Image source @ Visual China
Wen 丨 Song Xuan, Editor 丨 Mainland
Let Lu Zhengyao break his wrist to bet, let Jia Guolong use human head guarantee, since January 2022, the stock prices related to prefabricated dishes have soared, and more than 10 prefabricated vegetable brands such as Love Cooking Rice, Wang Jiadu Food, Three Meals with Ingredients, Pot Circle, Taste Lion, Silver Food, And Mai Zi Ma have successively obtained financing within one year, and the highest financing amount has exceeded 100 million...
Prefabricated dishes have obviously become the darling of new capital, and the rapidly pushed up industry expectations behind them are also promoting the rapid development of this industry. Entrants not only have professional-level food companies, but also big-pocket catering companies.
It can be said that today's pre-made dishes, small players, can not play; big players, desperate.
Looking back at the development history of 100 years of prepared vegetables, today's Chinese pre-made vegetable market is actually just starting out, is it on the eve of the outbreak? Different players have their own conclusions in their hearts.
01、The "location" of the prepared dish
Before we think deeply about the pre-made market, we must first determine where the prepared vegetables are in the market.
The prefabricated market, which is constantly being discussed today, is really just a branch of the real prefabricated market. We can basically use 3 "Rs" to distinguish the classification of the prefabricated course.
The first R is "ready-to-eat food" Ready to Tat, such as canned food
The second R is "instant hot food" Ready to Heat, such as frozen fast food
The third R is ready to Cook, which is processed according to the cooking steps
This classification is to divide the prefabricated market according to the depth of prefabrication and the degree of consumer production, and most of the prefabricated food tracks we are discussing today belong to "ready-to-heat food", that is, standardized industrial food that can present delicious dishes in just one step of processing at home.
Of course, if the prefabricated food market is distinguished more broadly, it can also be divided in this way, the same is 3 "R":
Ready to Drink（即饮）
Ready to Eat
Ready to Cook（即做）
In this classification, the pre-made dish clearly belongs to the Ready to Cook track, which is obviously not as large as the other two "ready-to-eat" and "ready-to-drink" markets, but it is a market that is growing fast enough today.
After clarifying the position of the industry, let's take Japan as an example to see where prepared dishes are in the consumer's consumption category.
In Japan, people divide the food market into three major markets: internal food, Chinese food, and external food. Internal food refers to the way of eating at home to complete the entire processing and production process, external food is the dine-in dining market that eats outside the family, and Chinese food is the market where external semi-processed or nearly fully processed food is taken home for simple cooking.
The core reason for this division is that the "Chinese food" market is now a huge market that cannot be ignored in the Japanese food industry. Japan's total population today is about 126 million, and the revenue of Japan's prepared vegetable industry in 2019 reached 51.441 billion yuan, with a total consumption of 1.9314 million tons. Today, China's total population is 1.413 billion, but according to 2020 statistics, the size of the mainland's prefabricated vegetable market is only 31.4 billion yuan (excluding fast-frozen dumplings and other speed foods). Compared with Japan, the domestic "Chinese food" market is not enough to compete with "internal food" and "outside food", but this situation may change rapidly over time...
02. History of Japanese pre-made cuisine
Before exploring the domestic pre-made market, let's first look at the development of pre-made vegetables in Japan. Compared with the development of China's prefabricated vegetable market today, the development process of Japan's prefabricated vegetable market belongs to the state of development while exploring and innovating, and its development time is close to a hundred years. It is conceivable that in today's more mature technology, if China follows the whole process, it will be much faster than Japan...
△ The size and growth rate of the Japanese prefabricated vegetable market from 1958 to 2020
The development of prepared dishes is always accompanied by economic downturns, population crises, wars, epidemics, and other moments in the history of mankind or countries that cannot bear memories. But the prosperity of prepared dishes always indicates the emergence of new technologies, new groups of people, and new models. This is the history of japan's prepared cuisine.
The emergence of a new species is always contingencious and niche, and in 1930, the Hankyu Department Store in Umeda, Osaka, tried to sell frozen strawberries, which has a well-documented history of commercialization of prefabricated foods. At this stage, pre-made dishes have not become a demand into people's vision, but only as a means of commodity promotion, as well as a niche retail experiment.
In 1956, the Antarctic expedition team began to use prefabricated vegetables as the main food source in the scientific expedition process, and as a result, prefabricated dishes began to gradually enter the stage of large-scale production.
△ Antarctic expedition and refrigerated prepared dishes
Of course, the real driver of the development of prepared dishes at this stage is "hunger" itself.
Beginning in 1958, post-war Japan truly entered the era of pre-made vegetables, and the compound annual growth rate (CAGR) of the pre-made vegetable market was as high as 33.1%. During this period, Japan was in a state of national food shortage, and a large number of fish and meat were frozen for the national food, so a large number of prepared foods began to enter thousands of households.
However, because the storage conditions of prepared dishes are not yet complete, it also limits the development of prepared dishes. It wasn't until 1965 that the penetration rate of refrigerators reached 50% in Japan, and the dishes of the pre-made wet market began to grow rapidly.
The prefabricated vegetable market in the growth period ushered in the "dual engine" power first, and the dual demand from the to C and to B markets pushed up the scale of the prefabricated vegetable market in this period. Compared with the rapid growth from zero to one in the introduction period, the compound annual growth rate (CAGR) of the Japanese prefabricated vegetable market in the growth period is 9%.
Although it is a dual engine, the growth rate and scale of toB in this period are much higher than the market size of toC. At this stage, Japan's housing prices and labor costs rose rapidly, only from 1970 to 1980, the Japanese urban land price index increased by 100.47%, and the monthly salary of employees increased by 225.58%, forcing catering brands to turn to the use of prepared dishes as raw materials to reduce the cost of production and processing sites and time costs. The entry of prepared dishes into the Japanese catering market in turn has pushed up the rapid growth of the chain rate of the Japanese catering industry, and during the growth stage of prepared dishes, the chain rate of the Japanese catering industry has increased by nearly 10%, and the main driving force for growth comes from fast food. (McDonald's entered Japan in 1971)
△ Comparison of B-end and C-end market size of Japanese pre-made dishes
There are 2 reasons why the maturity period of Japanese pre-made dishes appears to B pre-made market faster than to C pre-made markets, one of which is that most Japanese women are full-time housewives, home cooking is the basic family responsibility, and the sales of pre-made dishes are naturally not high. The second is that from the perspective of the cooking method of the prepared dish, the main cooking method of the prepared dish in this period is "fried", and the production process is still more complicated than the later microwave cooking, requiring more complete cooking conditions and time.
It wasn't until 1990 and 1987 that these two disadvantages were gradually broken, and in 1990, Japanese women began to enter the workplace in large numbers, quickly pushing pre-made dishes into the family kitchen. In 1987, the penetration rate of microwave ovens exceeded 50%, and more microwave heated foods entered the pre-made vegetable market. By 1990, Japan's per capita consumption of prepared dishes had soared from 1.2 kilograms in 1969 to 10.8 kilograms.
At this stage, the compound annual growth rate of the Japanese prepared vegetable market was only 0.1%, but the main driving force of growth shifted from to B growth to to C growth.
The main driving force for the growth of To C is the shrinking size of Japanese households and the expansion of the size of single and elderly people. A large number of one-person food markets have replaced the household collective consumption market, making the number of people who "eat outside" gradually decrease, and the number of people who "eat outside" continues to expand. At the same time, the growth of fried foods peaked during this period, and the main prepared vegetable products have been mainly microwave heated. During this period, Japan's annual per capita consumption of prepared dishes continued to reach a record high of 23.4 kg/year.
△ Comparison of the growth rate of Japan's foreign food market and the Chinese food market
With the development of Japan's prepared vegetable market in recent years, it has increased from gold digging to stock competition. Japanese prefabricated vegetable companies have also begun to gradually merge and integrate in recent years. The number of frozen food production plants in Japan has dropped from 599 in 2010 to 442 in 2020, but the production and output value have shown an increasing trend. Obviously, the last player belongs to the giants.
03. Elements of the outbreak of Japanese pre-made dishes
In summary, we see a complete development of prepared dishes, below, we sort out the explosive elements of the Japanese pre-made vegetable market.
1. Low-cost life after the war. After World War II, Japan's economy gradually recovered from its state of ruin, and in the process of restarting businesses, people needed a lower-cost lifestyle.
2, the cost of the out-of-food market soared. In the 1970s and 1980s, the guarantee of housing prices and the rising cost of labor in Japan promoted the continuous realization of social division of labor in the catering and dine-in market, and the process of cooked production and processing was gradually moved from stores to factories.
3. Professionalization of women. The improvement of women's entry into the workplace and education level has made the main position of women in society no longer just housewives, and the family kitchen has gradually become fast-food and lightweight.
4. Popularization of key equipment. The outbreak of the pre-made vegetable market during the growth and maturity periods has benefited from the successive popularization of refrigerators and microwave ovens. At the same time, the continuous strengthening of cold chain transportation capacity in this process also promotes the rapid development of the prepared vegetable market.
△ Japan's early cold chain logistics vehicles
5. The decline in the number of family members. The aging of the population, the lack of children, and the non-marriage have all made the number of family members decline rapidly, which further reduces the value of the family kitchen, and at the same time, compared with external food, Chinese food is suitable for the one-person food market.
04. Opportunities for domestic pre-made dishes
The domestic prefabricated vegetable market is obviously faster than the Japanese prefabricated vegetable market, and because the development factors are more complete and unified, the development momentum is more concentrated, and the outbreak opportunity of China's prefabricated vegetables is more obvious:
1. Opportunities for prepared dishes under population crisis
As of 2021, the total number of Chinese population is 1.413 billion people, and the population growth in 2021 is only 480,000, as a population country of 1 billion, 480,000 is obviously indicating that the era of negative population growth will soon come, and the national population growth dividend will completely disappear. At the same time, the number of people living alone on the mainland has approached 100 million, reaching 92 million. The total population figure of Beijing, Shanghai, Guangzhou and Shenzhen is equivalent to nearly 10 million. 25% of households have only one person. 65% of post-90s takeaway orders are for one-person meals.
It is not difficult to see that China's population crisis is creating new opportunities for the prefabricated vegetable market, and the solitary habitation of the population has made the family kitchen a "place of entertainment" in China, rather than a "place of production". There will be more room for pre-made dishes to play.
2. The increase in the cost of catering and dine-in
Nowadays, catering is difficult to recruit people, rent is rising has been the normal business of catering people, the recurrence of the epidemic has made the catering business generally difficult to do, but the high cost of rent, labor costs, not falling but rising. According to the 2021 data, the labor cost of the catering industry is rapidly devouring the profit margin of the catering manager at a compound annual growth rate of 7.6%. Taking Japan as an example, the average net profit margin of the catering industry in the catering industry is now 2-3%, while the figure in China is still 7-8%, and the downside still exists.
However, the penetration of pre-made dishes to B is still seriously insufficient, taking the data given by the China Hotel Association as a benchmark, the annual food market size of China's catering industry is about 1.96 trillion yuan, while the sales of pre-made dishes in the B-end in 2020 are only 25.104 billion yuan, and the penetration rate is only 1.54%, while this figure is 9.3% in Japan, which is obviously a huge space.
3. Decline in consumption expectations.
Even more frightening than the decline in consumption is the decline in consumption expectations, which clearly pointed out the triple pressure that the mainland economy is currently facing, namely demand contraction, supply shock, and weak expectations, in the "Central Economic Work Conference" held in December 2021. It can be seen that with the increase of social unemployment pressure and the decline of income expectations, people will generally be more cautious about consumption. Cheap, prepared dishes may become a home-based dining option for more pragmatic consumers.
4. The cold chain infrastructure is perfect.
From 2013 to 2018, China's low-temperature storage cold storage capacity grew rapidly from 83.45 million cubic meters to 147 million cubic meters, with a compound annual growth rate of 12%. The number of cold chain transport vehicles on china's highways increased from 55,200 to 180,000, with a compound annual growth rate of 26.7%. The penetration rate of refrigerators in urban residents is 100%, and the penetration rate of microwave ovens is more than 50%. This clearly prepares the infrastructure for the outbreak of the prefabricated wet market.
05. Regional discernment of domestic pre-made dishes
Although the domestic prefabricated vegetable market has obvious opportunities, it also faces different challenges, and it still needs to be discerned and considered by entrants.
1. Who is the opponent?
When we watch the prefabricated vegetable giants fight, we forget that it is often not the opponent who kills "yourself", but the market risk that you do not recognize.
Today, on the home side, mainland prefabricated dishes penetrate only 0.19% on the home side, and 3.69% in Japan, with a market of more than 20 times.
However, it is worth noting that Japan's takeaway market is far inferior to China's, due to the higher labor costs in Japan, takeaway platforms and merchants are obviously unable to afford the high cost of delivery of foreign food. But China's takeaway market has always been developing rapidly. As we mentioned above, 65% of the post-90s takeaway orders are one-person food, that is, the one-person food market has been satisfied by takeaways before the pre-made dishes have entered.
Previously, there were prefabricated vegetable products that could be heated on the table in 30 minutes in the market, and the result was that sales could not meet expectations, which was very important because when we opened the takeaway APP, takeaways that could be delivered to home in 30 minutes abounded, and the pre-made dishes that naturally took 30 minutes to heat well and were more expensive were not dominant.
What is more worthy of long-term attention is that with the frequent occurrence of social security and work injury problems of takeaway riders, the platform is looking for unmanned delivery solutions, and it is currently known that the unmanned delivery of the US group is being tested and has a planned scale to bring unmanned delivery to the market, when the delivery efficiency will be faster, and the delivery cost will be reduced to 3 yuan / single, which will further compete with the home production efficiency of prefabricated dishes.
Therefore, the real competitors of the prefabricated cuisine brand are not exactly other pre-made cuisine brands, but also include the continuous improvement of takeaway.
△ Meituan unmanned delivery vehicle
2. Where is the channel?
Japan is a highly developed convenience store industry, and the main To C sales channel for prefabricated dishes is convenience stores. The penetration rate of convenience stores in China is obviously not as good as that in Japan. So in contrast, the sales channels of prepared dishes in the two countries will be very different. Among them, including catering brands, the main sales method of a large number of new prefabricated dish brands is to establish self-sustaining stores, shop in stores, and sell in dine-in scenarios, which is obviously based on catering dine-in thinking, rather than retail thinking, that is, taking pre-made dishes as an increase in dine-in sales, which is both the channel advantage of catering brands. But in the medium to long term, a return to online and offline retail channels may be the leverage to leverage the larger market.
3. To whom? How expensive is it to sell?
Should pre-made dishes be expensive or cheap? Different prefabricated brands have given different answers in the current situation where the prefabricated market is relatively fragmented. From the perspective of brand building, it may be the right way to reduce the dimensionality of the brand from high to low.
But from the perspective of market space, it is clear that the low-price market may have more space. The financial report released by Meituan Takeaway in Q3 of 2021 shows that the average price of takeaway orders has risen to 49.3 yuan / order. From the perspective of mutual substitution between takeaway and prepared dishes in the one-person food market, if pre-made dishes want to gain a better competitive advantage in this market, the unit price of customers needs to be the same as the unit price of takeaway per capita or slightly reduced, that is, less than 49.3 yuan. (Except for the positioning of prepared dish products in non-one-person food scenes)
From the perspective of the pre-made cuisine division, the main products of Japan's home-made vegetable market are mainly staple foods, that is, a pre-made vegetable product completes all the needs of a meal, which can also be seen that the main scene of pre-made dishes is one-person food. At present, most of the domestic prepared dishes are mainly "dishes", facing the middle-class white-collar workers who eat at family dinners and "third courses" on the family table. However, in the long run, whether it has a certain product and price exploration ability determines the size of the final brand development space.
△ Japan's 2016-2020 prefabricated cuisine main categories ranking
epilogue
Under the epidemic, there is danger and organic.
According to Tmall data in 2020, sales of prepared dishes increased by 111% year-on-year. In the Spring Festival of 2021, the sales of Tmall New Year's goods prefabricated dishes increased by 16 times year-on-year, and Jingdong data showed that the turnover of 1-2 people small packaged prefabricated dishes increased by 3.5 times year-on-year.
By 2022, more people will not be able to return to their hometowns for the New Year, and a large wave of prepared dishes is on the way to thousands of households, becoming the Chinese New Year's Eve meal on the table of thousands of households. This battle of prefabricated dishes has obviously sounded the horn in this cold winter, and countless entrants are running with force.
Also as a consumer, I would like to say in the end, any high-quality business is inseparable from the four words of "good quality and low price", delicious and not expensive, although it is difficult to do, but value for money is the duty of the business.
Note: The data in this article comes from the prospectuses of Debon Securities, GF Securities Development Research Institute, Meituan, China National Bureau of Statistics, Japan Bureau of Statistics, Japan Frozen Association, Japan Ministry of Agriculture, Forestry and Fisheries, China Hotel Association and major related listed companies.