On another year's Dragon Boat Festival, "the fragrance of zongye floats ten miles, carrying bottles of wine." Dragon boat ferry, cheer, pay tribute to Jiang Chunjun Fu, Wufangzhai, which has been zongzi for 100 years, also issued a prospectus to the CSRC.

It is reported that this IPO, Zhejiang Wufangzhai Industrial Co., Ltd. (hereinafter referred to as "Wufangzhai") plans to seek listing on the main board of the Shanghai Stock Exchange, raising 1.056 billion yuan, mainly for smart food workshop construction projects, digital industry wisdom park construction projects and supplementary liquidity.

As a century-old brand, Wufangzhai has always occupied a place in the hearts of Chinese people because of its long history, profound cultural heritage and strong humanistic feelings.

According to the "2020 Dragon Boat Festival Chinese zongzi brand ranking list TOP10" released by Ai Media Consulting, Wufangzhai topped the list with a gold index of 96.3. In 2020, Wufangzhai zongzi market accounted for more than 20% of the market, firmly dominating the Chinese zongzi market.

On the other side of the coin, with the social changes in recent years, the overall consumption environment has changed, especially the rise of the new generation of consumers, many time-honored brands, including Wufangzhai, are facing the contradiction between persistence and reform, inheritance and innovation.

The man at the helm who can't make zongzi.Has been holding for 20 years.

More than two thousand years ago, qu Yuan and Wu Zixu left immortal legends, and their family and national feelings were interpreted into the custom of eating rice dumplings during the Dragon Boat Festival. More than 600 years ago, Jiahu Fine Dim Shop founded the Jiangnan Dim Sum School and became famous in China, especially zongzi, which has been popular among the people in Jiaxing since the late Qing Dynasty.

"Wufangzhai" zongzi came out in 1921. At that time, Mr. Zhang Jinquan, a native of Lanxi, Zhejiang, who worked as a cotton player, hawked "Wufangzhai zongzi" in the old city of Jiaxing when his cotton business was light in spring and summer, thus opening a historical chapter of the time-honored brand.

In the 1940s and 1950s, Wufangzhai was known as the "Jiangnan zongzi king" with the characteristics of "waxy but not paste, fat but not greasy, fragrant and delicious, moderate salty and sweet", and gradually developed into a well-known gold-lettered signboard in the country. it has also become a city business card of Jiaxing.

In 1992, Jiaxing Wufangzhai zongzi company was established, and Wufangzhai was selected into the first batch of "Chinese time-honored brands".

In 1998, Jiaxing Wufangzhai zongzi Company was reformed as a whole, including Jiaxing Department Store, Jiaxing Meat Center, Jiaxing Brewing, Jiaxing Academy of Agricultural Sciences and some natural persons, and established Zhejiang Wufangzhai Industrial Co., Ltd.

Three years later, Wufangzhai transferred state-owned shares, opening the door for private capital to enter.

In 2002, Li Jianping, a real estate businessman, bought 60% of the restructured Wufangzhai and became the helm. According to the understanding of Node Finance and Economics, Li Jianping cut in line, taught, and worked in public security work when he was young, and later went to sea to do business with rich experience.

According to the prospectus, Wufangzhai is currently 40.36% directly owned by Wufangzhai Group and indirectly 9.7% through its wholly-owned subsidiary Ocean Decoration, with a total of 50.06% of the company's shares, making it the company's controlling shareholder.

After the equity penetration, Li Jianping and Li Haojia and his son each hold 20% of Wufangzhai Group, thus indirectly controlling the corresponding equity of Wufangzhai and being the actual controller of the company.

Interestingly, Li Jianping, who embraced Wufangzhai, is a person who "can't make zongzi".

In 2010, in an interview with Beijing Daily, a reporter asked Li Jianping: "Chinese time-honored brands pay attention to inheritance and want to be taught. You are not an apprentice and you cannot even pack zongzi, so how can you be in charge of Wufangzhai?" "

Li Jianping said: "although Wufangzhai is a time-honored shop, it is no longer a traditional time-honored workshop." Leading a workshop and leading a modern enterprise group are two different concepts. The former depends on the master to pass on, help and lead, while the latter needs modern business philosophy and management system. "

Through the prospectus, let's take a look at the achievements of modern Wufangzhai. Are zongzi selling well?

Sell 45 million less in two years.Zongzi changed to "high-end".

After so many years of modernization, strictly speaking, Wufangzhai is no longer an enterprise that only produces zongzi, the product line includes zongzi, moon cakes, egg products, pastries, lo mei and other new products, the business is more diversified.

In 2018,2019 and 2020 (reporting period), Wufangzhai's operating income was 2.423 billion yuan, 2.507 billion yuan and 2.421 billion yuan respectively, and the corresponding net profit was 96.985 million yuan, 163 million yuan and 142 million yuan respectively.

From the perspective of data growth, Wufangzhai's performance is not stable. In 2020, the company's revenue and net profit decreased by 3.44% and 12.9% respectively compared with the same period last year.

According to the type composition, zongzi series products generate income of 1.502 billion yuan, 1.609 billion yuan and 1.644 billion yuan, accounting for 66.28%, 67.74% and 70.77% of the main business income respectively, which is still the largest source of income.

It is worth noting that although the income and contribution of zongzi series products are increasing, its sales are not optimistic.

Node Finance consulted the prospectus and found that from 2018 to 2020, Wufangzhai zongzi sold 411 million, 408 million and 366 million respectively, with a shortfall of 45 million in two years.

However, depending on the price increase, each zongzi rose from 3.66 yuan in 2018 to 3.95 yuan in 2019, and further to 4.49 yuan in 2020. Wufangzhai managed to make up for the undersold money.

In other words, had it not been for the price increase of 22.68% in two years, the rate of decline in revenue and net profit of Wufangzhai in 2020 would have been more than the above figures.

Node Finance believes that the price increase is free, but Wufangzhai still has to face the problem that zongzi is "difficult to sell" and "unfragrant", and the reason why zongzi is not popular is the most important. Is the taste not suitable for consumers? Or is the price too expensive? Or some other reason in terms of sales channels. It is not a long-term solution for Wufangzhai to make up for the decline in zongzi sales by raising prices.

Zongzi "difficult to sell", Wufangzhai zongzi series of products capacity utilization is also declining.

According to the prospectus, the capacity utilization rate of Wufangzhai zongzi in 2018, 2019 and 2020 was 121.30%, 84.82% and 60.57%, respectively. In 2020, 40% of the production capacity will be idle.

In response, Wufangzhai explained that capacity utilization was affected by factors such as the COVID-19 epidemic and insufficient recruitment during the Dragon Boat Festival season in 2020.

The epidemic does affect the sales and capacity utilization of Wufangzhai zongzi, but it should also be noted that the company's capacity utilization has shown signs of unsaturation in 2019, which has nothing to do with the epidemic.

Even so, Wufangzhai is determined to expand production, saying in its prospectus, "the company's existing zongzi production line is mainly used for traditional zongzi production, and there is no special production line for high-end zongzi series products. It is necessary to further increase the supply capacity of high-end products on the basis of the existing zongzi production capacity. "

In this IPO, Wufangzhai plans to spend 451 million yuan of the funds raised on the third phase of the intelligent food workshop construction project. after the completion of the project, it is expected to increase the annual production capacity of 100 million high-end zongzi series products, 43.5 million bakery products, 13.04 million bags of frozen food and so on.

Old brands need a new trend.

According to statistics, there are nearly 50 "time-honored" companies in the A-share market, mainly in the fields of liquor, traditional Chinese medicine, catering, condiments and so on.

In the queue waiting for listing or preparing for listing, the figure of time-honored brands is becoming more and more common, such as Lancang ancient tea, Braised Chicken, Dezhou Style, Qingfeng steamed buns, GouBuLi steamed buns and so on.

It is certainly a good thing for time-honored enterprises to connect with the capital market, but in the view of Node Finance, due to some "old" problems formed by time-honored brands for a long time, they face many challenges in the ever-changing market.

Observe the name of each time-honored brand, in addition to the vicissitudes of history, it is not difficult to find that almost all of them are named after a product.

This just reflects the current situation of most time-honored brands: products, models and other aspects are relatively simple.

Take Wufangzhai as an example, it has been nearly 20 years since Li Jianping's acquisition. But so far, the company is still eating the dividend of Wufangzhai zongzi, and the degree of dependence during the reporting period has increased from 66.28% to 70.77%. Moon cakes, meals, egg products, pastries and other categories have contributed less than 30%.

Rely on zongzi this single product to create revenue, the intuitive "harm" is the small size of the market and limited space for growth. This is also one of the key points to consider in the valuation of capital markets.

According to Node Financial observation, at present, a small number of areas except Jiangsu, Zhejiang and Guangdong have the habit of eating zongzi all the year round. in most parts of China, zongzi is only a symbol of the Dragon Boat Festival, belonging to ultra-low-frequency consumer goods, and many places do not even have the habit of eating glutinous rice.

In order to break through the "ceiling", time-honored brands mostly choose to take a diversified approach, but one more product line means more dilution of the brand and is limited by the impression that has been ingrained in the minds of consumers for hundreds of years. On the contrary, it poses a "constraint" on the promotion of new products.

In addition, as a brand with national characteristics and flowing in the long river of history, the products, skills or services of time-honored brands are mainly inherited from generation to generation, and the brand effect is mainly through word of mouth and time accumulation. this also determines that there are natural deficiencies in product innovation and marketing ability.

Entering the era of Internet and digital economy, with the penetration of western food culture, the popularity of fast food, and the erosion of takeout business, many young consumers, especially the new generation of consumers, are more inclined to "package" style food. impatient with the "taste" and "taste" emphasized by time-honored brands.

Time-honored brands emphasize the refinement in the process of employment, the freshness of materials and the freshness of making, steaming and selling, which is incompatible with the "fast food" lifestyle of the new generation of consumers, while the conservative marketing makes time-honored brands rarely enter a variety of hot topics, making it difficult to reach young groups, resulting in many consumers' understanding of time-honored brands still stay on the word "old".

When consumers do not buy it, the inheritance itself will lose its fulcrum and meaning. For time-honored brands, including Wufangzhai, how to keep the essence of the brand and win the love of consumers at the same time is a difficult problem of the times.