The rise in costs poses a significant challenge to food enterprises, but this challenge is unlikely to change within a few years. It can be anticipated that the CPI will increase every year from now on. Therefore, food enterprises need to prepare psychologically and adopt corresponding response measures both in the short term and long term.
Response measures should be considered from two aspects: one is short-term response measures, and the other is long-term response measures.
In the short term, consideration should be given mainly in the following three areas:
1. Price Increase. Whether it's direct price hikes or through other means such as reducing weight to raise prices, price increases are the fastest method. In this regard, especially the leading enterprises in the industry should take the lead in raising prices because of their large scale and high brand recognition. Consumers trust them more, and food expenditure as a proportion of household support is decreasing. When all prices are rising, it is normal for enterprises to raise prices, and consumers can accept it. To some extent, price increases bring more benefits to leading enterprises than to small and medium-sized enterprises.
2. Improve Cost Efficiency. The main costs for enterprises are divided into two parts: marketing costs and management costs. Generally speaking, marketing costs far exceed management costs. Therefore, improving the efficiency of marketing costs is the most important. Many companies have great potential to improve their advertising fees, channel promotion costs, and personnel costs.
3. Maintain cost stability through bulk procurement, futures, and other means, and reduce reliance on labor through mechanization, thereby reducing costs. The prices of raw materials for food enterprises, such as pork, flour, eggs, vegetables, and packaging materials, fluctuate significantly by season. Enterprises can collaborate with large suppliers to devise ways to reduce procurement costs, such as paying part of the goods in advance to lock in prices and supply quantities, rather than buying as needed.
In the long term, consideration should be given mainly in the following three areas:
1. Brand Enhancement. As consumers' awareness of food safety gradually increases, incomes rise, and food expenditure as a proportion decreases, the value of brands in the food industry will become increasingly important. Consumers are willing to pay higher prices for more reliable and well-known brands. This trend is accelerating. In terms of enhancing the brand, enterprises should first define a clear, market-oriented, competitive brand image, and then convey the company's brand to consumers through various means. It should be emphasized here that brand building today cannot rely solely on advertisements; more needs to be done through consumer participation and experience.
2. Product Upgrade. Consumers' spending levels are continuously improving, and many enterprises that constantly upgrade their products see increasing market share and profits, adapting and capturing the trend of consumption upgrades. For example, Kang Shi Fu’s high-end product ratio is getting higher, and the sales of Want Want Pier are rapidly increasing. The sales growth rate far exceeds the industry growth rate. When expanding from Beijing, Shanghai, Guangzhou to other provincial capitals and economically developed prefecture-level cities, they are almost invincible. The price of Want Want Pier is at least 30% higher than other brands, while many companies' gross profit margin is only 30%.
3. Product Innovation. Innovative products have relatively poor price comparability and can achieve relatively high gross profit margins. For example...