Since its inception, pre-made dishes have been controversial, with mixed reviews, and even many industry insiders are pessimistic. The controversy largely stems from the fact that pre-made dishes serve not only B-end but also C-end consumers. In China, there are already about 20,000 pre-made dish companies, but the market is highly fragmented, with average annual sales of around 15 million yuan per company, totaling a market size of 300 billion yuan. Before last year, these companies mainly sold semi-finished dishes to institutional clients such as restaurants, companies, schools, and government agencies, i.e., the B-end. At the same time, some players have broken out of the box and increasingly sell to mass consumers, i.e., the C-end. △舌尖工坊门店 Specifically, the factors affecting B-end and C-end differ: B-end is mainly driven by increased demand and rising costs, forcing cost reduction and efficiency improvement; C-end is mainly influenced by consumers' consumption concepts, spending power, and consumption structure. Despite this, Guohai Securities has a very optimistic projection, estimating that in the next six to seven years, China's pre-made dish industry scale could exceed 1 trillion yuan, and in the long term, exceed 3 trillion yuan. So, pre-made dishes target a market of trillions, and it involves deep processing of agricultural products. On this, Du Guoying once made a sharp point: the deeper the processing, the easier it is to form a brand. From the perspective of processing depth, brands will definitely emerge in pre-made dishes; it's just a matter of time. Gartner Curve for Pre-made Dishes Gartner believes that a new technology's mature commercialization goes through a process including: emergence, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity – the famous "Gartner Curve." So, what stage are pre-made dishes currently at? — B-end penetration is basically complete, C-end is just starting, and companies are in the stage of primitive accumulation. Current stage: To B-end penetration is basically complete, with room for industrialization and product upgrading. To C-end is just starting, growing rapidly, but consumer awareness is not yet sufficient. Competition is in the first stage (single-product competition), with a highly fragmented landscape, each developing in its own field. In the future, competitors, even cross-industry competitors, may emerge, and the landscape is uncertain. Steady-state landscape has not yet formed: For current companies, the most important task is to complete primitive accumulation. Because the industry is fragmented, the industry form and steady-state competitive landscape have not yet formed. Companies focus on completing accumulation in their own track, and then in the future have more capital to enter other fields for competition. Mapping the development of the pre-made dish industry to these five stages, it is clear that it has passed the emergence stage but has not yet entered the trough, far from reaching the plateau. Specifically, pre-made dishes are currently in the transition stage between emergence and peak of inflated expectations. In fact, outside China, pre-made dishes have long been popular in Japan. After World War II, Japan gained opportunities for industrial division of labor in the global economy, such as automobiles and electronics, entering a period of rapid economic growth, and the pace of life accelerated significantly. In that social environment, time-saving and labor-saving pre-made dishes began to enter a period of high-speed growth from the 1980s, with industry growth rates reaching 20% at the time. So from a global perspective, pre-made dishes entered the Chinese market relatively late, and the pandemic in recent years has been a key catalyst. According to relevant data, in 2020, the number of newly registered pre-made dish companies was 12,984, and in 2021, it was 4,031. Additionally, from 2020 to 2021, the pre-made dish track saw a financing peak, with 12 financing events in 2020 and over 35 pre-made dish-related companies completing financing in 2021. But compared to the United States and Japan, China has diverse tastes and dispersed demand, so it may be a long time before an absolute leading brand emerges, which is closely related to China's large population base and large market capacity. Moreover, pre-made dishes have a very rich application scenario, and the C-end faces picky consumers. According to surveys, among those who try pre-made dishes, young people are the main force. These young people have certain requirements for food, are unwilling to eat instant food frequently, and find it difficult to cook for themselves. In this case, pre-made dishes become a good alternative. Those who reject pre-made dishes believe that such food has too strong an industrial flavor and lacks freshness. It is evident that pre-made dishes have not yet transformed from a hot word to a necessity in people's perception. With this in mind, let's delve into the scenarios and think: What are the needs of C-end consumers? What are pre-made dishes selling? From the perspective of C-end market education, when users choose what to eat, given a specific scenario, it is a complex decision-making process, considering personal preferences, price fairness, nutritional richness, variety, time, environment, etc. But once the category narrows to a brand, the user's decision becomes relatively simpler. So brands must consider: Are pre-made dishes a "need" or a "want"? "Need" is something you must have; without it, you feel a sense of loss. Products can sell quickly but not at a high price. "Want" is something you desire; without it, it's fine, but having it is a spiritual reward. In this case, products can be sold at a high price but not quickly. Someone might ask: "If my product sells, doesn't that mean there's demand? Why split demand into 'need' and 'want'?" What does "user-centric" mean? It means demand positioning. What is demand positioning? The first step is to distinguish whether you are a "need" or a "want." For example, lunch is a need because if you don't eat, your body feels uncomfortable. Having prawns for lunch is a want; if you don't have prawns, you won't be hungry, but if you do, you'll feel happy and spiritually satisfied. Returning to pre-made dishes, for brands, in different scenarios, pre-made dishes can be either a need or a want. For example, "Jia Guolong Kung Fu Cuisine." Although this restaurant is called Kung Fu Cuisine, there is no kitchen or chef working on-site; only over 30 types of semi-finished dishes in freezers, including Northwest dishes that Xibei is good at, as well as popular Cantonese and Hunan dishes. If you order, the staff heats up the semi-finished dish and serves it to your table. There is naturally controversy, but some people still go. For consumers, wanting to eat fast, well, and economically is the "want" in demand positioning; it can be sold at a high price but not quickly. It is not a rigid need, but for young consumer groups, the only standard to test happiness is "eating at home," not "cooking at home." We cannot overestimate the willingness of Generation Z to "wash dishes." Another point is "identity value recognition." For example, if Starbucks sells a drink that costs 10 yuan to make for 30 yuan, and I sell the same drink with the same recipe for 20 yuan, some consumers would still prefer to pay 30 yuan for Starbucks. Why? Because consumers are buying the "identity value recognition" brought by the brand logo. This is also why "Jia Guolong Kung Fu Cuisine" is expected to help Jia Guolong realize the vision of "100 billion Xibei." Therefore, to some extent, this is a "value upgrade." In the system of "value upgrade," products must let users perceive the value of the product, occupying the main value points in consumers' minds from dimensions such as scenario and demand. So, in what scenarios are pre-made dishes a "need"? For example, the lunch mentioned earlier: you can choose a fast-food restaurant or a pre-made dish, as long as it fills your stomach. But in this scenario, the presence of pre-made dishes is weak, with no perceived value, and they are dispensable. So, in different scenarios, the perceived value points of pre-made dishes for consumers differ. Under this premise, brands must consider: In what scenarios do they replace which categories, and what is the user's perceived value? From this perspective, creating more "want" consumption scenarios might accelerate the market education time for pre-made dishes. Challenges in the Pre-made Dish Supply Chain Whether B-end or C-end, the emergence of the pre-made dish market benefits from the improvement and centralization of China's supply chain, which is the most critical foundation. Let's look at the pre-made dish industry chain, still distinguishing between B-end and C-end. Depending on the B-end and C-end differences, the industry chain behind them can be divided into four major schools: professional pre-made dish manufacturers (including frozen food manufacturers), catering enterprises, upstream agricultural enterprises, and retail enterprises. Professional manufacturers: They have product-oriented thinking, are good at creating hit products and channel construction, and have advantages in scale. However, there are differences between 2B and 2C companies: 2C companies are good at brand maintenance but not at point-to-point service development, while 2B companies are the opposite. Catering enterprises: They naturally have service-oriented thinking, with advantages in dish R&D, brand premium, and store membership groups. However, packaged food operations require upfront investment in the early stage, testing the company's channel construction and service capabilities. The difficulty lies in the transformation of thinking and team building. Retail enterprises: They have high product richness, mainly asset-light operations, are good at consumer insights and data-driven approaches, with retail-oriented thinking. But the disadvantage is that quality is difficult to control, and products are hard to go beyond their own platform. Upstream agricultural enterprises: Agricultural enterprises have natural advantages in pre-made dish development because they control the upstream and have rich channels accumulated from agricultural and livestock products. But the problem is still how to balance the relationship between 2B and 2C, and between new and old products. In downstream channels, depending on the product's developability and demand stability, companies can choose B or C channels: B-end for volume, C-end for brand building. However, serving B-end and C-end users are completely different business forms. Therefore, when a company shifts from B-end to C-end, it poses a challenge to cost control in distribution, cold chain, and other aspects. For example, for B-end companies like Weizhixiang, their IPO is actually a sign that they have reached a certain mature stage. But for the pre-made food track, in the long run, C-end has more potential, while the B-end market is more stable. B-end requires strong offline channel capabilities, such as cold chain logistics, warehousing, and finance. C-end requires building online momentum and converting it into offline kinetic energy, which also places higher demands on the company's R&D, marketing, traffic management, and other online capabilities. So in the pre-made dish track, the core competitive factor among companies in the future is cost-performance ratio, because it is a systematic capability, not a single point. The ability to systematically build barriers from supply chain to market is the core of competitive capability, ultimately reflected in the brand's cost-performance ratio. Although some brands in the market have broken through with hit products, gradually controlling and optimizing the supply chain, ultimately only brands that go deep into the upstream and downstream of the supply chain can go further. In summary, for the B-end to grow bigger and stronger, the supply chain is a key difficult factor; for the C-end market to achieve mass popularization, education and awareness need to be accelerated. This battle of pre-made dishes is a hard fight, not easy to win. Are you "watching" me?