Prefabricated dishes on the wind: trillions of capital to bet on the C-end to accelerate the growth of new consumption

Reporter Wang Jinchen

Spicy crayfish, diced Kung Pao chicken, sauerkraut fish.
.
.
Dishes that seem to be complex can now be tasted in just a few minutes in a few simple steps
.

In recent years, with the changes in consumption patterns brought about by the epidemic, the "stay-at-home economy" and "lazy economy" have accelerated, and a variety of convenient pre-made dishes have become a new choice
on consumers' tables.
This has also attracted the attention of more and more enterprises and capital, promoting the trillion-scale prefabricated vegetable track from the traditional B-end market to the C-end
.

Prepared dishes first originated in the United States and began to be commercialized in the 60s of the 20th century
.
China's prefabricated dishes began in the 90s of last century, McDonald's, KFC and other international catering giants entered the Chinese mainland, and some factories began to distribute semi-finished dishes for them, becoming the earliest prototype of prefabricated dishes
.

However, for a long time, the development of prepared dishes in China has been relatively slow
.
With the acceleration of the pace of urban life, the trend of restaurant chaining and the acceleration of the standardization process of ingredients, pre-made dishes have achieved rapid development
on the B side.
In the past three years, under the influence of the epidemic, pre-made dishes have ushered in accelerated development
at the C-end.

Consumption is an important driver of
economic development.
The Central Economic Work Conference held a few days ago took "focusing on expanding domestic demand" as the primary task of next year's economic work, and particularly emphasized "giving priority to the recovery and expansion of consumption", and proposed to enhance consumption capacity, improve consumption conditions, and innovate consumption scenarios
.

Prepared dishes are gaining more and more attention
as a trend of new consumption.
This market ushered in rapid development, and will promote the further improvement of the prepared vegetable industry and food industry system, and will also give birth to and meet new market demand, and become a growth force
to expand domestic demand and consumer markets.

Capital pursues the trillion-dollar market and accelerates to the C-end

With the increase in the penetration rate of prepared dishes, capital has begun to pour into this potential "trillion-level" track
in recent years.
According to Tianyan inspection data, in 2021, there were nearly 300 investment events in PE/VC in the catering industry, including 23 investment and financing events in the prefabricated vegetable track, with a financing amount of about 5.
6 billion yuan.

Since the beginning of this year, although the epidemic has had a certain impact on the catering industry, the popularity of the pre-made dish track has still increased, and together with the metaverse and carbon neutrality, it has become the most concerned track for investment institutions, and the number of financing and the amount of financing have also reached a new high
.

It is worth mentioning that Lu Zhengyao, founder of UCAR and Luckin Coffee, launched a new entrepreneurial project at the beginning of this year, Hero of the Tongue, which received financing of up to 1.
6 billion yuan in March this year, which is the highest single-round financing pre-made vegetable brand
at present.
Baidu Venture Capital, Source Code Capital, CICC Capital, China Renaissance Capital, Yuanqi Forest, Xiaohongshu, etc.
have all bet on and increased the pre-made vegetable track
.

Prefabricated dishes have also become the direction of traditional agricultural and animal husbandry food enterprises, catering industry, etc.
, Guolian Aquatic Products, Anjing Food announced the investment of hundreds of millions of funds layout, Shuanghui, New Hope, Arowana, Haidilao, etc.
have also come, Luo Min, the founder of Qudian who is good at chasing the wind, with a live broadcast, pushed the popularity of prefabricated dishes to a climax
.
At the same time, this has also attracted a large number of enterprises to enter the market
.
According to Tianyancha data, in the first 11 months of this year, more than 1,690 new registered enterprises were registered in the prepared vegetable industry, with a growth rate of 42.
7%.

At present, there are more than 64,000 prefabricated vegetable related enterprises in China, of which 47.
3% have been established within
5 years.

Behind this lies a huge market opportunity
.
According to Deloitte China, the size of China's prepared vegetable market in 2021 will be about 550 billion yuan, and the CAGR is expected to reach 13%
in the next five years.
From the perspective of potential trends, the prefabricated vegetable track will reach a trillion scale
.
From the overall situation, the B side is still the basic plate
of the prefabricated vegetable market.
It is recognized in the industry that the proportion of the overall sales volume of prepared dishes on the B side and the C end is about "82 Kai", that is, 80% of the sales are on the B side, and only 20% of the sales are on the C side
.
After the epidemic, pre-made dishes for the C-end have been popular, and new brands have continued to emerge, which is expected to become the main growth engine
of pre-made dishes in the future.

Accelerate the growth of new consumption and promote the improvement of the industry system

Eating is one of the most basic human needs, and pre-made dishes meet the needs
of convenience.
As a new consumption trend spawned in the consumer market in recent years, prepared dishes also meet the needs
of some consumers in the market, especially people in first- and second-tier cities.

Consumption is an important driver of economic development and will play an increasingly important role
in the future.
The "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)" issued by the state clearly mentions that it is necessary to accelerate the cultivation of a complete domestic demand system, continuously release the potential of domestic demand, promote consumption investment, and further enhance the basic role of consumption and the key role
of investment.

This also requires the food consumption industry, including prepared dishes, to continue to meet the growing market demand of consumers and continuously generate new consumer demand
.
At present, the scale of pre-made dishes in the C-end is small, and it is necessary to strengthen guidance and cultivation, which is inseparable from the promotion of
enterprises and industries.

At present, prepared dishes are mainly divided into three major markets: ready-to-cook, ready-to-cook and instant-to-heat, with market shares of 2%, 47% and 51% respectively, but the growth potential of ready-to-cook and ready-to-cook is much higher than that of ready-to-cook.

Deloitte China believes that the focus of the ready-to-cook market is on products, and the focus of the ready-to-cook market is on scale, so the C-end market needs to pay more attention to product strength and channel strength, and product development, brand building and sales network layout will be the key to
expanding customers.

Therefore, different companies often have different ways
of playing when laying out pre-made dishes.
For example, quick-frozen food companies similar to Sanquan Foods, their main products are ready-to-cook food, often too dependent on the competitive retail end, and the ability to customize product development is weak, but the use of capacity, channels, cold chain infrastructure and other advantages have also won consumer favor
.

The rookie hero of the prepared vegetable industry has copied the "Luckin model", adopted the asset-light, traffic-oriented and capitalized approach to rapid expansion, and announced the signing of 6,000 franchise intentional stores
in 3 months under the business model of "only joining but not directly operating".
However, the company basically relies on cooperation with third parties, and does not really control production capacity, channels, cold chains, etc.
, and the supply chain is not stable
.

The prepared vegetable industry has the property of a long chain, involving raw materials, processing, fresh locking, transportation, sales and other links
.
And enterprises entering the prefabricated dishes, must open up all links, whether it is the B side or the C side, the final competition is still the supply chain strength, if there is no large-scale, low-cost supply chain support, it is difficult for prefabricated vegetable companies to go further
in the future competition.

At the same time, as a typical product of food industrialization, due to the large number of industry participants and low market concentration, industry standards still need to be unified, and problems such as supply chain norms, taste retention, logistics and transportation, and pricing need to be solved
.
With the expansion of the scale of prepared dishes and the attention of the market, the industry standard for prepared dishes is also increasingly perfect
.

According to the data of Tianyancha Research Institute, since the beginning of this year, local government departments, industrial organizations and enterprises have issued more than 30 prefabricated vegetable related standards, involving raw materials, processing, distribution, packaging, professional terminology and other aspects, making up for the gap in a number of industry norms, which will also promote the further improvement
of the food industry system.

For the hot prefabricated vegetable track, the sustainable and healthy development of the future is inseparable from the norms of the industry, and also inseparable from the construction of products, brands, channels, supply chains, etc.
, so as to form a circular pattern
of good development of the industry and enterprises.

Preliminary review: Li Song Responsible editor: Ouyang Meihua Review: Peng Zonglu