Three Squirrels are in trouble again, and the status of the snack king is not guaranteed!

      Good fortune is hidden by misfortune, and misfortune depends on good fortune. This sentence is not an exaggeration to describe the three squirrels.

      On Double 11 just past, Three Squirrels won the first place in the sales of casual snacks in 14 core and new e-commerce channels, including Tmall, JD.com, Taobao, JD.com, Tmall Supermarket, Douyin, Kuaishou, Vipshop, Suning.com, Taobao Live, JD.com Live, Dangdang, JD.com Group Shopping, Duodian 14 core and new e-commerce channels.

      As a result, it was revealed in the past two days that the Three Squirrels had food quality and safety problems again. Many consumers posted on Weibo to expose the whole story and defend their rights, saying that the three Squirrel snacks they bought on Double 11 had problems with mold and spoilage to varying degrees.

      As the "leader" of the casual snack category, this is no small matter, so the exposure and tracking of various media are followed one after another. Three Squirrels' attitude is absolutely responsible to the end. They said that they had paid 1,000 yuan in compensation to the consumers in the incident and agreed to send the moldy nuts back for testing and investigate the reasons for the product.

Food problems occur repeatedly

      Food is the first priority for consumers, food safety is greater than the worst. But for Three Squirrels, it seems that they have become accustomed to it, because this is not the first time that it has been exposed to food quality and safety issues, and has been on the list repeatedly due to food safety issues.

      According to online information, Three Squirrels can be said to be on the list for many years. In February 2016, the Three Squirrels were exposed to exceeding the standard of saccharin. Immediately in May of the same year, they were fined 56,300 yuan for adding medicines to food and producing food with non-food raw materials.

      In August 2017, the former State Food and Drug Administration issued an announcement that the three squirrels pistachios were on the list, and there was a problem of mold exceeding the standard, which was 1.8 times higher than the national standard, and was fined 50,000 yuan.

      In 2019, flies appeared in the bread of Three Squirrels: In October 2020, the carcinogens of Three Squirrels' original crispy potato exceeded the standard; in May this year, according to the random inspection announcement issued by the State Administration for Market Regulation, the peroxide value of a batch of open pine nuts in Three Squirrels exceeded the standard, with an exceeding range of up to 3.4 times.

      In addition, problems such as eating canned fruits from three squirrels and moldy beef chestnuts also occur from time to time. It is said that the three squirrels have also fallen into the vortex of "food carcinogens exceeding the standard".

      There are 1,575 complaints about the Three Squirrels on the Black Cat Complaint Platform, involving many food issues such as product swelling, eating insect eggs, moldy, and spoilage. However, the Three Squirrels have not yet responded to this food safety accident through official channels.

Shareholders withdrew, and market value evaporated by 20 billion

      Three Squirrels officially landed on the Shenzhen Stock Exchange GEM on July 12, 2019. It has been listed for more than two years. Before June 2020, Three Squirrels were all making rapid progress. It took less than a year to double the stock price again, and at its highest total market value was close to 36 billion yuan.

      But after June 2020, the stock price of Three Squirrels continued to fall. According to media reports, the stock price of Three Squirrels fell to its lowest price of 34.01 yuan per share in March 2021, a drop of more than 60%. At present, the latest market value of Three Squirrels is only 16 billion yuan, a shrinking 20 billion yuan compared with the high point.

      According to the report of The Paper, Three Squirrels revealed in the third quarter report that the company's second largest shareholder, NICE GROWTH LIMITED, and its joint actor, GAO ZHENG CAPITAL LIMITED, reduced their holdings by 0.52% respectively. At the end of September this year, Three Squirrels issued a pre-disclosure announcement of shareholders' share reduction, saying that the two will also reduce their holdings of the company's shares in the next six months, totaling no more than 24.06 million shares, that is no more than 6% of the company's total share capital.

      It is said that LT GROWTH, the second largest circulating shareholder under Today Capital, also made a reduction in holdings. It reduced its holdings by about 2% in one year, cashed out hundreds of millions of yuan, and further reductions will be made in the future.

      Multiple shareholders have successively reduced their holdings, which shows that capital is not optimistic about the future development of Three Squirrels . In fact, Three Squirrels has indeed fallen into a downward trend in the past three years. In the financial report of the first half of this year, Three Squirrels' promotion fees and platform service fees have reached 721 million yuan, accounting for 65% of the overall sales expenses in the current period, a surge of 81% compared with 398 million yuan in the same period last year.

      Three Squirrels had an annual revenue of 9.794 billion yuan in 2020 and a net profit of 301 million yuan, while the annual revenue in 2018 was 7.001 billion yuan, but its net profit was 303 million yuan. Comparison between the two is what the media said about increasing revenue but not increasing profits.

Is it all caused by OEM?

      As soon as the incident happened, online analysis mostly attributed the problem of Three Squirrels to OEM factories, believing that it was caused by the hidden dangers of the OEM factory model. This conclusion is not groundless, as the Three Squirrels call themselves snack porters.

      Because Three Squirrels do not have the ability to produce snacks and do not directly produce snacks. They adopt the "Official Brand + OEM" business model. Three Squirrels has multiple suppliers jointly supplied, and then they are uniformly labeled as the "Three Squirrels" for sale to the outside world, and finally reach the consumers.

      This model does make the Three Squirrels develop faster because the assets are light enough. As the saying goes, success is Xiao He and failure is Xiao He. The "Official Brand + OEM" model also laid hidden dangers for the food safety of the Three Squirrels.

      In the annual reports of Three Squirrels in recent years, it has been mentioned many times that upstream suppliers fail to produce in accordance with relevant laws and regulations and company requirements, the quality control system and standards are not strictly implemented, and the production and testing process is improperly operated, which leads to the inability to completely avoid food quality and safety control risks.

      At this point, the reason is basically clear, and it is indeed the trouble caused by the OEM model. Since food safety issues occur every year for many years, Three Squirrels should make a profound review of their own model, otherwise food accidents will continue until one day the brand's life is ruined.

Thoughts of the Founder of Three Squirrels

      For entrepreneurs, his company is his work. The development of a company is not only related to the trend of the times, but also to the founder. The founder determines the development direction of the company, the formulation of strategies, and the tactical approach.

      Three Squirrels are no exception. In today's dispersed traffic, Three Squirrels decided to shrink the front line, focus on nuts, not just e-commerce, but also enter offline distribution. These are the decisions of its founder Zhang Liaoyuan, which is also the result of his thoughts on the company's strategic transformation and brand value in recent years.

      In 2012, Zhang Liaoyuan took seven years to become a snack food brand of 10 billion yuan. However, after entering 10 billion yuan, Zhang Liaoyuan fell into a turning point in the development of the enterprise, and in the end he set himself the goal to complete a leap from 10 billion to 100 billion yuan in 2030.

      As an Internet food brand that has risen by traffic, Three Squirrels is the harvester of traffic dividends, but today's traffic pattern is also different from the past. Zhang Liaoyuan understands this very well. As he himself said, in the era of traffic centralization, whoever can grasp the channel dividends with the greatest efficiency will be successful. This means that merchants must continue to extend their brand and sell more things to the consumer group. However, entering the era of decentralization of traffic, people's demand for products is becoming more and more professional and refined. If the brand's positioning is too broad and cannot be focused, it will not be able to build the user's mind and the long-term value of the brand will not be able to be established.

      This is also the fundamental reason why Zhang Liaoyuan decided to shrink the front line and focus on nuts.

      Zhang Liaoyuan also mentioned that the online efficiency is the highest when the brand goes from 0 to 1; but most of the life radius of people is still offline, and to make the brand from 1 to 10, you still need to get offline. The private brand retail model is effective in special stages, but in the era of specialized division of labor, it is inefficient. Compared with self-built channels, the optimal solution is to utilize social efficiency.

      In Zhang Liaoyuan's view, the new brand strategy model should be: from 0-1 online and from 1-10 offline. He believes that to ensure good quality and high price, to use sales and build products, to quickly build a brand with the Internet, to achieve the brand from zero to one, and then rely on the brand potential to enter the offline mainstream distribution terminal, and complete from 1 to 10. E-commerce is not everything, the Internet and supermarkets are all traffic.

      This is the fundamental reason why Zhang Liaoyuan decided to change his previous tactics, not just e-commerce, but to move into offline distribution.

      Of course, Zhang Liaoyuan also said that the ultimate battlefield of business is not a channel or traffic, but should be the mind of consumers. He has a deep understanding of entrepreneurship. In his eyes, development is actually a long-term career, but the entrepreneurial mistake that entrepreneurs are prone to make is that when survival becomes a habit, development is easily overlooked.

      Since the founder has such a clear mind, the company will not be dizzy. Three Squirrels are repeatedly involved in food safety issues, just reminding Zhang Liaoyuan to quickly implement his cognition and put it into every link, including the cooperation and production of OEM factories.

      I hope to see the new three squirrels in the near future. The three squirrels that no longer have food quality problems, have gone from tens of billions to tens of billions of billions of dollars.