Hoarded "not hot" prepared dishes

Image source @ Visual China

Text | Kaiboluocaijing, author | Jin Jiepan, Editor | Ai Xiaojia

Have you stockpiled goods lately?

Affected by the epidemic, in addition to hoarding vegetables, hoarding canned food, and hoarding refrigerators, prepared dishes also have names.

Entrepreneurs who are in Shanghai and around Shanghai told Kai Pineapple Finance that prefabricated vegetables have indeed hitched a ride on hoarding goods and are being continuously delivered to Shanghai citizens.

Some C-end prefabricated dish entrepreneurs said that in recent times, Shanghai's fresh and group purchase platforms and some traders and institutions are communicating with themselves, asking whether they can transfer goods from Hangzhou, Ningbo or even Fujian to add prefabricated vegetable products to the anti-epidemic package.

Joining the battlefield of shanghai's prefabricated cuisine is to B companies that used to do frozen food and cold chain logistics. Some companies originally did B-end prefabricated dishes in the East China market, and after the sudden outbreak in Shanghai, they urgently entered the C-end and delivered the prefabricated dishes to Shanghai consumers through the head of the group.

However, people who hoard goods, some do not choose, what to hoard, for those who have choices, pre-made dishes may not be the first choice.

Some young people in Beijing, Shenzhen and second-tier cities told Kai Pineapple Finance that their priority is rice, flour, grain and oil, frozen meat, followed by fast food, dry goods and dairy products. Because there are few dishes to choose from, I am not sure about health, and I have tried a taste that is not as good as expected, I did not add pre-made dishes to the hoarding list this time.

Even Cheng Shi, who lives in Pudong, Shanghai, and has a tight inventory, has not considered pre-made dishes. According to his observation, once there is a choice, people who can cook will first stock meat and fruits and vegetables, and he will not cook, and previously stockpiled instant noodles and self-heating rice.

Some prefabricated vegetable entrepreneurs also poured a basin of cold water: under the tide of hoarding, it is true that some people are "willing to try" prefabricated dishes, but even if there are companies that flash highlight moments in some channels, the reference significance is not great. It seems to be a "godsend opportunity", but standing in the bureau, it is still difficult to seize the opportunity for prefabricated dishes that are still in the education market stage, and entrepreneurs are still cautious.

Hoarding, pre-made dishes are still not on the list?

Since March this year, affected by the epidemic, people in many places have rushed to hoard goods, and what to hoard varies from person to person. We can simply divide them into two categories, those who can cook and those who can't.

Cheng Shi said to Open Pineapple Finance that friends who often cook are grabbing fruit and vegetable combination packages, generally Dingdong to buy vegetables, Meituan to buy vegetables, and daily excellent fresh together. He doesn't know how to cook, has bought cooked food after eating the convenient fast food he had hoarded before, and recently ate instant box lunches.

He noticed that just a few days before the sealing, the takeaway platform is mostly selling cooked food, after about 7 days of sealing, semi-finished pre-made dishes began to appear on the community group meal platform, but most of them were 30 parts and 60 parts of the group, often because of insufficient quantity, the group failed.

One of the companies that supply prefabricated dishes to Shanghai is looking for ingredients, and its founder Cui Hengliang learned the same situation from the front line: some people who cook often prioritize hoarding raw materials needed for daily cooking, such as meat, rather than cooking people, and the first choice for hoarding goods is not pre-made dishes.

The core area for finding ingredients is the east china region that is the hardest hit area of this round of epidemic. During the epidemic in Shanghai, the company tried to provide C-end consumers with pre-made dishes through the group purchase platform of to C, directly facing the group leader.

But the process was not smooth. On the surface, people's enthusiasm for hoarding goods is not false, but "what is a pre-made dish", many people do not know.

The head of the group for C-end consumers has the most feeling about this point. Cui Hengliang said that many leaders found that people's awareness of prepared dishes was not enough, the acceptance was not high, and when they were isolated at home for eight or ten days, the prepared dishes began to sell well. The shortage of materials and the reduction of choices do make some people "willing to try" prepared dishes.

Recently, a consumer communicated with Cui Hengliang that cooking is time-consuming and laborious, and he will only make three or four home-cooked dishes, and began to buy prepared dishes a few days later, in order to meet the needs of diversified tastes and convenient cooking. In other words, during the epidemic period, the home is in a hurry, and the "identity" of the pre-made dish is still the "spare tire dish" of the kitchen.

In the wave of hoarding, who is hoarding pre-made dishes?

In the surrounding markets of Shanghai, Cui Hengliang received feedback that there are mainly three types of people, couples, families with children and some single women. Their common feature is that they are cooking at home, not the main group of takeaways, and dining is more concerned about health than convenience, "definitely not a user who hoards instant noodles and fast food." ”

Lin Zhiyong, CEO of Three Meals, believes that the main force of hoarding pre-made dishes is the young people. They can't cook, even if they grab fresh, they won't do it, when the takeaway can't be delivered, cook it, microwave it can eat the hot, cooked pre-made dish, the demand naturally soared. As a new retail platform for prefabricated dishes in East China, the demand for hoarding felt by three meals is not concentrated, but the revenue data of stores since March this year has increased significantly.

It is undeniable that the epidemic is objectively favorable to the prefabricated vegetable industry. Many entrepreneurs can intuitively feel that their peers have invested more in the education market and user acceptance has increased.

But many investors and entrepreneurs still maintain a rational judgment of the market, saying that they will not take the frequency of consumption in special periods as a reference, when people go out of the house, the frequency of cooking at home will be greatly reduced, and consumers who have bought prepared dishes during this time, even if they cook at home, the materials required will be completely different.

"After the epidemic, logistics are restored, and with Shanghai's abundant materials, it will be a different scene." Cui Hengliang said.

Staple foods are hot and have no chance; dishes are cold and difficult to innovate

The hoarding is hot and the pre-made dishes are small, and it does not mean that all the pre-made dishes can be hitched a ride.

More than one entrepreneur told Kai Pineapple Finance that the staple food noodles are more accepted among C-end consumers and sell better. When looking for ingredients to make a group purchase package of 198 yuan and 298 yuan in Shanghai recently, some seed users in the testing stage strongly demanded that the package not all dishes, but should be accompanied by staple foods and some snacks.

However, there are also "dark horses" in the prepared dishes. To Cui Hengliang's surprise, there are many Shanghai users who are willing to try to buy some non-home-cooked dishes, such as sauerkraut fish and beef products with high unit prices.

These two signals, not very good.

Start with a pre-made staple snack.

The tempting side of it is that the acceptance is high and the ready-made market size is large, but it is not the main direction of most startups. Most companies are like Mai Zi Ma, who has been invested in by Yuanqi Forest, and focus on dishes.

Before the epidemic, many people often bought semi-finished staple snacks as snacks. Recently, a number of consumers told Open Pineapple Finance that they have developed the habit of hoarding some buns, dumplings and cakes in the refrigerator.

But frozen staple pasta is not a real pre-made dish in the eyes of many entrepreneurs. Lin Zhiyong believes that these can only be regarded as the first stage of generalized prefabricated dishes, which are different from the current concept of pre-made dishes that pay attention to ready-to-match and cook.

The high acceptance of staple snacks is because "the predecessors planted trees", and the "descendants" entered cautiously, which is also the reason. Lin Zhiyong analyzed that in the past ten years, the cake of staple snack products has been nibbled by giant companies such as Sanquan, Si Nian, and Yasui Foods, and new players want to share a piece of the pie and can only do more differentiated products. Rice burgers, pizza dumplings, and real fresh noodles featuring taste-seeking lions are examples.

Let's look at the prepared dishes.

In contrast, the acceptance of prepared dishes is much worse. However, to Cui Hengliang's surprise, people hoarded pre-made dishes during the epidemic, and most of them chose dishes that were complex and had high culinary requirements, with the purpose of enriching the table.

Although pre-made dishes are the main direction of startups and market opportunities, until now, there are too few types for consumers to choose from.

Before the Spring Festival in 2022, chen Fang, the hostess of the family of three, considered preparing several prepared dishes on the Chinese New Year's Eve table, but in the end he did not start, because the homogenization of the category was too serious, and it seemed that the "old three" of Buddha jumping off the wall, sauerkraut fish, and soups were all. Cui Hengliang has been paying attention to the industry trends of C-end dishes, according to his observation, from the small climax of pre-made dishes before the Spring Festival to the present more than two months, the richness of SKUs has not improved significantly.

This is related to the fact that the C-end prefabricated vegetable track is still in its infancy, and with the current capabilities of many companies, they can only push a few fist products or series. In Lin Zhiyong's view, the characteristics of the "old three things" are high degree of industrialization, and the B-end catering has been quite mature before.

The problem facing the entrepreneurs of prefabricated dishes is that the staple food is very hot, but there is no new opportunity, the dish can be done, but the innovation is really difficult, and the market is still underheated.

Both roads are not easy

Kai Pineapple Finance previously found that among the participants in the prepared dish, many B to C faces were added. Today, this trend continues unabated. Those who sell meat and seafood, quick-frozen products, restaurants, and control fresh retail channels are all coming.

An investor who pays attention to the consumption track concluded that the C-end startup company of prefabricated dishes has stepped out of two clear routes. One is that SKUs are abundant, and you can control the channels. One is the idea of explosive products, do categories and brands.

At the beginning of this year, zhenwei Xiaomeiyuan and Lu Zhengyao's new project tongue tip hero (formerly known as "tip of the tongue workshop") completed the B+ round of financing, taking the first route.

There are more than 50 SKUs in Zhenwei Xiaomeiyuan, from pasta dim sum to meat dishes, and its own controllable channel is more than 30 offline community franchise stores in Shanghai and surrounding areas.

The tip of the tongue hero is equivalent to the community store of "semi-finished dish + pre-made dish + hot pot ingredients", and the offline outlets under the franchise mode are wider. Recently, its rotating CEO Li Yingbo introduced to the outside world that the tip of the tongue hero has signed more than 6,000 intentions in stores across the country, covering 30% of prefecture-level cities and major large and medium-sized cities in the country. However, a practitioner close to the tip of the tongue hero told Kai Pineapple Finance that there are only a few hundred stores that have actually landed.

I have to say that there are many stumbling blocks on this road.

The large number of SKUs means that large-scale production is difficult, and it is necessary to give more profits to foundries. Cui Hengliang revealed that for C-end startups, according to industry practices, foundries have to take away more than a dozen points of gross profit.

The first problem facing the national market with a game of chess product structure is that the SKU is difficult to adjust. "It is difficult for southern cuisine to eat well in the north, and the lychee meat and drunken ribs that we sell well in Fujian may be unmarketable in the northern market." Lin Zhiyong told Open Pineapple Finance that Western-style dishes steak, pasta and pizza are eaten by the whole country, but if you want to take root in the local area, you must have a certain proportion of local dishes. Therefore, three meals have materials to come out of Fujian, go to Zhejiang to develop Zhejiang cuisine, and go to Shandong to develop Lu cuisine.

At the same time, supply chains and logistics will be challenged. When the density of supply chain and offline outlets is not enough, the associated costs are very high.

There are more startups that take the second path. Tang Wanli founded Ding Ding Fresh Food is one of them, the core is online play, make one or two SKUs into large items, and when the time comes, then follow the trend to do the brand premium.

The pros and cons of this route are also obvious.

Online, borrowing video-based means of communication, the acceptance threshold is lower. When Cui Hengliang communicated with some community leaders, he found that when they first came into contact with pre-made dishes, their first reaction was "How is this thing made?" It would be nice if there was a video".

The disadvantage is that "it is easy to fall into a price war online, even if the brand relative to the head is inevitably pulled into the water", according to Lin Zhiyong's observation, some prefabricated dish brands respect the "explosive methodology" in online channels, the product hits the "lowest price of the whole network", the traffic cost is handed over to the platform and the anchor, and 20%-40% of the cost is handed over to the courier company. When some brand categories are very similar, and brand awareness has not opened up the gap, it depends on who is low in price and how much traffic fees are willing to spend.

More than one practitioner said that in the second half of 2021, the traffic battle on the prefabricated dish online is a loss of money, after the Spring Festival in 2022, the playing style is more professional, the competition is more intense, and the tide of hoarding goods in March has come, and the price of some prefabricated dish brands in the Douyin channel has been lowered.

Of course, these two routes are not either/or, but one and the other. Companies that make larger products rely on online traffic to start quickly, but the ceiling is low, and they will go to the line when they are mature. Companies that do SKUs richness, along with the channels and brand awareness become higher, will also choose some excellent SKUs to sell through online channels.

It's just that most of the companies on the market are still attacking one direction and surviving first.

Crazy pre-made dishes, and so on

Since the second half of 2021, prefabricated dishes have become a hot star in the venture capital circle. Since 2022, companies that have been involved in "eating" have been more active in adding firewood to it.

More than one person in charge of the to B prefabricated vegetable company told Kai Pineapple Finance that many processing parties, channel parties, and C-end startups have come to cooperate. Some C-end prefabricated dish companies said that some chain convenience stores and fresh supermarkets have successively opened pre-made dish areas and invited brands to settle in.

In March, shanghai and other areas suddenly broke out of the epidemic, and those B-end enterprises that were originally in the East China market and doing pre-made dishes business have recently entered the C-end pre-made dishes.

New and old players have launched a new round of offensives. Of all the projects, the most radical is the tongue hero, offline, to the door store to the whole country; online, through Focus, Douyin crazy advertising.

Activists hold high, and many entrepreneurs think this is good for market education, but they also see hidden drawbacks. Cui Hengliang's point is that pre-made dishes are not like coffee, not sexy tracks, neither high gross profit nor high frequency, and the penetration time required is still very long.

"Don't expect a pre-made dish to be a high margin product."

At present, the price of a semi-finished net dish on the market is 8 yuan-20 yuan; the price of homemade single products of frozen pre-made dishes ranges from more than 20 yuan to more than 50 yuan, and the unit price of large dishes and hard dishes is about 100 yuan. Catering supplier Wang Yang said to Open Pineapple Finance that the cost of pre-made dishes is lower than dine-in and takeaway, and the pricing can be 50% lower than dine-in, but the current pricing can only be 10%-20% lower.

In theory, the degree of pre-made dishes relies on a higher degree of intensification, and there is still more than 30% room for price reduction. However, as a reference, the gross profit margin of the industry tycoon Michika and Yasui Foods is between 20% and 30%. Cui Hengliang's experience is that this is the reasonable gross profit level of prefabricated dishes, even through supply chain advantages, scale, and product differentiation, the possibility of making a higher gross profit structure is very small.

"Pre-made dishes are only a medium-frequency consumption category on the C-side."

The above-mentioned practitioners close to the tip of the tongue hero revealed that the tip of the tongue hero currently relies on subsidies, one head "raises" franchise stores, and the other end wins over consumers. It focuses on two major items nationwide, kung pao chicken cubes and sweet and sour tenderloin, reducing the price to 9 pieces of 9; in order to give the APP a new one, the new customer has a red envelope of 200 yuan. "But even so, many franchise stores have too few orders to feed themselves."

Some investors also said that copying Luckin's play method to the prefabricated dish shows that the prefabricated dish is on Lu Zhengyao's plate, which is only a traffic entrance, not a product.

But now, "the market acceptance of prepared dishes is a problem, and it will take a long penetration time to spread to the whole country", Cui Hengliang believes that it is difficult to play a drainage effect.

From a regional point of view, many entrepreneurs and related practitioners said that the acceptance of prepared dishes in the Yangtze River Delta and Pearl River Delta regions is slightly higher than that in the north, which is related to the level of economic development and the maturity of the food industry.

Prefabricated dishes themselves are not a market that can explode in a short period of time. Its penetration rate in Japan has reached 60%, after 20 years or even longer, and currently there is only about 10% penetration rate in China, becoming a regular customer on people's tables, it is bound to go through a long period of time.

At present, it is the golden time to educate the C-end market, and some entrepreneurs and investors believe that entrants need to maintain more respect for the market, otherwise, the aggressive way of playing and low-price competition may backfire, resulting in prefabricated dishes not even having a "spare tire" status.

Bao Yuezhong, a new retail expert, feels that pre-made dishes are not as good as consumers expect in terms of taste reduction, cost performance, and convenience of purchase. He has a hunch that the entire prepared vegetable industry also needs to cool down, extinguish the fire, and be cautious about the performance of the pre-made vegetable market after the epidemic.

In the past year or so, the capital of the primary and secondary markets has roasted the prefabricated dishes hot, but the C-end players obviously cannot sketch the blueprint too ideally, and the road under their feet must be walked steadily. As Lin Zhiyong said, it will take at least three to five years for China's C-end market to run out of the number one player.

*At the request of the interviewees, Cheng Shi and Chen Fang are pseudonyms.