KFC opened a milk tea shop, but the fried chicken burger can’t be sold? /Grandpa Zizai Tea official website
KFC sells Internet-famous tea. is not sold at the dessert station, but an independent brand "Grandpa Zizai Tea" has been hatched.
Recently, Grandpa Zi Zai Tea’s first store in the country opened in Suzhou . Most of the young people who check in come for the conflicting combination of traditional fast food giants and Internet celebrity tea drinks.
did not disappoint. The main colors of the store are peach pink and grass green, which is full of Instagram style; the logo image is somewhat similar to the KFC colonel, but the wrinkles have been smoothed, and the Chinese style gown is put on, and the cheeks are painted Blush.
The cute "Grandpa KFC". /Grandpa Zizai Tea official website
"KFC Grandpa becomes younger " is the first reaction of consumers, and it is also the effect that KFC wants.
From 2016 to the first half of 2021, myths about the Internet black tea track appeared frequently. When Heytea carried out the B+ round of financing, some investors lamented that "it's hard to squeeze in even if you squeeze your head"; Nayuki's Tea, "the first new tea drink stock", was listed on the Hong Kong Stock Exchange; tea Yanyese store In the past, there were long queues every day, giving rise to the "cross-city sales agency" service... According to statistics from Qichacha, during this period, there were a total of 78 financing incidents for domestic tea drink brands.
As a "veteran" who has been deeply involved in China's fast food market for 35 years, KFC did not enter the market when the Internet tea economy was at its peak. Instead, it added this business line only after 7 years of development. It was not just to get a piece of the pie, more It's because -
it panicked.
What kind of tea did grandpa make?
saw from the Grandpa Zizai Tea Mini Program that the price of a small cup of tea is 13-19 yuan, and a large cup is 16-23 yuan. You can optionally add other toppings such as grape jelly and cheese milk cap for 2-4 yuan.
From a price point of view, Grandpa Zizai Tea focuses on the mid-range consumer market, which is the most stable strategy. According to the "2020-2021 Chinese New Tea Drink Industry Development Report", 57% of consumers prefer tea drinks with a price of 10-15 yuan, and 27% of consumers will choose tea drinks with a price of 15-20 yuan. The pricing of Grandpa Zizai Tea is in line with the psychological expectations of more than 80% of tea drink consumers.
The most expensive one is the Yangzhi Manna Smoothie, and the cheapest one is the pure tea series. /Grandpa Zizai Tea Mini Program
Tea beverage category is also seeking stability and taking the popular route. Grandpa Zizai Tea has launched 4 series, namely rice milk tea, pop lemon tea, fruit tea and dim sum series.
rice milk tea is a flagship series, made with homemade rice pulp and tea, and added with water chestnuts , orange red cake and other ingredients;
burst lemon tea and fruit tea series, including the guava tea that became popular last year , tangerine tea, there are also classic poplar nectar , milk cap pure tea;
snack series, including egg tarts, Swiss roll, small fresh meat shortbread , etc., and a small amount of ice cream -
Grandpa Zizai Tea Official website
Grandpa Zizai Tea is still in the trial and error period, but its business strategy is quite cautious. Its pressure comes from KFC, which operates behind the scenes.
KFC has high hopes for Grandpa Zizai Tea and is willing to share its manpower, technology platform and distribution chain resources with it.
According to the media "Mingming Company", Grandpa Zizai Tea and KFC have opened up a membership system. When consumers place an order for tea, they will receive KFC points at the same time. The employee systems are also interconnected, and the salary is the same 22 yuan/hour. As the number of stores increases in the future, Grandpa Zizai Tea can share waiters with KFC on the same floor to solve the manpower shortage problem in advance.
Grandpa Zizai Tea’s official website also writes that KFC’s production process, quality control and safety management experience accumulated over the years will become its advantages and will also save it a large amount of operating costs.
stands from the perspective of KFC and spares no effort to cultivate another independent brand. This is to inject fresh blood for itself and its parent company Yum China , and to open up the development path of trendy culture and new consumption in order to bring the people born after the millennium to the market. The post-00s and post-10s generations embraced her.
But thinking about it from another angle, KFC’s courage to enter the unfamiliar field of online tea may also be because the fast food industry is no longer in its comfort zone.
KFC was hit.
KFC also created myths.
In November 1987, China's first KFC opened in Beijing.On the menu, a set meal of "2 pieces of finger-licking original chicken + chicken juice mashed potatoes + cole slaw + small meal bag" is priced at 7.3 yuan. This is a very high price in the year when the per capita monthly disposable income in the country was only 83.5 yuan. luxury.
But the combination of novelty and Westernness can ferment the temptation. On the opening day, the store with a total area of 1,460 square meters and three floors could not accommodate the influx of consumers. On average, each person had to wait 2 hours for a seat. The store clerk even asked the police for help to maintain order at the scene.
Zhang Qinghong was one of the first employees of KFC’s first store in China. According to her recollection, KFC was "open but not closed" every day, and at closing time at 10 p.m., there was often a long queue outside the door.
KFC has brought about the "foreign fast food trend" in China. /network
This trend began to cool down in the early 2000s. With the popularity of the Internet in China and the popularity of overseas travel, Chinese people have more and more ways to contact the outside world, and "Western flavor" is no longer attractive.
In 2004, KFC shouted the slogan "Based in China", thus starting the model of combining Chinese and Western styles. During this period, Chinese food categories such as hot dry noodles, fried noodles, hot pot skewers, beef rice bowls, and preserved egg and lean meat porridge were launched, which attracted high attention and topics in a short period of time.
But after the popularity dissipated, most of the new Chinese food products were criticized by consumers as "tasty" and "nondescript", and disappeared from the menu. Some netizens ridiculed that KFC's new product development idea is "just hit it randomly, and it will catch the fire."
Chinese scholar He Mingke once used Dianping's data monitoring to analyze Yum Group and KFC's operating conditions changes from 2006 to March 2015. He pointed out that the shares of Yum Brands and KFC in China's catering market both reached their peak from 2008 to 2010, and then declined all the way; while the national catering industry consumption increased year by year with the CPI (Consumer Price Index), KFC's per capita consumption has been declining for many years. No change, excluding inflation factors, we can conclude that people's actual spending on KFC has actually decreased.
This means that the traffic brought by KFC’s “combination of Chinese and Western” gimmick, has not achieved the effect of stimulating consumption.
The controversy over the marketing strategy has not yet shaken the foundation of KFC. But the outbreak of the epidemic in 2020 has really put it in crisis.
The financial report shows that in 2021, Yum China's restaurant profit was only 13.7%, 1.2 percentage points less than the 14.9% profit margin in the same period the previous year; the adjusted net profit was US$525 million, a year-on-year decrease of 15%; the same store Sales, a measure of how well a store is doing, fell 1% year over year. KFC's same-store sales fell 3% year-on-year.
Looking at the Q4 2021 data alone, the situation is even more severe. Yum China's adjusted net profit fell 93% year-on-year, and same-store sales fell 11% year-on-year; KFC's operating profit fell 68% year-on-year, and same-store sales fell 12% year-on-year.
has entered Q1 of 2022, and its financial report is still not good. Yum China's same-store sales fell 8% during the same period, while KFC's fell 9%. Yum China CEO Yang Jiawei said in the Q1 financial report conference call that if the external environment does not improve in May and June, "Yum China is expected to experience operating losses in Q2 and there will be great pressure on performance growth."
Looking at China Yum’s financial report for Q3 2021 alone, the situation is not optimistic. KFC is one of the two major brands under Yum China (the other is Pizza Hut ). The two influence each other. The rise and fall of Yum China's financial report data can also reflect the situation of KFC. /China Yum Financial Report
In addition to the decline in data year by year, the change in consumer preferences has also put KFC in a mess.
According to the "2021 Catering Industry Digital Research Report", the post-95s generation contributed nearly 40% of total catering consumption in 2020, making them the largest catering consumer group. But compared with those born in the 1980s and 1990s who loved fried chicken burgers, 82% of those born after 1995 said they were more willing to buy healthy food with low oil, low salt and low sugar, and 65% of those born after 1995 were willing to pay for healthy, high-quality food. Pay a premium for the product.
Following Western culture, fried food has also lost its appeal among young people. KFC needs to find a new outlet, and Grandpa Zizai Tea is one of them.
Fried chicken is no longer tasty./Tu Chong Creative
Can the online black tea business be successful?
In the past, KFC sold tea at the dessert station.
In 2018, KFC opened a Tiffany blue dessert station in Beijing, with a large number of tea drinks on the menu. With the development of business, the dessert station has successively launched new series of oolong tea, dirty tea, milk tea and other series, and also sells various types of ice cream. Yum China's 2018 Q4 financial report shows that the quarterly sales of KFC dessert stations increased by more than 30% year-on-year.
The success of the dessert website in the early years gave KFC the confidence to turn it into an independent business.
But building a tea brand is different from selling tea at a dessert station. Internet celebrity tea economy can be popular. In the final analysis, it is that sells trend culture, third space and new social methods. allows young people to obtain the psychological satisfaction of belonging to the public and showing their individuality.
This tests the brand's premium ability. is the ability to attract consumers to spend more than the market price of the product to purchase corresponding products. For example, the premium price of luxury brands is to satisfy vanity; the recently popular home aromatherapy brings consumers a pleasant experience and emotional healing effect.
mentioned earlier that KFC is good at creating gimmicks, but the monetization rate of captured traffic is low and consumers do not pay. According to a 2015 survey released by market consulting firm Millward Brown, only 25% of sellers believed that "KFC is different", while three years ago in 2012, this proportion reached 42%. Both examples of
can prove that KFC has not yet mastered the trick of increasing its premium capability, does not know how to give its products higher value, and it is difficult to help consumers find emotional resonance points.
Scholar He Mingkobi compared the coffee performance of KFC and McDonald's on Dianping and pointed out that KFC's coffee users have been falling behind more and more since 2014 in driving per capita consumption. This means that when promoting the same drink, KFC's ability to gain consumer recognition is not as good as that of its competitor, McDonald's. Looking at the entire new beverage market, KFC will have more competing products and it will be more difficult to win. /He Mingke
What’s more, looks at the online black tea industry, and it is no longer as brave as it used to be.
In 2021, Naixue's tea suffered a net profit loss of 145 million yuan, Heytea was deeply involved in layoffs, Cha Yanyuese ushered in the third wave of store closures, Lele Tea announced its withdrawal from South China ...
In order To adapt to the overall slowdown in the Internet celebrity tea market and increasingly fierce competition, they have to bow to reality. In March 2022, Naixue's tea will reduce prices across the board, with product reductions as high as 10 yuan, completely bidding farewell to the 30 yuan era, and launching a low-price series of 9-19 yuan. Heytea had already lowered the price of milk tea, fruit tea and other products earlier, with the price reduction ranging from 3 to 7 yuan.
The situation of industry giants is still like this, and it is even more difficult for small brands to do business. Data from iiMedia Consulting show that only 18.8% of milk tea shops across the country can operate for more than one year in 2021.
Let’s take a closer look at Grandpa Zizai Tea:
The product features are not distinctive – In addition to the original rice milk tea, the other poplar nectar, tangerine tea, grape meat tea, etc. are all leftovers from Heytea and Naixue tea.
Product quality evaluation is average - On Dianping, Grandpa Zizai Tea, which has been open for less than a month, has received many negative reviews, mainly focusing on taste (too sweet/ lemon tea too astringent/not very special) place), poor management (no one clears the tables). The overall score of the
store is only 3.5 points, with taste, environment and service not exceeding 4 points. Both Heytea and Naixue's Tea, which are both located in Suzhou and target similar consumer groups, have overall store ratings of over 4 points, with the highest score for a single store being 4.7 points. Even Mixue Bingcheng , which specializes in low-price gimmicks and does not pay so much attention to taste, has a store rating of 3.7 or above in Suzhou.
Some of the public reviews of Grandpa Zizai Tea./ Dianping
Grandpa Zizai Tea, as seen so far, lacks innovation and has a poor reputation among consumers. The KFC behind it also does not understand the real needs of consumers and lacks the ability to increase product premiums. In addition, it has missed the opportunity to enter the Internet celebrity tea industry. It’s a good time, so I would like to ask:
Grandpa Zizai Tea, what can you use to win over other brands?
KFC’s reputation alone is not enough to ensure the development of a brand new brand. How will Grandpa Zizai Tea survive and how far can it go? For KFC, there are still many problems to solve.
References
[1] Grandpa Zizi Tea: Can the new tea brand incubated by KFC be "zizi" in China? |Financial Breakfast
[2] In the 30 years since KFC entered China, what else has it done besides selling fried chicken burgers? |爱faner
[3] KFC's operating profit dropped by nearly 70% in the fourth quarter, analysis of the investment prospects of the burger industry | Zhongyan.com
[4] From a "hot cake" to a burden, what happened to KFC China? |First Financial Weekly
[5] After so much, how is KFC? |He Mingke
[6] Yum China’s revenue last year was US$9.853 billion, and its performance fluctuated significantly due to the epidemic | 21st Century Business Herald
