What are the difficulties to overcome in investing in organic food?

What are the difficulties to overcome in investing in organic food?

China Organic Agriculture Network Time: 2015.11.09 Source: organic agriculture.

It is predicted that in 20 15 years, the consumption of organic agricultural products in China will reach the market scale of 24.8 billion-59.4 billion yuan, and the organic food will develop at an average annual growth rate of 15%. Where is the consumer demand, where is the capital operation and investment, and what difficulties need to be overcome in investing in organic food?

Background of investing in organic food

Enterprises and Capital Nuggets Organic Food: Due to the large market space and good development prospects, Nuggets organic food industry has gradually become the direction pursued by entrepreneurs, businesses and capital.

According to the survey, the "organic agriculture concept stocks" in A-share listed companies include Longli Bio (002604, shares bar), Beidahuang (600598, shares bar) and Wang Xi Food. China Organic Agriculture Co., Ltd., which is listed on NASDAQ and registered in Songyuan, USA, is also engaged in organic food production. Unlisted small and medium-sized organic agricultural companies have also been sought after by funds. As early as a few years ago, Zheng Gu agriculture had been favored by a group of venture capitalists, including Zero2IPO Group, the boss of PE industry.

It is precisely because of the development prospect of organic food that various capital predators have already begun to lay out and lay out organic agriculture: Lenovo Group began to invest in the agricultural field through mergers and acquisitions four years ago; Hongyan Capital also announced that it will invest 654.38+08 billion yuan in organic agriculture; Wanda Group has built a huge organic agricultural base in Beijing with an area of 6,000 mu. Minsheng bank (6000 16, stock bar) also has an ecological park of 3000 mu; JD.COM and other technology companies have also turned their attention to agriculture; Evergrande invested 7 billion yuan in organic rice and green soybean oil after the ice spring. ...

What should I do to invest in organic food?

1, industrial chain layout and operation

The commercial operation of organic food involves production bases, processing plants, circulation links, sales companies, investors and other commercial entities, which are distributed in the upper, middle and lower reaches of the industrial chain, and each has its own competitive advantages. Consumers' "high-value organic consumption experience" needs the cooperation of all links, so industry integration is imperative.

2. Control the source of raw materials

The production base of organic food is the most important and the focus of capital investment. At present, consumers' cognition of organic food still stays in the aspects of "standardized production, safe and organic", and "excellent production base construction" is one of the core links of its commercial operation, which can not only enhance its brand image of organic food, strengthen its excellent brand cognition, but also lay an excellent production foundation for subsequent commercial operation.

3. Control the sales network

The distribution channel of organic food is an important investment link. At present, there is not a powerful organic food channel operator in China. The existing channels in the industry are mostly single-store sales, organic food chains in some areas, and online direct sales. Investing in "organic food stores" now will undoubtedly take the lead in the industry and lead the development of the industry.

4. Online and offline layout

Store sales in organic food industry is no longer the mainstream, and "Internet sales" mode is an important trend in the future development of the industry. A large number of Taobao organic food stores and organic food websites are constantly emerging, and some excellent "organic food websites" are well received by consumers; Powerful enterprises will rely on their own brands to vigorously promote the brand height online, so as to realize the linkage between offline sales and online promotion.

Investing in organic food requires patience. Investing in organic food needs to overcome the following difficulties.

1. It cannot be ignored that there are many chaos in the whole industrial chain of organic food at present. Analysts of ChinaVenture Investment Group said that organic vegetable and food enterprises may face certain expansion bottlenecks, and if they do distribution, they may gradually develop into a heavy asset enterprise. This model may not be reproducible, and it may be easy to popularize in first-tier cities such as Beijing, but the demand in second-and third-tier cities will be relatively small. In the future, the income scale and profitability of enterprises may face bottlenecks.

2. Secondly, some inherent characteristics of agricultural production still bring some uncertainties to investment in this field. The profit level of agricultural products is relatively low, and the industry net profit is 5%- 10%. Moreover, the production of agricultural products is easily affected by weather, natural disasters, pests and diseases, the standardization of production processes is low, the controllability of product quality is low, and the price of agricultural products fluctuates obviously.

According to strict international certification requirements, the land for producing organic products has not been polluted for more than ten years. But how to ensure the source of high-quality land when the enterprise further expands its scale? In fact, many venture capital institutions have found that the scale of enterprises that really do organic food in the industry is not large. A considerable number of organic food enterprises have no obvious benefits or even losses. Among them, the biggest obstacle is poor sales.

4. In the process of introducing venture capital, many organic agricultural enterprises find that some venture capital is radical and eager to arbitrage in three to five years. In fact, this is against the industrial law of organic food. Strictly speaking, it is quite difficult for an enterprise to make a profit in the first three years. It is reported that Whole Foods Agricultural Technology Co., Ltd., established in 2008, has been working in the organic food industry for several years. It is said that at the beginning of its establishment, its founder Jiang Wei was prepared for "losing five years". Established in 2009, Shanghai Tekbia Agricultural Development Co., Ltd. predicted the profit in 20 15 years, but the real situation is unknown at present.

5. "The investment cycle of venture capital is three to five years, which can accompany the enterprise for a long time and wait for about ten years before listing. Most venture capitalists won't take the risk. Once cooperation is reached, venture capitalists have to make long-term plans. " Several venture capital institutions that have been keen on investing in China's food industry are cautious about entering the organic food industry, and one of the important factors is "too long waiting time".

For organic agricultural enterprises, especially small and medium-sized enterprises, the difficulty in financing and investment in the field of organic food is undoubtedly a roadblock that hinders the development of enterprises. As one of the top ten Internet financial service platforms in China, the investment and financing sector focuses on the precise docking of capital and projects, with 3 trillion yuan in hand, which will surely solve the financing problem for the vast number of enterprises committed to developing modern ecological agriculture in the country.