Recently, according to media reports, China’s first national public welfare self-discipline organization for the prefabricated vegetable industry – China prefabricated vegetable industry alliance has been officially established. The alliance is jointly guided by the agricultural trade promotion center of the Ministry of agriculture and rural areas, the Shenzhen Agricultural Products Group Co.Ltd(000061) quality safety center of the Ministry of Agriculture and rural areas and the China Green Food Development Center, and has received the support of more than 10 provincial agricultural and rural authorities and municipal governments.
This is another favorable guarantee since the notice on doing a good job in promoting consumption in the near future issued by the national development and Reform Commission in January 2022 “encouraging the listing of semi-finished products and clean vegetables”.
At the opening of trading on April 18, the prefabricated vegetable sector continued to rise. Stocks such as Fortune Ng Fung Food (Hebei) Co.Ltd(600965) , Better Life Commercial Chain Share Co.Ltd(002251) , Shandong Xiantan Co.Ltd(002746) , Zhongbai Holdings Group Co.Ltd(000759) , etc. hit the daily limit one after another, but some stocks fluctuated significantly.
Among them, Better Life Commercial Chain Share Co.Ltd(002251) staged the “Earth Sky board”. As of the closing, Better Life Commercial Chain Share Co.Ltd(002251) fell by 6.6%. The company once said on the interactive platform that it has a prefabricated dish brand “master dish”, and prefabricated cooked food products include sushi, rice balls, boxed meals, pickles, pasta and so on.
At the same time, China Quanjude(Group) Co.Ltd(002186) also announced that it would launch convenient roast duck products for single person scenarios, such as the younger generation of office workers and single people, and continue to increase the TOC end business.
Whether catalyzed by the epidemic “home economy” or encouraged by policies, the prefabricated vegetable industry has come to the eve of the outbreak.
b and C both ends work together, and C end is expected to be the focus
According to the Research Report of Anxin securities, China’s Prefabricated vegetable industry has begun to take shape, with a market scale of about 210 billion yuan. By 2025, the industry scale is expected to grow to about 600 billion yuan.
Dongguan Securities Research Report shows that the sales of prefabricated vegetable end tob end accounts for the largest proportion, about 80%, and the consumption of retail end accounts for about 20%.
In the b-end market, with the improvement of cold chain transportation and supply chain system, the chain and large-scale development of Chinese catering brands has become the main development trend of the industry. In addition, the standardized prefabricated dishes serving the back kitchen of the restaurant have effectively driven the development of the industry. At the same time, the fast-paced growth of the takeout market has also provided new growth points for the prefabricated dishes represented by cooking bags.
According to the calculation of sample catering enterprises by China Hotel Industry Association, catering enterprises using prefabricated dishes can greatly save labor costs and reduce the meal delivery speed, and the profit margin is expected to increase by 7%. At the same time, it can also reduce the raw material procurement cost of restaurants by 10% and finally reduce to 30%.
At the same time, the consumer oriented C-end prefabricated vegetable market is also growing rapidly.
According to the data, in 2022, the sales volume of pre prepared dishes for Ding Dong’s new year’s Eve dinner increased by more than 400%, the sales volume of pre prepared dishes for HEMA increased by 345% compared with the Spring Festival in 2021, and the sales volume of pre prepared dishes for daily fresh new year’s day increased by 130%. With the continuous enrichment of research and development of prefabricated dishes and the continuous promotion of consumer education, the subdivision track of family dinner and “one person food” will be the focus of attention.
The investment and financing market also focuses more and more on the prefabricated dish brand facing the C-end. The data show that the financing peak of prefabricated vegetables is from 2020 to 2021, including 12 cases in 2020 and more than 35 cases in 2021.
Except for Suzhou Weizhixiang Food Co.Ltd(605089) which was launched in April 2021, which is mainly for b-end customers, Daxidi, Guoquan Shihui, maizima, looking for ingredients, Zhenwei xiaomeiyuan, Dingding lazy food and other prefabricated food brands mainly engaged in C-end retail. Many brands have a single financing amount of hundreds of millions of yuan, and there are many investment institutions, such as Sequoia Capital, IDG, meituan, Yuanqi forest, etc.
large single product scale breakthrough
Since March, the sales volume of prefabricated vegetables across the country has increased significantly. Among them, semi-finished clean dishes and snacks are the most popular, and the sales of multiple single products increased by more than 50% over February.
However, the treatment of finished prefabricated dishes is very different. The financial Associated Press reporter learned from Shenzhen and Shanghai that it is always difficult for finished prefabricated dishes to form a group during the sealing and control period. On the one hand, it is due to the price, on the other hand, it is also due to the different taste needs of everyone, and there is a lack of dishes that form a “consensus”.
Zhengzhou Qianweiyangchu Food Co.Ltd(001215) Board Secretary Xu Zhenjiang once said that the entrants are still in their own exploratory stage. The two signs of the maturity of the prefabricated vegetable industry are the emergence of leaders and the birth of large items.
Although the development of the track is in full swing, according to the statistics of China Hotel Industry Association, whether at the b-end or C-end, the prefabricated vegetable market has the characteristics of small sales area, obvious regional characteristics, many participants and low industry concentration.
According to the data of prospective industry research institute, the sales scale of the top ten enterprises in China’s Prefabricated vegetable industry accounted for 14.23% in 2020, while the sales scale of the top five enterprises in Japan’s Prefabricated vegetable industry accounted for 64.04% in the same period. At the same time, according to Huatai research data, in 2020, there were five large single products with a sales scale of 1 billion in Japan, while in the same year, only small crispy meat and plum vegetables can reach the sales threshold of 1 billion yuan in China.
Minsheng Securities said that under the demands of catering enterprises to reduce costs and increase efficiency, the demand of b-end is relatively clear. We expect that the long-term market space of Chinese food prefabricated dishes at b-end is expected to exceed trillion and the market scale of C-end is expected to exceed 100 billion. However, due to the wide variety of Chinese food and huge differences in cooking technology, the industry may present an industry pattern of overall dispersion and category concentration in the future.
In terms of product types, Chinese prefabricated dishes are mainly divided into upstream agricultural, animal husbandry and aquatic enterprises, such as Zhanjiang Guolian Aquatic Products Co.Ltd(300094) , Longda cuisine; Traditional frozen food enterprises, such as Fu Jian Anjoy Foods Co.Ltd(603345) , Sanquan Food Co.Ltd(002216) ; Catering enterprises, such as Haidilao, Jinling Hotel Corporation Ltd(601007) , China Quanjude(Group) Co.Ltd(002186) , Tongqinglou Catering Co.Ltd(605108) ; New retail enterprises, such as HEMA and dingdong, have their own advantages.
Hai Securities believes that categories with strong inclusiveness and large taste mass base are easier to produce large-scale single products. At the same time, the categories with high added value and differentiation of products and meeting the needs of C-end consumers have stronger profitability, such as finished dishes and prepared meat slices. This is also the reason why the gross profit margin of Suzhou Weizhixiang Food Co.Ltd(605089) beef series for C-end can reach 31.4%, higher than that of similar brands.
Recently, Guangdong, Wenzhou and other places have begun to actively layout the development plan of regional prefabricated vegetable industry, focusing on supporting regional advantageous enterprises and characteristic dishes.
With the development of prefabricated food industry around local specialties, large single products that can be widely recognized by consumers and have large-scale production may be born in different cuisines.
