they won't buy. Find ways to sell more expensively, involving the issue of brand pricing.
**Third, sell new things.** I completely stop playing with the same products and competitors in this industry; I create a new category and sell new things. This involves innovative R&D and innovative ways of selling. Your original method was offline sales; now you switch to WeChat sales; this is method innovation. R&D is also the same. Others are selling one thing; you now sell something different from others, and you can price it at will. For example, the recently popular convenient hot pot products had pricing power as soon as they came out.
So there are only these three solutions: **Either sell more, which is a brand influence issue; second, sell more expensively, a brand pricing issue; third, sell new things, involving innovation and R&D, innovating from the product's organizational form and product state.**
In the early days, food companies built brands by relying on supply scarcity. Why are there so many nostalgic foods from the 80s now? Actually, this nostalgic food is not because that brand was particularly good back then, but because that era was too scarce, and supply scarcity led to brand creation.
At that time, they occupied core communication channels. The carrier for people to obtain information was television. Apart from television, there was almost no other carrier for information. Whatever TV said, you could only remember that. We have many subconscious advertisements that keep brainwashing you repeatedly, including "This year, holidays don't accept gifts," constantly making you remember. Subconscious advertisements actually played a significant role in the past monopolistic media. At that time, advertising was building the brand, and occupying monopolistic channels was building the brand. Your supply was scarce, and your channels were also scarce.
But why doesn't the tactic of splashing advertising work now? Because now you need a lot of money to advertise. Now channels are fragmented; not only CCTV, but also Weibo, WeChat, subscription accounts, Douyin, Kuaishou, and a series of carriers.
People also have a scarcity: time is limited. Their eyes are either staring at Douyin or Kuaishou, if not Kuaishou then Weibo, if not Weibo then WeChat. These carriers invisibly disperse people's attention. At this time, splashing advertising everywhere to let everyone know me, I can only say the cost is too high.
**We don't have as good an era as the previous generation of food people. At that time, it was very precise to invest in one channel; now there is none. If you use the past advertising thinking and traffic thinking to fight, it's useless. At this time, change your mind and consider solutions to the problem.**
Changing your mind means insight and service. You need to gain insight into where consumers are and how to serve them. This is the way to solve the problem. You've talked about so many difficulties, but why are there still so many peers emerging, and the internet-famous brands that make me both love and hate appear? "Love" is that this industry still has hope; "hate" is that it's not you, which is uncomfortable.
Let's look at these so-called internet-famous brands, the brands that have survived. What did they do right? In my logic, I sorted this out. When everyone sells goods, they focus on money, money, money. The first thing to consider when selling goods is pricing. Because after I entered the food industry, I contacted many traditional distributor bosses. In the process of learning and understanding from them, I found one thing that I am absolutely inferior to them: they are extremely sensitive to price, so sensitive that when they see the selling price, they can blurt out the cost. I thought it was amazing. How did they do it?
Actually, everyone, when selling goods, has always been focusing on money, money, money.
**First, focus on pricing.** How much should I sell for? Even each of us has a formula in our hearts to calculate cost and pricing gross profit space.
**Second, focus on profit.** How much profit do I earn?
**Third, focus on cost.** When everyone considers cost, they often desperately lower costs. In the past, I once fell into a misunderstanding. I thought the food industry couldn't make good things. Later, I found out that I was arrogant. It's not that they don't have the ability to make good things, but they don't want to make good things. Why? It's simple, because to control costs, they can't make good things.
Why are there so many internet-famous brands rising today? What model do these internet-famous brands follow? Selling services. The three things they care about are people, people, people.
**The first is people's needs. They don't consider how much this thing costs or whether it can be made; they first consider whether there are people who need good things. The second thing is experience. The third thing is, after receiving the goods, what is my feeling?**
So everyone will find that in the form of selling services, what is considered is all people's feelings, and money is not prioritized as a consideration factor.
At this time, some traditional businessmen will attack me: What you say below doesn't hold; sooner or later, you have to come to the above route. I admit it, because when I started my own business, I completely took the below route, not considering costs, and doing according to needs. But I found that these two routes are not completely incompatible. Because if you come out according to the below service route, it's likely that you can make this thing sell a bit more expensively than others, and at the same time, you have more bargaining chips than others, and many platforms will actively invite you.
So when you have a very good service awareness, in fact, many platforms will take the initiative to make concessions. I'll let you come, lower the middle space for you, and let you earn more money. All this depends on the fact that you have already generated service value.
What does it mean to not respect consumer needs so much? You may feel wronged. You also hired new copywriters and new designers, and changed according to the path of internet-famous products. I see a lot of self-congratulatory awkward copy, a lot of copycat X small X pretending to be young and cute, a lot of incomprehensible childish IP, and a lot of low-quality cartoon-like design packaging.
Because your awkward copy itself is like drawing a tiger, drawing an appearance. How is the copy played? You don't know; you just think it's good and use it. Actually, when you move it, it distorts. When people mention IP, they think of cartoons. Chinese people always understand IP as cartoons, which has always confused me.
This generation of consumers is a group that cares a lot about inner feelings. They are people with very rich inner dramas. Have you really considered consumers? Does your team really understand them, comprehend them, and write truly high-level things? Consumers' sense of smell is very sensitive. These behaviors reflect a lack of insight into consumers' real behavior. The masses have sharp eyes. They find that you are really not serving them, but are too anxious to make money.
I once went to a leisure snack company. The boss was particularly enthusiastic and told me he wanted to build a brand, because he felt that his own brand would have higher pricing power. His requirement was to completely imitate a competitor, directly copy one. I was stunned at the time. I could only say, after we copy it, how can we sell it better? I didn't know how to continue this conversation. I couldn't tell him from the beginning, but I could only tell him that channels can hardly be a 100% decisive factor anymore.
More, more expensive, newer. These three points can truly be activated from insight into consumers. Does the word "insight" only mean meticulous observation? This statement is also vague. I think it also includes unique observation. Your understanding of this matter is different from competitors, peers, and vertical categories. This is the definition of insight. Sometimes we often say this matter always feels something is wrong, but forget it, others do it this way, so I do it too, submitting to this industry. Actually, others in this industry may all be wrong, because there are not many successful enterprises. Everyone must have this thinking.
Next, share a few entry points for insight. **First, insight from trends; second, insight from categories and products; third, insight from consumers themselves; fourth, insight from brand marketing.**
Regarding methods of insight, first, adhere to on-the-ground insight. Let me share a small story with you. When we were doing food, I got a piece of information: "No one eats puffed food anymore." This was the conclusion given to me by many predecessors and data research reports when I first entered the industry. Young people or people of this era no longer eat puffed food. At that time, I was very desperate about puffed food. But I did one thing: there was a 7-Eleven downstairs from my house. Every night, I squatted across from 7-Eleven and noted what consumers bought when they came out of the store. A young man in his 20s, late at night, carried a cola in his left hand and potato chips in his right. Then a little girl bought a lot of things, and from one corner, you could see it was also a bag of potato chips. So I was very surprised. Aren't many people still eating puffed food?
The health trend. Actually, the person who made the health trend report should be about my age, or older than me, before he published this report. But you can't judge the market by your own preferences. Those teenagers and young people in their teens and twenties are still desperately eating puffed food, because they haven't realized their body problems. Because you are not young, you think young people have no demands. I think this doesn't hold. If you really want to do it, go back to the consumption scene and see if those young people still eat it.
Second, practical insight. The people who write copy in our company must sell goods on the street, including myself. Selling on the street in parks, night markets, and food markets helps you connect face-to-face with consumers. Why? This is something you can never experience in the office. This is insight about practice. When we go to parks and offline markets to sell goods, we find that there is a following effect offline. When we have a very conspicuous dog food bag of food, someone will ask, where did you buy this? Gradually, you will find everyone is carrying this big yellow dog food bag.
Third, attentive insight. At that time, there was a beef jerky, particularly expensive, and we needed to position the crowd. When a girl likes to go to the supermarket to buy such an expensive product, what other characteristics does she have? Our final research result was particularly exciting: girls who like manicures particularly love to buy this thing. This is called insight. It's not telling me how 18-35-year-old young female white-collar workers are, but a girl who does manicures once a week is likely to buy this thing.
Fourth, awe for insight. An 11-year-old child gave me a resounding slap. When I was doing insight, he gave me a reminder. He said, if you do insight as a bystander, you should never think you understand anyone. You'd better let the child speak for himself. That child likes anime and cosplay. This person is a consumer himself. This is very important. Since then, our team has done one thing: every time we develop a product and decide who to sell it to, we find an actual user from the team. He must be this user, rather than our group of people speculating and imagining that others might like this. So you must have awe for insight, because you may have insight, but you can't gain insight into his own thoughts.
Finally, think about insight. I've talked so much just now. Some are constantly overturned and re-overturned, repeatedly pondered. It's possible that it's really not like this. You need to meet many people, talk a lot, meet experts in this industry, and maybe the conclusion will be overturned again. I want to say that unique judgment and choice are the weapons of competition.
There is an important law in this world: the 80/20 rule. 20% of people earn 80% of the world's wealth, meaning only a few people do the right thing. When everyone in the market is doing this thing, then this thing must be wrong. So unique judgment and choice are the weapons of competition.
**First, insight into trends is in life and data, not just in reports, not in data, but in real life.**
**Second, trends in industry research reports can be followed, and trends that industry reports are not optimistic about are also worth doing.** Some trends you haven't seen, or are not written in reports, or even not optimistic about, you can firmly do them, as long as you use differentiated thinking.
**Third, never understand trends from your own preferences, and never understand trends from a single position.** Finally, the food industry cannot be directly compared with other industries; it has its particularities. This is what I found after doing it myself: the food industry is different from other industries. For example, I said at the beginning that it's different from the internet. The essence of the food industry is still products, still supply chain, based on zero-sum games. So industries are different; you can't copy other industries. This industry has its own trends.
For industry analysis and investment, there are large and small categories, but for an individual enterprise, there is only category advantage. In the food field, large categories are good, but being first in a small category is also great. For example, spicy strips. Before Weilong came out, did you know that spicy strips were a good category? If it's a small category, can you be first?
Not long ago, a friend who runs a factory in Beijing told me something that made me particularly emotional. He said, my business is getting better and better this year. I said, isn't Beijing driving factories away? Aren't you all closed? Isn't it hard to do? He said, I didn't leave; I gritted my teeth and held on to the end, so his business is the best. So regardless of large or small categories, you must stand out in this category.
Second, the choice of category and product: either quickly follow trends or play differentiated in the opposite direction.
If you follow quickly, there are dividends to follow. For example, when convenient hot pot came out, you found Taobao started selling it, and I made it in a week. This is a fast trend. But if it has been popular for two years and you react and make it, then you can no longer enjoy the dividend. You can consider another trend, which is the opposite direction.
Third, truly good things will sell well. If they don't, it must be that the product is not yet good enough to speak for itself. This is what I often discuss with people: which is more important, product or marketing? The conclusion is, if it's not good, it must be that your product is not yet good enough to speak for itself. If this thing is not good enough for you to run around telling people, sorry, it's not a good product yet, and it still needs a brand with marketing intervention.
Finally, good products are not only about taste, but also include good service and products that understand consumers. It's hard to make products with huge differences in the food industry, and you also need good service. Three Squirrels, they added an opener and garbage bags, so they have pricing power over other brands.
Regarding consumers. **First, consumption is increasingly showing a trend of personalization.** Therefore, the original segmentation methods need to change, such as by income, occupation, age, gender, etc., all are changing. Look at spending rather than income, look at habits rather than occupation. Look at what habits they have rather than what occupation. As I just mentioned, manicures. Manicures are very interesting. Girls who do manicures cover all occupations, but they belong to one type of person. But if you look at this person as being in banking or finance, you can't see anything. It's better to look at life habits. So this is a change.
**Second, consumers are not numbers, not heads, but living people. Start with a potential user around you, and don't consider half the country from the beginning.**
**Third, we ourselves are also consumers. Ask yourself about your consumption details and feelings, and summarize them.** When you look at others, you don't bother to study and learn. These are my three statements and trends about consumers.
Finally, about brand marketing. **First, good marketing notes are completed in the store, not in the office. I also made this mistake in the past. Good marketing notes are in the store: who is on the shelf, who is off the shelf. This is the first.**
**Second, evaluate the quality of marketing: first look at input-output ratio, second look at persistence, and don't just watch the excitement.** Some young friends often talk to me: I saw a particularly good brand, this brand is amazing, recently their voice is everywhere. I say, don't look at how much voice they have recently; first ask how much money they spent. Some people can spend one billion to create an influence of 500 million, but some people are amazing to spend 50 yuan and produce an influence of 100 yuan. Actually, the latter is more powerful. So don't just look at the commotion; first look at cost-effectiveness. Then look at persistence: how long can this thing stay lively after it goes down?
**Third, distribution and marketing are a push-pull relationship; both are indispensable.**
**Fourth, from the moment you contact consumers to before the next contact, every link must have marketing thinking.** Many people think my marketing thinking appears in the production of the product itself. Wrong. In customer service, returns and exchanges, every link must have marketing thinking.
Finally, the key to marketing is not to shout loudly, but to understand what the other party needs.


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