How should pre-made dishes be made? This hot question in the food industry has seen diverse approaches in recent years. From a capital perspective, pre-made dishes are a popular sector that can bring attention and favor, leading numerous companies to enter the field. Companies like Haitian Flavoring, Haidilao, Quanjude, and even outsiders like SF Express, Gree, and Nongfu Spring have started to layout pre-made dish businesses. In the entrepreneurial track, pre-made dishes are also a hot trend. According to incomplete market statistics, in 2022 alone, more than ten well-known cross-sector players entered the pre-made dish track, including Luo Min, founder of Qudian, and Lu Zhenyao, founder of Luckin Coffee. No matter how lively the concepts around pre-made dishes are, when the noise fades, the pre-made dishes that came with traffic are just as fragile. First, cross-sector players have retreated one after another. Then, in the secondary market, the pre-made dish concept began to fail. Wind sector data shows that in 2021, the pre-made dish sector rose 82%, outperforming the market, but then fell for two consecutive years. Hot money fled, speculation failed, and pre-made dishes, having emerged from the traffic bubble, welcomed another industrial wind. In 2023, "cultivating and developing the pre-made dish industry" was written into the No. 1 Central Document; subsequently, Guangdong, Henan, Shandong and other places issued policies to support the standardized development of pre-made dishes. Under this tailwind, pre-made dishes have moved from a hot capital trend to a long-term business of industrial integration. Under the new trend, whoever can upgrade pre-made dishes with systematic capabilities and thinking will determine who becomes the new direction of the industry's future.
The Pre-made Dish Market: A Tale of Two Extremes
The pre-made dishes being hyped have already entered the elimination round. Last year, "舌尖英雄" (Shejian Yingxiong), which boasted it would open 3,000 stores in five months, eventually opened 400 stores in seven months, then began closing stores and its expansion plans stalled, leaving the project's future uncertain. The offline entrepreneurial trend is hard to step on, and many online brands have also fallen. Qudian, which had previously entered the pre-made dish market with great fanfare, has seen its Douyin live stream stop. The only explanation for its pre-made dish business is in last year's second-quarter report, which explained a net loss of 61.3 million yuan. Self-heating foods, which had previously ridden the broader pre-made dish concept and thrived in the capital market, have also disappeared this year. In mid-April, 自嗨锅 (Zihaiguo), once valued at up to 7.5 billion yuan, appeared in an acquisition announcement with a valuation of about 1.5-3 billion yuan, nearly halved to the bottom. Previously, 烹烹袋 (Pengpengdai) and 叮叮袋 (Dingdingdai), which entered the pre-made dish track with the feature of "microwave heating, eat in the bag," were the two main brands in the subcategory that received financing, but their Tmall and JD self-operated flagship stores have now closed. However, the continuous cooling and store closures of the pre-made dish concept players do not overshadow the heat of the strong retail enterprises in pre-made dishes. In March this year, Hema collaborated with new consumer brand Moodles to launch a series of chicken and shrimp noodles. Within a month of launch, sales exceeded one million, with weekly sales growth of over 60%. During the earlier Spring Festival, market demand was also hot. Public data shows that in the week before the festival, Hema's pre-made New Year dishes increased 407% month-on-month. Behind the polarized market performance is the industry inflection point; different thinking about pre-made dishes determines different directions. Looking at the development history of pre-made dishes in China, they can be viewed in two parts. In 2014, the rise of takeout and the standardization of restaurant chains accelerated the penetration of pre-made dishes in the B-end. At this stage, for To B catering enterprises, pre-made dishes mainly solved problems such as labor costs and ingredient loss in business scenarios. As the pace of life changes, in multiple To C consumption scenarios such as single-person meals and family gatherings, pre-made dishes mainly target consumer groups with relatively high quality of life and relatively low price sensitivity. They solve the trivial matters of home cooking, such as taste and convenience. Different needs in different scenarios also mean that although the industry has developed for many years, the capabilities that pre-made dish companies have accumulated in the past cannot be simply and roughly reused in the current market. Taking the common product homogenization in the industry as an example, the core is that To B supply chain enterprises have advantages in scale production capacity, but have low sensitivity to market demand, often only adopting a follow-up strategy: when a head single product becomes popular in the market, they follow suit. However, competition under the follow-up strategy cannot truly activate consumption demand in the To C market. At the same time, under the past B-end product thinking, the consumer perception of "not tasty, not fresh, not healthy" left in the C-end market has further hindered the development of To C scenarios for pre-made dishes. Enterprises with different thinking and capabilities will inevitably show different results when facing the industry inflection point.
Hema's Twofold Elevation
As a representative enterprise continuously increasing its investment in pre-made dishes, targeting the industrial contradiction that To B thinking cannot do To C pre-made dishes, retail enterprises represented by Hema have launched a battle to elevate with "tasty" as the keyword. At the market front, to address the problems of product homogenization, not tasty, not fresh, and not healthy under the B-end scale effect thinking, Hema, from the consumer perspective, uses three product strategies: fresh, novel, and new scenarios. In terms of fresh product power, Hema focuses on two series: "pre-made spring dishes" and "seasonal clean vegetables." Using its established 300+ fresh food supply chains, it develops short-shelf-life refrigerated fresh pre-made dishes with seasonal ingredients as the main raw materials. This spring vegetable season, Hema launched the "咬春八鲜" (Bite Spring Eight Delicacies) series, making innovative pre-made dishes from eight seasonal ingredients such as saury, spring bamboo shoots, and cherry blossoms. According to the plan, from mid-February to April, Hema will launch nearly 40 pre-made spring dishes. Freshness is a race against time and seasons, mainly emphasizing fast product iteration and freshness; in terms of novel product power, Hema is being particular about space and geographical location. Previously, it sold the regional and relatively niche specialty ingredients "长江三鲜" (Three Delicacies of the Yangtze) nationwide in the form of pre-made dishes; it delved into local specialty foods, using food technology and supply chain "mixing" to make the regional classic dish "红鲟米糕" (Red Sturgeon Rice Cake) into a more standardized pre-made dish; through process innovation and supplier co-creation, it developed internet-famous creative new products like "漏奶华八宝饭" (Leak Milk Hua Eight Treasure Rice). While satisfying consumers' need for variety with "novelty," it also further enhances the differentiated advantage of Hema's pre-made dish product power. Competing for freshness in time, differences in space, and even for different kitchen utensils, Hema can also compete for scenario fit. In May last year, Hema launched an air fryer pre-made dish series, directly processing ingredients into pre-made dishes suitable for air fryer direct processing, such as salted egg yolk swimming crab, pepper and salt mantis shrimp, and salted egg yolk chicken wings. Not only that, but for scenarios such as single-person meals, camping fever, and New Year's Eve dinner, it has launched different product series, which is exactly the "new scenario" of Hema's pre-made dish development strategy: at different time points, home kitchen appliances, hot consumption trends, etc., develop pre-made dish products with higher fit for consumers' needs in different scenarios. The three major product innovation strategies are only the path to elevate pre-made dishes. Based on this product innovation direction, seeking product capabilities from the B-end is another dimension of Hema's battle to elevate pre-made dishes. First, in terms of internal capabilities, in early April, Hema CEO Hou Yi publicly stated that he is very optimistic about the development direction of pre-made dishes centered on new food processing technology, and this year he has listed the three departments of private label, major imports, and pre-made dishes as first-level departments. Following the top leader's tone, at the 2023 China Chain Catering Summit, Chen Huifang, general manager of Hema's pre-made dish department, stated that Hema will focus on "tasty," and through the three implementation paths of fresh, novel, and new scenarios, fully accelerate new product development, emphasizing quality and differentiation in pre-made dishes. Next, in terms of external industrial cooperation, it targeted the pain points in the product end of the pre-made dish industry, such as difficult food safety control, single variety, and low flavor restoration. In early May, Hema announced the launch of a strategic upgrade for pre-made dishes, establishing an integrated "production-learning-research-sales" ecological alliance, linking with upstream raw material enterprises, midstream production and processing enterprises, and downstream kitchen appliance enterprises, combined with university research and innovation in food technology, to collaboratively solve the industry's problems.
Why Hema Again?
Organizational changes, business adjustments, and industrial cooperation around pre-made dishes are making Hema the new direction of the industry. Being able to take the lead in the battle to elevate pre-made dishes comes from Hema's long-term pursuit of retail innovation. On the one hand, in trend prediction, combined with global consumption trends, Hou Yi was the first to shout: The development of pre-made dishes is irreversible and will quickly become a major category in fresh food shopping. The prediction comes from two elements: one is market capacity. According to data estimates, by 2026, the pre-made dish market will exceed one trillion yuan. The other is that as an early participant, Hema has accumulated unique judgment since establishing Hema Workshop in 2017, from basic pastries and frozen products to exploring "fresh pre-made dishes." For example, in the C-end market, due to the low recognition of pre-made dish consumption, many companies remain wait-and-see or pessimistic. But in Hema's eyes, pre-made dishes can no longer be simply understood as "cooked and prepared is pre-made." In Hou Yi's view, pre-made dishes also require food process innovation, especially for meat and poultry, fish and aquatic products, and fruits, to achieve product restoration. Hema plans to open a Hema Fresh store in Shanghai in the second half of this year with a core category structure of pre-made dishes, mainly selling refrigerated and frozen pre-made dishes. Rational market analysis and innovative solutions to problems are Hema's long-term pursuit of product power. In terms of consumer reach, Hema's store count and long-term product power advantages in other categories also keep it sensitive to market innovation. As a new species, Hema has repeatedly led innovation in China's retail formats. Although it has stepped on many pits along the way, its ability to repeatedly launch upgrade battles in retail formats is also making it an important innovative force driving the vitality of China's retail industry.