The young people shouted, "Hurry up!"!, 70 yuan per kilogram of duck neck

Recently, once the semi annual reports of the "three giants of braised meat" were released, discussions such as "duck necks are selling again" and "young people love to eat duck necks again" resumed.

From the data of the semi annual report, in the first half of this year, except for the slight decrease of 2.98% in the revenue of Huangshanghuang, both Zhouhei duck and Juewei Food achieved a double increase in business and profit, of which Zhouhei duck's net profit increased by 453.6%, earning 102 million yuan in the half year.

In the same period last year, the net profits of the "three stewed flavor giants" fell collectively, and Zhouhei duck and Juewei Food fell by 92% and 80.36% year on year.

As consumption rebounds, are young people really willing to pay for duck necks again?

Are duck necks selling again?

From the data, Zhouhei duck's income from ducks and duck by-products in the first half of this year was 1.108 billion yuan, up 19.3% year on year; The revenue from flavorless food and poultry products was 2.282 billion yuan, a year-on-year increase of 4.93%.

In fact, the net profit growth of these companies is not entirely due to selling more duck necks.

A very obvious data shows that in the first half of this year, the net profit attributable to the parent company of Huang Shanghuang increased by 3.32% year-on-year, but the revenue did not increase synchronously, but decreased by 2.98% compared to the same period last year. Among them, the sales volume of meat processing industry decreased by 10.63% year-on-year, and the revenue of sauce braised meat products decreased by 1.66% year-on-year.

Although the revenue of Juewei Food and Zhouhei duck in the first half of the year increased by 10.91% and 19.8% year on year, it can be seen that the proportion of income from poultry products or duck products is decreasing. According to data, in the first half of 2023, the proportion of revenue from poultry products from flavorless foods decreased from 66.98% in the same period last year to 62.94%, a decrease of about 4 percentage points.

Zhouhei duck is the same. In the first half of this year, the company's revenue from ducks and duck by-products decreased from 78.7% in the same period last year to 78.3%, a decrease of 0.4 percentage points.

The reason why the net profit of the "three giants of braised food" can resume growth is not only due to the sales recovery brought by the recovery of consumption, but also due to the significant reduction in market subsidies and related expenses.

Data shows that in the first half of 2023, the sales expenses of Juewei Food were 262 million yuan, a year-on-year decrease of 33.74%, mainly due to a decrease in advertising and promotional expenses and franchisee subsidies.

During the same period, the three expenses of Huangshanghuang decreased by 22.6531 million yuan year-on-year, mainly due to a significant decrease in sales expenses such as direct store rental fees and market promotion and publicity expenses.

The launch of new products has also played a certain role. For example, Zhouhei duck continued to expand the non duck product track in the first half of the year, and added spicy and barbecue flavors to the Shrimp balls series of large single products. During the reporting period, the tax inclusive sales of Shrimp balls series of products exceeded 120 million yuan.

In addition, Zhouhei duck also launched a new series of items with a price of 9.9 yuan. In the first half of 2023, the company's new product terminal sales including tax accounted for over 20%.

In response to an interview with China News Service, the Securities Department of Juewei Food also mentioned that in order to improve operational efficiency, the company has responded to the impact of raw material prices by improving its single store model, optimizing product structure, and strengthening new product research and development.

Cost pressure is still significant

From the semi annual reports of Juewei Food, Zhouhei duck and Huangshanghuang, we can see that in the first half of this year, the braised food industry still faced greater cost pressure, leading to a collective decline in gross profit margin.

Data shows that in the first half of 2023, the comprehensive gross profit margin of Huangshanghuang was 27.99%, a decrease of 2.05 percentage points compared to the same period last year. Among them, the gross profit margin of sauce braised meat products was 29.55%, a decrease of 3.52 percentage points year-on-year.

In the same period, Zhouhei duck's gross profit margin also decreased from 56.9% in the first half of 2022 to 52.5%. According to Wind data, in the first half of 2023, the sales gross profit margin of Juewei Duck Neck was 23.31%, a decrease of 4.71 percentage points from the same period last year.

One of the main reasons for the decline in gross profit margin is the increase in raw material prices. According to Huang Shanghuang's disclosure, based on the fluctuation trend of main raw material prices in the first half of 2023, due to the shortage of personnel in the northern raw material supply market after the Spring Festival, the supply of goods is in short supply. The market prices of the company's main raw materials, such as duck feet, duck wings, and duck necks, have all significantly increased. Among them, the highest price of duck feet has risen to 37.60 yuan/kg, duck wings to 19.80 yuan/kg, and duck necks to 27.80 yuan/kg.

Zhouhei duck also mentioned that at the beginning of 2023, under the background of insufficient supply and soaring demand of raw materials, the price of the company's main raw materials continued to rise, far exceeding the average level of previous years, and the cost side pressure increased sharply.

Starting from the second quarter of this year, the prices of related raw materials have gradually fallen. According to a recent research report by Guoyuan Securities, since April, the supply side of duck seedlings has increased, and the daily average seedling investment in mid May has exceeded the level of the same period in 2019. The institution expects that the cost side of halogen product companies is expected to reach a turning point.

However, in Zhouhei duck's view, the current price of raw materials is still at a historical high. The high cost of raw materials and the higher costs expected to be incurred by the new processing plant in Chengdu may affect the company's profitability.

Juewei Food also mentioned that the differentiation of the braised food market is accelerating, and brands below the waist are facing survival pressure. Top enterprises are also facing cycle tests, and the industry needs to overcome the difficulties of increasing operating costs such as raw materials, logistics, and labor. The supply-demand balance also needs time to further repair.

Will prices continue to rise?

While the net profit of the "three stewed flavor giants" has resumed growth, the roast of netizens about "more and more expensive duck necks" have also kept rising.

A netizen said, "I bought a duck neck for 15 yuan on the weekend, and when I came back to count it, it was eight and a half yuan." "Whatever I weigh, a few yuan will cost me tens of yuan.". Others roast, "It's not expensive, but you can't sell things like this. Before buying, you agreed that you would only need a little, but then you still weighed a lot, so you can't refuse if you are sure of your good face".

▲ Netizen comments

Ms. Zhao from Beijing also deeply understands this. "Every time I go to buy a duck neck, I always tell the salesperson in advance to grab less, but they still grab a lot and weigh it for fifty or sixty yuan. It's really expensive, I can buy a whole pickled duck."

How expensive are duck necks nowadays? Zhongxin Jingwei saw on the takeout platform that in Beijing, Zhouhei duck locked the fresh duck neck, which was about 300 grams in a large box and sold for 42 yuan, so it was about 70 yuan per kilogram; The large box of duck wings weighs about 230 grams and is priced at 34.9 yuan, which is about 75.87 yuan per kilogram; A large box of duck feet weighs approximately 225 grams and is priced at 35 yuan, which is approximately 77.78 yuan per kilogram; The large box of duck heads costs 23.9 yuan, only two, and one is about 11.95 yuan.

Juewei Duck Neck is slightly cheaper. 240g of duck neck sells for 29.8 yuan, about 62.08 yuan per kilogram; Two duck heads are 18 yuan, one is about 9 yuan. 50 grams of Huangshanghuang duck neck are sold for 6.9 yuan, about 69 yuan per kilogram.

According to data, in 2012, the unit price of one kilogram of Zhouhei duck duck neck was 45 yuan. At the current price of 70 yuan per kilogram, the increase exceeds 55%.

At the beginning of 2023, Guoyuan International once mentioned in its research paper that in the fourth quarter of 2022, the cost pressure of Zhouhei duck's raw materials has gradually appeared, and the trend is expected to continue until 2023. The price of some large items such as duck neck and duck paw is expected to rise by more than 30%.

According to the semi annual report, the passenger price of Zhouhei duck in the first half of this year was 62.01 yuan, up about 4.87% year on year.

Under cost pressure, the relatively stable price of Juewei Duck Neck has also started to rise in price. At the beginning of 2022, Juewei Food raised the prices of some products by 5%. In July of the same year, it further adjusted the prices of certain categories such as duck feet and squid, with an average increase of 7% to 10%.

Guoyuan Securities pointed out that under the background of rising costs, halogen product companies have successively taken measures such as price increases and structural optimization to reduce the impact of costs.

On the 12th, China Singapore Jingwei respectively sent interview letters to Zhouhei duck, Juewei Food and Huangshanghuang on issues such as price increase expectations. As of the time of writing, Zhouhei duck and Huangshanghuang had not replied.

Juewei Food stated that its product pricing policy is influenced by various factors such as fluctuations in raw material prices and economic environment. According to different situations, the company flexibly adjusts the end price policy based on market conditions in different regions.

As for whether there will be a price increase plan in the future, the company did not directly answer, but only stated that the company's product costs are jointly affected by factors such as the overall economic environment and changes in raw material prices. The continuous optimization of the company's cost structure can effectively reduce the impact of raw material price fluctuations and continuously enhance the company's risk resistance ability. In addition, the company will further improve its supply chain system, continuously strengthen the construction of digital, intelligent, flexible and other capabilities, and continuously improve efficiency and reduce costs.