---
title: "Dining Channels Rekindle the Bustle: How to Seize Sales Opportunities?"
description: "As the pandemic recedes, the dining sector, the most vibrant symbol of urban life, is gradually recovering its former bustle. Despite economic uncertainties, people's enthusiasm for food remains undiminished, presenting a significant market opportunity for FMCG beverage manufacturers this year. According to the 2022 China Catering Big Data White Paper and the 2023 China Chinese-style Catering White Paper, national catering revenue in 2022 reached approximately 4,394.1 billion yuan, accounting for 10% of total retail sales of consumer goods, with a year-on-year growth of 9.2% in January-February."
author: "邢仁宝"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-04-12"
language: "en"
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# Dining Channels Rekindle the Bustle: How to Seize Sales Opportunities?

> As the pandemic recedes, the dining sector, the most vibrant symbol of urban life, is gradually recovering its former bustle. Despite economic uncertainties, people's enthusiasm for food remains undiminished, presenting a significant market opportunity for FMCG beverage manufacturers this year. According to the 2022 China Catering Big Data White Paper and the 2023 China Chinese-style Catering White Paper, national catering revenue in 2022 reached approximately 4,394.1 billion yuan, accounting for 10% of total retail sales of consumer goods, with a year-on-year growth of 9.2% in January-February.

After the pandemic restrictions were lifted, the dining sector, as the most vibrant symbol of urban life, is gradually recovering its former bustle.
"Food is the first necessity of the people." Even in the current uncertain economic climate, people's enthusiasm for food has not diminished in the slightest. For some FMCG beverage manufacturers, this year is undoubtedly a market opportunity that cannot be ignored under the accelerated marketing pace. Let's first look at a set of data:
According to the "2022 China Catering Big Data White Paper" and the "2023 China Chinese-style Catering White Paper," national catering revenue in 2022 was approximately 4,394.1 billion yuan, accounting for 10% of total retail sales of consumer goods. In January-February, national catering revenue grew by 9.2% year-on-year.
Currently, the Chinese catering market has about 8.44 million stores. Despite the impact of the pandemic, the number has continued to rise for three consecutive years, demonstrating resilient vitality. Among them, Chinese fast-food restaurants number 3.577 million, accounting for 42.4% of all catering stores, far ahead of other categories. First- and second-tier cities remain the main battleground for catering enterprises (more than 50 cities have over 50% of stores). Compared to other catering categories, hotpot stores have the highest proportion in lower-tier markets, reaching 51.2%. The per capita consumption of exotic cuisine, hotpot, and Chinese formal dining is significantly higher than the overall catering average, while Western fast food, light dining, and Chinese fast food are below the overall level. Among them, exotic cuisine has the highest per capita consumption, followed by hotpot, and Chinese fast food has the lowest. In terms of regional characteristics, East China, the largest catering region, accounts for 33.6% of store scale. Guangdong, the largest catering province, has over 950,000 stores; the lower-tier market, the most promising market, has over 4 million stores; Shanghai, the largest catering city, has over 200,000 stores. Currently, over 50% of catering stores have per capita consumption below 30 yuan, and in the past five years, per capita catering consumption has been below 40 yuan, indicating that mass consumption remains mainstream. It is not difficult to see that the catering market is recovering faster than other consumer sectors, with steady resilience, showing clear concentration and regional distribution characteristics across different market types, with certain patterns to follow. Consumption prices and scenarios align with mass-market beverages, making it a good channel for immediate consumption and consumer cultivation. **Consumers in the current dining channel are also evolving, with gathering, socializing, and check-ins becoming symbols of the new dining era.** This is why many leading beverage brands have been keen to penetrate the dining channel in recent years, because once a beverage establishes a foothold in the dining channel, competitors find it hard to dislodge it. **Sub-channel segmentation and entry points** Referring to a brand's definition of dining channels, they can be divided into four categories based on scale and consumer characteristics: **A-type dining channels** typically refer to high-end clubs and star-rated hotels, where consumers focus on health and quality, making them more suitable for high-end packaged products. Entry barriers for beverage companies are relatively high and difficult, but profits are substantial, such as Voss and Evian. **B-type dining channels** refer to restaurant-style and business hotels, where consumers are mostly business or official, making them more suitable for mid-range products, which can help build brand and increase sales, such as Red Bull and Kunlun Mountain.
**C-type dining channels** refer to food stalls and specialty restaurants, where consumers are mostly family gatherings and friend gatherings, making them particularly suitable for small and medium-sized beverage products, as well as mass-market products from big brands, such as JDB, Six Walnut, Huiyuan, and Lulu. **D-type dining channels** refer to fast-food restaurants and food courts in shopping malls, where consumers eat simply and quickly with limited spending power, making them particularly suitable for canned and large-bottle beverages, such as Coca-Cola, Vitasoy, and Dayao. Manufacturers need to combine their product positioning to enter the channel, focusing on two key things at this stage: **1. Gain deep insights into product consumers to more accurately target dining types.** Analyze existing distribution channel data: which channels have high turnover? What age groups and occupations are the main consumers in these channels? What are their life trajectories and dining channel types? At the same time, it is best to conduct field research to verify whether the targeted dining channels already have competing products on the shelves, how well they are selling, and what feedback store owners have. Know yourself and know your enemy before acting. **2. Think through the product's entry selling point.** Beverage consumption demands in dining channels generally have distinct functional labels: such as quenching thirst, cutting grease, relieving spiciness, sobering up, reducing internal heat, aiding digestion, supplementing nutrition, and also adding to the festive atmosphere, such as when women or those allergic to alcohol need to substitute drinks for alcohol at gatherings. Find a selling point that matches your brand among these demands. In fact, many brands do not have a selling point as fitting as JDB's "Fear of Getting Heated Up," but many brands can extend their offerings based on the various demands of the scene. For example, fruit juices generally have selling points of cutting grease and spiciness, fresh and refreshing; functional drinks have selling points of adding energy and helping you get back on track; sparkling water has selling points of vitality, low sugar, and refreshing confidence, but drinking healthily is an eternal element. **Key success factors for products in dining channels** **1. Attractive pricing system.** Competition in dining channels is fierce, and the premium and profit margins of dishes are constantly being compressed. Relying on high-margin beverages to increase profits is a common demand in dining channels. Therefore, the supply chain value for dining channels needs to leave higher profit margins than traditional channels, generally above 30%. The lower the brand awareness, the higher the margin requirements. This indirectly compresses the profit space of upstream suppliers, so developing dining channels generally requires additional budget investment, especially in the early stages, to ensure overall profit levels through in-store visual merchandising and other expenses. **2. Product packaging that fits the scene.** Beverage packaging in dining channels has some preferred characteristics, such as glass bottles, cans, large capacity, fresh and light styles, or visually striking large red or gold tones that can instantly capture consumers' attention. **3. Channel suppliers with networks.** Relying on salespeople to visit and develop dining channels one by one is inefficient. More often, it is necessary to find local wholesale customers who supply these dining stores. These customers are usually distributors of beer, liquor, condiments, grains, and oils. They have good relationships with these stores, and in terms of profits, they can better meet the demands of dining clients through their product matrix. However, to gain the support of channel suppliers, it is necessary not only to let them truly see the manufacturer's determination and support, but more importantly, to make the beverages complement their other products in terms of peak and off-peak seasons, making it easier to persuade them to contribute their networks. For example: provide special incentive fees for dining distributors to achieve regional dining channel development, improve store service rates, and assist in executing channel activities; among liquor wholesalers with a certain sales scale, select those with dining channel supply networks and distribution capabilities to sign as core secondary distributors, enhancing control over the dining channel sales network in the project area. **4. Visual merchandising with atmosphere.** Dining establishments are semi-closed channels. As long as consumers have a drinking need while dining, transactions are easy to complete. In such scenarios, advertising through bar displays, in-store posters, promotional hanging flags, and table cards is very effective. Of course, the visual design for dining channels should revolve around product selling points and dining scenes, evoking emotions as much as possible. Additionally, if the product itself can be designed into attractive artistic shapes, it can be displayed in the store to become a point of attention for consumers. There are many ways to leverage this based on different dining types and in-store decorations, but it is essential to be thoughtful and avoid making consumers feel a strong advertising flavor.
**5. Strong waiter incentives.** The most important role in dining channels that must not be overlooked is the waiter. A single recommendation from them can double or more your product turnover. Setting up effective incentives to motivate waiters to promote your product is a topic brand manufacturers need to consider. A common practice is collecting bottle caps/pull rings/labels and exchanging them for cash or gifts after reaching a certain quantity. This process can be made more efficient with one-code-one-item digitalization.
Additionally, strengthening relationships with key store personnel, such as lobby managers and shift leaders, through daily relationship building and rewards, should not be overlooked. **6. Value-for-money and thoughtful meal sets.** Here, meal sets include two types: one is the in-store menu, and the other is the electronic menu on delivery platforms. Meal sets should offer higher cost-performance, ideally bundled with the store's signature dishes. The beverages paired should align with dining habits. For example, a fast-food restaurant launched an energy set: a large bowl of beef meatball soup + Red Bull; a parent-child nutrition set: steamed sweet potato + stir-fried mushrooms with garlic + rice + millet porridge + yogurt, making consumers feel the nutrition is balanced and tailored to their needs. In addition, in nightclubs and bars, "cocktail set" approaches can be tried, such as: whiskey + orange juice = sunrise cocktail, Red Bull cocktails, etc.
**7. Innovative and heartwarming free drinks.** In the early stages of channel development, it is also essential to conduct offline promotional activities at popular stores on main streets. Promoters' attire and activity design should both enliven the dining atmosphere and reflect the product's core selling points. Avoid simple giveaways; let consumers obtain products through participating in fun activities, which creates lasting memories. For example, a brand used a big wheel/table tennis draw, rock-paper-scissors, or photo-taking to give away products. Each product was pre-chilled for over an hour, and product dates were monitored; products over six months old were not allowed for free tasting to ensure the best quality. Additionally, joint promotional activities with dining establishments during special festivals can achieve resource integration. **Channel development case** In recent years, a certain soda brand has become a hit in the dining channel. What exactly did it do right? Let's briefly analyze. **1. Packaging.** Glass bottle packaging has inherent advantages in dining channels. The design of 520ml and 550ml large-capacity bottles similar to beer bottles was the first step to success, followed by moderately sweet taste. Packaging and taste are always the first threshold for communicating with consumers. Therefore, when manufacturers choose SKUs for dining channels, it is best to align packaging and taste with the channel's characteristics: large packaging and cost-effectiveness. **2. Profit.** Alcoholic beverages are expensive in dining channels, and many consumers have a habit of bringing their own drinks. Therefore, sufficient profit and affordable pricing are the second key to success. The distributor's landed cost is 17.5 yuan per case, the second-tier distributor price is 22 yuan per case, and the terminal invoice price is 30 yuan per case. With purchase incentives, the single-case price can reach 25 yuan. Based on a retail price of 5-6 yuan, the single-bottle gross profit reaches 3-4 yuan, nearly six times that of Coca-Cola. Combined with the large capacity, it is highly attractive to consumers, store owners, and wholesalers alike. **3. Customer selection.** Instead of blindly pursuing the number of distributors, they evaluated distributors based on four aspects: capability foundation, soft factors, industry status, and cooperation willingness, with a 3-month trial agency period to ensure precise customer selection. **4. Channel selection.** They focused on mid-to-low-end dining establishments, first building influence in barbecue, hotpot, and skewer restaurants. These consumers are more price-sensitive and easily become the first batch of fans. In the dining industry, the most taboo is casting a wide net; instead, choose influential stores, such as internet-famous ones, establish a pilot market in a small area, and then expand to other markets after successful promotion. **5. Brand promotion.** They adopted a high-profile, fast-paced approach, inviting popular celebrities as spokespersons, highlighting the brand's selling points with slogans, and combining traditional online and offline marketing with new media matrix marketing to maximize traffic marketing. Dining channels are difficult to attack but easy to defend. Once a foothold is established and consumers form drinking habits, it easily drives more dining stores to join, forming a channel moat from point to line to surface, creating new business growth points. Expanding dining channels requires not only patience but also continuous insight into details and innovation, truly testing the marketing skills of brand manufacturers.
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