In 2022, the pre-made food industry underwent too many changes. Some entered with high profile, some left quietly; some brands advanced steadily, while others were mired in losses; old players continued to exert efforts, and new players kept increasing... As an observer and recorder of the industry, Pre-Made Food Insights closely monitored these changes. Here, we have selected ten representative events from the pre-made food industry in 2022 to glimpse the overall development of the industry over the past year.

Focusing on Advantageous Industries, Multiple Regions Compete to Become the 'Capital of Pre-Made Food'

In 2022, pre-made food became extremely popular, and local governments also joined in, with many regions vying for the title of 'Capital of Pre-Made Food'. According to incomplete statistics, in the past year, multiple cities in Shandong, Guangdong, Liaoning, Chongqing, Hubei and other provinces have called for 'building the capital of pre-made food'.

  • At the beginning of 2022, the Zhaoqing government work report proposed to accelerate the construction of the Guangdong-Hong Kong-Macao Greater Bay Area (Gaoyao) Pre-Made Food Industrial Park, build a pre-made food research platform in the Greater Bay Area, and accelerate the agglomeration and development of Guangdong's pre-made food industry.
  • Subsequently, the General Office of the People's Government of Guangdong Province issued a notice on 'Ten Measures to Accelerate the High-Quality Development of Guangdong's Pre-Made Food Industry', pointing out the need to build Zhanjiang into the capital of aquatic pre-made food.
  • In addition, Chongqing Liangping proposed to focus on Sichuan cuisine and build the 'Capital of Pre-Made Food in Western China';
  • Dalian, with seafood as a breakthrough, announced the creation of the 'Capital of Chinese Seafood Pre-Made Food';
  • Shouguang, known as the 'Hometown of Vegetables', also expressed its intention to plan and build three pre-made food industrial parks around the three major industrial chains of vegetable pre-made food, meat pre-made food, and aquatic pre-made food;
  • Shaoguan stated that it would use edible fungi as a starting point to build the capital of Chinese edible fungi pre-made food;
  • Laiyang, known as the 'Famous City of Green Food', is making efforts to build the 'Hometown of Chinese Pre-Made Food';
  • Jingzhou also announced its intention to build the 'Capital of Pre-Made Food in Central China'.

It is not difficult to see that when planning to build a pre-made food capital, most cities will rely on their advantageous industries, focus on developing differentiated categories of pre-made food, and strengthen the local pre-made food industry cluster. At present, the pattern of the pre-made food industry is not yet set, which means there are still many opportunities hidden on the track. Focusing on advantageous industries to develop pre-made food and seizing first-mover advantages has become a common choice for many regions.

Zhenwei Xiaomeiyuan Received Financing Twice Within Six Months

Capital investment enthusiasm for pre-made food has increased unabated. In 2022, the pre-made food field also saw a large influx of capital and was favored by capital. According to Qichacha data, in 2022, there were more than 30 financing events in the pre-made food field. Among them, the pre-made food brand Zhenwei Xiaomeiyuan, established in 2019, received financing twice within six months, attracting industry attention. In January 2022, Zhenwei Xiaomeiyuan completed a B+ round of financing with an amount of tens of millions of yuan, led by Baidu Ventures, with Dingxiang Capital and Zero One Venture Capital following. In May 2022, Zhenwei Xiaomeiyuan completed another strategic financing with an undisclosed amount, with the investor being Deju Brothers. As of the end of 2022, Zhenwei Xiaomeiyuan had completed a total of 6 rounds of financing.

According to the '2022 H1 VC/PE Report' released by CVSource, in the first half of last year, pre-made food, along with 'metaverse' and 'carbon neutrality', became the most watched tracks by investment institutions, with the number and amount of financing for pre-made food reaching new highs. In the second half of 2022, capital investment enthusiasm for pre-made food continued unabated. According to Qichacha data, of the more than 30 financing events in the pre-made food industry in 2022, 19 occurred in the second half of the year. In the past December, there were 6 financing events. Overall, capital has shown an optimistic attitude towards the prospects of the pre-made food track, and it favors pre-made food product processing enterprises and ingredient supply chain enterprises. Some industry insiders said that with the relaxation of epidemic controls and optimization of prevention policies, the pre-made food track may face a cooling down in the future. But at present, capital support for pre-made food is still an indisputable fact, and capital support will greatly help the future development and growth of the pre-made food industry.

Controversial Remarks: 'Pre-Made Food is Pig and Dog Food'

In September 2022, Wang Zhigang, founder of Zhigang Think Tank, commented in the Oriental Selection live stream that pre-made food is like pig and dog food, sparking heated public debate. In response to this remark, some netizens said that pre-made food has poor taste and food safety concerns, and the expert spoke the truth this time; but more netizens supported pre-made food, saying that standardized production of pre-made food is cleaner and more hygienic than freshly made takeout. Although there are chaotic phenomena of uneven product quality in the industry, not all pre-made food should be dismissed. As the controversy continued to ferment, staff from Zhigang Think Tank also responded. They said that the remark was a straightforward personal statement, expressing Wang Zhigang's feelings as a gourmet, not targeting any specific industry or individual. Regarding Wang Zhigang's remarks, a health manager also commented that his statement was somewhat one-sided, saying, 'Evaluating a new business format like pre-made food based solely on personal attitude has scientific misunderstandings.' This incident also confirmed that there are still many prejudices against pre-made food. Especially in the C-end market, pre-made food is still questioned, and controversies about pre-made food still exist. In the future, for pre-made food to open the door to the C-end consumer market, it must solve the problem of missing mandatory standards and regulate the industry through strong binding standards. Enterprises must also continuously improve product research and development capabilities, do a good job in quality control, and gradually break consumer concerns.

Pre-Made Food Caught in Additive Controversy

During the National Day holiday in 2022, a video released by internet celebrity Xin Jifei sparked a heated discussion about food additives. The video showed Xin Jifei using edible salt, monosodium glutamate, disodium 5'-ribonucleotide, high-concentration soy sauce flavor, caramel color and other raw materials to create 'soy sauce without any beans or soybeans'. During the tasting session, Xin Jifei covered the logo of a certain brand of soy sauce and compared it with pure natural soy sauce. The video itself had no problem, and the meaning was clear: soy sauce can be blended, using various additives to pass off as real. △Image source: Shetu.com Subsequently, 'Hextech' and 'all technology and hard work' became hot words and topped the hot search list. Discussions about additives became increasingly intense, and 'additive anxiety' quickly spread among consumers. Many consumers also began to 'review' the ingredient lists of food at home. Pre-made food, because it is produced in factories and has a long shelf life, also became a target of public criticism, labeled as 'tech products' and 'technology and hard work'. From the 'additive controversy' incident, it is not difficult to see that most consumers are very resistant to preservatives and additives. In fact, not all pre-made food contains preservatives or additives. For example, pre-made products using liquid nitrogen quick-freezing or ultra-low temperature freezing technology do not require additional preservatives. Moreover, if additives are used within a reasonable range, they will not bring food safety risks. But in the short term, consumer concerns about the food safety of pre-made food are hard to break. This incident also warns pre-made food enterprises to use additives reasonably in the future and consolidate the foundation of food safety. In addition, enterprises must continuously improve research and development technology, enhance product taste, and avoid excessive use of additives to compensate for insufficient product taste, to avoid the phenomenon of bad money driving out good money and weakening consumer trust in pre-made food.

Country Garden, SF Express, Gree and Others Cross Over into Pre-Made Food

Looking back at 2022, cross-industry entry is undoubtedly an unavoidable topic in the pre-made food industry. Pre-Made Food Insights noticed that in the past year, players from multiple fields rushed into the pre-made food track, trying to get a piece of the pie. Among them were industry giants. From the perspective of participation methods, cross-industry players can be said to have shown their own skills. Some chose to directly intervene in the production, research, and sales of pre-made food. For example:

  • Country Garden invested in the establishment of a sturgeon pre-made food industrial park, launching the 'Shiji Yidao' series of sturgeon pre-made dishes;
  • Shenzhen Metro and Nongjinyuan jointly created the brand 'Shentie Food Research Room', targeting office workers who do not have time to cook, choosing the peak hours of subway commuting as business hours, and selling pre-made food in subway stations;
  • Jinjiang Online, which mainly operates vehicle operations and low-temperature logistics, jointly registered and established the pre-made food brand Jinjiang Yuyu with Shanghai Jinjiang International Catering Investment Management Co., Ltd. The brand develops and sells ready-to-heat and ready-to-cook products;
  • Nongfu Spring began selling pre-made rice dishes;
  • Listed companies Cheetah and Qudian also sold pre-made food on Douyin...

Some chose to leverage their original advantages and enter the upstream and downstream industrial chain links of pre-made food, such as Gree, Galanz, SF Express and other enterprises. Galanz launched a pre-made food microwave oven; Gree Electric invested 50 million yuan to establish a pre-made food equipment manufacturing company; SF Express launched a supply chain solution for the pre-made food industry... △Image source: Galanz official Weibo With many forces crossing over, is the pre-made food pie really that easy to divide? In fact, pre-made food is not an easy business. Entrants need to comprehensively consider their own strength and needs before deciding whether to enter. When the tide recedes, who is swimming naked, time will tell.

Jia Guolong Kung Fu Food Tests the 'Food Market' Model

In 2022, Xibei continued to make efforts on the pre-made food track. Since the launch of its first pre-made dish, lamb spine hot pot, in September 2019, Xibei's pre-made food business has been running for more than three years. In August 2022, the first experience store of Jia Guolong Kung Fu Food opened in Beijing Zhongguancun e-World, but it was shut down half a day after opening, causing much speculation. However, Jia Guolong himself said that he remains optimistic about pre-made food and Xibei will continue to develop its pre-made food business. Subsequently, Xibei announced the launch of a new species that integrates a food plaza, food classroom, and food supermarket - the Food Market. Soon after, its official account also began to change its name. On November 8, 2022, the official account of Jia Guolong Kung Fu Food was renamed to 'Jia Guolong Food Market'. On November 16, it was renamed again to 'Jia Guolong Snack Market'. From the layout, the Food Market has made bold innovations based on the previous store types of Jia Guolong Kung Fu Food. The Jia Guolong Food Market consists of a food plaza, food classroom, and food supermarket, covering an area of several thousand square meters, completely different from the previous 'Chinese small restaurant model'. The SKUs in the food plaza are quite rich. In addition to Northwestern cuisine, there are also regional specialty foods and exotic flavors from all over the country. Consumers can experience the products produced by Jia Guolong Kung Fu Food on site; in the food classroom, chefs teach cooking skills on site. The food supermarket mainly sells pre-made dishes of Jia Guolong Kung Fu Food. From the market model, Jia Guolong intends to subvert the practice of pre-made food and give people a refreshing feeling. △Image source: Dianping According to Xibei's plan, it would launch the Food Market in Beijing in 2022. However, Dianping shows that as of now, the Jia Guolong Food Market located in Beijing Shougang Sports Building has not yet opened. At present, the prospects for C-end pre-made food are still unclear. Whether the Jia Guolong Food Market, which focuses on the C-end, can become a game-changer remains to be verified by time.

Qudian's Single-Quarter Loss Exceeds 600 Million Yuan

Looking back at the pre-made food industry in 2022, it is hard to find a more controversial figure than Luo Min, founder of Qudian. In July 2022, Luo Min, founder of Qudian, invested heavily in a 19-hour live stream on Douyin called 'One Cent to Eat Sauerkraut Fish', not only inviting stars like Jia Nailiang and Fu Shouer, but also distributing one million portions of one-cent sauerkraut fish and giving away 1,500 iPhone 13s. Such a large discount attracted a large number of viewers to the live stream, with over 90 million viewers and cumulative sales exceeding 250 million yuan. △Image source: Shetu.com After the live stream, Qudian's stock price once rose by more than 104%, and Qudian's pre-made food became famous overnight. However, not long after, news broke about the founder's history of campus loans, and incidents such as 'consumers buying expired pre-made food in Luo Min's live stream' and 'shelf life inconsistent with the official three-day shelf life' broke out one after another, plunging Qudian into a whirlpool of public opinion. Later, at the brand strategy conference, Qudian proposed the 'Entrepreneurial Partner Strategy', calling on mothers to join, which was even more questioned by the public as a way to lend money, harvest mothers, and make money. Now, the voice of Qudian's pre-made food has gradually faded. From its financial report data, the pre-made food business is also difficult to hide its decline. Qudian's second-quarter financial report showed that the company plans to cut investment in the pre-made food project, including layoffs, termination of supplier cooperation, and inventory clearance. Qudian's third-quarter report showed a net loss of 648 million yuan in the third quarter, the largest single-quarter loss since listing. It is worth mentioning that Qudian also attributed the huge single-quarter loss to the pre-made food project. It said that due to the reduction of the pre-made food business, the company's long-term asset impairment loss in the third quarter was 5.9 million yuan. In addition, after announcing layoffs, pre-made food inventory clearance, and contract termination with suppliers in the second quarter, the company's cash expenditure for paying severance and supplier compensation in the third quarter was as high as 469 million yuan. In just a few months, Qudian experienced a transition from betting heavily on pre-made food to becoming famous to falling into losses. The development of Qudian's pre-made food also reveals that burning money on marketing cannot do the pre-made food business well. Products are the foundation for the long-term development of pre-made food brands. In the future, pre-made food enterprises must continuously strengthen their supply chain capabilities, quality control capabilities, and fulfillment and delivery capabilities.

Insufficient Labeling of Pre-Made Food Becomes New Complaint Hotspot

In August 2022, the China Consumers Association released the 'Analysis of Complaints Accepted by Consumer Associations Nationwide in the First Half of 2022' (hereinafter referred to as the 'Analysis'). The Analysis showed that issues such as insufficient labeling of pre-made food dishes, failure to inform consumers when using pre-made food in takeout and dine-in, and damage to consumers' right to know and choose became hot complaint issues. Subsequently, a wave of discussions about 'whether consumers should be informed when pre-made food is used in takeout and dine-in' broke out online. Many people believe that the use of pre-made food in takeout and dine-in should be informed in advance and consumers should not be kept in the dark. The reason given is that freshly cooked dishes are usually superior to pre-made food in taste and freshness. It is not worth paying the price of freshly cooked dishes and finally eating pre-made food. At the same time, some people also said that this is not a resistance to pre-made food, but a reluctance to eat pre-made food without knowing, especially pre-made products with unknown manufacturers and shelf life, which makes it difficult to feel at ease. △Image source: Shetu.com At present, the main application areas of pre-made food are still takeout and dine-in. C-end consumers still have great resistance to eating pre-made food products, especially when forced or unknowingly. Whether the use of pre-made food in takeout and dine-in will be informed in advance in the future has not yet been determined. But it is certain that more and more people will pay attention to the food safety issues of pre-made food.

First Store of Shejian Hero Closes

In 2022, Lu Zhengyao, founder of Luckin Coffee and former chairman, continued to focus on the catering industry. This time, Lu Zhengyao, a trend chaser, turned his attention to the booming pre-made food industry. In January 2022, Shejian Technology, established by Lu Zhengyao's investment, announced its entry into the pre-made food industry, launching the 'Shejian Workshop' project, later renamed Shejian Hero. Its first store also officially opened in Beijing Changying Lijingyuan. However, just seven months later, the first store of Shejian Hero closed. In August 2022, the first store of Shejian Hero in Beijing closed. Stores in multiple cities also reported closures one after another. Later, franchisees revealed that they suffered heavy losses from joining Shejian Hero, causing an uproar in public opinion. △Image source: Shejian Hero mini-program Looking back at Lu Zhengyao's entrepreneurial journey, in the pre-made food track, he also adopted the old routine. He targeted the C-end track, adopted the original Luckin Coffee approach of 'heavy marketing + subsidies + fission-style promotion + rapid store expansion', developed Shejian Hero in the form of regional agents and dealer franchises, and tried to replicate another Luckin myth with internet tactics. However, the barbaric approach of high-profile, money-burning expansion may not be suitable for the pre-made food industry, especially in the C-end market where consumer acceptance is not yet high enough. C-end users tend to be more 'picky' about taste, have higher requirements for dishes, expect fresh ingredients, rich dishes, and diverse tastes. These are also important reasons why many companies have failed in the C-end market and why Shejian Hero's pre-made food retail business did not take off. But in any case, the C-end pre-made food business is still trending upward. In the future, companies that want to enter and share the market need more market education and develop suitable offline store models.

Ma Liuji Pre-Made Food Live Stream Sells Well

In 2022, live streaming can be said to be an unignorable marketing channel for C-end pre-made food. Many pre-made food brands sold goods on Douyin live streams. Among the pre-made food companies, Ma Liuji performed quite well. In November 2022, during the 'mutual tearing' between Wang Xiaofei and his ex-wife Da S, Zhang Lan, Wang Xiaofei's mother and founder of South Beauty, vigorously promoted Ma Liuji's products in her Douyin live stream, including many pre-made dishes such as sauerkraut fish, boiled beef, and maoxuewang. △Image source: Zhang Lan·Qiao Life Douyin account According to Chanmama data, on November 21, the sales volume of Zhang Lan·Qiao Life's live stream exceeded 1.2 million yuan, a tenfold increase compared to the estimated sales of just over 100,000 yuan the previous night. Other data showed that from November 22 to 24, 2022, the sales of Ma Liuji's Douyin official live stream were between 2.5 million and 5 million yuan. The live stream sales of Zhang Lan·Qiao Life on November 23 and 24 reached 10-25 million yuan, with Ma Liuji accounting for about half. It is undeniable that Ma Liuji's big sales largely benefited from Zhang Lan's opportunistic marketing, attracting many onlookers to the live stream through the feud between Wang Xiaofei and his ex-wife Da S. With this wave of traffic, Ma Liuji's pre-made food gradually gained popularity. From the current operating status, Ma Liuji's online retail business seems to be more prosperous than its offline restaurant business. Therefore, some speculate that Ma Liuji's restaurant may just be one of the themes of Wang Xiaofei's pre-made food capital story, a springboard for his coveting of the pre-made food track. Pre-Made Food Insights also noticed that in addition to Ma Liuji, brands such as Zhiweiguan, Anjoy Foods, Dingding Lanren Cai, Weizhixiang, Shizhedao, Maizima, Shejian Hero, Guangzhou Restaurant, Huifa Foods, Delisi, and Yuxianfeng are all selling pre-made food on Douyin live streams. Short video live streaming is becoming an important direction for C-end pre-made food to break through. But it should also be noted that with intensified content competition and higher user tastes, pre-made food companies may need to produce more creative differentiated content and content that is truly valuable to users to play well on Douyin.

Conclusion:

In 2022, pre-made food moved forward amid controversy for a year, and pre-made food companies were also exploring their own development paths. The involvement of local governments boosted the confidence of the upstream and downstream industrial chain, and new entrants also injected new vitality into the industry. On the road forward, there are difficulties and gains. In 2023, what new breakthroughs will the market pattern of pre-made food usher in? Let us wait and see!