Image source @ Visual China
Text | Zhuang Shuai
Japan's prepared dishes originated in the 1950s, industrial production earlier than the domestic, due to the similar consumption habits and food culture, the historical environment, development stage and corporate genes of the Japanese prepared vegetable industry have reference and learning significance for China.
The development of Japan's prepared vegetable industry can be divided into four stages:
1) Introduction stage (1958-1967): Japan's frozen food was formed after World War II, driven by the construction of the cold chain, the consumption of prefabricated dishes increased from 0.13 million tons to 25,400 tons in 1958-1968, of which the 1964 Tokyo Olympic Games and the World Expo purchased a large number of frozen foods, including prefabricated dishes, so that the public's cognition was fully improved and people's stereotypes were broken;
2) Outbreak stage (1968-1996): With the take-off of the Japanese economy during this period, the increase in single households also increased the overall demand for convenient meals among residents, and the externalization of diet and the chaining of restaurants jointly promoted the growth of the industry, and the pre-made dishes ushered in an explosive period in the mid-1970s, which lasted until the bursting of the Japanese real estate bubble in the 1990s;
3) Stabilization phase (1997-2006): Japan's economic bubble and birth rate fell sharply, and the prepared vegetable market grew steadily, but the growth rate slowed down;
4) Recovery stage (2007 to date): After the financial crisis, the consumption of prepared vegetables showed a significant V-shaped recovery, and then maintained a relatively stable trend, according to the Japan Frozen Food Association, the size of the Japanese prepared vegetable market reached 23.85 billion US dollars (retail caliber) in 2020, of which frozen prepared foods accounted for 85% and net vegetables accounted for 15%.
Benchmarking against Japan, the mainland prepared vegetable industry is experiencing a similar macro and industrial background to japan's outbreak stage.
Japan's 70s and 80s were in the explosive stage of the pre-made vegetable industry, and the surge in B-end and C-end demand promoted the rapid development of the frozen food industry, including quick-frozen dishes.
At present, some macro indicators on the mainland are similar to those in Japan in the 70s and 80s, with per capita GDP exceeding $10,000, the urbanization rate constantly improving, and economic development boosting the modernization and evolution of society, which is embodied in the shrinking size of households, and also faces the problems of declining proportion of the labor force, rising rents of shops, and aging population structure.
Affected by the epidemic in 2020, residents' consumption habits have changed, the demand for convenient foods such as prepared dishes has doubled, while catering enterprises have generally been deeply affected, and the speed of liquidation of small and medium-sized enterprises has accelerated, promoting the process of catering chaining, and the prefabricated vegetable industry has ushered in the outlet.
01 Benchmarking system in the knowledge of the day
Penetration benchmarking: The Japanese market is relatively stable, and the penetration rate of prepared dishes in the mainland is quite different.
According to the "China Cuisine Association Work Plan", the penetration rate of Japanese prepared dishes has reached more than 60% in 2021, while the mainland is only about 10%.
Japan's penetration rate is much higher than That of China for two main reasons:
1) The taste of Japanese food is relatively single, and the diet type is relatively fixed, and the prepared dishes can meet most of the needs of daily diet;
2) Japan's land area is small, the cold chain logistics coverage rate is high, and it is easy to form a situation of high concentration.
Category benchmarking: Japanese cuisine is relatively single, but the category mining is more sufficient.
1) Types: Japanese food is divided into Kanto cuisine and Kansai cuisine, all of which are mainly sashimi, sushi, tempura, but according to the Japan Chinese Food Association, Japan's pre-made dishes have exceeded 3,000; although there are eight major cuisines in Chinese food, the pre-made dishes are less than 1,000, far less than Japan, and there is still a large space for excavation.
2) Scale: There are more large items of the order of one billion in Japanese prefabricated dishes, mainly staple foods, according to the Japan Frozen Food Association, the total output value of meatballs/ fried rice/ pork chops / hamburgers / udon noodles in 2020 is 30.8 / 23.8 / 20.0 / 19.5 / 165 million yuan (1 yen≈0.05 yuan, the same below); among the mainland quick-frozen dishes, only the volume of small crispy meat and plum vegetable buckle meat can reach the order of one billion, and the category scale of the single product has a large room for improvement.
3) Degree of standardization: The processing of Japanese food is relatively simple, mostly for roasting, frying and other ways, so the degree of standardization of production is higher than that of Chinese food; the cooking methods of Chinese food are diverse, stir-fry, steamed, stewed, etc. emerge in an endless stream, compared with the difficulty of standardized research and development of dishes, it is difficult for prefabricated vegetable enterprises to cover multiple cuisines, and the industry penetration rate is not as good as japan.
Pattern benchmarking: The Japanese market is relatively mature, and the market concentration is higher than that of China.
According to Zhiyan Consulting, the total market share of CR10 in the mainland prepared vegetable industry in 2020 is only 14.23%, while the CR5 market share of the Japanese prepared vegetable industry is 64.04%, and the gap between the concentration of the mainland and Japanese industries is obvious.
And the revenue of cr10 enterprises in the mainland is mostly 6-1 billion yuan, and in fiscal 2021, Japanese prepared dishes represent the company Kobe Products /Nippon Cold Food/Ajinomoto/Japan Aquatic Products Company's total revenue of about 322/204/638/391 billion yuan, of which frozen food revenue is about 183/145/133/122 billion yuan, and the Matthew effect is more obvious.
Compared with Japan, the mainland has a larger advantage in population size, and domestic enterprises have a broad space for growth.
The mainland has a large population, with a total population of 1.412 billion in 2020, 11.21 times the total population of Japan, providing a larger market for catering and household consumption, and the prefabricated market should have a higher ceiling, which is expected to spawn leading enterprises with larger income scales.
The competitive pattern of Japan's prepared vegetable industry has been determined, and a leading enterprise with an income of more than 20 billion yuan has been born. Referring to Japan's experience, when the industry's high dividend gradually recedes, enterprises with stronger product strength, brand power and supply chain capabilities will settle down in the big waves.
02 B-first-C business model
Japan: The prefabricated vegetable industry has experienced a development process of B-after-C, and the demand for C-end has risen steadily since the 1990s.
Reviewing the channel development process of Japanese prefabricated dishes, in the mid-1970s, the development of B-end and C-end channels gradually opened up the gap, and the B-end channels entered a rapid starting stage of up to 20 years, and at the end of the 90s, with the bursting of the Japanese economic bubble, the willingness of residents to go out to consume declined, the catering industry regressed, and the demand for B-end prepared dishes declined.
In contrast, C-end demand has crossed the economic cycle and maintained a steady growth rate from the 1970s to the end of the 90s after the Japanese economic crisis.
After the 1990s, the economic development slowed down, the proportion of women working outside the home increased, the miniaturization of superimposed households, and the popularity of home appliances such as microwave ovens/refrigerators, and the gradual rise of C-end consumption.
China: The B-end market started earlier, and the C-end demand still needs to be cultivated.
According to Euromonitor, the ratio of 2B to 2C of prepared dishes in the Japanese market in 2021 is 6:4 (sales caliber), and the channel structure is more balanced, and the ratio of 2B and 2C of Chinese prepared dishes is about 8:2 (revenue caliber).
The soil of prefabricated vegetables at the B-end of the mainland has been relatively mature, the penetration of chain restaurants, group meals and small and medium-sized restaurants has been basically completed, catering enterprises are currently the most important sales channels, C-end demand still needs to continue to cultivate, follow-up or more penetration.
In the past, enterprises positioning the C-end needed to undertake the responsibility of consumer education, and the difficulty of operation was reflected in:
1) On the demand side, C-end consumers have diversified needs, taste preferences are changing with each passing day, and enterprises need to keep up with market trends to innovate and maintain a faster frequency of new product updates;
2) On the supply side, there may be a series of supply chain problems, such as scattered demand points, high transportation costs, etc., and it is difficult for sales to break through the bottleneck.
During the epidemic, natural consumer education, product innovation and marketing innovation may be the way to break the game.
1) On the demand side, the consumption of home scenes during the epidemic has increased significantly, and fresh e-commerce has flourished in the post-epidemic era, and prepared dishes have gradually occupied the minds of consumers.
2) On the supply side, most of the new brands choose the C-end with a lower threshold, the prevalence of the Internet helps to diversify publicity methods, and the marketing methods of enterprises have become more flexible recently.
3) On the product side, the rare little plum garden launched specialties such as sauerkraut fish and Wellington steak, and Shin Liang Ji developed spicy crayfish and other dishes, and creative new products emerged in an endless stream;
4) On the marketing side, merchants actively embrace community marketing and live broadcast channels, or will further strengthen the awareness of C-end consumers on prepared dishes, and become a breakthrough in C-end development.
03 Common elements of Japanese companies
Starting from Nichiren Group and Kobe & Co., Ltd., the leading japanese enterprises in prefabricated cuisine, this section analyzes how the above-mentioned enterprises form strong barriers in all directions from multiple dimensions, and explores the common factors for prefabricated vegetable companies to become bigger and stronger:
1) Product accumulation of grain: diversified categories is an important way to expand the audience, and the importance of product development capabilities is prominent;
2) Channels build a high wall: BC takes into account or is a better channel model, and differentiated strategies should be implemented for different channels;
3) Tightly woven supply chain network: improving the supply layout can effectively improve the synergy effect and supply capacity.
Nichiren and Kobe are both The largest prefabricated vegetable companies in Japan, with revenue of RMB32.221/20.37 billion in fiscal 2021.
1) Ri Leng: Founded in 1942, initially based on the sale of frozen fish, in the 1950s began to lay out the pre-made vegetable business, seize the opportunity of the outbreak stage of the industry, promote quick-frozen food to the catering end, expand its own popularity, the company's main business is food processing, logistics, livestock and aquatic products. In fiscal 2021, the company achieved revenue/operating profit of 32.21/1.85 billion yuan, -2%/+8% year-on-year.
2) Kobe: Born in Hyogo Prefecture in 1985, it mainly sells quick-frozen food and semi-finished products in the form of business supermarkets, chain supermarkets are mostly operated by franchisees, the company collects 1% royalties, and as of May 2021, the company has 927 stores.
In fiscal 2021, the company achieved revenue/net profit of 20.37/1.10 billion yuan, +6%/30% year-on-year, and the revenue of prepared dishes accounted for more than 90%.
According to the company's official website, by the end of 2021, the company has 23 food processing plants in Japan, more than 350 cooperative factories overseas, and a complete system of domestic production capacity and foreign suppliers.
Product side: Compared with quick-frozen rice noodles and quick-frozen hot pot products, the degree of differentiation of pre-made dishes is more significant, so the importance of product development capabilities is prominent.
Ri Leng: Outstanding R&D capabilities, core competitiveness of star large single lines.
Under the premise of market research and understanding consumer demand, the company has strong R&D capabilities, and the compound growth rate of R&D expenses in 16-21 years (8.5%) and the R&D expense rate in 2021 (7.3%) are in the forefront of the industry.
In 2021, the company's research and development costs reached 143 million yuan, the technical team continued to polish new products, and has now launched a variety of foods such as rice, Chinese food, chicken, etc., mainly deep-processed products such as fried rice and meat cakes, and seasoning contributes added value.
The company pays attention to the taste and quality of products, and strives to create a variety of timeless star items, "authentic fried rice" since its launch in 2001 is still constantly improving, with the restoration of the taste of professional chef cooking, for 20 consecutive years won the first place in the sales of Japan's quick-frozen fried rice category, according to the company's official website, the scale of national fried rice in 2021 is about 600 million yuan.
Kobe: Has a large number of self-operated brand products, diversified products cast strong product strength.
According to the company's official website, the company provides more than 360 kinds of self-operated brand products, the number of categories is about 5300, the imported product SKU is more than 1400, from 40 countries and regions around the world, with a rich product matrix, and then relies on a keen sense of smell and innovation ability to create a German sausage, water goat soup, tapioca and other product combinations, mainly in the business supermarket sales, refined mining market demand.
Channel side: Nichiren Group and Kobe Properties have shifted from the main B-end to the BC-side dual drive, and then through the blessing of related products, they have copied their dominant position on the B-side.
Day cold: BC two-wheel drive, polishing products to match the subdivision channel demand.
According to the announcement of Rileng Group, the BC side of the company's revenue will account for 55% and 45% of the company's revenue in 2021. At the beginning of its establishment, the company mainly faced scenes such as school meals, group meals and convenience stores, and matched corresponding products for different channels.
For convenience stores and small B customers, the company mainly promotes chicken products with high cost performance, and for hotel customers, the company's project team can provide customized services and develop high-end products.
With the maturity of Japan's prepared vegetable industry, under the influence of the aging population and family miniaturization, the demand for families continues to increase, and Nichiren has also developed more C-end products, such as the company's launch of a variety of microwave cooking products in 1992 to strengthen its dominant position at the home end.
Kobe: From the main B-end to the BC, the product is cost-effective to build a competitive advantage.
The company sells goods as a chain of franchises, and since the opening of its first business supermarket in March 2000, it has grown at a frequency of about 30-40 new stores per year.
In the early days of its establishment, the business supermarket was mainly for B-end customers such as restaurants and retailers.
According to the company's official website, in order to meet the needs of corporate customers, business supermarkets sell large-scale products, avoid price competition with competing products, because the price is about 20% cheaper than other supermarkets, cost-effective products are also welcomed by C-end consumers, in addition, business supermarkets have created a series of "mother-flavored food", positioning housewives, widely favored by the consumer group, and rapidly increase the number of stores.
Supply side: prefabricated cuisine quick-frozen subdivision, the need for the whole cold chain transportation, enterprises to take the way of self-built cold chain or through third-party enterprise outsourcing, according to the 2021 China pre-made vegetable industry conference, cold chain transportation costs accounted for 20%-25% of sales.
Nichiren: Upstream fresh companies provide high-quality and low-cost raw materials, and downstream logistics companies provide efficient global transportation services.
Upstream Nileng Fresh operates seafood and livestock and poultry products business, relying on mature freezing technology and global food procurement network, sourcing ingredients from more than 30 countries at low prices, providing the company with high-quality, low-cost raw materials, effectively improving food taste and product profit margins.
Downstream logistics companies mainly engaged in cold chain transportation, warehousing and integrated solutions, by the end of 2021, there are 7 regional cold storage companies in Japan, 80 storage distribution centers, cold storage capacity of more than 1.5 million tons, ranking first in Japan.
Overseas, NISS Logistics started with the acquisition of refrigerated warehouses in the Netherlands and has now expanded to Europe and Asia, with a total of 42 bases in 12 countries.
Kobe: The formation of production, supply and marketing integration, self-built cold chain in the distribution route and distribution timeliness has advantages.
According to the company's official website, by the end of 2021, the company has a total of 25 factories in Japan, and most of the products come from its own factories.
The company's layout takes the store as the core, continuously extends upstream, and masters the supply of raw materials, product processing and final sales links, and the integration of production, supply and marketing can provide customers with a diversified product portfolio under the condition of controllable costs.
Cold chain logistics infrastructure has a large initial investment and a long recycling cycle, and after maturity, it can bring cost advantages through scale effects.
By building independent cold chain logistics, the company maintains the low temperature transportation of raw materials and fresh products throughout the process, and effectively controls supply chain costs.
Success model: At the valuation level, kobe property / nichiren in the rapid growth period of PE-TTM in 70-80x/30-35x, overseas leaders have formed "product + channel + supply chain" three aspects of competitive barriers, for the development of mainland enterprises to provide reference.
1) Product side, Ri Leng develops the C end by enriching the product matrix, helping it to become the industry leader, and Kobe's large single product building ability to build a moat of the enterprise;
2) Channel side, Japan's C-end prefabricated dishes are gradually gaining momentum, according to Euromonitor, the ratio of 2B and 2C in Japan in 2021 is 6:4 (sales caliber), Nippon Group and Kobe Properties have shifted from the main B-end to take into account the consumer demand of B-end and C-end, and implement differentiated strategies for different channels;
3) On the supply side, Nissle actively expands the upstream fresh business, with the downstream logistics layout, Kobe also has a strong upstream and downstream supply chain, Japan's land area is small, leading enterprises in the early stage of development through the advantages of funds to quickly increase the cold chain logistics coverage, the formation of scale advantages, after pulling up the industry entry threshold.
Referring to the development experience of Japanese leading enterprises, benchmarking overseas and combining with the actual situation of the mainland, there are the following enlightenments:
Japan's prepared vegetable industry is promoted by large single products, the mainland traditional cuisine is huge, the cooking technology is complex, the difference in taste causes the breadth of single products to be excavated is not easy, the company's product matrix research and development capabilities need to be further improved, improve the taste of dishes, and overcome the problem of "water and soil dissatisfaction" faced in the national expansion.
In addition, the market space of the B-end and the C-end is relatively considerable, BC takes into account or is a better channel model, the regional characteristics of domestic prefabricated vegetable enterprises are obvious, and the cold chain layout still needs to be improved.