① Affected by factors such as macro-level consumer demand falling short of expectations and increased competition in the industry, Fuling Mustard's mustard sales declined slightly in 2023; ② Fuling Mustard's general manager Zhao Ping explained that currently the direction of pre-prepared dishes from Sichuan and Chongqing is in the R&D, commissioning and market research stage, and new products such as mustard instant soup have been developed to closely follow market conditions and strategic promotion schedule plans; ③ The company plans to expand to third- and fourth-tier cities to explore market growth.
Financial Services Association, April 12 (Reporter Wu Weiling) The decline in revenue of Fuling Mustard (002507.SZ) in 2023 has become the focus of investors' attention. At the company's 2023 annual results briefing held today, investors frequently asked questions about the reasons for changes in revenue, how the company is coping with the decline in mustard sales, and the impact of competitive products.
The company's general manager, Zhao Ping, confessed at the meeting that the mustard industry is a completely competitive industry. Affected by factors such as macro-consumer demand falling short of expectations and increased competition in the industry, the company's mustard sales declined slightly in 2023. The company will continue to stick to its main business and develop in a multi-category matrix. With mustard as the center, it is developing in the direction of “mustard +”, categories related to mustard, Sichuan-style compound seasoning, and pre-prepared dishes from Sichuan and Chongqing.
“Currently, the direction of ready-made dishes from Sichuan and Chongqing is in the R&D, commissioning and market research stage. New products such as mustard instant soup have been developed, and the future will keep up with market conditions and strategic layout progress.” Zhao Ping said.
According to the announcement, the year-on-year changes in the company's total revenue from 2021 to 2023 were 10.82%, 1.18%, and -3.86%, respectively. By category, the company's revenue from mustard, radish, and kimchi fell 4.56%, 25.99%, and 6.51%, respectively, year on year in 2023.
At the meeting, some investors asked, “What specific measures does the company have to solve the problem of weak revenue?”
In response, Zhao Ping said that the response to mustard products is mainly through measures such as consolidating traditional offline channels, expanding emerging online channels, developing empty markets, and increasing the coverage of main products.
“Currently, the company's channel layout is mainly in Tier 1 and 2 cities and some Tier 3 and 4 cities. Among them, third- and fourth-tier cities account for relatively few. It will continue to expand in the future. Particular emphasis is placed on expanding to third- and fourth-tier cities with a consumer population and consumption capacity but lacking the company's products to explore market growth.” Zhao Ping said.
At the same time, investors are looking forward to live e-commerce. Xie Zhengjin, the company's securities affairs representative, explained at the conference that currently the company uses official accounts and cooperation with celebrities to broadcast live broadcasts irregularly on Douyin, Kuaishou, and Tmall live streaming platforms to spread the brand and sales products through various methods such as cooking Kuaishou dishes during live broadcasts, eating and broadcasting during live broadcasts, and connecting to wheat during live broadcasts. In the future, the company will also strengthen the daily operation of official accounts, enhance communication with consumers, and carry out live streaming activities in various formats and contents.
It is worth noting that in 2023, at the three production bases in Fuling, Meishan, and Northeast China, the actual output was lower than the design production capacity, the company still initiated civil construction of the Wujiang Fuling Mustard Green and Intelligent Production Base (Phase I) project at the beginning of that year, which raised questions from investors.
Source: Fuling Mustard 2023 Report
Xie Zhengjin responded that after completion of the project, it will raise the company's production and operation level in terms of production capacity, cellar pool capacity, integrated production of various categories of products, digital marketing, etc., and replace some of the existing old production capacity. At the same time, the company will gradually purchase and install product production lines according to current consumer market demand, and gradually release new production capacity.