OEMs with disparities in gross margin of edible oil are afraid of upsetting success

Not satisfied with the low gross margin of OEM, after many years of OEM production for leading enterprises such as goldfish and Fulinmen, more and more OEM enterprises are transforming from OEM and wholesale to growth of their own brands. However, industry aides said that although there are many success stories in the new forces, with the increase of brand concentration in the edible oil market, new entrants with limited financial strength and operational capacity are afraid to shake the style of the edible oil market dominated by Yihai Jiali and Zhongliang.

OEM enterprise cluster transformation

After Changminghua, Xiwang and other brands have gained a firm foothold in the edible oil market, another old edible oil OEM company has issued a transformation to grow its own brand. Recently, at a press conference in Beijing, Chen Shengbo, CEO of Jiamei Food Marketing (Beijing) Co., Ltd., introduced that the corn oil products of its own brand will be sold in Beijing, Tianjin and Hebei within the year.

According to the previous data released by the China Food and Oil Association, the self-sufficiency rate of edible oil in China is less than 40%, while AC Nielsen's retail sales statistics of large and medium-sized supermarkets and convenience stores show that by the end of last year, soybean oil accounts for 33% of the domestic edible oil market, and harmonious oil accounts for 30%, while corn oil rises from 6% three years ago to 12%, surpassing peanut oil for the first time, ranking third.

"Whether from the lack of domestic supply in the overall market of edible oil or the agile expansion of the corn oil market, we conclude that the new brand of corn oil still has a wide space for growth." In Chen Shengbo's opinion, besides the above two reasons, there is another main reason that their parent company, KangEnfeld of Hebei Province, has been doing OEM for Yihai Jiali and Xiwang brand enterprises for many years, and the accumulated experience in this era has also become the capital for the company to enter the edible oil market.

In fact, not only Jiamei, but also there are many examples of the transformation of famous enterprises from OEM in the domestic edible oil market. At present, before Xiwang, who occupied an inevitable share of the corn oil market, he produced small packaged corn oil for Yihai Jiali and Zhongliang Brands, such as Golden Dragon Fish, Fulinmen, etc. until 2009, he began to operate the brand of "Xiwang". As a Shandong enterprise, Samsung Corn Property Technology Co., Ltd. began to produce corn oil in 1998 and to work as an agent, and launched its own brand in 2006. FLOWER.

According to industry assistants, goldfish has no raw material base of its own, while China Food and Agriculture Corporation has its own raw materials, but it is far from enough to meet its market demand. It is because they need some enterprises to produce raw oil for them in accordance with their technical requirements, while large enterprises are better encapsulated and responsible for the marketing and promotion of obscene products. Edible oil OEMs emerged as the times require.

Gross interest rates vary widely

In fact, the domestic edible oil market has already entered the oligopoly era. At present, China has 26 million tons of edible oil market. The proportion of small packaged edible oil is less than 20%, and that of bulk oil is more than 80%. Although there are thousands of rare brands in the country, the first-line brands with real influence are also in the hands of three or four brands, namely, goldfish, Fulinmen and Luhua. The total sales volume accounts for the national market sales. One third of the volume. In the corn oil segment market, 60% has been occupied by goldfish under Yihai Jiali and Fulinmen under Zhongliang. So in this market, why do some enterprises abandon the processing of drought and flood to enter the oligopoly style edible oil market? Chen Shengbo's answer is simple: to pursue high profits.

Although Chen Shengbo did not reveal the profit gap between the two different modes of operation: generation processing and independent brand, Xiwang, the same agent, disclosed publicly at the beginning of the transformation that the gross interest rate of bulk corn oil was only 12.6% in 2009, while the gross interest rate of brand corn oil was 24%, and the gap between them was widening. According to Xiwang's annual earnings report, the gross profit rate of small packaged edible oil is as high as 35.83%, which is close to six times that of bulk corn oil.

"Profit is the first consideration for OEMs to launch their own brands." The food industry researcher of CIC staff suggests to Jianjun that OEMs are only responsible for the production sector and miss the profit margin brought by branding, while the profits brought by brands are often immeasurable. OEMs with certain industry production experience can not only gain surplus profits from brands, but also enhance their own growth by introducing self-supporting brands. Self-reliance.

Another industry assistant who refused to sign revealed that although the edible oil market has entered the era of pan-monopoly, the food safety crisis faced by large enterprises due to OEM processing has also been regarded as an opportunity for some agents who grasp the craft to enter the market. The person suggested: "An executive of Yihai Jiali Group once confessed that the hidden concern of goldfish in the corn oil market was that the company could not control the upstream link of corn germ processing, so if the quality control of the manufacturer presented problems, it would give other businessmen the opportunity to fish in troubled waters."

OEMs are afraid of upsetting success

However, in the view of industry assistants, the domestic edible oil market, goldfish and Fulinmen have comparative advantages in all aspects, leaving limited market space for follow-up enterprises.

Similarly, Zhu Danpeng, a researcher at China Food Business Research Institute, hinted to Beijing Business Daily that he was not optimistic about the prospects of OEM transforming into a self-supporting brand. He believes that once the OEM launches its own brand, it needs to face the new issues of upstream raw material procurement and terminal market operation, which is not covered by OEM, so it does not have advantages. Moreover, Yihai Jiali and Zhongliang are two major brands.