4 trillion fresh market, how should entrepreneurs break through?
Fresh is a big road of 4 trillion, and it is not so easy for startups to run out. The problems I have had for a few years have not been solved very well.
01 Three great mountains of fresh entrepreneurship
The first is upstream, that is, the cultivation of fruits and vegetables, and the cultivation of poultry.
Why solve the upstream? Because of quality control. Fresh quality depends not only on natural factors such as soil, air, water, and trace elements, but also on human factors such as agricultural technology and planting management. For example, in accordance with the requirements of quality control, it is necessary to eliminate bad breeds, too small and poor quality in the growing season.
02 Doing heavy supply chain is a lifeline
So, where is the path of fresh entrepreneurs? My answer is to differentiate, to focus on the supply chain, to grow upstream, to grow, to do production or integration.
Fresh start-up companies go upstream, and one road is a self-built base and enters the production chain.
The startup company first makes one or two self-operated bases. The purpose is not to turn itself into a farmer, but to master the processes of production and quality control and standardize the products. Without a base, there is no way to master the growth cycle and production process of agricultural products, and it is impossible to grasp the quality and size of products. Agriculture is a three-year cycle, and mature agricultural products can be produced in three years.
After the self-operated base matures, a platform will be established to cooperate with local farmers. Farmers will put into production according to the standards of the platform, and the platform will acquire the products planted and farmed by farmers.
I and my colleague Dong Jinpeng have researched a Shanghai startup company that sells black soil pork on the e-commerce platform, and the meat comes from rural farmers in Anhui. This company is very smart and knows that it is the future to grasp the product. If 100,000 pigs are sold in a year, a pig is 5,000 yuan, which is 500 million yuan, and the profit is about 20%. It is also a small business.
This is very hard, but the market is big. Baiguoyuan, sales of 8 billion in 2017, 2 trillion market in China, and only 4/1000 in Baiguoyuan. This is just fruit, there are many choices for fresh start-ups, such as vegetables and meat.
The upstream supply chain consisting of self-operated and platform should be the main mode of future fresh business. After a category is opened, you can expand other categories. For example, Baiguoyuan, the following categories can be called Baiguoyuan apple, Baiguoyuan pear and so on.
How many vertical companies are possible in how many categories are fresh. First, do the vertical category champion, a single product to achieve the ultimate, at least more than 10 billion companies. This model can be copied to many categories, and after the end, it will expand to other categories, which may be tens of billions of companies.
03 Deeply ploughing upstream, taking advantage of downstream advantages
Fresh start-ups are doing a heavy supply chain rather than becoming an agricultural grower.
The things to be farmed must be clarified, but it must also be borne in mind that the strengths of fresh start-up companies are downstream, marketing and channels. Do a good job of the upstream, fill the short board, the downstream will become stronger.
When it comes to fresh-starting business, many people will think of the oranges that Shih-hsiang is doing. I once went to the Qi Shijian Orchard in Xinping County, Yunnan Province, and thought that the most essential reason for the development of the orange is that he used his entrepreneurial management ability to plant. Qi Shijian is in his 80s and is 8-10 days a month. He is very careful in the management of the orchard and is strictly managed. Yan Shijian’s younger brother, Shi Shizuo, is also planting an orchard, but the difference is great.
Orange is only responsible for upstream production, not for self-sale, and is essentially a self-built brand of agricultural planting enterprise. The sales of oranges rely on dealer channels across the country. In the future, fresh start-up companies may have to produce and sell themselves.
This road looks bitter, long-term, and risky, but for startups interested in entering the fresh-skinned field, entrepreneurship is a life of ninety-nine, and this road can be said to be one of the few vitalities. I dare not say that it is the only way to live, but it is certainly one of the few ways to live.
Finally, let’s talk about the cold chain. No startup can solve it. In the future, it may be necessary to rely on the relevant departments to take the lead, but there may be startups trying to solve the cold chain problem of the last mile
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