1997 was an unforgettable year for Lujiu.
That year, the media exposed the Qin Chi blending scandal. Lujiu, which once occupied the C position of CCTV advertisements, was knocked back to its original form. Shandong liquor's status in the industry was in decline.
The fate of enterprises is unpredictable. A group of black sheep have been eliminated by the times, and another group of talented horses have begun to thrive.
Sichuan Wine took advantage of the situation and seized the market vacancy left by Lu Wine. The "Biao Wang" of the Spring Festival Gala has shifted, and Tuopai is willing to take over .
A few years later, a similar fate happened on the Qianyi Pet Track. This time, Shandong won.
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At No. 8 Mudanjiang Road, Liaocheng, Shandong, a gray and white building comes into view.
In the upper right corner of the building, two huge Chinese characters for "Guai Bao" are very eye-catching. This is a leading pet food company with annual revenue of more than 2.5 billion yuan and is sprinting towards GEM .
Recently, Guobao Pets has updated its prospectus, and the IPO review status has also entered the inquiry stage.
If Guabao Pets is successfully listed, it will become the third Shandong pet food company to be listed on A shares after Zhongchong Co., Ltd. (002891.SZ) and Luce Co., Ltd. (832419.BJ).
Shandong will also take this opportunity to become the "king" on the pet food track, gathering together the three leading companies.
In fact, in the early years, the people who contracted cat food and dog food were not people from Shandong, but people from Hebei next door. Located in Nanhe District, Xingtai City, Hebei Province, has always been known as the "Hometown of Pet Food in China".
At that time, the market of nan and feed industry was saturated, and the profits of enterprises were extremely low, so the government guided them to transform into pet food. As a result, Nanhe District occupied more than 60% of China's pet food market.
However, it is easier to start a business than to keep it. Especially in the food field, one safety incident is enough to wipe out years of efforts.
In 2020, the self-media platform "Microstory" exposed the "Hebei poisonous cat food" incident.
According to reports, many pet food companies in Hebei will mix platycodon powder into cat food in order to save costs. The result of this operation is a low protein ratio and an imbalance of calcium and phosphorus, which ultimately leads to kidney failure and shortened life span of pets.
Almost overnight, "Hebei Grain" was labeled as a "dirty grain" by the outside world, and its reputation dropped to freezing point.
From the perspective of raw materials, Shandong has unique conditions for making cat food and dog food.
The raw materials of pet food mainly include chicken, duck meat, animal bone meal, corn, grains, etc. Coincidentally, Shandong Province is not only a major agricultural province - the first and only province in the country with a total agricultural output value of over one trillion yuan; it is also a major province of poultry products, such as Jinluo , Delis and Xiwang. Food, Longda Meat, etc. are all in Shandong.
Shandong Province slaughters nearly 3 billion chickens and ducks every year, accounting for half of the country.
In 2021, Shandong’s pet food output reached 268,000 tons, accounting for 23.7% of the national total, an increase of 6 percentage points over the previous year.
Moreover, the growth rate of pet food production in Shandong is also the fastest in the country.
According to China Feed Industry Association statistics, the total national output of pet feed (dog and cat food) in 2021 is 1.1298 million tons, an increase of 17.3% compared with 2020. Although Hebei is still the largest pet feed production province in the country, with output reaching 429,800 tons in 2021, it only increased by 3.6%. Shandong grew by 59.3% year-on-year, much higher than the national average (23%).
According to Tianyancha, as of now, there are more than 80,000 surviving enterprises in Shandong Province whose business scope involves "pet food", making it the province with the largest number.
People from Shandong are contracting dining tables for pets.
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Compared with countries such as Europe, America, and Japan, my country’s pet economy developed decades later. Behind the development of Shandong's pet food industry is actually a history of domestic substitution.
In 1995, Mars, the world's largest pet food company, built China's first pet food factory in Huairou, Beijing, kicking off my country's pet economy.
At that time, Qin Hua, the founder of Guobao Pets, was still a civil servant in Yanggu County, Liaocheng, Shandong. Earlier, he was a physics teacher at Yanggu No. 2 Middle School.
It was not uncommon in the 1980s and 1990s for civil servants to go overseas to start their own businesses.
Before founding Guobao Pets, Qin Hua first worked at Liaochenga large broiler production and processing companyShandong Fengxiang for several years, and was promoted from CEO assistant to vice president, and later became the deputy mayor of Anle Town, Yanggu County .
An inspection experience in the United States allowed Qinhua to see opportunities in the pet food track.
He found that Americans love pets very much. Instead of feeding their pets with leftovers, they have special pet food, usually made of chicken and duck meat.
It is much cheaper to produce and process chicken and duck meat in China than in the United States. Why not produce it in China and export it to the United States?
In 2006, 38-year-old Qin Hua resigned as deputy mayor, founded Guobao Pets, and began the pet food export business.
Qin Hua is not the first civil servant to sell cat food. Before him, Hao Zhongli of ZhongChong Co., Ltd. and Guo Hongqian of and of Luce Co., Ltd. had already tasted the benefits.
Hao Zhongli was a high school teacher in Siping, Jilin, and came to Yantai, Shandong in the 1980s to do international trade business. Because he often deals with foreign customers, Hao Zhongli has long discovered the "money scene" of the pet food track. In 1998, Hao Zhongli began to get involved in the field of pet food.
At almost the same time, Guo Hongqian also started a pet food business. However, Hao Zhongli is eyeing the Japanese market, while Guo Hongqian is targeting North America, and his products are mainly exported to the United States and Canada.
They are involved in pet snacks, a subdivision of the pet food industry, that is, chicken jerky products.
This is also related to the advantages of Shandong’s raw materials mentioned above. At that time, Hao Zhongli rented a small factory building in Yantai and registered his own brand "Wanpy naughty ". "Naughty" once became synonymous with chicken jerky and is the earliest well-known trademark in China's pet industry.
Later, pet food companies such as Guabao Pets, China Chong Co., Ltd., and Luce Co., Ltd. began to "conquer cities and territories" in the international market.
Take Guabao Pet as an example. Thanks to its cost advantage, the dog food, cat food and other products produced by Guabao Pet are best-selling in the United States, and exports have doubled for four consecutive years. By 2011, Guabao Pet was already one of the largest pet food processing companies in China, with exports accounting for more than 20% of the industry's total exports.
In 2020, the total output value of pet snacks in Shandong Province was approximately 8 billion yuan, accounting for about 15% of the total pet food in the country. There are 73 pet food processing companies exporting, with export value reaching US$320 million, and export volume ranking first in the country.
But this has undoubtedly moved the cheese of the foreign pet food industry.
In September 2018, the United States imposed an additional 10% tariff on Chinese exports with a total value of US$200 billion. The product list clearly stated that Guabao Pets exported pet food to the United States. In May 2019, the United States once again raised the original 10% tariff to 25%, making the export business even worse.
Fortunately, the domestic pet economy is on the rise. Qin Hua, Hao Zhongli, and Guo Hongqian all saw the opportunity at their doorstep.
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It’s hard to imagine that in China, cats and dogs eat 130 billion yuan a year.
According to the "2021 China Pet Industry White Paper", last year, the number of people raising dogs and cats in my country reached 68.44 million. Among them, the number of dog owners is 36.19 million, and the number of cat owners is 32.25 million.
In 2021, the size of my country’s pet (dog and cat) consumer market will be 249 billion yuan. Ten years ago, this number was only 33.7 billion yuan, with a compound annual growth rate of 31%.
Pet food is the largest market segment in the field of pet consumption.From 2012 to 2021, the market size of my country's pet food industry increased from 15.7 billion yuan to 128.2 billion yuan, more than eight times.
In the early days, when domestic pet food companies were first established, they mostly used their advantages in labor and raw materials to produce OEM products for foreign pet food companies.
Although OEM can also get out of Shenzhou International (2313.HK), Foxconn (601138.SH) and other companies with a market value of 100 billion, pet food OEM is greatly affected by raw material prices and exchange rate. With low interest rates, it's not exactly a good business.
In 2013, Guobao Pets created its own brand "McFudiMyfoodie" and began to focus on the domestic market. The
prospectus shows that from 2019 to 2021, Guabao Pet’s revenue was 1.403 billion yuan, 2.013 billion yuan, and 2.575 billion yuan respectively; its net profits were 4.16 million yuan, 111 million yuan, and 140 million yuan respectively. In 2021, the total sales revenue of private brands will be 1.33 billion yuan, which has exceeded half of the total revenue, with a compound growth rate of 37.29%.
The domestic market revenue share of China Chong Chong Co., Ltd. and Luce Co., Ltd. is also gradually increasing.
In 2021, China Chong Petrochemical Co., Ltd. achieved revenue of 2.882 billion yuan, with domestic revenue accounting for 23.97%, an increase of 6 percentage points from 2018; Luce Co., Ltd. achieved main business revenue of 458 million yuan, and domestic revenue was 75.862 million yuan, a year-on-year increase 10.96%.
Moreover, the 618 peak battle report released by JD.com Pets this year shows that "McFudi" under Guabao Pets has entered the TOP3 matrix, second only to Royal. In the 2021-2022 Tmall pet TOP brand power list, "McFudi" is ranked first.
At one time, more than 80% of the Chinese pet food market was divided up by international brands. Nowadays, more and more domestic brands are rising.
As a gathering place for pet food companies, Shandong has also attracted more and more capital attention.
In addition to the already listed Zhongchong Shares and Luce Shares, Guabao Pets, which is in the process of IPO, and Shandong Shuike Pets, which makes pet food, also completed the Pre-IPO round of financing at the end of May this year.
It is understood that this is the 8th round of financing completed by Shuike Pets in three years. Shuike Pets is a key company planning to be listed in Yinan County, Linyi, Shandong. In May last year, the Yinan County Local Financial Development Service Center went to Shuike Pet to conduct corporate listing and financial guidance research.
In Shandong, many cities have made it clear that they will vigorously support the pet industry.
Linyi City, where Shuike Pet is located, proposed to establish a pet food industrial park in accordance with the requirements of the "14th Five-Year Plan" for the feed industry in Shandong Province, and introduce pet feed, feed additives, pet feed raw materials, pet feed machinery , and testing testing and other advantageous industries, and vigorously support the development of pet-related high value-added industries.
The Liaocheng Development Zone where Guabao Pet is located is one of the first national-level export pet food safety demonstration zones in the country. Starting from 2020, a total of no less than 100 million yuan has been allocated for three consecutive years to support the development of the pet industry. , Liaocheng Development Zone has also set a small goal: striving to build a nationally renowned "pet industry capital" in 3-5 years. The rise of
may take time. In the future, it is inevitable that domestic brands and international giants will compete in the Chinese pet market.
But obviously, domestic brands are ready to "wrestle" with them.
