Recently, China's leading kitchen staple food company October Rice Field released its 2024 mid-term financial report.

Financial reports show that in the first half of the year, rice fields achieved revenue of 2.621 billion yuan, a year-on-year increase of 17.7%, maintaining a relatively rapid growth rate on the basis of years of continuous growth; adjusted net profit was 0.149 billion yuan, an increase of 30.6% year on year, reflecting a significant increase in overall profitability.

Combined with industry data, the revenue growth rate of rice fields in October outperformed the zero growth rate of grain, oil and food companies during the same period, leading the grain and oil industry. It is also one of the few enterprises in the industry that recorded both revenue and net profit growth. Development resilience and competitiveness have improved.

The reason for this is that the most important point is the release of innovation momentum in rice fields in October. Specifically, we might as well discuss the two core dimensions of products and channels.

Innovate and develop corn products to become the second growth curve

Looking directly at financial data, the increase in income from rice fields in October in the first half of the year mainly came from grains, beans, and other product categories. Revenue from this category reached 0.726 billion yuan, up 151.9% year on year, and its share of revenue rose to 27.7%, weakening the short-term impact of adjusting rice sales prices and product mix, and ensuring overall rapid growth.

Source: Company Financial Report

The rapid increase in revenue in this category is mainly due to rice paddies actively working on new categories and products in October to achieve breakthroughs in sales of corn products. The underlying logic is still to meet consumer demand through innovation.

From a category perspective, the public's demand for staple foods gradually evolved from being full to being healthy, nutritious, and unburdened. Corn follows this trend to become a new staple food. Coupled with the public's demand for convenient and diversified meals, it has jointly driven its supply-side upgrade. In this context, the pace of branding and marketization of corn accelerated, and the forward-looking layout of rice fields in October became the leading brand on the corn circuit.

From a product perspective, October Rice Field made many innovations in product form. It successively developed more than 30 products covering sub-categories such as corn cobs, corn segments, corn kernels, popcorn kernels, and corn kernels, which are suitable for staple foods, snacks, and complementary foods, etc., and developed small package designs, etc., to fully meet these needs. The layout of corn also enabled rice fields to enter the FMCG market in October, and has the ability to increase product value and profit margins.

In terms of actual sales, it is reported that October rice field corn products have obtained Frost & Sullivan's “Leading Sales in the Corn Category” certification (data as of March 2024), and continue to “dominate” the major e-commerce platforms.

Looking further, the deeper reason for leading the way in rice field corn sales in October is that it carried out a full chain transformation of corn, a primary agricultural product, to create a highly competitive product through innovation in quality and efficiency.

October Rice Field has now set up corn planting bases in Liaoning, Jilin, Heilongjiang, and Inner Mongolia. Northeast China, Ukraine, and the US Golden Corn Belt are also known as the “Three Golden Corn Belts”. The corn grown has unique advantages in terms of nutrition and taste. At the same time, in October, rice paddies set up automated factories close to plantations to ensure that corn only takes less than 6 hours from farmland to the factory to ensure the taste of corn to the greatest extent possible.

This series of initiatives involves the development of scarce resources such as high-quality production areas and the accumulation of long-term operations. It is also difficult to replicate, and has built a deep moat for October rice fields.

Optimize the multi-channel ecosystem to help expand your business

At the channel level, the online channel sector in the rice field maintained a relatively rapid growth of 14.3% in October in the first half of the year, consolidating its competitive advantage; the offline channel sector accounted for 32.2% of revenue, an increase of about 2 percentage points. Revenue from all three segments grew, and the multi-channel ecosystem was continuously optimized.

Source: Company Financial Report

Furthermore, in October, rice paddies paid more attention to laying out high-potential energy channels to further free up space on both sides of revenue and profit.

As can be seen, it has adjusted the online channel structure, while reducing investment in low-margin channels on e-commerce platforms, while opening new stores and increasing promotion and brand exposure on several social e-commerce platforms, driving self-operated store revenue surging 203.2%; actively expanding channels such as modern supermarkets and direct customers offline, increasing product sales and brand influence through high-traffic physical retail spaces, strengthening cooperation with catering companies, and anchoring the high-quality development trend of the catering industry, driving revenue growth of 35.2% and 24%, respectively.

Behind this, October Rice Field has set up a professional combat team based on the characteristics of each channel, continuously exploring the development experience of each channel, reorganizing the rules, and embarking on a unique development path with refined operation, and superimposing marketing innovation capabilities, etc., such as launching large-screen airport advertisements and elevator media advertisements through offline channels to improve the communication efficiency and super exposure of brands and categories, help consumers recognize the brand in 3 seconds, and fully stimulate multi-channel effectiveness.

This also provides solid support for rice paddies to create new big products in October.

Taking the corn category as an example, after the launch of the corn product, in October, rice fields quickly promoted its broad channel layout, including deepening the development of JD, Tmall, and Douyin platforms, modern supermarkets, dealer networks, and linking offline to accelerate word-of-mouth marketing, etc., to help its sales continue to rise with multi-channel efficiency. In July, the corn category also began a new round of national offline dealer recruitment, which is expected to once again usher in accelerated growth.

epilogue

Overall, the resilience and elasticity of rice paddies in October became more and more prominent. Breakthroughs in categories from rice to corn, and the layout of the deep cultivation of the multi-channel ecosystem have enabled them to upgrade their business structure, enhance resilience to risks, and find more incremental growth.

This also brings more development possibilities and imagination to the future. In October, rice fields can achieve more performance, and strategically replicate and iterate on the basis of this proven mature model, breaking through more new staple food tracks, forming multiple growth curves.