Interface News Reporter | Li Ye
Interface News Editor | Xu Yue
Recently, a Canadian company specializing in frozen fries has settled in Shanghai, and it is McCain Foods.
According to the Minhang District Government of Shanghai, on April 25, McCann Foods Shanghai officially settled in Minhang Hongqiao International Central Business District, and the relevant person in charge of the company said that in the future, McCann Foods China will take this place as the first choice for future business development and operation of the company, and further expand the company's business in the Chinese market.
The average consumer may not know the name of this company, but they must have eaten their products. Founded in 1957, McCann Foods is one of the world's largest producers of frozen potato products and hors d'oeuvres, with products distributed to more than 160 countries and regions and annual sales of $10 billion.
Its business mainly supplies frozen potato products to chain restaurant brands, and its customers are Western-style fast food brands such as McDonald's, KFC, Burger King, and Tex.
This kind of frozen potato products are actually semi-finished products such as French fries and potato wedges, which are usually pretreated by slicing and flouring before being transported to restaurants or frozen shelves in supermarkets, and then fried before eating.
In fact, McCann Foods has long been rooted in China and has continued to invest in China in the past.
The company entered China in 1994 and established a modern French fries processing plant in Harbin as early as 2004. In 2020, McCann Foods announced an investment of more than US$200 million to build a second production base in Yangling, Shaanxi Province, which was officially put into operation in October last year. At present, McCann has two production bases in Harbin and Yangling in China.
The company established in Minhang is not the first time that McCann has settled in Shanghai, but its previous company in Shanghai is smaller, only the Shanghai branch of "McCann Food (Harbin) Co., Ltd." This big move may also indicate that the company will further expand its business in China with Shanghai as the center in the future.
Chinese consumers' perception of French fries is mainly developed by the cultivation of Western-style fast food such as McDonald's and KFC. With the continuous expansion of the Western-style fast food market, suppliers such as McCann Foods, which are mainly oriented to the B-end market, are also ushering in greater opportunities in China.
According to iiMedia Research, the size of China's Western-style fast food market in 2023 will be 368.78 billion yuan, a year-on-year increase of 36.3%, which is higher than the average development level of the catering industry throughout the year, and the market size is expected to reach 427.78 billion yuan in 2024.
The specific performance in the market is that the expansion of leading brands in the Chinese market has accelerated significantly. Just last December 5, KFC opened its 10,000th store in China, making it the first overseas brand to reach this scale in the Chinese restaurant market, and also pulling a Western-style fast-food chase into a white-hot stage — followed by McDonald's, which plans to achieve 10,000 stores in the Chinese market by 2028.
At the same time, brands are still sinking, and consumers in lower-tier cities can at least see McDonald's, KFC, Tustin, Wallace, Zhengxin Chicken Steak and other brands.
From the perspective of the consumer market, under the influence of Western-style fast food, French fries have become a star item in the hearts of consumers, and its popularity can be seen from the expansion of its channels: at present, in China, it is not only Western-style fast food that sells French fries, but also in cafes, bakeries, bars and other catering outlets, you can see French fries.
From the industry level, just like the enlightenment of prefabricated dishes to Chinese catering, semi-finished products such as frozen potato products, due to their standardized processing process, are also of great significance for catering stores to achieve chaining. At a time when the degree of China's restaurant chain is constantly improving, French fries will also have more room for consumption. This is also the reason why McCann Foods continues to increase its weight in the Chinese market.
Although there are good prospects, the main players in China's frozen potato products are still foreign companies, such as Simplao in the United States, Lamb Weston in the United States, Famforry in the Netherlands, and McCann Foods. According to public information, Chinese companies account for less than 1% of the world's French fries processors.
The performance of the retail market also echoes the above information, Jiemian News has seen from online and offline supermarket channels that there are currently more frozen french fries brands on the market are Lamb Weston, McCann and Simplau, in addition to some local small business brands appear in some channels, such as Shandong Miele and Meihuan sold in RT-Mart, and Tianjin Jinkaili sold on Meituan e-commerce.
One of the more important reasons is that potato processing has always accounted for a relatively small proportion of China's potato industry. According to the "2022-2027 China Quick-frozen French Fries Industry In-depth Research and Investment Prospect Forecast Research Report" released by the China Research Industry Research Institute, from the perspective of the product structure of potato processing, China's potato processing accounts for about 15% of the total output, compared with more than 60% of fresh potatoes in the United States.
According to the report on the potato industry on the agricultural big data platform Breck, the current domestic potato processing market is about 80 billion yuan, with more than 5,000 enterprises, but there are only about 120 large-scale deep processing enterprises, and most potato processing enterprises have a small production scale, outdated equipment, lagging technology, backward management level and production and operation methods, and serious lack of competitiveness.
However, in view of the broad development prospects of the Chinese market, the leading foreign investors have increased their investment.
In addition to McCann Foods, in 2018, the Dutch Famforey Group and Inner Mongolia Lingzhi Potato Technology Co., Ltd. announced a joint venture to build a quick-frozen French fries processing project, and in 2023, Lamb Weston will officially build a second factory in Ulanqab, Inner Mongolia, with a total investment of about 250 million US dollars.
Domestic companies are also catching up. For example, in 2012, the agricultural company "Snow River Agriculture" opened a sub-unit of its food processing business, "Snow River Food", focusing on potato processing, and has already cooperated with the food supplier "Shuhai", and the agricultural industry company "Kaida Group" has set up three factories in Beijing and Inner Mongolia, which has a frozen potato brand.
This also gives more participants opportunities at a time when the level of domestic cold chain logistics and the popularity of convenient household tools such as C-end air fryers are increasing. The joy of "getting chips to the pier on the hour" will also be extended to more scenes.
Returning to McCann Foods, in addition to anchoring the Chinese Western food market, the company is looking to expand frozen potato products beyond Western food in China. On its official public account, it has been announced that it has launched products suitable for Chinese food, such as "Pepper and Salt V Potato", "Potato Pineapple Bun", "Black Pepper Beef with Potato Pieces" and so on.