Prepared dishes are not the "antidote" for fresh food e-commerce to fully recover. From various internet grocery shopping models competing for the vegetable market, major companies are now shifting their focus to "prepared dishes" on the dining table. Recently, JD.com released a new "prepared dish plan," Meituan launched a prepared dish section, and Dingdong Maicai elevated prepared dishes to a first-level department. At the 2023 China Chain Catering Summit, Chen Huifang, General Manager of the Prepared Dish Department at Hema, revealed that the company established a new prepared dish department this year. Currently, a "prepared dish" channel has also been launched on the Hema app. However, making prepared dishes the second growth curve for fresh food e-commerce is not easy. Besides vertical platforms like Hema and Dingdong Maicai, there are traditional food companies such as Qianwei Kitchen, Anjoy Foods, and Lvjin Foods; as well as catering brands like Haidilao and Xibei. The veteran MSG company Lotus Health plans to acquire the Zihaiguo brand to enter the prepared dish track. Even the domestic "first stock of sporting goods," Guirenniao, has crossed over into prepared dishes, investing 100 million yuan to establish Jinhe (Qiqihar) Prepared Dish Industrial Park Co., Ltd., which is wholly owned by Guirenniao. In short, the prepared dish track facing Hema and Dingdong is not easy to make money from.
Prepared Dishes Go Online: New Bottle, Old Wine According to iiMedia Research data, among prepared dish consumers, those aged 22-40 account for over 80%, reaching 81.3%, with those aged 31-40 accounting for 46.4%. This indicates that young and middle-aged people are the main audience for prepared dishes. Among this group, they often have higher education levels, make more independent decisions, and have higher demands for personalized, high-quality, and convenient products. Domestic demand for quality consumption is gradually transitioning to personalized needs. Furthermore, as the domestic consumption structure increasingly optimizes, consumption hotspots are gradually shifting from traditional physical goods to service consumption that meets people's needs for a better life. Prepared dishes meet Chinese residents' demands for personalized, diversified, and convenient dining. Baidu Index shows that from 2020 to the end of 2021, the frequency of the term "prepared dish" appearing in Baidu-related news headlines was generally low, mostly below 200 times, with a slight increase around May 23, 2021. Towards the end of 2021, the popularity of "prepared dishes" began to grow. Prepared dishes are not new; there are already many veteran players in the industry. For example, Guolian Aquatic, the largest aquatic product enterprise with a full industry chain layout in China, still focuses its prepared dishes on aquatic and seafood products. Chunxue Food continues to develop chicken-based prepared dishes, which are related to its existing chicken processing business. They continuously strengthen their advantages based on category differences. Moreover, these leading prepared dish companies achieved considerable results in 2022. From the perspective of revenue and layout, the supply of representative enterprises in the prepared dish industry is showing a growth trend. The supply situation in China's prepared dish industry is relatively good, and some enterprises also have a tendency to expand production capacity. Among them, Guangzhou Restaurant stated in its 2022 annual report that it achieved revenue of 4.112 billion yuan, a year-on-year increase of 5.72%. To further increase market share and expand capacity, Guangzhou Restaurant also co-founded Guangdong Guangmei Prepared Dish Industry Investment Fund Partnership with Guangdong Province Agricultural Supply-Side Structural Reform Fund Management Co., Ltd., which will invest in industries related to prepared dishes, food processing chains, and ingredient supply chains. Guolian Aquatic also stated in a revised announcement that its total revenue for 2022 was 5.2-5.4 billion yuan, a year-on-year increase of approximately 16.22%-20.59% compared to 4.474 billion yuan in 2021, completely reversing the previous three consecutive years of revenue decline. Its prepared dish business is still primarily B2B, but in B2C, revenue is also growing rapidly. Guolian Aquatic said: "In the first three quarters of last year, our C-end e-commerce business grew by more than 50% year-on-year. We continue to invest most of our profits into advertising and marketing to increase brand awareness." Zhengzhou Qianwei Central Kitchen, which focuses on providing quick-frozen flour and rice products to catering enterprises, mainly serves B-end customers such as catering companies (including hotels, group canteens, and rural chefs). It is classified by customer size into large B (direct sales model) and small B (distribution model). In fact, these traditional brands specializing in prepared dishes mostly focus on B2B, with B2C as a supplement. There are also a few brands like Guangzhou Restaurant and Weizhixiang that focus mainly on B2C. The core value provided by B2B prepared dishes is standardization for the catering end and convenience in kitchen cooking. Key words include: stable output, controllable food safety, cost control, and relative customization. Internet giants, as latecomers, may have seen the market opportunity in the C-end and want to get a share of the prepared dish pie.
Can It Unblock the "Ren and Du Meridians" of Fresh Food E-commerce? Now, in addition to traditional brands like Guolian Aquatic and Chunxue Food, fresh food e-commerce platforms such as Hema and Dingdong Maicai are also "raring to go." Previously, Hema CEO Hou Yi publicly stated that he is very optimistic about the development direction of prepared dishes centered on new food processing technology. Public information shows that over the past five years, Hema has built 300 fresh food supply chains nationwide. Since last year, Hema's self-built central kitchens in Wuhan, Chengdu, Shanghai, and other places have been put into production one after another. At the 2023 China Chain Catering Summit, Chen Huifang, General Manager of Hema's Prepared Dish Department, stated that prepared dishes have been moving from B-end to C-end over the past three years, but C-end consumers' demands and consumption scenarios for prepared dishes are completely different from those of the B-end. Prepared dishes designed only for chefs and professional kitchen equipment cannot meet the needs of consumers who are accustomed to using household kitchen appliances like air fryers and microwaves. Based on observations and research on the needs of different consumer groups, Hema focuses on the complexity of the dish's cooking process, whether the single product has an obvious upward trend, and whether consumers can easily replicate it when developing new products. Therefore, since this year, Hema has started with seasonal ingredients and launched a series of prepared spring dishes with a shelf life of no more than 5 days. Looking at Dingdong Maicai, which entered the market in 2020, it has successively launched private brands such as Quanji Xia, Cai Changqing, Dingdong Wangpai Cai, and Dingdong Daman Guan. While its own channel business develops steadily, in 2022, Dingdong Maicai's supply chain company Dingdong Guyu launched an independent brand for external channels—Zhaoxi Xianshi. Zhaoxi Xianshi not only has an independent food R&D center but also has formed a diverse R&D team, combining Dingdong Maicai's big data insights into the market, continuously innovating and iterating based on consumer preferences and needs. From the Dingdong Maicai app, it can be seen that the pricing of prepared dishes covers multiple ranges. The more expensive ones are in the Wangpai Cai section: 700g tomato beef brisket stew at 49 yuan per serving, 1.2kg grilled fish at 78 yuan per serving, and 1260g flavored lamb offal soup at 70.5 yuan per serving. Ou Houxi, the person in charge of prepared dishes at Dingdong Maicai, once said that many young people buy prepared dishes often to have a healthy, quality meal. The portion and quality of Dingdong Maicai's Wangpai Cai are not lower than ordering a dish in a restaurant, so the pricing is also higher. In fact, Dingdong Maicai's positioning of prepared dishes in the mid-to-high end may be related to its profitability issues. According to Dingdong Maicai's latest financial report, under non-GAAP, its net margin turned from a quarterly loss of 37.2% at IPO to a profit of 1.9% in the fourth quarter of 2022, and it also achieved positive quarterly profit under GAAP for the first time. It can be seen that besides social responsibility, to find a second growth curve, Dingdong Maicai needs high-premium product lines. JD.com, which targeted prepared dishes earlier than Hema and Dingdong Maicai, also recently released its annual prepared dish strategy: to create 20 prepared dish brands with sales exceeding 100 million yuan in the next three years. JD Supermarket has launched three major measures in its original direct-operated model: resource support, exclusive dish customization, and the establishment of an independent team. Therefore, its new prepared dish strategy: to meet the two consumption needs of family socializing and solo dining, implement a traffic support plan, and create bestsellers. Meituan, the industry leader in food delivery, has not personally engaged in the prepared dish field on a large scale. However, in 2022, Meituan Waimai launched a prepared dish sales section. At the same time, to solve the problem of limited delivery range due to few stores, Meituan Waimai, in conjunction with all prepared dish brand stores, launched a "city-wide delivery" service in Beijing to expand the delivery range of dishes. This year, Meituan Maicai also stated that in the future, it will continuously strengthen cooperation with more leading national brands, deeply cooperate in developing customized products, optimize the supply chain, and provide consumers with a richer selection of products. In short, every major company wants to compete for a piece of the prepared dish pie.
The Money-Burning Model Is Hard to Sustain For traditional prepared dish brands and fresh food e-commerce, the current prepared dish industry still has many pain points, such as incomplete standards, product homogenization, low freshness, and other product and technical issues, as well as the problem of burning money and difficulty in making a profit. For example, Qudian previously promoted "1 cent to eat fish-flavored shredded pork" in a livestream, and then suddenly announced cuts to its just-launched prepared dish project, taking measures such as personnel optimization and inventory clearance. Many onlookers lamented the money-burning subsidy model and quality issues of prepared dishes. This means that for major brands to occupy more market share, they need to work on model innovation, channel capabilities, cost control, quality improvement, and financing capabilities. According to iiMedia Research's "2022 China Prepared Dish Industry Development Trend Research Report," among the issues that prepared dish consumers believe need improvement, the first is the degree of taste restoration. Low taste restoration is the direct reason for mixed consumer evaluations of the prepared dish category. However, in Chinese food culture, a single item has different cooking methods and standards in different regions. Apart from techniques and craftsmanship, cold chain transportation technology also plays a crucial role in the prepared dish industry. Cold chain plays a fresh-keeping role in the transportation of raw materials and finished products. Freshness is the most important key factor for prepared dishes and their raw materials, and the prepared dish industry has a high dependence on cold chain transportation. Taking Weizhixiang as an example, besides brand marketing investment, another high investment is cold chain transportation, accounting for about 14% of its investment. On the other hand, this year, the Central Document No. 1 mentioned prepared dishes for the first time, proposing to "cultivate and develop the prepared dish industry." The China International Food and Ingredients Expo and the first China International Prepared Dish Industry Expo were held subsequently, attracting more than 800 prepared dish industry chain enterprises to participate. With the successive involvement of local governments and enterprises across the country, prepared dishes are accelerating onto the fast track. With Douyin and Kuaishou livestreaming, traditional shelf e-commerce, community models like Guoquan, and front-warehouse models like Dingdong... who can seize the opportunity? We still need to let the "bullet" fly for a while.