---
title: "A Tale of Two Extremes: The Brutal Business of Pre-Made Dishes"
description: "The pre-made dish industry, a trillion-yuan market with vast potential, is experiencing a boom-and-bust cycle. While giants like Hema, Dingdong, and Qian Dama are entering the sector, many early players have already failed, highlighting the industry's brutal realities."
author: "湃动研究院"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-07-25"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/a-tale-of-two-extremes-the-brutal-business-of-pre-made-dishes-96cf8274/"
markdown: "https://xinjignxiao.com/en/articles/a-tale-of-two-extremes-the-brutal-business-of-pre-made-dishes-96cf8274.md"
original_source: "https://mp.weixin.qq.com/s/Tj7V31gCzwgv-6qcXfoQUQ"
translation: "https://xinjignxiao.com/zh/articles/%E5%86%B0%E7%81%AB%E4%B8%A4%E9%87%8D%E5%A4%A9-%E9%A2%84%E5%88%B6%E8%8F%9C%E7%9A%84%E6%AE%8B%E9%85%B7%E7%94%9F%E6%84%8F-96cf8274.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/a-tale-of-two-extremes-the-brutal-business-of-pre-made-dishes-96cf8274/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# A Tale of Two Extremes: The Brutal Business of Pre-Made Dishes

> The pre-made dish industry, a trillion-yuan market with vast potential, is experiencing a boom-and-bust cycle. While giants like Hema, Dingdong, and Qian Dama are entering the sector, many early players have already failed, highlighting the industry's brutal realities.

**A Trillion-Yuan Market with Vast Potential**

After a long day at work, you return home with no energy to cook. You tear open a pack of pre-made sour cabbage fish, toss the sauce, pickled vegetables, and ingredients into boiling water, and within ten minutes, a hearty dinner is ready. Some say the pre-made dish industry is the biggest new trend in recent years, but the reality is a mixed bag of fortunes. Recently, fresh food e-commerce giants like Hema, Dingdong Maicai, and Qian Dama have collectively ventured into side businesses, establishing their own pre-made dish brands. Hema even plans to create a "5,000-square-meter pre-made dish store." They are not the first to cross over into this "vegetable-selling" business. As early as August last year, SF Express launched a supply chain solution for the pre-made dish industry, fully deploying in this sector. In December, Gree invested 50 million yuan to officially enter the pre-made dish market. In early March this year, Guirenniao spent 100 million yuan to establish Jinhe (Qiqihar) Pre-Made Dish Industrial Park Co., Ltd. Giants like Meituan, Shuanghui, and Juewei have also successively joined the fray. Behind this competition among major players lies a surge of capital. Data shows that from 2021 to the first half of 2022, there were over 40 financing projects in the pre-made dish sector. In April this year, Guoquan, a representative company in the home dining solutions space, also began its push for a Hong Kong IPO. However, the reality is not as rosy as it seems. Let's look at the other side of the industry. Last year, both Lu Zhengyang and Qudian attempted to make their mark in the pre-made dish arena. "Shejian Yingxiong" announced ambitious plans to sign 6,000 stores, and Qudian's pre-made dishes sold 250 million yuan in a single livestream. This year, both have become fleeting phenomena. Lu Zhengyang has shifted to coffee shops, Qudian is mired in losses, and their pre-made dish dreams have collapsed. Pengpengdai, an industry star that once received tens of millions in investment, stopped updating its official blog in October last year and officially ceased production and sales in March this year. Even Weizhixiang, the "first stock" of pre-made dishes, was reported to have closed 183 franchise stores in 2022. While capital continues to rush in, big names are quietly exiting. The pre-made dish industry has ridden the wave of the macro environment and tapped into the lazy economy of young people. In today's efficiency-driven cities, pre-made dishes offer modern workers a new lifestyle that combines the joy of cooking with time savings. Pre-made dishes, essentially an imported concept, are pre-processed finished or semi-finished products made from agricultural, livestock, poultry, and aquatic products, with various auxiliary ingredients. They can be categorized as ready-to-mix, ready-to-cook, ready-to-heat, and ready-to-eat foods. Pre-made dishes emerged in the United States in 1940 and later flourished in Japan, where they achieved high penetration due to the country's lifestyle and eating habits. Data shows that in 2021, the penetration rate of pre-made dishes in Japan reached 60%. In contrast, China's pre-made dish industry started later, initially hindered by low consumer awareness and underdeveloped cold chain technology, and only began rapid development in recent years. In 2022, the market size of China's pre-made dish industry reached 415.2 billion yuan, with a growth rate of 32.4%. Looking ahead, the market is expected to expand further. **It can be said that the pre-made dish industry is racing forward with vast potential, but navigating the fog ahead and telling a story tailored to the Chinese palate requires careful, step-by-step strategy.**

**Industry Chain Structure Under the Blue Ocean**

Since the 1990s, with the entry of Western fast-food chains like KFC and McDonald's, China saw the emergence of the first batch of processing plants providing prepared vegetables. After 2000, the number of semi-finished dish producers gradually increased, but the industry remained immature due to various constraints. By 2014, the semi-finished dish industry experienced rapid growth in the B2B sector. As the pace of life accelerated and economic conditions improved, the catering industry faced labor shortages and high costs. Many chain restaurants began using central kitchens or outsourced pre-made dish packages to enhance efficiency and standardization. **China's pre-made dish industry has long been dominated by the B2B sector, with B2C playing a secondary role.** After 2020, due to home isolation and local New Year celebrations, many consumers could not dine out or buy fresh ingredients, so they turned to pre-made dishes, which allowed them to enjoy delicious meals at home with minimal preparation. Concurrently, advancements in freezing and cold chain technology provided the necessary technical support for preserving and transporting pre-made dishes. Riding the wave of the times, pre-made dishes became a sensation, and various industries set their sights on this lucrative market. In terms of the industry chain, the upstream, midstream, and downstream segments are closely interconnected, yet each link hides unresolved internal and external challenges beneath its polished exterior.

**Upstream: Prices Highly Susceptible to Supply and Demand**

The upstream of the pre-made dish industry supports the entire chain by providing high-quality raw materials and auxiliary ingredients. Agricultural enterprises, leveraging their expertise and channel advantages in raw materials, hold strong competitive positions in pre-made dishes. However, the supply of raw materials is influenced by seasonal changes, weather conditions, and market demand fluctuations, making prices and supply stability a concern. For instance, Weizhixiang, once the "first stock" of pre-made dishes, had raw material costs accounting for 90.93% of total costs in 2021. Clearly, Weizhixiang's profit levels largely depend on controlling raw material costs. Due to significant price volatility in raw materials, Weizhixiang's gross margin was also affected, standing at 24.4% in the first half of 2021, a year-on-year decline of 1.51 percentage points.

**Midstream: Market Saturation and Intensifying Competition**

In recent years, as pre-made dishes have become a trend, many players have entered the industry. Based on different market entry points, mainstream pre-made dish companies can be divided into five categories: upstream agricultural, livestock, and aquatic enterprises led by New Hope and Guolian Aquatic; professional pre-made dish companies like Weizhen Xiaomeiyuan and Weizhixiang; traditional fast-food companies such as Anjoy Foods and Sanquan Foods; retail-oriented companies like Dingdong and Guoquan; and large chain restaurants like Xibei and Haidilao. With market saturation, competition has further intensified. According to Qichacha data, from 2018 to 2020, the number of newly registered pre-made dish-related companies showed an overall upward trend, but in 2021, the number of new companies declined, and growth slowed.

**Downstream: Highly Variable Consumer Demand**

The downstream of the pre-made dish industry chain is divided into B2B and B2C sectors, primarily including the catering industry, retailers, and consumers. The catering industry, part of the B2B sector, is the main consumer of pre-made dishes, using these products to improve dish preparation efficiency and taste consistency. Meanwhile, retailers like supermarkets and convenience stores directly face consumers in the B2C sector, and new retail and e-commerce livestream platforms are also driving new growth in B2C consumption. As the end users, consumers purchase and consume pre-made dish products to enjoy convenient and quick dining experiences. They have a direct influence on the quality, taste, and price of pre-made dishes and serve as the primary driver of market demand. **Overall, although many pre-made dish brands have received capital support, most are still in the early stages of development, with weaknesses in various links of the upstream, midstream, and downstream. Building a moat for pre-made dish brands will take considerable time.**

**The Predicament of Apparent Profitability**

The influx of numerous brands has led to supply-demand imbalances, and the pre-made dish market has officially entered a phase of market consolidation. As stated in the book "Competitive Strategy," within an industry, the competitive strategies of businesses are essentially a game among industry participants. **The once harmonious and rapid growth has faded, and the undercurrents have finally surfaced.**

* **Diverse Tastes, Low Flavor Restoration**
Pre-made dishes need to be stored at specific temperatures and humidity levels to maintain freshness and safety. However, China's cold chain logistics system is not yet fully developed, and the transportation and sales processes can affect the quality and taste of pre-made dishes. Additionally, taste preferences vary across regions and populations, all of which influence consumers' subjective evaluations of flavor restoration.

* **High Operating Costs, Unsustainable Cash-Burning Model**
Freshness is a key factor in preserving the flavor of pre-made dishes. According to the "2022 China Pre-Made Dish Industry Development Trend Research Report," 35.9% of consumers prefer pre-made dishes with a shelf life of within 7 days, 24.3% prefer a shelf life of within 3 months, and only 1.3% prefer a shelf life of over one year. Maintaining the freshness of ingredients and preventing spoilage, deterioration, and off-flavors requires cold chain technology. China's cold chain system is not yet complete, with insufficient facilities and equipment, leading to low utilization of cold chain resources and deficiencies in transportation and storage capacity. Moreover, due to the low concentration of the domestic cold chain market, facilities and enterprises are unevenly distributed, with more in the east and fewer in the west, and no economies of scale have been achieved. Combined with high consumption of equipment, energy, and labor, cold chain logistics costs remain persistently high. It is estimated that the operating costs of cold chain logistics in China account for about 20%-30% of product sales, compared to around 10% in developed countries.

* **Numerous Entrants, Growing Homogenization Pressure**
As mentioned earlier, the development of the pre-made dish industry has attracted various types of enterprises. According to statistics, as of the end of 2022, there were 75,900 existing pre-made dish-related companies in China. Due to the relatively simple production processes and the difficulty of product innovation, differentiation among similar products is low, leading to severe homogenization. For example, the popular single product sour cabbage fish has multiple brands in the market, such as Zhenwei Xiaomeiyuan, Dingding Lanrencai, and Wumanxian, but the differences in form and taste among these products are not significant, resulting in intense competition.

* **Standardization Challenges, High Food Safety Risks**
The pre-made dish industry involves multiple stages, including raw material procurement, processing and production, packaging and storage, and sales channels. With numerous processes and difficult standardization, each stage may harbor risks. These include the freshness of ingredients during procurement, hygiene conditions during processing, packaging materials and cold chain equipment quality during storage and transport, and product information recording in sales channels. These issues could inadvertently lead to spoilage of pre-made dishes, thereby endangering consumer health.

**Vitality from Overseas**

We have heard many stories of overseas products entering the domestic market, such as pizza, baked goods, and burgers. These imported items are all trying to find new stories that suit the Chinese palate. For example, pizza has borrowed from foreign brand management and product standardization while also introducing flavors that cater to Chinese tastes, such as Sichuan-style and spicy options. They have also developed pizza products for different occasions and demographics, including personal pizzas, mini pizzas, and dessert pizzas. Burgers in China have developed by learning from foreign chain operations and brand images to enhance competitiveness and influence, while also introducing products that align with Chinese eating habits, such as Chinese-style burgers, vegetarian burgers, and breakfast burgers. **Compared to Japan, a neighboring country with a more mature pre-made dish industry, China's development path is remarkably similar. In fact, we are following the path Japan once took.** From 1955 to 1975, Japan's economy recovered rapidly, with population growth and rising per capita income, creating opportunities for the catering market to flourish. Simultaneously, with the improvement of cold chain facilities and the spread of refrigerators and other home appliances, the frozen food industry also experienced rapid growth. From 1976 to 1995, Japan's economy grew at a high rate, and the pace of life accelerated, leading to the rapid expansion of the B2B food service industry. To meet the needs of catering enterprises for standardization, chain operations, and cost reduction and efficiency, the demand for semi-finished dishes also increased significantly. These dishes were primarily processed in central kitchens or factories and then distributed to stores, where customers only needed to heat or cook them briefly. From 1996 to the present, Japan's pre-made dish industry has entered a mature phase, with slowing growth but still an upward trend. Significant changes in Japan's social structure, including declining birth rates, an aging population, and an increase in single and dual-income households, have driven demand for ready-to-eat foods in the B2C sector. Ready-to-eat foods have also become more diverse, covering soups, salads, sushi, and more, with a greater focus on nutritional balance and health safety. In summary, Japan's pre-made dish industry has evolved from frozen foods to meal kits and then to ready-to-eat foods, with penetration from B2B to B2C and innovation from single to multiple categories. Compared to China, Japan's pre-made dish industry is more concentrated, mainly due to its smaller land area, which results in higher cold chain coverage, and fewer food types, leading to simpler production processes. Today's China's pre-made dish industry resembles Japan in the 1970s and 1980s, where, after B2B maturity, C-end demand surged due to social structural changes, consumption upgrades, and the pandemic catalyst. **When China's market meets overseas experience, we see new facets of this industry.**

* **Strengthening Online Channels**
The primary buyers of pre-made dishes are young people, singles, and dual-income families without time to cook. They prioritize convenience, variety, and health, and prefer the ease of online ordering over visiting physical stores. Japan's online channel for pre-made dishes developed relatively late but has shown rapid growth in recent years. According to the Japan Frozen Food Association, online sales of pre-made dishes in Japan reached 1.3 trillion yen in 2020, a year-on-year increase of 18.8%. In China, the pre-made dish market has long been constrained by cold chain and cold storage limitations, with high transportation costs and risks for online channels. There are also regional disparities, with faster development in the east and slower in the west, leading to uneven online channel coverage and service levels.

* **Product Segmentation**
In Japan, pre-made dishes are finely segmented by category, occasion, and function. Currently, there are over 3,000 types of pre-made dishes in Japan, covering Japanese, Chinese, and Western cuisines. For different demographics, Japanese pre-made dishes offer various dining options, such as large portions for family meals, small portions for singles, and portable options for travel. Japanese pre-made dishes have achieved extreme precision in product segmentation and control to meet the diverse needs of different groups. Industry insiders have long pointed out that the development of pre-made dishes will go through three stages: "channel dominance," "brand dominance," and "product dominance." After establishing brand recognition and capturing consumer mindshare, the most crucial factor remains the product itself. All food products must ultimately return to being delicious, safe, and truly resonating with consumers to genuinely improve repurchase rates.

**Epilogue**

The rise of pre-made dishes is an inevitable outcome of urban efficiency, representing a shift in people's lifestyles under the urban revolution. As the renowned architect Frank Lloyd Wright stated in his work "The Future of the City," "The city is a machine for freedom, granting people more control over their lives by providing convenience and efficiency." In the rapidly developing urbanization, efficiency and division of labor have become key to people's lives, and pre-made dishes have emerged as a product of this process. Originating in the United States in the 1940s, pre-made dishes were a result of post-World War II urban reconstruction. Japan, with the most mature industry today, had an urbanization rate of 91.8% in 2020, ranking first in Asia. And we, too, have finally embarked on the path of urban transformation. **The popularity of pre-made dishes is undeniable, but the industry has quietly reached its first crossroads. Whether it advances or retreats depends on its fate.**

References:
1. Chuangketie | "Pre-Made Dish Industry Insight Report" https://www.djyanbao.com/report/detail?id=3404538&from=undefined
2. Hongcan.com | Opportunities with Risks: Where is the Future Breakthrough for the Pre-Made Dish Industry? https://36kr.com/p/2233592568852097
3. Restaurant Boss Internal Reference | Another Big Player Arrives: The Boom and Bust of the Pre-Made Dish 2.0 Era https://36kr.com/p/2211787663602307
4. Zhuang Shuai | Learning from the Japanese Market: The Growth Path of China's Pre-Made Dishes https://36kr.com/p/1698425031898368
5. CITIC Securities | In-Depth Research Report on the Pre-Made Dish Industry: A Big Business on the Tip of the Tongue https://new.qq.com/rain/a/20230216A01JTW00
6. Sales and Market Magazine | Development History and Insights of Overseas Pre-Made Dishes https://www.163.com/dy/article/HHA0L7AF0519AU4N.html
7. Liu Run | Pre-Made Dishes: Advance or Retreat? https://baijiahao.baidu.com/s?id=1741929063817698027&wfr=spider&for=pc
8. Titanium Media | In-Depth Analysis of the Evolution of Pre-Made Dishes: Finding Development Amid Change https://baijiahao.baidu.com/s?id=1740196870890600191&wfr=spider&for=pc
9. iiMedia Research | 2022-2023 China Pre-Made Dish Industry Development Trends and Business Layout Analysis Report https://www.iimedia.cn/c400/85944.html


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671