Author | Liu Jingfeng
Edit | weber
Wang Xing in 2024 has finally made up his mind to go to the Middle East to pan for gold.
According to reports, Meituan will launch KeeTa, an international food delivery platform in the Middle East, with the first stop in Riyadh, the capital of Saudi Arabia, and will be launched in the next few months.
As early as last year, Wang Xing led a team to inspect the Middle East and other news, which has been heard endlessly. As the leading takeaway platform in China, Meituan's entry into the Middle East is bound to drive a major change in the local catering industry, and at the same time bring new changes to some upstream and downstream catering enterprises.
Disposable tableware is one of the most obvious markets.
In fact, since the outbreak of the epidemic, the sales of disposable tableware in the Middle East market have increased significantly. According to data from Alibaba's international station, in 2020, the disposable catering packaging exported by Chinese enterprises increased by 110% year-on-year in Saudi Arabia and 135% in the United Arab Emirates, becoming the fastest growing market.
What few people know is that behind the disposable tableware market in Saudi Arabia and the United Arab Emirates, a Shandong company has won nearly 80% of the market share.
The disposable tableware industry across the country is facing a new opportunity and challenge. These opportunities and challenges all come from going to sea.
There was once a video titled "How Arabs wash dishes", which once sparked heated discussions.
In the video, a group of men in white robes collect used utensils, then sit around and wipe the food residue and grease on it with their hands, and then lick their fingers, and so on, even with a spoon. These dishes, which are "cleaned" with the tongue, appear extremely white.
This picture, coupled with descriptors such as "Arabs" and "washing dishes", instantly makes people feel that in the Middle East countries where water is scarce, people have to "wash" the dishes like this after every meal?
The true intent of the video is unverifiable. Although not everyone in the water-scarce Middle East will "wash dishes" in this way, in an environment where "dripping water is as expensive as oil", washing dishes is indeed an important way to waste water. As a result, a very easily overlooked demand - disposable tableware, grows unexpectedly here.
Israel, for example, is one of the countries that uses single-use plastic tableware the most in the world, second only to the United States in per capita usage. The Arab Observer has reported that Israel consumes more than 250 million plastic cups a month, uses 1.3 million tons of plastic every year, and spends NIS 2 billion ($574 million) on single-use plastic dishes.
As early as 2017, Liu Wei, manager of Shandong Jiajie Plastic Industry Co., Ltd., noticed that the disposable tableware produced by the company has a very high sales volume overseas, especially in the Middle East market.
Shandong Jiajie Plastic Industry Co., Ltd. is located in Binzhou. Although from a national point of view, disposable tableware enterprises are mainly concentrated in Guangdong, Hubei, Jiangsu and Zhejiang and other places, but with the location advantages of the mold industry near Huanghua, Hebei Province and the plastic raw material industry of Weifang Shouguang, as well as the support of the local government for enterprises, Jiajie Plastic Industry has developed into the largest disposable tableware production enterprise in Shandong.
"In the early days, we mainly provided disposable lunch boxes to takeaway businesses such as Meituan and Ele.me, as well as some catering companies in Beijing. But it soon became clear that the domestic disposable tableware market is very competitive. Subsequently, he began to contact the overseas market demand through some exhibitions. Liu Wei, manager of Shandong Jiajie Plastic Industry Co., Ltd., said.
In 2017, after winning orders from several overseas customers one after another, Jiajie Plastic Industry realized that the foreign disposable tableware market was ushering in new growth opportunities. Subsequently, the company's products also began to transform from the production of disposable lunch boxes to disposable tableware including disposable lunch boxes and disposable knives and forks.
"We have opened up markets in more than 40 countries overseas, including the United States, Canada, Japan, Saudi Arabia and the United Arab Emirates. At present, the company has completely done overseas markets and has no domestic business. Liu Wei said.
Among them, it is worth mentioning that in the overseas market of Jiajie Plastics, about 80% of the orders come from Saudi Arabia, the United Arab Emirates and other Middle Eastern markets; The market share of Jiajie plastic industry in Saudi Arabia and the United Arab Emirates disposable tableware market is also close to 80%.
Disposable tableware displayed by Shandong Jiajie Plastic Industry in the Middle East market
It can be said that this Shandong company has "monopolized" the disposable tableware market for Middle Easterners.
In the past, it was generally believed that developed markets such as the United States and Japan were the most important markets for disposable tableware. However, with the changes in global trade relations in recent years, Chinese products have repeatedly hit a wall in the United States, coupled with the constraints of the global plastic restriction order, Chinese disposable tableware companies urgently need to find another way.
The rise of emerging markets has just opened a new way out for domestic disposable tableware companies.
"We first focused on the Middle East market, because we saw that there was a shortage of water here, and people did not use washing dishes as often as we did, so there was a strong demand for disposable tableware." Liu Wei introduced.
As he learned more deeply, Liu Wei found that a large food production industry is actually rising here, including food processing and food packaging production.
As the transportation hub of the Middle East, the UAE is also home to the world's culinary scene. More than 80% of the UAE's population (or about 90% in Dubai) comes from nearly 200 countries around the world, and they bring with them food from around the world. In recent years, the F&B industry has grown rapidly in the UAE, especially in Dubai, where not only are more and more international F&B brands presence, but local brands are also growing.
At the end of 2023, the UAE Food and Beverage Group's 2023 UAE Food Industry Report released said that the UAE now has more than 2,000 food and beverage manufacturing companies with annual revenues of US$7.63 billion, accounting for 25% of the country's manufacturing GDP, second only to the oil and gas industry.
In fact, in the year when Jiajie Plastic Industry was preparing to open up the Middle East, several major events occurred in Dubai's food industry one after another. In July 2017, the Dubai government announced an investment of 5.5 billion dirhams (about 1.5 billion US dollars) to develop the Dubai Food Park in Dubai Wholesale City to promote the development of the food industry in Dubai and the United Arab Emirates.
Dubai Food City is planned for construction
During the China-Arab States Expo in the same year, Dubai Wholesale City signed a cooperation agreement with China Ningxia Fengchuang Fund Management Co., Ltd. to jointly develop a China-Arab Food Industrial Park project worth 2.7 billion yuan in Dubai Food Park. According to the plan at that time, the project would have more than 30 food manufacturers settled, and the introduction of printing and packaging companies and cold chain transportation enterprises.
After several years of development, the food and beverage industry in the UAE has also begun to take shape.
According to Mordor Intelligence, an international consulting agency, the UAE foodservice market size is expected to be USD 19.98 billion in 2024 and reach USD 43.98 billion by 2029, registering a CAGR of 17.10% during the forecast period (2024-2029).
The rise of the food and catering industry will not only drive the local food processing industry, but also drive the existence of a number of related needs around it, such as the food packaging industry including disposable tableware, the catering robot equipment industry, and the takeaway market.
According to Statista, the UAE alone is expected to reach US$2.79 billion (about 20 billion yuan) in the food delivery market by 2026, with 5.5 million users.
On April 26 this year, it was reported that Meituan plans to launch its international food delivery business in the Middle East market, but the first stop will be in Riyadh, the capital of Saudi Arabia.
For China's disposable tableware companies such as Jiajie Plastics, Meituan's entry into the Middle East is undoubtedly good news. Because takeaway will not only drive the development of the local catering industry, but also greatly drive the demand for disposable tableware.
In the past, under the plastic restriction order, most countries in the country intended to reduce the use of environmentally unfriendly disposable tableware. However, after the epidemic began, the overseas tableware market ushered in another outbreak.
According to the International Solid Waste Association, the use of single-use plastics in the United States skyrocketed by 250%~300% during the epidemic. In Canada, nearly one-third of the population bought more plastic packaging products during the pandemic, and support for a complete ban on single-use plastic bags, straws, cutlery and other products dropped from 70% to 58%.
In the Middle East, the use of disposable cutlery is also on the rise. On April 24, 2020, at the beginning of the first Middle Eastern Ramadan during the pandemic, the Dubai government required restaurants to use disposable utensils for a large number of Middle Easterners who were unable to cook at home.
Alibaba International Station released a set of data on December 10, 2020, showing the vigorous export of disposable tableware in China in 2020: at that time, the export of disposable catering packaging produced by domestic enterprises has been growing for 8 consecutive months; Interestingly, in addition to the traditionally strong U.S. market, the Middle East also has great potential, with Saudi Arabia increasing by 110% year-on-year and the United Arab Emirates increasing by 135%, becoming the fastest growing market for China's disposable catering packaging exports.
Liu Wei is the one who has actually experienced this change. "In 2019, our company bought a batch of raw materials at a lower market price. The epidemic once caused a shortage of masks, and the price of raw materials skyrocketed. At that time, many companies took advantage of the trend to raise the price of disposable lunch boxes, but our company still produced on the basis of the previous price of raw materials, and the price of products did not increase significantly. When we sold these products to the Middle East, we were immediately recognized by local distributors. ”
Subsequently, the sales scale of Jiajie Plastics' products grew rapidly in the Middle East market. "Our company's total import and export volume in 2021 reached 36.89 million yuan, a year-on-year increase of nearly 638% compared with 2020. By 2023, the total import and export volume will be close to 200 million yuan. Liu Wei, manager of Shandong Jiajie Plastic Industry Co., Ltd., said.
For enterprises with low added value and fierce market competition such as disposable tableware, this is already a rare growth rate.
You must know that at present, the domestic disposable tableware industry has entered a cruel competitive situation. In the past, the gross profit of the disposable tableware industry was about 20%, but in recent years it has been as low as 5%.
On the one hand, the reason for the decline in gross profit comes from the fierce competition in the market, which reduces the selling price; On the other hand, there is the rise in costs. For disposable tableware manufacturers, there are four main costs: raw materials, freight, electricity, and labor. Among them, except for the electricity bill, which has not changed significantly in recent years, the other three costs are rising.
Taking freight as an example, Liu Wei introduced that from Qingdao to Dubai, when it was low in the past, the freight of sending a batch of disposable tableware was 700~800 US dollars, and now the freight has risen nearly 3 times, "only the sea freight accounts for about 15% of the entire value." ”
In order to reduce costs, disposable tableware companies have chosen to build factories to build factories to produce.
Xiaguangshe found that as early as 2018, Ningbo Changya New Material Technology Co., Ltd., a domestic disposable tableware manufacturer, set up a subsidiary in Vietnam, which is an early "going out" enterprise in the disposable tableware industry.
This year, Shandong Jiajie Plastic Industry Co., Ltd. has also accelerated the pace of going out - after finalizing the cooperation with local partners in Dubai to build a factory, it began to export disposable tableware production equipment, molds, raw materials and technologies to the local area.
At the end of April this year, during a visit to Xiaguang Society, Liu Wei said that "the new equipment can be transported to the local area in the near future", and after the equipment is installed and commissioned, it will soon be put into production.
Although there is still market space for overseas disposable tableware, the hidden concerns cannot be ignored.
The biggest variable comes from policy tightening.
China implemented a "plastic restriction order" as early as 2008. In 2020, the mainland further promulgated the "Opinions on Further Strengthening the Control of Plastic Pollution", clarifying that by the end of 2022, the use of non-degradable disposable plastic tableware will be prohibited for dine-in services; By 2025, the consumption intensity of non-degradable disposable plastic tableware in the field of catering takeaway in cities above the prefecture level will be reduced by 30%.
Europe is currently one of the most stringent markets for disposable tableware in the world. On January 1, 2020, the ban on plastic part of the French "Energy Transition for Green Growth Law" was officially implemented, and France became the first country in the world to ban the use of single-use plastic tableware. At present, most European countries have banned the use of disposable cutlery.
On the contrary, in the United States, in addition to the plastic bags that have been explicitly banned or restricted, the restrictive policies on plastic tableware and plastic straws have not been implemented nationwide at this stage, and only some states and cities have introduced bills restricting disposable plastic tableware. This also makes the United States still the world's largest consumer of disposable tableware, and it is also the most important export market for domestic disposable tableware enterprises.
In addition, in emerging markets, the disposable tableware industry is also gradually facing policy pressure.
Take, for example, the Middle East. On December 31, 2023, the Dubai government issued a plastic ban, prohibiting the trade and import of single-use plastic bags in Dubai from January 1, 2024; From June 1, 2024, Dubai will ban the use of non-plastic single-use products, including single-use packaging bags of other materials; From January 1, 2025, Dubai will ban single-use plastic products, including plastic blenders, table covers, cups, plastic straws and plastic cotton swabs, etc.; From January 1, 2026, the plastic ban will be extended to plastic products such as plates, food containers, cutlery and cups.
The Dubai government requires businesses to provide customers with affordable, recyclable alternatives to single-use plastic bags. Practitioners who violate the ban face a fine of 200 dirhams (about 389 yuan).
In Southeast Asia, Indonesia is one of the countries that produces the most plastic waste in the world. Indonesia, with a population of 270 million, produced 12.6 million tonnes of plastic waste in 2022, with an average of 46.7 kilograms per person, according to official data. Faced with this situation, the Indonesian government has stipulated a complete ban on single-use plastic products, including plastic straws, plastic cutlery and plastic shopping bags used to hold food, by the end of 2029.
Other Southeast Asian countries are also grappling with plastic waste. The Malaysian government also announced in 2023 that it plans to completely ban the use of plastic bags by 2025 at the latest; The Thai government has also launched an action plan on waste management and will ban all plastic waste imports from 2025.
These bans have forced the domestic disposable tableware industry to be reborn and upgraded.
First of all, it is the change of product raw materials, which needs to be upgraded from non-degradable plastics to degradable plastics. In recent years, driven by policies such as carbon peak and carbon neutrality, domestic biodegradable plastics have entered a stage of rapid development, according to the Frost & Sullivan research report, from 2016 to 2020, the compound growth rate of biodegradable plastics in mainland China was 9.70%; From 2020 to 2026, the compound growth rate of biodegradable plastic production in mainland China will reach 27.05%.
Secondly, disposable tableware manufacturers are also seeking product transformation. Liu Wei of Jiajie Plastic told Xiaguang that Jiajie Plastic is currently building a new production line to produce medical device products, "Many medical device products are also made of plastic, but their production environment needs to be in a sterile environment, so the process requirements are more stringent." It just so happens that we will find a new direction for development. In fact, overseas, the supply of medical supplies in many countries is seriously insufficient, and even disposable syringes are in short supply, which is still an opportunity. In addition, they also cooperated with Jiangsu University to jointly develop a production line for degradable tableware to accelerate the transformation to the production of degradable disposable tableware.
Finally, in the face of the flood of disposable plastic waste, it is necessary to establish a standardized plastic waste management and recycling system. According to the Ocean Atlas 2017, jointly released by the Heinrich Böll Foundation and other institutions, the lack of global plastic waste recycling methods, the lack of environmental awareness and imperfect laws have led to a large amount of plastic waste being discarded.
Plastic waste disposal is a problem all over the world. At present, there are several types of garbage disposal methods in mainland China: landfill, incineration, composting, and sorting and recycling. However, no matter which method is used, there is a certain risk of secondary pollution. Therefore, the government is also needed to deal with plastic waste.
2023 marks the 50th anniversary of World Environment Day. The theme of this year's June 5 Environment Day is "Beat Plastic Pollution". This is also a reminder to the world that while developing the economy, it is necessary to pay attention to the control of plastic pollution. Although disposable tableware is only one part of plastic pollution, the successful transformation of this industry is still relevant to the global control of plastic pollution.