The mixture of wheat flour and water goes through high temperature and high pressure, then add pepper, monosodium glutamate and salt to infiltrate into the taste, make different shapes, and package them into bags one by one. This is the whole process of making spicy gluten.

Due to the low cost of raw materials and simple process, the retail price of spicy gluten on the market can even be as low as a few cents per pack. But such "cheap" snacks have a "divine" status in the hearts of most post-80s and 90s in China-spicy gluten was popular in primary and secondary schools at a time when there were few entertainment facilities and snacks.

It's just that no one expected that this trend has lasted for a long time and swept the world. This year, many years later, spicy gluten has not only become a new era of "national snack", on the list of American luxury food, and even spawned a listed company.

On Nov. 19, it was reported that Weilong, China's largest spicy gluten brand, plans to raise US $1 billion in Hong Kong's IPO next year. It is reported that Weilong is currently working with China International Capital Corporation, Morgan Stanley and UBS to discuss a listing in the second half of next year.

Wei long was founded in 1999 by Liu Weiping, who has only a high school degree. In the spicy gluten industry with low production threshold and unknown brands, Weilong has chosen to establish its own strong brand image through modern production means and diversified product lines in a unique way of marketing. in just a few years to seize the "spicy gluten" status and maintain so far.

Under the fresh air of snack food, spicy gluten is being involved by many foreign players, such as three squirrels, quality shops, Baicaowei, Yanjin shops and other online celebrity snack brands have added spicy gluten to their product matrix.

In addition, under the new trend of healthy food, how to take off the hat of "junk food" for spicy gluten with high oil, high salt and heavy flavor? For Wei long, the test is still heavy.

The kingdom of spicy gluten established by high school students

Liu Weiping was born in Pingjiang County, Hunan Province in 1978. Here, almost every household makes dried soy sauce (bean products, mostly salty and spicy), and the main source of income of Liu Weiping's family also depends on his mother making and selling dried soy sauce. Liu Weiping also learned the good skill of making dried sauce from his mother from an early age.

1998 Hunan floods, heavy losses of agricultural products, soybean production capacity dropped sharply, in order to support the family, dried sauce producers can only use wheat flour instead of soybeans, creatively invented a taste similar to the sauce dried "big gluten", this is later the "spicy gluten".

From 1997 to 1998, Liu Weiping, who graduated from high school, worked in a Taiwan-funded enterprise in Guangdong. he found that although there were 2,000 to 3,000 people here, the management was very good, so he also came up with the idea of starting his own business. "I just want to learn from other people's model and do it myself. "

Liu Weiping first thought of the production of spicy gluten he was familiar with. On the entrepreneurial address, he finally circled the Luohe on the main line of the map-he had no concept of Luohe before, and only a fellow-villager who was familiar with Luohe told him, "say there is a Shuanghui over there." I think Shuanghui is very good at making ham sausages, so I'm going there, too. "

Luohe is an important city of the food industry in Henan. There are not only Shuanghui, but also local food leading enterprises such as Nanjie Village, Australia's Li, and Beixu. It has also attracted domestic and foreign heavyweight food enterprises such as Goldman Sachs Group of the United States, DuPont of the United States, Japan Ham Co., Ltd., Rakuten of South Korea, Cofco Group, Wangwang Group, CP Group and other domestic and foreign heavyweight food enterprises to set up local factories to invest.

According to the data disclosed by Luohe Daily and Dahe Daily in September 2019, the annual business income of Luohe food industry accounts for 6% and 60% of the annual business income of the whole province, and there are 10 local top 100 enterprises in the food industry of the whole province.

So in August 1999, Liu Weiping boarded the No. 2153 train, came to Luohe at 3: 00 in the morning, found a room with four beds, and spent 10 yuan to book the only bed left to settle down.

At first, Liu Weiping was only produced in a small workshop. Bring artificial meat and bean skins from hometown, mixed with Hunan spicy seasoning, the products are sold on the market, the response is good.

In 2000, Liu Weiping had dinner with his fellow villagers and found a kind of food called beef noodles. Liu Weiping finally found the production place of beef noodles, which is also a small workshop with only one simple puffing machine.

Liu Weiping paid a deposit and asked the shopkeeper to improve the mold. A week later, when the product came out, he added some caramel and chili noodles and turned it into a brown product, a bit like eel, so he named it "eel stick". Later, because it was difficult to write the name, he changed it to "fish stick". Later, "fish sticks" is also called "spicy gluten" by more and more people because of its unique spicy taste.

In 2002, Liu Weiping's production of beef noodles soared, gradually increasing from one machine to dozens. In 2003, he registered the trademark of "Weilong", and "Weilong spicy gluten" was officially born.

One theory about the origin of the name "Wei long" is that Jackie Chan's kung fu movies were popular all over the country in 2003, and Jackie Chan became Liu Weiping's idol, so he combined the word "Wei" in his name with Jackie Chan's "dragon" character and named the spicy gluten "Wei long".

After more than ten years of development, Weilong has become the largest spicy gluten brand in the country.

At the partner meeting in 2020, Liu Weiping, chairman of Weilong, revealed that the overall revenue of Weilong in 2019 was 4.909 billion yuan, an increase of more than 40% compared with the revenue of 3.5 billion yuan in 2018. At the same time, Liu Weiping also said that Weilong's revenue target for 2020 is 7.2 billion yuan, which is expected to increase by nearly 47 percent on the basis of 2019.

According to a picture circulated on the Internet, Weilong's sales target is 10 billion yuan in 2022.

From a small spicy gluten factory to a giant enterprise with billions of dollars in annual revenue, how does Weilong do it?

Why did Wei long become a "dragon"?

Liu Weiping has said that Weilong produces 300 to 40 million bales of spicy gluten every day, accounting for 10 per cent of the country's spicy gluten industry. At present, there are more than 1000 spicy gluten manufacturers in the country.

Weilong's growth all the way to its present scale has something to do with several key changes in its development history.

Due to the low threshold for the production of spicy gluten, family workshops exist widely in this industry, and the lack of industry standards has left a big hidden danger to the industry-food safety.

In fact, for a long time, spicy gluten industry food safety incidents have occurred frequently, in the eyes of consumers, spicy gluten has been synonymous with "low-end junk food".

In December 2005, CCTV exposed the use of the banned additive dimethyl fumarate (commonly known as Dimethyl Fumarate) in a food factory in Pingjiang County, and the notoriety of spicy gluten "junk food" due to illegal additions and dirty production environment.

In 2007, the former AQSIQ listed Pingjiang as a national food safety priority county, setting off another round of industry rectification.

From 2015 to mid-2017, a total of 195 batches of spicy gluten from 131 spicy gluten production enterprises in 15 provinces across the country were included in the "blacklist" of the former Food and Drug Administration.

Spicy gluten received the first shot in food safety exposure at the CCTV 315 gala in 2019. The party exposed a spicy gluten food called "Shrimp bullshit", which was covered with dirt in the workshop, and the main method was to add various additives to the flour. Other spicy gluten factories have also found that workers even touch semi-finished food products directly with their hands.

These situations have dealt a big blow to the spicy gluten industry, such as the 2005 scandal, when the number of producers plummeted from 2000 to 500as a result of declining performance.

During this period, Weilong was also affected and affected. This makes Liu Weiping realize strongly that only food safety can keep the cause of spicy gluten.

So around 2005, Weilong Food began to upgrade the factory, invested millions of yuan, bought an expensive production line from Europe, and changed the packaging machine from semi-automatic to fully automatic, through a modern process to ensure quality control. Since 2006, Weilong began to expand its production base to Zhumadian, Fugou and other places.

In order to improve the brand image, Weilong also began to explore in marketing.

In fact, Liu Weiping is a marketing master. In the early days of Wei long, Liu Weiping targeted the consumer groups of primary and secondary school students, and provided free spicy gluten at the school gate for children to taste and understand their tastes.

In order to make the packaging of spicy gluten look good, Weilong has also reformed the outer packaging of spicy gluten, changing the 12-centimeter large package into a smaller one, making it convenient for students to put it in their clothes pocket, and changing the transparent packaging into foreign-style aluminum foil and aluminum film packaging.

In order to promote spicy gluten, Wei long adheres to the "mass line". Promote your own spicy gluten by posting small advertisements on the street, writing soft articles and giving lectures on health knowledge. For example, it is rumored that in the early days, Liu Weiping hired a large number of farmers to lay out the ground and put up posters and flags everywhere, with Luohe as the center, radiating 100km and 200km around, from Carrefour and Walmart Inc to small shops in schools and communities.

According to Liu Weiping, "Weilong" spicy gluten first took root in Luohe, which must first open the Luohe market, and then expand to Zhengzhou, and then to the whole province of Henan and the whole country.

At the beginning of opening up the market, Weilong spicy gluten set the standard of "600 pieces a day" for dealers. If it does not reach the order quantity of 600 pieces a day, it will not open up the next customer. For Weilong, it can not only ensure that the sales volume of the products can keep up, but also have a quantity basis, and customers will pay more and more attention to it.

In the brand image building, Weilong opened the star endorsement line. In 2010, Weilong teamed up with Zhao Wei to launch the Weilong classic series; in 2012, Yang Mi was invited to endorse a series of products such as "kiss burning" and "kiss dried beans".

After the popularity of mobile social products such as Weibo Corp and Wechat, Weilong's marketing began to move towards the line of "Internet celebrities", shooting parodies imitating "truant Veyron" and directing and starring in Tmall's official website "being hacked". When iphone7 went public, Weilong also launched "Hot Gluten 7", which mimics the picture on Apple Inc's home page.

"We have specially set up a marketing and design company in Hangzhou, where there is the soil and talent for the development of Internet culture, and they came up with these ideas. They are all young people and have a better understanding of what consumers like better now. This is also a way for us to entertain and popularize our traditional products. Liu Weiping, who was promoted to the head of "Internet celebrity", once told Dahe Daily.

Even in the face of the most acute questions about health and safety, Liu Weiping responded positively, and even used Taobao live broadcast to invite Internet celebrity Zhang Quanyan to the Weilong workshop to show the whole process of spicy gluten production, with 200000 people at the peak of the broadcast room. it caused a lot of reaction.

At the beginning of this year, Liu Weiping also revealed to the media that he would build brand-new factories and workshops to create a more intelligent Wei long.

This series of measures not only brought a lot of online exposure to Weilong, but also made it establish an image different from other spicy gluten manufacturers.

In the report of the two sessions of Henan Province this year, Dahe Daily wrote about Wei long, as the "handle" of the spicy strip world, Weilong Food has successfully "stepped out of the circle" through a series of upgrades and creative marketing in recent years. let consumers see a different "spicy gluten brother": fashion, close to the people, health, convenience.

In the process of marketing touching the net, Weilong's sales also began to march online in 2015. In a short time, Wei long quickly settled in Tmall, JD.com, No. 1 store, Taobao Mall and other major e-commerce platforms.

Wei long disclosed at the 2020 partner meeting that of the total revenue of 4.909 billion yuan in 2019, the revenue from direct sales of terminals was 2.55 billion yuan, that of circulation channels was 1.8 billion yuan, and that of e-commerce channels was 559 million yuan. This also means that Weilong spicy gluten online accounts for about 10% of total revenue.

In addition to production capacity and marketing efforts, Weilong is also good at product innovation.

The traditional taste of spicy gluten is mainly salty and spicy, and the spicy Prince, which is owned by another well-known brand in the spicy bar world, insists on the spicy taste. Weilong, on the other hand, has created a "sweet and spicy" taste, which is less spicy than that of other families.

This is because Weilong's survey found that in addition to Hunan and Sichuan, people in more areas prefer spicy food. For example, in Guangdong, the largest sales area, Cantonese people have a light taste and do not like spicy food. So Weilong improved the taste of spicy gluten, reducing the spiciness of the original spicy gluten from spicy to sweet and spicy, which is more in line with public taste.

A market research conducted by the School of Food Science and Technology of Hunan Agricultural University also found that when buying spicy gluten, "71.1% of consumers choose sweet and hot taste, and salty and hot and sour taste can be accepted by nearly 20% of consumers. Less than 7% of consumers prefer other flavors. "

In 2019, when Weilong's annual income was close to 5 billion yuan, the annual income of Yufeng, which insists on spicy taste, was less than 600 million yuan, which proved this conclusion to some extent.

Although it started with spicy gluten, in fact, today, Weilong's products are already more than spicy gluten. Its product line is constantly enriching and expanding.

In 2014, Weilong invested a lot of money to set up a third food production base, which led to the completion of crisp noodles and konjac production lines, and Weilong entered the broader spicy snack food market.

When the self-heating food boom broke out around 2017, Wei long actively followed up and launched the self-heating hot pot brand "scapegoat" for people with heavy tastes in Sichuan, Hunan and Chongqing, focusing on the spicy taste of Sichuan and Chongqing. In 2018, Weilong launched "self-cooked" spicy gluten hot pot products, the layout of convenient food market.

Weilong began to sell Hot and Sour Rice Noodles and charcoal-roasted sausages on Tmall in 2019. The retail price of the former is 7.9 yuan, and the cooking method is similar to that of instant noodles. It only needs to be soaked in boiling water for 5 minutes. While charcoal-roasted sausages cost 180g per pack, the price is 19.9yuan. Wei long set the eating scene is the "appetizer" before eating Hot and Sour Rice Noodles and hot pot.

It's not just about spicy food. In 2020, Weilong launched a brand-new series of Marinated Egg products.

According to the official website, Weilong Food has created dozens of products in four categories: noodle products, bean products, konjac products and vegetable products. According to Liu Weiping, in 2019 alone, Weilong used nearly 200000 tons of agricultural and sideline products such as flour, kelp, soybeans, peppers and konjac.

How does Wei long "defend" the dragon?

Spicy gluten belongs to the leisure snack industry, is ushering in the development opportunity.

According to the "snack Industry Development report under the background of consumption upgrading" released by the Circulation Industry Promotion Center of the Ministry of Commerce, the total output value of the snack industry may be close to 3 trillion yuan in 2020.

Spicy gluten, as one of the market segments, is also expanding rapidly in recent years. According to the Analysis report on the Development trend and Investment profit of China's spicy Gluten Industry from 2020 to 2026 released by Zhiyan Consulting, the market size of the spicy gluten industry in 2019 is 65.1 billion yuan, with an annual compound growth rate of 8.59%. It is estimated that the market size of China's spicy gluten industry is expected to reach 94.9 billion yuan by 2026.

In fact, spicy gluten is a very profitable product. Zhu Danpeng, a Chinese food industry analyst, has said that the average gross profit margin of spicy gluten is close to 50%. However, there is no national leader in the industry, and even Weilong, which has the highest share, has a market share of less than 10% of the industry as a whole.

High gross margin naturally attracts capital to join in. At present, online celebrity snack brands such as three squirrels, good product shops, Baicaowei and Yanjin shops have all entered the spicy gluten industry.

Take Yanjin store as an example, in the second half of 2017, Yanjin shop introduced a professional team of spicy gluten to start the spicy gluten project. Enter the spicy gluten market in 2018, launch "Little New Prince" coarse grain spicy gluten, and hire star Lin Gengxin as spokesman and chief brand officer.

In the spicy gluten business, Yanjin shop has achieved good results. Its financial report shows that in 2019 and the first half of 2020, the revenue of Yanjin spicy gluten business was 49.4136 million yuan and 27.51 million yuan respectively, up 13817.12% and 29.77% over the same period last year.

Zhang Xuewu, chairman of Yanjin store, said at the 2019 annual shareholders' meeting held in early 2020 that "spicy gluten has great potential to be tapped. This year, the company will officially enter the spicy gluten industry and strive to reach 1 billion yuan in sales within five years." and strive to spend four to five years to achieve the second position in the spicy gluten industry.

In 2019, the candy brand Golden Monkey launched a series of six spicy gluten during the Chengdu Sugar and Wine Fair, challenging Weilong and selling them in Beijing, Shanghai, Zhengzhou and Guangzhou.

Golden Monkey, Yanjin shop in the field of snacks for many years, such a large-scale investment in the spicy gluten industry, and intentionally or unintentionally compete with Weilong. It can be seen that as a big brother in the spicy gluten industry, Wei long will inevitably become the target of public criticism.

Can Weilong keep its status as "the first brother of spicy gluten"?

In terms of strength, the advantage of Weilong is not obvious. According to FMCG's retail monitoring in Shanghai and surrounding areas, Weilong ranked fifth in bulk snack food in 2017, Yanjin store ranked 10th, Yanjin store maintained the ranking in 2018, Yanjin store rose to seventh place, and the two sides are getting closer.

In the face of competition, Weilong has carried out channel reform. In 2018, Weilong set up 18 business areas, implemented all-channel sinking, fully covered the terminal, promoted dynamic display, and made Weilong products everywhere.

Even in March 2019, there were media reports that Weilong issued a notice to dealers, requiring them to choose one of the two: if they represent Weilong's products, they cannot represent other brands.

In the sales channels of leisure snacks, Tianfeng Securities believes that e-commerce channels in the leisure snacks industry are developing rapidly, but KA (large chain) is still the main channel. Compared with 2015 and 2018, KA channel declined slightly, but still accounted for about 60% of the market share.

A survey of spicy gluten purchase channels by the School of Food Science and Technology of Hunan Agricultural University also showed that supermarket purchases accounted for 49.48%, small stores accounted for 39.09%, and online purchases accounted for only 8.52%.

In the view of many consumers, online purchase not only takes time, but also requires more quantity to be delivered to your door. another problem is that "the packaging of spicy gluten is mostly in plastic bags, which is very easy to leak oil." "

In addition to channel occupancy, Weilong also faces a problem of upgrading its own brand.

Over the years, no matter how Weilong upgrade, high-oil, high-salt, heavy-flavored spicy gluten has not completely got rid of outside doubts about its health and hygiene. A questionnaire survey conducted at a middle school in Sanming City, Fujian Province showed that 98% of the students thought that spicy gluten contained ingredients harmful to human health, "but they are not sure what it is."

In fact, even Wei long, which actively uses the fully automatic production line, still has to face this problem in recent years.

Since 2005, constant negative news has made the big players in the spicy gluten industry realize that the industry must establish a set of standards in order to regulate it.

In 2007, leading enterprises such as Hunan Yufeng Food, Hunan Wanghui Food Co., Ltd., Hunan Xianyu Food Co., Ltd., located in Pingjiang, jointly declared the local standards of the gluten industry in the name of Pingjiang County Food Industry Association. finally, it signed the "Hunan Local Standard (Xiangwei flour cooked Food)" with the Hunan Provincial Standardization Committee.

At the same time, Henan Province, where Weilong is located, has also established its own set of standards. On December 20, 2007, Henan Province issued a local standard for "seasoned Noodle Food (DB41)", which defines spicy gluten as "seasoned noodle products".

However, these two standards have since become a source of disputes over health problems in the industry. according to Hunan standards, spicy gluten belongs to extruded pastry and follows pastry standards in terms of additives, while according to Henan standards, spicy gluten belongs to seasoning noodles products. Reference is the provisions of pastry and puffed food.

The key difference between the two standards is that according to Henan standards, spicy gluten can add some preservatives, such as sorbic acid and its potassium salt and dehydroacetic acid and its sodium salt. Therefore, this is also known as the "North-South struggle" of the spicy gluten industry.

Different standards have caused trouble for Weilong. Since 2018, Weilong brand products have been repeatedly named by Ningbo, Guiyang, Shanxi, Hubei and other market supervision administrations and food and drug administrations, and a number of products have been determined to be unqualified products. the reason is that sorbic acid and its potassium salt and dehydroacetic acid and its sodium salt preservatives are added to Weilong related food.

These news attracted a lot of attention at that time, and the idea that Wei long's spicy gluten was unhygienic spread among users.

Weilong felt wronged in the face of this result, and the company said at the time that it was implementing Henan standards, according to which sorbic acid, potassium salt, dehydroacetic acid and sodium salt could be used in pastries and expanded foods. therefore, the above two additives can be used for spicy gluten.

However, with the announcement on strengthening the quality and safety supervision of seasoning noodle products issued by the State Administration of Market Supervision and Administration at the end of 2019, the Henan standard was abolished and settled. The new standard means that Weilong will no longer use sorbic acid and its potassium salt (sorbic acid) and dehydroacetic acid and its sodium salt (dehydroacetic acid).

In addition, the new standard also sets requirements for spicy gluten in terms of health, advocating reducing salt, oil and sugar, and requiring spicy gluten production enterprises to improve production processes and product formulations with reference to the relevant requirements of the Dietary guidelines for Chinese residents. Formulate food enterprise standards, reduce the content of salt, fat and sugar in seasoned noodle products, and improve the nutritional and health level of products.

In fact, in recent years, spicy gluten enterprises have focused on building their healthy concept when launching new products. For example, when Yanjin Shop launched the "Little New Prince" spicy gluten series, it was mentioned that oats and corn were added to the raw materials to blend into dietary fiber, meeting the R & D direction of "green, healthy and delicious" and "four declines" in production, that is, reducing the content of sugar, oil, salt and additives in the products.

In order to cope with the new changes, Weilong also began to make efforts in research and development, specially set up the Central Research Institute of Spicy Snack Food, and developed new spicy gluten products through professional R & D personnel's experience of product taste, ingredients, packaging and so on.

Whether it is to cope with market competition or the need for self-reform, Weilong needs the help of the capital market.

As early as the end of 2018, Weilong was rumored to be listed in Hong Kong. At that time, outsiders found that 60% and 40% of Pingping Food held by Wei long founder Liu Weiping and Liu Fuping respectively had industrial and commercial changes, Liu Weiping and Liu Fuping withdrew, and Luohe Weilong Trading Co., Ltd. held a 100% stake in Pingping Food.

Since then, Weilong Trading has undergone many industrial and commercial changes from investors to company types, and the controlling shareholder of Weilong Trading has been changed to two companies registered in the British Virgin Islands-Hehe Holdings Limited and Yifeng Capital Co., Ltd.

Amid a series of equity changes, it is speculated that Wei long is paving the way for an overseas listing, most likely in Hong Kong. At that time, the owner of the Weilong spicy gluten brand, Henan Luohe Ping Food Co., Ltd., said that he had not heard of it and that the listing had not yet been determined.

In an interview with the media in early 2020, Liu Weiping said, "the listing plan of Weilong Food is gradually advancing. Last year, the accounting firm has entered the audit process, and the company has been operating and managing in accordance with the standards of listed companies." "

"entering the capital market is not the purpose of enterprise development, it is only a tool to promote the development of enterprises. As for listing, Liu Weiping believes that enterprises introduce some ideas that some investors can lead enterprises through listing, which is not only enlightening the development of enterprises, but also conducive to the improvement of corporate governance structure.

However, how to keep the future of Wei long, as he said, "the most important thing is to practice internal skills."