How to judge the competitiveness of the food and beverage industry

by:NEWLINE     2021-06-01
How to judge the competitiveness of the food and beverage industry2017-01-24 15:56 At present, most of the subdivisions of my country's food and beverage machinery industry have bid farewell to the high-speed growth period. The future opportunities depend on the bottom-up judgment of the company's competitiveness changes. On the one hand, it includes the long-term trend of the rate of return on invested capital. On the other hand, it judges the changes in pricing power brought about by changes in the industry's competitive landscape. The later stage of growth mainly comes from monopoly profits. Food and beverage machinery is a typical consumer goods industry. From the perspective of industrial investment, the long-term return on capital invested by brand companies is relatively stable. First of all, from the perspective of demand, as a necessary consumer product, the demand side of food and beverage is less cyclical than other industries, has higher stability, and the probability of sustainable operation is higher than that of other industries. Secondly, from a product perspective, commodity differentiation is high, differentiation means pricing power, and pricing power means that it is possible to obtain higher income stability. Building long-term differentiation capabilities is the long-term pursuit of consumer goods companies, and it is also where the company's core competitiveness lies. Generally, in the initial stage, the differentiation of product functions is used to obtain excess returns, but consumer product companies build long-term stable sources of differentiation to establish brands. Finally, from the perspective of sales, food and beverage products are generally low-value and easy-to-consumable fast-moving consumer goods. For mass consumers, channel construction generally requires in-depth distribution, and the capital threshold is not high. Companies with higher operating capabilities can obtain higher turnover rates. In fact, the vast majority of food and beverage companies are not cost-driven, but are brand-driven or channel-driven. The branding cycle of consumer products in my country is generally not long. In the context of global competition, the branding process of most food and beverage companies is based on in-depth distribution and corresponding advertising costs. Therefore, in the past, my country’s brand building and channel system are mutually exclusive. together. Some high-end liquor brands in my country have special brand attributes, and their growth mainly depends on activating intangible assets. Historically, price increases have been the main source of their growth. Generally speaking, brand companies can be divided into two categories: mass brands and high-end brands. Volkswagen brands tend to maintain a higher price-performance ratio, reduce the price increase rate between the factory and the terminal, and increase the turnover rate of the entire industry chain, thereby obtaining a higher level of return. Another type of non-popular products, among which high-end products tend to maintain higher channel profit margins and product gross profit margins. The turnover level of high-end products is weaker than that of popular products, but the profitability of single products is strong, and the overall rate of return is also good. Regarding the growth analysis other than the rate of return, since the overall growth center of the food and beverage industry has fallen, more consideration is given to the monopoly profits brought about by the optimization of the market competition pattern. This stage focuses on pricing. The consumption upgrade will inevitably bring about an optimized reshuffle of the market competition pattern. In the early stage of brand establishment, most companies are in the process of cultivating the market. The proportion of expenses rises first, and profit growth lags behind expenses. However, the proportion of fixed assets of food and beverage companies is generally not high, production costs are relatively rigid, and the scale of income has exceeded the critical point of cost. Will bring about the release of scale effect. An important sign of a good branding process is the increase in market share and terminal distribution rate. In the early stage of growth without a strong brand, pricing power was generally not strong. After in-depth distribution, market competition intensified and brand clearing, such as the air-conditioning industry after 2000. After the market competition structure has cleared, the increase in concentration has led to a decline in the pricing power or expense ratio of strong brands. my country's consumer goods companies have eliminated localized liquor companies, and most of the fields are facing the squeeze of overseas brands. Due to the long history and culture of overseas brands, my country's branded consumer products are facing the bottleneck of high-end products during the consumer product upgrade stage. It is rational for popular brands to take the route of high turnover and high cost performance. Generally speaking, the food and beverage industry needs to adhere to bottom-up refined research in the future. Research companies are like doing physical examinations for companies. From company history, management and employee background, product and channel quantity and price data, and reflected in the report Financial data analysis needs to be implemented one by one. We believe that research based on the growth of company value can maximize the investment winning rate!
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