Author/ Author of "Finance and Economics" Weekly Xu Ge
Editor / Chen Fang
No one expected that the first outlet in 2022 would be pre-made cuisine, a category that has a history of more than 80 years in the world and a history of more than 20 years in China, ushered in a big outbreak at the spring festival of the Year of the Tiger.
Last week, the Shanghai and Shenzhen prefabricated vegetable concept stocks led the way, a number of stocks in the sector set off a tide of ups and downs, and the stock price of China United Aquatic Products soared from 5.18 yuan to 8.95 yuan in three trading days, an increase of more than 72%, and Haixin Food, Fucheng Shares, Delis and so on rose and stopped for three consecutive days.
The capital market is always moving, and the sudden heat of the prefabricated vegetable concept stock is not unrelated to the increase in the heat of the consumer market. Although there are still two weeks to go before the Chinese New Year's Eve, many people have already prepared to Chinese New Year's Eve meal early, do not want to waste time and effort, and people with poor cooking skills invariably set their sights on the prepared dishes.
"This year, my family Chinese New Year's Eve rice plan to buy a gift box of Quanjude, 1088 yuan has 12 dishes." A consumer revealed that the oil braised sea shrimp, sauce elbows, and dry roasted yellow fish in the gift box are laborious to make, and they used to go to restaurants to eat, and now they are made into semi-finished products by merchants, and Chinese New Year's Eve can be made into a hearty Chinese New Year's Eve meal with a little processing at home, saving time and effort.
Experts analyzed that near the Spring Festival, superimposed many places to advocate the local New Year, it is expected that the prefabricated dishes will have a very large market demand in the near future. Indeed, after the market cultivation in 2021, pre-made dishes have continued to heat up in recent times, and many e-commerce platforms such as Daily Excellent Fresh and Hema have also released news of the soaring sales of prepared dishes.
Capital stir-fry prepared dishes
Pre-made dishes have become a new outlet in 2022.
Since January 12, the concept stocks of prefabricated vegetables in Shanghai and Shenzhen have ushered in a big outbreak, and the entire sector has risen sharply for three consecutive trading days. On January 14, 7 of the 38 constituent stocks in the prefabricated vegetables sector reaped the limit, including Guolian Aquatic Products, Zhangzidao, Fucheng Shares, Delis, Haixin Food, Jinling Hotel, etc., many of which have been up and down for many consecutive days.
Guolian Aquatic Products, which has the highest gainer, rose as much as 72% in three consecutive trading days, and the impetus for its stock price rise was related to an announcement. On the evening of January 11, Guolian Aquatic Products issued an announcement that it cooperated with Hema to deeply develop pre-made dishes for aquatic products such as shrimp, tilapia, crayfish, etc., and said that it would use Hema's online and offline channels to develop the C-end market.
The next day, Guolian Aquatic Products' share price began to rise, with the total market value increasing by 4.2 billion yuan to 8.9 billion yuan in just four trading days, setting the best historical record since 2015. The capital market regained confidence in Guolian Aquatic Products, the core reason comes from the company's statement, emphasizing that although the contribution of prefabricated dishes to the company's total revenue in 2020 is not high, the company will continue to adjust the product structure in the future, increase the research and development and launch of prefabricated vegetable products, thereby improving the added value of the company's products. In the end, 37,000 shareholders of Guolian Aquatic Products reaped a long-lost surge.
Some listed companies also took the opportunity to advertise, although Ewushang A is an upstream and downstream industrial chain company, said that the Wushang supermarket Chinese New Year's Eve rice prefabricated dish gift box has been online and offline synchronous pre-sale, is expected to be able to pick up the goods on January 23; because the scallops escaped out of the circle of Zhangzidao, announced the dragon rib Buddha jumping off the wall, wrapped in powder fish steaks and other detailed menus, looking forward to pulling the next round; Tongqinglou, Jinling Hotel is more clever, only the subsidiary involved in the prefabricated dish, but also non-stop announcements.
With the sharp rise in stock prices, a number of companies issued abnormal fluctuation risk warnings, indicating that the current industry concentration is low, competition is fierce, affected by the prevention and control of the new crown epidemic, regional markets and supply chain integration, and there is also uncertainty about new business. But it does not affect the attention of investors, or even brokers.
Brokers are unanimously optimistic about the development prospects of prepared dishes. Guohai Securities believes that prefabricated vegetables are one of the fastest growing sub-industries in the food processing industry in the past five years, and it is expected that the compound annual growth rate of the industry will reach 15% in the next five years. Huaxin Securities believes that prefabricated dishes meet the needs of young people for the lazy house economy, and prefabricated dishes and upstream and downstream enterprises will have greater potential in the future.
Huachuang Securities gave a specific data prediction, believing that under the promotion of various factors, the market size of prepared vegetables will increase to 700 billion. Shanxi Securities is more optimistic, and the space scale of mainland prepared vegetables is expected to reach 340 billion yuan in 2021, an increase of 18% year-on-year. In the next 3-5 years, the mainland prepared vegetable industry is expected to become the next trillion catering market.
The wind mouth that is eaten by young people
In the eyes of ordinary consumers, pre-made dishes are ready-to-eat hot and cooked foods, easily helping young people to create a table of "full Han Full Table" in 10 minutes. In the most serious period of the epidemic in early 2020, there was a wave of pre-made dishes, when staying at home, takeaway was restricted, catering enterprises such as Haidilao and Yunhai Cuisine, as well as new retail enterprises such as Daily Excellent Fresh and Hema have entered the game.
However, when the epidemic situation is relatively stable, the prepared dishes return to the regular growth rate, and people re-lift the pot stove or order takeaway. Now that the pre-made dish is on fire again, it is doubtful.
Wu Tingting, head of the daily excellent fresh frozen food group in the front line, revealed that the popularity of pre-made dishes this year is the result of the long-term cultivation of the market. "At the beginning of 2020, Daily Excellent Fresh sensed this category opportunity very early, and was the first in the industry to establish a 'Kuaishou cuisine' category around convenience foods such as pre-made dishes, and began to explore and deeply cultivate pre-made dishes." Under the huge demand of C-end and B-end, prefabricated vegetables have developed into a large market of 100 billion, upstream and downstream enterprises have entered the game, the heat of the entire market has suddenly risen, and the perception of consumers is getting stronger and stronger.
In Wu Tingting's view, the rise of the prefabricated vegetable market is inseparable from the help of the following factors: first, the help of the epidemic has increased the demand for eating at home; secondly, the smaller family unit has spawned the home economy and the lazy economic effect; secondly, the development of cold chain logistics has further improved the timeliness of food preservation and distribution; especially the change in population structure has accelerated the rise of prepared dishes. According to the data of the seventh census, the average household population in the mainland in 2020 will be 2.62 people, which is 0.48 fewer than ten years ago, which is in line with the target household user structure of the prepared vegetable market with one or two people.
This was followed by fierce market competition, with the ultimate wrestling handed over to big players among the more than 69,000 prefabricated food companies (as of January 2021).
Wu Tingting classified four major players, the first type is from catering enterprises, such as Xibei, Xinya, Zhiweiguan, etc.; the second category belongs to the comprehensive school, and prefabricated dishes are one of the categories, such as Sanquan, Anjing, Qianwei Central Kitchen, etc.; the third category is the new retail school of Daily Excellent Fresh and Hema; the fourth type is the relatively professional school of condiments, such as Suzhou Haodelai, Hubei Huikang, etc.
There are both specialized prefabricated vegetable enterprises, as well as large-scale catering and food enterprises, as well as channel-driven enterprises, most of the products produced in them are supplied to the B-end market, that is, semi-finished products that provide assembly lines for chain restaurants, accounting for 80% of the market share. However, recently, there have been more and more products for the C-end crowd, and Delis revealed that the company's pre-made dishes have accounted for 30% of the C-end business.
From the perspective of market structure, users in first- and second-tier cities are more receptive to prepared dishes. According to the survey of Ai Media Consulting, users in first- and second-tier cities buy more prepared dishes, of which the number of customers in East China is larger, and more than 80% of the surveyed users consume pre-made vegetable products every week. As for the reasons, one is to save time, and the other is to feel that pre-made dishes are healthier and more hygienic than takeaways.
Kaiyuan Securities believes that from the perspective of the C-end market, the cost performance of prefabricated dishes is higher and the taste is good, which can effectively reduce the burden of cooking for consumers and improve the quality of life.
The pre-made dish became the outlet to be eaten. As early as the Spring Festival in 2021, young people who celebrate the New Year on the spot have seen a sharp increase in the number of prepared dishes on major platforms. In the fourth quarter of 2021, the penetration rate of daily fresh prepared dish products exceeded 40%, and the repurchase rate among member users was close to 70%. Among them, the sales of boutique pre-made dishes in November increased by 92% year-on-year.
It can be said that the entire 2021 prefabricated vegetable market is full of harvest, and Weizhixiang logged into the capital market in April last year and became the "first stock of prefabricated vegetables", and the current market value has doubled compared with when it was just listed, with a total market value of 9.3 billion yuan. Five months later, the "first share of the quick-frozen supply chain", Qianwei Central Kitchen, was listed on the Shenzhen Stock Exchange, with an issue price of 15.71 yuan, all the way up to 55.11 yuan, with a total market value of 4.7 billion yuan.
In this context, a number of start-up companies have also frequently obtained capital favor, such as Wangjiadu Food, Zhenwei Xiaomeiyuan, etc. have received financing, and many investors include well-known institutions such as Sequoia China and IDG Capital. Even Lu Zhengyao, the "hunter of the wind", also entered the prefabricated vegetable market, wanting to get a piece of the pie, and promised to open three thousand tip workshops.
The "strategic category" of fresh e-commerce
Although there are many enterprises digging for gold in the prefabricated vegetable market, the current competitive landscape in this field is extremely fragmented, the industry concentration is low, there are fewer enterprises above the scale, and it is still in the initial stage of horse racing.
However, industry insiders believe that with the expansion of market scale and the increase of concentration, companies with supply chain advantages and brand effects in the future may run out in advance.
Daily Fresh is in the middle of a hard run. Wu Tingting revealed that at present, pre-made dishes are internally listed as strategic categories, and there are higher requirements for the speed and quality of commodity planning and SKU development "At present, we have more than 800 SKUs of prepared dishes including ready-to-cook, instant heat, and ready-to-eat, of which there are hundreds of SKUs for high-quality pre-made dishes, and we are still increasing the variety, and it is expected that the sales growth rate in 2022 will be higher than that in 2021." ”
In Wu Tingting's view, pre-made dishes can not only meet the consumption upgrades of platform users and the dining needs of different scenarios, but also enhance the company's gross profit margin and product differentiation ability. "Our prepared dishes are at least 15 percentage points higher than the average gross margin of the platform."
Improving the level of profitability and verifying the ability to make blood are obstacles that many fresh e-commerce companies will face sooner or later.
In the past, subject to restrictions such as the standardization of agricultural products and cold chain logistics, fresh e-commerce was regarded by the outside world as a difficult bone with heavy investment and a large capital gap, and countless companies fell in the financing war. After a few survivors go public, they still need to return to the most essential business world and become a profitable company by improving their operations.
On the road to improving profitability, pre-made dishes are highly expected. Due to the high added value of prepared dishes and the complex production process, consumers are willing to pay for time-saving and labor-saving, so the gross profit is relatively high. Because of this, many enterprises such as Daily Excellent Fresh also incorporate prepared dishes into their own brands, relying on their own supply chains to further optimize costs and increase gross profits.
Good retailers, often also well-performing brand manufacturers, seem to be a recognized development path in the industry. For example, offline Japanese convenience stores will incorporate high-margin fresh food into their own brands, and now online retailers are following a similar trajectory.
At least for the fresh e-commerce platform, there is an opportunity to improve profitability by prefabricated dishes.
Traditional FMCG products are mainly standard products, such as beverages, dairy products and other industries, usually have the head of the big brand entrenched, consumers almost only recognize the brand. The prepared dish is a blue ocean market, rooted in the broad and profound Chinese food culture with large regional differences, which cannot form a unique pattern, and there are more opportunities for late entrants.
Daily Excellent Fresh has also experienced nearly two years of precipitation. As early as March 2020, Daily Excellent Fresh launched the "Famous Shop Famous Dishes" channel, inviting catering enterprises such as Xibei and Meizhou Dongpo to settle in to provide consumers with pre-made dishes.
Nowadays, it has formed a two-legged walk, and the daily excellent fresh pre-made dish has its own brand mainly doing the national mass commodities, while the regionalization relies on the introduction of catering enterprises to cooperate in development, such as Xibei, which is good at the northern market, favors Xinya in East China, and Hui cuisine represents Tongqinglou.
Especially in this winter, the daily excellent fresh launch of the boutique pre-made dish "daily signature dish", this private brand products are mainly ingredient hot pot, the first batch of online products include flavored sheep scorpion, domineering beef bone pot, etc., with high degree of taste reduction, heat can be eaten, once listed on the market, it has become a top 3 product in the sales of prefabricated dishes.
The hardest part is the taste
Daily excellent fresh can create explosive products, seize the outlet of pre-made dishes is not without reason, thanks to the accumulation of years of experience in commodity research and development, supply chain construction, cold chain distribution.
In order to identify consumer preferences and market trends, Wu Tingting and his team will study market reports, and will also refer to the products with high order rates on takeaway platforms, combined with seasonal development and trial products. For example, considering the demand for winter supplements, as well as the sales data of previous years, this autumn and winter they have created pot products, in the hot pot season, to provide consumers with more diversified demand for dishes.
"The biggest challenge in the development of pre-made dishes is the restoration of dishes, after thawing and cooking, the taste is still similar, and the industry is currently exploring, if it is reduced to 80%-90% of the taste, it is good." Wu Tingting revealed.
Take the flavor of sheep scorpion, domineering beef bone pot two explosive products, whether from market research, or raw material selection, process improvement, have experienced a lot of exploration.
For example, in the selection of sheep scorpions, the daily excellent fresh requires bone marrow and a high meat rate, specifically it will look at the proportion of sheep neck bones and sheep backbones, the former has a higher meat rate, "Our sheep scorpion meat rate is 33%, and the mainstream of the market is not more than 30%. ”
In the development of the beef bone pot, the process has been sampled back and forth at least ten times, such as the fat-to-lean ratio of the meat, the thickness of the soup, the degree of saltiness and spiciness, whether the pot is round or square, and even refined to add fruit corn to degrease.
In Wu Tingting's view, their research and development ideas are to push back from the needs of consumers and make high-quality and good-tasting goods, rather than blindly pursuing cost cheapness. At present, they are also engaged in the product planning of spring and summer, focusing on high-protein and low-fat white meat series.
Of course, the construction of the supply chain has also brought a lot of convenience to the development of prefabricated dishes. According to the financial report of the third quarter of 2021, there are currently nearly 200 "excellent fresh farms" direct procurement bases in the country, covering aquatic products, vegetables, fruits, aquatic products and other categories, as well as about 350 "excellent fresh factories", with in-depth direct supply cooperation with well-known manufacturers of meat, eggs and fast moving consumer goods. Strengthening the direct procurement supply chain has also further reduced procurement costs.
The development of pre-warehouses and cold chain logistics also ensures the effective supply of prepared dishes. As of the end of September 2021, the front-end warehouse network of Daily Fresh covers 17 cities, and the average delivery time is compressed to 36 minutes, alleviating the worries of ensuring the quality of prepared dishes.
Compared with peers who have also laid out pre-made dishes, Wu Tingting revealed that daily excellent fresh has two differentiated capabilities, one is selection, alleviating the concerns of users who choose too much and cannot start, and also reducing losses; the other is to cooperate with the industry's leading catering brands or factories, so that consumers can buy worry-free and eat at ease.
In the face of uncertain risks in 2022, Daily Excellent Fresh has listed prepared dishes as a strategic category, which will not only further increase the proportion of categories and sales growth, but also accelerate the research and development of dishes and provide consumers with more diversified choices.
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