Summary of Key Points
Xueji Roasted Seeds, a established roasted seeds chain, initially gained popularity for its fresh and freshly prepared products. Later, in order to expand on a larger scale and attract investment, it shifted to producing long-shelf-life pre-packaged snacks (such as milk dates and yogurt citrus slices), thereby downplaying its focus on freshness. Now, with the opening of new stores in Beijing, it has introduced a range of short-shelf-life baked goods, aiming to regain its reputation for freshness. This move comes amid the booming market for fresh snacks, which is experiencing rapid growth, with consumers preferring products that are freshly made, have fewer additives, and are of shorter shelf-life. The market is crowded with both established brands, traditional snack giants, and newcomers. However, Xueji faces challenges: short-shelf-life products have higher spoilage rates, its supply chain needs to be restructured, and its operational approach must change. Whether it will succeed depends on the quality of its products and the customer experience it offers.
Detailed Analysis
1. Why is Xueji returning to fresh snacks? —— The “old advantage” it once had to regain
Xueji’s core strength was always its freshness. It started in 1992 by roasting and selling sunflower seeds at the Jinan market, building a reputation for quality and freshness. After 2018, in order to break through regional limitations and secure capital, it moved its stores to commercial areas and switched to pre-packaged snacks with longer shelf-life (such as the popular milk dates), which allowed it to open thousands of stores quickly. However, this shift came at the cost of its original “freshly prepared” image.
Fresh snacks have become highly sought after; consumers are increasingly wary of additives and prefer products with visible production processes (such as bread made on the same day or freshly marinated chicken feet). Competitors like Jinlimen and Jiduquan have gained popularity with their freshly made, short-shelf-life products. If Xueji doesn’t return to its focus on freshness, it may fall behind in this competitive market. By adding baked goods, it hopes to reclaim the freshness that was once its key selling point.
2. How popular is the fresh snack market? —— From a niche to a highly competitive industry
The fresh snack market is no longer a niche business. According to the Lead Leopard Research Institute, the market size was less than 5 billion yuan in 2020 but is expected to grow to 18 billion yuan by 2025, with an annual growth rate of 40% (much faster than traditional snacks). 78% of consumers are increasing their consumption of fresh snacks, with a preference for products that are short-shelf-life, have fewer additives, and are freshly made.
The players in this market can be categorized into three types:
- Established brands: Jinlimen (openly produces products on-site), Yili (combines roasted seeds with fresh ingredients), Jiduquan (freshly marinated products); these brands have successfully established their single-store models and are expanding rapidly through direct sales or franchising.
- Traditional snack giants: Laiyifen has opened “Fresh Life” stores selling freshly made fruit cuts, while Liangpinpu and Sanshizoushu are testing fresh snacks in their stores.
- Newcomers: Juewei has entered the fresh snack market, and Chayanyueshe has launched the “Jishi Shangwei” series. Even 7-Eleven has introduced its “7 Fresh Snacks” line.
The market is now highly competitive, with no single player dominating; each has its own strengths.
3. What are the challenges for Xueji entering the fresh snack market? —— It’s more than just adding some baked goods
Entering the fresh snack market is not as simple as adding a few baked goods to the store. The challenges include:
- High spoilage rates: Short-shelf-life products (like bread) have higher spoilage rates, and the industry average is 8%-15%, compared to 1%-3% for traditional pre-packaged snacks. Xueji’s previous supply chain was designed for long-shelf-life products, so it needs to establish a new system with central kitchens and local cold chain logistics, which is costly.
- Product differentiation: Fresh snack stores typically offer a combination of roasted seeds, baked goods, and freshly marinated products. If Xueji only adds a few bread items without unique, freshly made products, it may struggle to attract customers.
- Changing operational requirements: Traditional roasted seeds stores require minimal staff training, but fresh snack stores require employees who can explain products, create promotional content, and organize events—these are more “operational” skills that require a different type of staff.
4. What are Xueji’s chances of success? —— Scale is an advantage, but quality and experience are key
Xueji does have some strengths:
- Scale-based bargaining power: With 1,200 stores nationwide, it can negotiate lower prices for raw materials, potentially reducing costs compared to smaller brands. If it can combine its scale with refined operations in the fresh snack sector, it can offer products at a competitive price.
- Brand recognition: Xueji is well-known, especially in northern China, and has a loyal customer base.
However, scale alone is not enough. Consumers will ultimately judge the success of the new fresh snack offerings based on the freshness of the products, the taste, and the overall experience. For example, will the baked goods at the new stores be made on the same day? Will they taste better than those from other brands? Will the staff be enthusiastic in introducing the products? These factors will determine whether Xueji’s new venture is a success.
If Xueji succeeds, it could set an example for traditional snack brands looking to transition to the fresh snack market. If not, it might just be a trial attempt to follow the trend.
Conclusion
Xueji’s return to fresh snacks is both a strategy to address its weaknesses and a response to market trends. However, its ability to establish itself in this highly competitive market will depend on its ability to truly deliver on the promise of freshness through its products and customer experience, rather than just opening new stores for show.