Workers have long puzzled over a mystery: Why are there more and more chain restaurants, but fewer and fewer wok-fired stir-fry dishes? About five or six years ago, street-side stir-fry shops were everywhere, and nearly everyone believed the stir-fry business would stay booming. But times have changed, and chain restaurants and pre-made dishes have quickly replaced stir-fry shops, stepping into the spotlight. Compound seasonings have been instrumental in the rapid spread of chain restaurants and pre-made dishes. They overturn the old habit of adding seasonings multiple times during cooking, allowing a single sauce packet to easily complete a dish—convenient, fast, and standardized. The same applies at home: previously, making braised pork required salt, soy sauce, sugar, and various basic seasonings; now, you just squeeze open a braised pork sauce packet, and the result rivals restaurant quality. Today, more than 20 listed seasoning companies in China have almost all launched compound seasoning products. Not only MSG and chicken essence, but also hot pot bases, scallion oil, various sauces, and seasoning pastes have flooded the market. Meihua Biotech earns billions annually from MSG; Yihai International supplies hot pot bases, helping make Haidilao the first hot pot stock; Richen, which supplies compound sauces to the B-end, has over a thousand products. Like the soy sauce war, this battle in a niche segment is equally brutal, with participants ranging from traditional seasoning giants to emerging brands and outside capital. To this day, the war is far from over. From the start, it was destined to be a game where the big eat the small and the strong swallow the weak. The Rise Compound seasonings have only recently overturned the use of seasonings. For a long time, the domestic seasoning market has been dominated by basic seasonings like soy sauce, vinegar, and salt, as well as compound seasoning products like MSG, chicken essence, and thirteen-spice powder. In fact, compound seasonings appeared as early as the 1980s. In 1982, the Tianjin Seasoning Research Institute developed the first Chinese-style dish compound seasoning and was the first to name it "compound seasoning." At the same time, domestically developed compound seasonings—such as meat bone paste powder—emerged. However, these products did not gain market popularity at the time and were left in the corner of the kitchen. It wasn't until the 1990s, when foreign seasoning brands like Kikkoman, Nestlé (Totole), and McCormick entered China, that the domestic compound seasoning market began to take off. Meanwhile, yeast extract and meat extract achieved domestic production, laying the raw material foundation for domestic compound seasonings. But that era was still dominated by MSG. A wave of MSG companies, including Meihua Biotech (600873.SH) and Lotus Health, rose to prominence, with products known in every household. Years later, as consumer demands upgraded, products like chicken essence and mushroom essence emerged, appearing safer and healthier than MSG. At that time, compound seasoning pastes primarily made from soybean paste and broad bean paste achieved industrialization, enriching the product lineup in the compound seasoning field. Here we must mention Lao Gan Ma, the top brand in seasoning pastes, and Wang Shouyi Thirteen Spices, an outstanding representative of compound spice powders. Neither has ever sought a listing, quietly making money in their niche segments. The first generation of basic seasonings, represented by soy sauce, vinegar, and salt, and the second generation, mainly MSG, chicken essence, thirteen spices, and seasoning pastes for enhancing freshness and flavor, have coexisted to this day. It wasn't until 2007, with the introduction of the "Seasoning Classification" standard by the China National Food Industry Association, that the compound seasoning industry began to accelerate. The Surge MSG was at its peak in the 1990s, nurturing companies like Meihua Biotech and Lotus Health. The industrial synthesis nature of MSG was once demonized. In people's growing health consciousness, industrially synthesized products are seen as contrary to safety and health. Indeed, the most direct experience is a dry mouth after eating. The fear of MSG led to a sharp decline in market demand. In 2013, China's MSG consumption was 1.146 million tons, but by 2018, it had fallen to 890,000 tons. According to Euromonitor International, domestic MSG consumption is expected to be about 770,000 tons this year. The rise of compound seasoning products has squeezed the living space of MSG companies, and the ceiling is clearly visible. Take Lotus Health (600186.SH) as an example: from 2020 to 2022, its MSG sales were 117,600 tons, 118,600 tons, and 120,500 tons, respectively, with growth basically stagnant. Coupled with the recent failed acquisition of Zihaiguo, this veteran MSG company's transformation path remains uncertain. In contrast, Meihua Biotech has long broken out of the MSG business, expanding into feed lysine, threonine, and medical lysine, with MSG now its second-largest business. Even so, its MSG business still generates annual revenue of over 10 billion yuan. As compound seasonings are widely applied, major seasoning companies are chasing after them, and the MSG industry's prospects are bleak. On one hand, seasoning manufacturers seek growth businesses; on the other, consumer market upgrades, especially the expansion needs of catering, provide vast opportunities for compound seasonings. A typical example is Yihai International (01579.HK). It started with hot pot bases, is the largest supplier of hot pot bases to Haidilao (06862.HK), and later spun off and listed. Backed by Haidilao, Yihai International has become one of the leading companies in the domestic hot pot base industry, with annual revenue of 6.147 billion yuan (2022). Similarly, every twelfth lunar month, the "Hao Ren Jia" sausage seasoning, which banners in vegetable markets, solves the pain point of sausage-making in one go. Behind it is Teway Food (603317.SH), which became famous through Hao Ren Jia. Of course, this company's products are not limited to that; it also offers seasoning pastes, hot pot bases, and actively penetrates the B-end. Richen (603755.SH), founded in 2001, focuses on providing compound seasoning products such as sauces, coating powders, and batters to downstream food processors and chain restaurant channels. Its downstream clients include food processors like CP Foods and Sunner Development, as well as chain restaurants like Ajisen Ramen, Xiabuxiabu, and Yuku. Meanwhile, in 2009, the company created the brand "Wei Zhi Wu Yu" to meet C-end household consumer needs, launching Chinese stir-fry series, crayfish, and barbecue sauce series. The Landscape The development of compound seasonings offers an enticing imagination. According to public data, the compound seasoning market size grew from 43.2 billion yuan in 2011 to 158.8 billion yuan in 2021, with a compound annual growth rate of 13.9%, and is expected to reach 259.7 billion yuan by 2025. But that's not all. The penetration rate of compound seasoning products abroad is around 70%, while in China it's only 26%. Per capita spending on compound seasonings in China was $15.4 in 2021, only about 10% of that in the US and Japan, leaving much room for expansion. Facing this vast emerging market, should one follow or not? Seasoning giant Haitian Flavoring & Food (603288.SH) has played its cards openly. In 2021, the company launched a variety of compound seasonings at once, including nine hot pot bases featuring tomato and seven Chinese-style compound seasonings such as braised sauce and stir-fry sauce. Haitian's confidence lies in its vast distribution network and brand advantages, ensuring products sell well. However, in its 2022 annual report, it did not separately disclose sales of these products. These leading seasoning companies that hastily entered the field face high market education costs for compound seasonings, leading to longer expansion cycles and unresolved difficulties. Haitian is not alone; Zhongju Hi-Tech, Qianhe Weiye (603027.SH), and Totole face similar issues. Zhongju Hi-Tech launched mushroom soup and beef tallow hot pot bases; Qianhe Weiye listed five Chinese-style compound seasonings like Yu Xiang Rou Si and Mapo Tofu; Totole launched five flavors of compound seasonings. All face problems similar to Haitian's—what will their future development look like? Traditional seasoning companies are following the trend, and outside capital is also gearing up. Even pickled vegetable giant Fuling Zhacai, grain and oil giant Yihai Kerry (300999.SZ), and meat product giant Shuanghui Development have entered the compound seasoning battle. When entering a new category, brand becomes a double-edged sword. The almost solidified brand images from earlier stages—such as Haitian's soy sauce or Totole's chicken essence—are deeply ingrained. How can they effectively educate the market on compound seasonings and form new brand recognition? In the current compound seasoning field, the best-performing and most popular products are mainly Sichuan-style seasonings like hot pot bases and sauerkraut fish seasoning, which have taken the lead in the Chinese-style compound seasoning market. According to public data, dozens of Sichuan-style seasoning companies had annual sales exceeding 100 million yuan in 2021, most located in Sichuan and Chongqing. Among them, companies with annual sales of over 1 billion yuan include Teway Food, Yihai International, Hong Jiujiu, and Ji Xiang Ju. Among these, Teway Food and Yihai International each derive half of their revenue from hot pot bases, making them evenly matched. In recent years, both companies have invested heavily in marketing activities, fiercely competing for the top spot in Sichuan-style compound seasonings.