– ChaCha Food’s revenue fell by 5.05% in H1 2025, marking its first decline since 2017.
– Net profit plummeted by 73.68%, highlighting severe margin pressure.
– Traditional retail channels are shrinking while competitors capture emerging markets.
– Younger consumers prefer healthier, more diverse snack options over traditional瓜子 (sunflower seeds).
– Overseas and e-commerce growth aren’t yet sufficient to offset domestic losses.
For over two decades, ChaCha Food has been synonymous with瓜子 (sunflower seeds) in China. Its catchy jingle, ‘快乐就要洽洽洽’ (‘Happiness means ChaChaCha’), once echoed in households across the country. But the company’s latest financial report tells a different story—one of struggle and adaptation. For the first time in eight years, ChaCha has reported a drop in half-year revenue, triggering concern among investors and market watchers. Are shifting consumer tastes, especially among younger demographics, to blame for this downturn?
Financial Performance: A Sharp Turn for the Worse
ChaCha Food’s H1 2025 results revealed a revenue of RMB 2.752 billion, down 5.05% year-on-year. More alarming was the net profit, which nosedived by 73.68% to RMB 886 million. These numbers aren’t just statistical dips—they signal a potential turning point for a company once regarded as the ‘King of Melon Seeds.’
The decline is particularly striking given ChaCha’s history of steady growth since 2017. While macroeconomic conditions and holiday timing were cited as contributing factors, the underlying issues appear structural. The profit collapse suggests that the company is grappling with rising costs and shrinking margins, not just temporary setbacks.
Profit Erosion and Cost Challenges
Operating costs climbed by 5.70%, with direct materials accounting for 81.53% of expenses. Poor weather in Inner Mongolia during the 2024 harvest led to higher sunflower seed霉变率 (mold rates), reducing the supply of quality raw materials and driving up prices. Additional nuts like almonds and cashews also saw price hikes due to supply chain and climate issues.
Channel Shifts: The Rise of New Retail Models
One of the most critical factors behind ChaCha’s struggle is the rapid transformation of retail channels. Traditional outlets like hypermarkets and supermarkets—where ChaCha has historically dominated—are losing foot traffic. In contrast, discount stores, membership clubs, and instant retail platforms are gaining traction.
Despite deriving 71.67% of revenue from distributors, ChaCha has been slow to adapt to these new channels. Competitors like Three Squirrels and Bestore have capitalized on live-streaming e-commerce, social media marketing, and influencer collaborations to engage digitally-savvy consumers. Even online, ChaCha’s sales on platforms like Taobao and JD.com have sometimes lagged behind newer brands like LaoJieKou and HuaWeiHeng.
E-commerce and Overseas: Bright Spots Amid Challenges
There are glimpses of hope. E-commerce revenue grew by 24.79% to RMB 451 million, and overseas sales increased by 13.18% to RMB 278 million. ChaCha has expanded into retail chains in Canada, Japan, and the Philippines, as well as coffee shops and convenience stores in Thailand and Indonesia. However, these segments still represent only 16.38% and 10.10% of total revenue, respectively—insufficient to counterbalance domestic declines.
The Youth Market: A Generational Divide
Perhaps the most significant challenge is the shifting preferences of younger consumers. As health consciousness grows, demand is moving toward snacks with ‘低糖、低盐、低脂’ (low sugar, low salt, low fat) and clean labels. ChaCha’s core products, largely traditional瓜子, do not align with these trends.
The company has attempted to rebrand through initiatives like sponsoring music festivals, partnering with tourism boards, and launching city-limited editions. Yet these efforts have yet to translate into substantial sales. New products such as nut-based ice cream, seasoned nuts, and sweet potato chips have been introduced, but they remain a small fraction of overall revenue.
Limited Impact of New Product Lines
Sunflower seeds still contribute 64.39% of ChaCha’s revenue, up from previous years. Nuts account for 22.32%, while other products make up just 11.05%. This indicates that diversification attempts have not yet resonated strongly with consumers. In the crowded nut market, established players like Three Squirrels and Walong already hold significant mindshare, making it difficult for ChaCha to break through.
Regional Performance and Future Strategies
Sales declines were most severe in Eastern China (down 24.76%) and Northern China (down 19.83%). Southern China remained relatively stable with a slight increase of 2.43%. This regional unevenness suggests that demand patterns are fragmenting, and a one-size-fits-all strategy may no longer work.
To regain momentum, ChaCha must accelerate its digital transformation, explore co-branding opportunities, and invest in R&D for healthier product variants. It might also consider strategic acquisitions to fast-track entry into growing categories or markets.
Conclusion: Navigating a New Era
ChaCha’s situation reflects a broader challenge faced by legacy food brands: evolving without losing their core identity. While the company still boasts extensive distribution networks and brand recognition, it must act decisively to reconnect with younger consumers and adapt to retail’s new reality.
The next decade will determine whether ChaCha can reinvent itself or risk fading into obscurity. For now, the question remains: Can a瓜子 giant learn new tricks in a rapidly changing snack landscape?
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