Guide
In recent years, the domestic prepared food market has been growing rapidly in various controversial events, from the explosion of "20 minutes to get a table of Chinese New Year's Eve dinner" during the Spring Festival to the "pre-made plum vegetable button meat found lymphatic meat" exposed by 315 has continuously pushed prepared food-related topics to the forefront.
Prepared food in a broad sense generally includes prefabricated staple foods and prefabricated dishes, and the rapid growth of prepared food by solving the key pain points of consumers for some foods and dishes that are "not easy to buy" and "not easy to make", and then catalyzed by the epidemic after 2020, the development of domestic prepared food has entered an explosive period. According to NCBD data, the market size of prepared food will exceed 500 billion yuan in 2023, which confirms the huge potential of the prepared food market. Therefore, a number of brands have also begun to launch various new prepared food products, trying to seize the industry dividends under the rapid growth, forming an unprecedented grand occasion of all kinds of prepared foods blooming in Chengdu Spring Sugar Fair this year.
Chengdu Spring Sugar will be prepared food
The ability to innovate products is unlimited, and the ability to operate in categories is limited
At the Chengdu Spring Sugar Fair, from traditional catering companies to various professional prepared food brands, many new products of prepared meals have been launched, covering rice and noodles staple food and various special dishes. Although there is a lot of innovation, new categories are rare, and enterprises blindly carry out product innovation, but ignore the more important category management.
Myth 1
No matter how much product innovation there is, it is difficult to replicate the success of the main business
Category is the key force hidden behind the brand, the size of the category represented by the brand often determines the market space of the brand, if the category in which the brand is located is a small non-mainstream market now and small in the future, then no matter how strong product innovation can not drive the brand to achieve further growth. Wufangzhai launched a new product on the basis of the existing main category "zongzi", which is a relatively niche category compared to zongzi, first of all, its eating scene is relatively limited, and the rice ball does not have the same broad spectrum of awareness and consumption habits in the Japanese market in the domestic market, in addition to being limited by the product shelf life and logistics cold chain, no matter how much product innovation is created in such a relatively niche market, it is difficult to replicate the success of its own main category, and the brand can only find the next one like "zongzi" Only new categories with the same growth potential and large enough category scale can be built as their second growth curve and contribute greater value to the long-term growth of the brand.
Image source: Internet
Myth 2
Having more children is good for fighting, the category is lacking in mind, and the more you give birth, the more miserable you die
Various instant hot food brands such as Mo Xiaoxian are also constantly expanding their own new products such as self-heating rice noodles, self-heating rice noodles, and self-heating hot pot. These so-called innovative products do not have a clear definition of the category value, and brands often want to fight by "having more children and fighting" In the way, launch more new products and occupy a larger market, these new products not only do not establish a division in the minds of consumers, but also lack a strong category backbone that can represent the brand and value in the cognition, the brand can not represent more products in the cognition, and the brand is greedy for more and faster, which will eventually lead to consumers' perception of the brand becoming more and more blurred, and it is difficult to take the initiative to buy, and finally it is still involuted in the old category, unable to withdraw from the homogeneous competition.
Myth 3
As a porter of offline catering signature dishes, it is difficult to succeed in category cognition risk
All kinds of traditional catering enterprises have entered the prefabricated food market by copying the signature dishes of offline stores. For example, Lu Wei Zhai has launched all kinds of Lu cuisine and marinated prefabricated food products. The old Sichuan cuisine Meizhou Dongpo launched prefabricated dishes such as Dongpo elbow, stilted beef, sprouts and buckle meat. Although the model of copying and redoing the existing signature cuisine can rely on the existing cognitive advantages of catering brands to harvest part of the market in the short term, it is difficult to further expand in the long run.
Image source: Internet
Under the general trend of rapid development of the prepared food market, if the brand does not operate the category, does not judge the category trend, and does not establish a real class segment in the cognition, it can only fall into a vicious circle of more product innovation, worse sales growth, and ultimately miss the dividend of industry growth.
Not only the various prepared food brands of the Spring Sugar Fair, but also from the current development status of various types of prepared food brands on the market, it is not difficult to find that the problem of category has already become the core obstacle for enterprises to achieve further growth.
New and old brands in the prepared food track: there are problems with the category, and each has its own difficulties
Looking at the new and old players on the current prefabricated food track, there are four categories: one is the traditional prefabricated staple food enterprises, mainly traditional quick-frozen rice noodles, the second is the emerging prefabricated staple food brands, often with Internet celebrity attributes, relying on online channels to overtake, the third is the professional prefabricated food brand, rooted in the prefabricated food industry for many years, often initially started at the B-end, and in recent years turned to the C-end, the fourth type is the traditional catering enterprises, which extend the company's signature dishes into the field of prefabricated dishes. Through the analysis and evaluation of typical brands of various new and old players, and the analysis of common problems, it provides inspiration for prepared food companies in the process of grasping industry trends and developing upwards.
The first category: Sanquan, Missing: Although there are many new products, there is a lack of new categories that can be played
Sanquan and Synear are long-established enterprises in the field of quick-frozen staple food in China, with annual revenues of billions. However, so far, the scale of the enterprise has not been able to exceed 10 billion, the core reason is that the quick-frozen dumpling glutinous rice ball category has entered a mature period, Sanquan and Synear in the dumplings, glutinous rice balls are seriously homogeneous, only existing products are difficult to drive a new round of growth of the enterprise, and the enterprise urgently needs to achieve category activation through innovation. Although some new products are launched from time to time, they are only multi-flavored dumplings such as black peppers, tomato and beef, or shrimp dumplings and other multi-form layouts, which are more reduced to the accumulation of products, with many categories but not strong, and cannot achieve sustainable growth strategically. The reason for this is that Sanquan and Synear have not really created and developed new categories. Consumers may buy tomato beef dumplings because they are early adopters, but they will also buy other products because they are early adopters, and the new products lack the core category value and competitiveness that can drive continuous purchases.
Image source: Organized according to Taobao pictures
Only through category innovation can product innovation be made into a large category and gain the largest market share. Through "ten catties of fresh milk to refine one catty of cheese", the taste is amplified into nutritional value, so that "cheese flavor yogurt" has risen from a flavor choice to a "cheese yogurt" that is necessary for daily nutrition, and it has sold 1 billion yuan in one year on the market, with a market share of 82%.
Image source: Internet
The new category created by combining consumer trends and consumer pain points is the category that truly has the potential to recreate a three-fold and thoughtful. Taking the Japanese market as an example, since the 70s of the last century, the trend of individualization in Japanese society has become more and more obvious. In Japan, nearly 20 million people out of a population of 100 million live alone, and the consumption unit has changed from family to individual, so a small number of new categories and new business formats that focus on individuals are emerging, and convenience stores are rising at that time. After the launch of dumplings in 1972, Ajinomoto has continuously upgraded its products, focusing on "convenience" and "small packaging". At present, Ajinomoto has become a Japanese prefabricated staple food giant.
Therefore, how to create a real new category will be a topic that established enterprises such as Sanquan and Synear must think about from the leading enterprises of quick-frozen staple food to the leading enterprises of tens of billions or even hundreds of billions of prefabricated staple foods.
Zihi pot: It used to sell one billion a year, but now it can't move because the category is not clearly defined
Zihai Pot once exploded during the epidemic by creating a new category of one-person self-heating hot pot and investing heavily in advertising, and achieved a revenue of nearly one billion yuan in 2022, but now the revenue has shrunk significantly, and the self-heating pot has begun to face the problems of consumers not paying, brand removal from the shelves, and capital withdrawal.
From the darling of the capital market and the consumer market to the fact that no one cares about it today, there are two main strategic mistakes in the self-heating pot:
The first is that as a category pioneer, he did not clearly define what the category is and what its unique value is, and the phrase "if you want to be high, you can eat from the pot" is not associated with any clear usage scenario, resulting in consumers initially fancy the convenience of self-heating to start trying, but because there is no clear scene, the repurchase is low. With the end of the epidemic and the return of takeaway to normal, consumers can choose more convenient and delicious categories in the scene of staple food or supper meal, and the staple food or supper scene is naturally lacking.
Second, as the competition among many self-heating brands has intensified, Zihai Pot, as a category pioneer, has not evolved in time, and it is different from many self-heating brands. Whether it is competing in the self-heating staple food category or competing with other pre-made products or even takeaway categories, Zihai Pot does not have clear competitiveness, and no amount of marketing bombardment can only be empty.
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As a pioneer of functional beverages, Red Bull took the lead in educating the core values and scenarios of the category "refreshing and relieving fatigue", successfully expanded functional beverages, and continuously strengthened the category representation of the brand through continuous product evolution and a series of extreme challenge public relations, making Red Bull a brand with tens of billions of dollars. Exploring the true core value of the category and educating the category will be the next question that Zihai Pot needs to think about.
Weizhixiang: Once the first stock of prefabricated dishes, the lack of category mentality and signature dishes makes Weizhixiang no longer "fragrant".
As one of the earliest enterprises to enter the prefabricated food track in China, Weizhixiang has been deeply involved in the prefabricated food industry, and in April 2021, Weizhixiang was listed, becoming the first stock of prefabricated food in China, and then offline franchise stores also began to expand rapidly. But the good times did not last long, and in 2022, the brand's revenue and gross profit began to decline, and nearly 200 terminal stores were closed in a year. The most critical strategic hidden danger lies in the lack of category mentality, Weizhixiang has eight product lines, about 300 kinds of SKUs, the brand is greedy for more, and one brand must not be able to represent all products in consumer cognition. In the face of more and more product lines and the lack of signature dishes, what the Weizhixiang brand represents has become more and more ambiguous, and the brand lacks mental pull, and in the surging and increasingly competitive prepared food market, it is inevitable that the brand's offline stores will fall into a wave of store closures and face a growth crisis.
Nichirei, the head enterprise of Japanese prepared food, has deeply cultivated the prefabricated fried rice category, built "Benge fried rice" into a best-selling single product for more than 20 years, and also established a strong category mentality of the brand, so that consumers think of the prefabricated fried rice and think of the Benge brand. Through mental pull, it continues to drive the company's C-end revenue growth. Brands often have a strong backbone and form a clear category mentality, so as to drive more product sales and support the healthy development of the brand through mental radiation.
Image source: Internet
Xibei Kung Fu Cuisine: Offline catering is extended online, and the risk of category cognition will only make the brand "lose the wife and the soldiers"
Jia Guolong, known as the most tossed boss in the catering circle, also aimed at the prefabricated food track early, trying to build it into the second growth curve of the brand after Xibei. once launched the "Jia Chuanlong Kung Fu Cuisine" store offline, and after suffering Waterloo, he began to hope for online sales, but it was still tepid. The core reason behind this lies in the huge strategic hidden dangers faced by category cognition.
On the one hand, the category cognition of Xibei's original catering brand is at risk, and Xibei will simultaneously make prefabricated dishes for online sales of the goods sold in offline stores, which is easy for consumers to have a negative perception that the dishes sold in Xibei's offline stores are also prefabricated dishes; on the other hand, there is no shortage of expert brands with leading advantages in e-commerce for all kinds of prefabricated foods sold online, taking Xibei's current online sales of sauerkraut fish products as an example, both in terms of cognitive potential and sales level, it is inferior to the current online channel sauerkraut fish category sales of the first expert brand" Ding Ding Lazy Dish".
Image source: Internet
Because consumers think by category and express by brand, when consumers have a clear category demand, the leading brands and expert brands in the category naturally have higher potential energy, and Xibei cannot represent sauerkraut fish or prefabricated dishes in cognition, so it naturally cannot become the first choice of mind. Xibei sells other types of prepared foods such as Wowotou rice and noodles staple food and sheep bones, which are also facing similar problems, and it is difficult to win the competition of leading brands and expert brands in subdivided categories. The extension of offline restaurants to prefabricated dishes will not make a breakthrough in the prefabricated food category, but will also overdraft the existing brand cognition, resulting in the risk of category cognition, which can be described as "losing the wife and losing the army". Mind is the ultimate battlefield of business competition, and if you lose cognition, you will lose the market, and it is destined to be even more difficult for brands to try to recreate a Xibei vision through pre-made dishes.
China's prepared food game-breaker
The key to the next stop of China's prepared food is category innovation, that is, the continuous upgrading and differentiation of categories
The upgrading and differentiation of categories will bring the next wave of major opportunities for prefabricated staple foods and prepared dishes. Overseas markets such as the United States and Japan have led the development of China for half a century, and have now entered a mature period, and many tens of billions of enterprises have been born. Japan has given birth to companies such as Nippon Suisan, Nichirei Foods, and Ajinomoto Foods, and the United States has also given birth to leading companies such as SYSCO, US FOODS, and Nestle.
Source: Reese based on publicly available data
Behind the success of these tens of billions of enterprises is to create and dominate one sub-category after another, and promote the continuous upgrading and enrichment of prepared food. American food giant Nestlé has laid out market segments through expert brands. Taking the pre-made pizza market as an example, Nestle's DiGiorno brand launched the "Croissant Crust Pizza", a large product suitable for the breakfast scene, which helped Nestlé win 28% of the pre-made pizza market share, becoming the first in the industry.
Image source: Internet
Healthy and younger will become the trend of China's prepared food, and grasp the trend to explore opportunities in new categories
Category innovation opportunities do not come out of thin air, but should be explored in combination with consumer trends and consumer pain points.
- Trend 1: With the great change of consumption concepts, health will become the driving force for the continuous iteration of China's prepared food industry
From the perspective of the high-end market, health concepts such as low fat, low sugar, low carb, and less additives have been deeply rooted in the minds of European and American consumers. According to the survey results of Reese Consulting's "2023 China Snack and Beverage Category Research Report", consumers are most concerned about food additives (flavors, pigments, preservatives, etc.), fat content, processed oils, and the naturalness of raw materials in the food ingredient list. Further down to the perspective of prepared food, especially quick-frozen food, health has also become the most concerned factor for consumers in addition to brands. With the emergence of negative news about prefabricated dishes, consumers have a negative perception of "adding too much" and "not fresh" for prefabricated dishes. Therefore, health will surely become one of the directions to promote the innovation and upgrading of the prepared food industry, and many category opportunities will also be born.
Source: Reese based on publicly available data
- Trend 2: Young people are gradually becoming the main group of prepared food, and the consumption demands of the younger generation often lead to the continuous birth of new categories
Under the trend of simplicity and efficiency, in recent years, the popularity of new small household appliances represented by air fryers and multi-functional integrated cookers has been rising in China, further promoting the penetration of convenient fast food among young people. Taking quick-frozen food as an example, the proportion of young people aged 22-30 has been as high as 32.9% of the current consumers of quick-frozen food, which has become the second largest group.
Source: Reese based on publicly available data
The prefabricated new categories created by young people also need to meet the needs of young people who pursue new tastes and richer diets, such as more Western-style and richer ingredients rather than traditional products. Taking the Japanese market as an example, Japan's quick-frozen conditioning food products show a trend of deepening the degree of pretreatment and moving towards diversification, and the products are constantly upgraded in terms of taste richness and ease of operation, and are more closely related to the final diet of consumers, such as noodles, fried rice and other products are added with various ingredients, and a single serving can meet the nutritional needs of a meal.
With the recent joint issuance of the "Notice on Strengthening the Food Safety Supervision of Prefabricated Dishes and Promoting the High-quality Development of the Industry" jointly issued by the State Administration for Market Regulation and other six departments, the standardization of the prepared food industry is also just around the corner and will enter the next era. If enterprises can cultivate a strategic awareness of category innovation and adopt effective category innovation methods to create new categories with real value, they will be able to take the lead in the next wave of prefabricated food and build China's prepared food giants.
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