How to choose products when opening a restaurant? Let's hear what a few industry leaders have to say.
This article is the record of the roundtable forum of "2024 Xingyao Food World - The 29th China Catering Influence Summit and the 2nd Catering Carnival", which was compiled and released by RedFood.com.
It's often said that "a good start is half the battle." This applies to the restaurant industry as well. For catering practitioners, choosing the right category is not only the first step on the road to entrepreneurship, but also often means that they can get twice the result with half the effort in the subsequent operation.
However, it is not easy to choose the right category, especially in today's increasingly obvious homogenization of catering, product selection has long become an important issue in front of every catering practitioner. How to choose products? How do you differentiate yourself?
On May 8, at the 2024 Xingyao Food World - the 29th China Catering Influence Summit and the 2nd Catering Carnival, Chen Hongbo, founder of Red Food.com, Gao Yuanze, founder of Dian Niu/Mini Coconut, Feng Mingqiang, founder of President Feng Hot Pot, Jiang Haowen, founder of KUMO KUMO/the Roll'ING, Xiao Yansong, founder of Murakou Second Uncle's Family/Mouthy Meat and Crab Pot, Liu Min, founder of Pancake Road, and Wang Yibo, co-founder of Huya Fried Chicken, focused on "how catering people choose categories and play differentiation" The topic was discussed in depth.
△ The scene of "2024 Star Food - The 29th China Catering Influence Summit and the 2nd Catering Carnival".
Gao Yuanze: A porter who does a good job in business, hates "competition"
Chen Hongbo, founder of Red Food: Please ask Mr. Gao Yuanze, you founded two very distinctive brands, mini coconut food stall and Dian cattle, so why did you choose to cut into these two tracks in the first place? Can you share some of your experiences and insights with us?
Gao Yuanze, founder of Dian Niu/Mini Coconut: At present, "volume" has become the norm in all walks of life, and every practitioner is facing unprecedented challenges.
In this context, how should catering people choose categories?
From my own experience, I have been in the catering industry for nearly 10 years, but I have always maintained a cautious attitude, from mini coconut to Yunnan beef to Chaoshan cuisine. In my opinion, it is really difficult to compete in the Red Sea, so the first rule when choosing a track is to "hate" competition and must "overtake in corners".
Taking the mini coconut food stall as an example, we chose this track during the epidemic period because we found the "time difference" and "regional difference", and we want to be a good "porter" of business. At that time, people could not travel abroad, and consumers' yearning and desire for Southeast Asian cuisine created a huge market gap. So we quickly seized the opportunity and succeeded in attracting a large number of customers by introducing authentic Southeast Asian flavors.
△ Image source: Mini Coconut Thai food stall official Xiaohongshu number
Our other brand "Dian Niu" has cut into the track of Yunnan sour soup, why should it cut into this field?
This is also due to the "aversion to competition". We believe that although categories such as Sichuan-Chongqing hot pot have a wide range of influence across the country, due to fierce competition and involution in the track, even if there are practitioners with strong strength, they must be cautious to enter this track.
In addition, there is a great opportunity for regional characteristic categories in the past two years, and in the new consumption period, all categories are worth redoing, and we must do a good job as a porter of business. Just like Sichuan's stilted beef and Hunan's chili fried pork, it used to be just a dish, and people didn't find it a category many years ago. But today, new brands are emerging in an endless stream under these two tracks.
We took a fancy to the advantages of ingredients brought about by Yunnan's unique geographical environment and climatic conditions, as well as the uniqueness of Yunnan sour soup in terms of taste. We try to introduce the original local specialty of Yunnan sour soup beef to other cities such as Shanghai, bringing a new taste experience to consumers.
At the same time, we are also very restrained in our operations. Although we have franchise qualifications and experience, in Shanghai and Beijing, we are not open to joining, and we are still developing in a full direct sales model. A lot of potential franchisees come to the door with money, but we resist the temptation.
I believe that only by learning restraint can we go far and steadily. If a brand wants to open up the franchise model, it needs to run all kinds of models, street models, shopping mall models, and community models. Brands need to pass on really good things to their partners, so that they have a chance. Do unto others as you would have them do to you.
In addition to resisting temptation, we insist on introducing the original Yunnan characteristics into the brand, which even includes three local intangible cultural heritage products in Yunnan.
△ Image source: Yunnan Niu, Yunnan Sauerkraut Hot Pot official Xiaohongshu number
Yunnan is rich in resources, but it is very scattered. From Xishuangbanna to Kunming, each place has its own unique ingredients and flavors. The importance of the supply chain to bring these ingredients and flavors from as far away as Yunnan to the bustling city of Shanghai is self-evident, so we are constantly improving our supply chain capabilities.
All of these are the main factors that make us stand out from the track. At present, Mini Coconut has nearly 350 stores around the world. There are also nearly 100 stores in Dian Niu. We are also slowing down our expansion and insisting on the quality and consistency of our products.
Feng Mingqiang: Occupy the traffic highland, maintain product differences,
Maintaining the ultimate cost performance is the key direction of the brand's breakthrough
Chen Hongbo: Hot pot is a red sea, how did President Feng use differentiated strategies to defend this bridgehead in the past two years? Please share your experience.
Feng Mingqiang, founder of President Feng Hot Pot: In today's environment, involution is common in every industry. However, compared with other entrepreneurial projects, catering has better cash flow. Because of this, more and more people choose to enter this industry.
In the catering industry, a good category will have a larger basic customer base. I have made hot pot, skewers, snacks and other categories, among which the repurchase rate, addiction and universality of hot pot are very high. Therefore, when I decided to build a new brand in 2023, I chose the hot pot category again.
After choosing a hot pot category, I interviewed Dong Ge (founder Wu Dong) in Xiaolongkan and the founders of other successful hot pot brands in Chengdu, all of whom have been industry leaders in the process of creating hundreds of stores. When I offered to work with them to create a new brand, they would have been more than happy to participate, but this time they unanimously refused. Everyone thinks that the hot pot market in 2023 is no longer suitable for new brands to enter.
But I think that when others are afraid, it often means that an opportunity has come. As long as we can cut into this track and make the ultimate differentiation, it is possible to succeed.
We chose the location of the store in the hot pot street of Taikoo Li in Chengdu. At the same time, we have also made the ultimate differentiation in scene creation and product system.
△ Image source: Principal Feng's old hot pot official Xiaohongshu number
For example, in the decoration, we have adopted the ultimate subtraction strategy. We have eliminated cumbersome decorations, and by streamlining the decoration, we have narrowed the distance with customers, eliminated their concerns, and made them feel the ultimate value for money.
When it comes to products, we do the same. While other hotpot restaurants were thinking about how to enhance the customer experience by adding add-ons such as desserts, we still chose to subtract and abandon the complicated menus and focus on providing a simple, efficient and cost-effective hotpot experience.
In terms of brand positioning, we emphasized the regional characteristics of Sichuan hot pot and Chengdu hot pot. In the context of the whole country talking about Chongqing hot pot, we choose to use Sichuan hot pot and Chengdu hot pot as selling points to occupy the minds of consumers through regional differentiation. We are not only making hot pot, but also inheriting and carrying forward the hot pot culture of Sichuan.
In terms of expansion strategy, we have taken a steady pace. Since its establishment on March 20, 2023, the Principal Feng brand has only signed 120 stores and only 75 stores have opened. We've had a big year, but it's definitely the slowest year to open stores compared to the pace of expansion in the past.
This is because we are waiting for "super franchisees" from all over the country to join us. It took us one year and one month to complete the layout of Beijing, Shanghai, Guangzhou and Shenzhen, of which about 40 stores were opened by super franchisees. Our goal for this year is to open 300 stores, and from the current situation, this goal is not difficult to achieve.
Finally, I would like to say to all of you here: occupying the traffic highland, maintaining product differences, and maintaining the ultimate cost performance will be the development trend of the catering industry in the next 3-5 years. No matter which category you choose as an entry point, you should work in this direction.
Jiang Haowen: The founder's greatest value to the company,
It is to delay the degeneration of "products" into "commodities"
Chen Hongbo: Next, we handed over the microphone to Mr. Jiang, the founder of the KUMO KUMO brand. Several brands under Mr. Jiang are at the head of the subdivision track. Among them, KUMO KUMO specializes in cheesecakes, while the Roll'ING specializes in the subdivision of Swiss rolls. Can you share with us why you chose the baking track in the first place? How?
Jiang Haowen, founder of KUMO KUMO/the Roll'ING: The reason why I chose the baking track is actually relatively simple. We observe a significant gap between the per capita consumption of baking in China and abroad, which means that there is huge growth potential in the market.
The data proves it. The volume of the baking market in 2018 was about 180 billion baking, and it is expected to exceed 320 billion by 2024, and the baking track is a high-growth track with a compound annual growth rate of more than 12%.
At the same time, the original baking brand is more in the form of regional brands or single stores, with the aging of the first generation of baking brands, the market demand continues to grow, which also provides development opportunities for new baking brands, and the new batch of baking brands are gradually moving towards national chain brands.
In the case of KUMO KUMO, we specialize in cheese baking and have opened directly managed stores in 25 cities in just three years. In February this year, we opened our business partnership model and now have stores in more than 40 cities across the country. According to the backstage data of the shopping center, we have been ranked first in the bakery field for 27 consecutive months. Last month, a 21-square-meter store in Shenzhen had a turnover of more than 1.8 million.
Tag: KUMO KUMO
In addition, we have the Roll'ING, a new brand that opened in June last year and is less than 1 year old.
This brand focuses on the category of Swiss rolls that have been verified by supermarkets and convenience stores, and the Roll'ING provides on-site handmade services for Swiss rolls. At present, the Roll'ING is ranked first on the baking hot list in Shanghai, Beijing, Shenzhen, Hangzhou and other places.
When it comes to differentiation, I only manage one department of the company, and that's the Consumer Experience Center. The reason why I value this department so much is because I believe that today's offline consumers are not just here to buy something, but to complete a shopping experience.
We named the Consumer Experience Center because our product is not just the cake, but the store itself, our partners and the details of their service. It's only when we build all of this as a consumer experience, and take it to the extreme, that consumers generate more emotional value.
In my opinion, the greatest value of the founders to the company today is to delay the transformation of "products" into "commodities" step by step. What is a commodity? Something that has only buying and selling value is called a commodity. The product is different, it not only has commodity attributes, but also attaches emotional value to consumers, such as KUMO KUMO's blind box cakes, limited cakes, and co-branded cakes.
Someone may not post to Moments when he buys a building or a yacht, but when he buys a different cake, he will happily post on Moments. This cake may not be expensive, but it has an emotional value attached to it.
△图片来源：the Roll'ING官方小红书号
I've been working in the F&B industry for 12 years and have witnessed the transformation of the F&B industry from a marketing-driven era to today's supply-driven era. Now, a TikTok may bring us a hot scene of queuing for 4 or 5 months. But in the future, I think supply is the mainstream. Even if consumption is downgraded, we don't have to "roll" the price, but to provide consumers with products with unique experience and value, which cannot be replaced by other brands.
Let's go back to the entire catering track, although some people say that the catering track is very "rolly" now, but I think this is the only track in China that has maintained a growth rate of about 10% and exceeded one trillion yuan in the past 15 years. From 8% and 9% in 2007 and 2008 to 20% today, catering is still a huge market. I firmly believe that this is still the golden age of the F&B industry.
Be sure to be within your own knowledge
Chen Hongbo: Xiao is always the founder of the multi-mouth meat and crab pot, and he is also the founder of the second uncle of the village. Why did you choose these two tracks? And how? Please share your experience.
Xiao Yansong, founder of the second uncle's house at the mouth of the village/multi-mouth meat and crab pot: Today's topic is about choosing a track. Two days ago, when I received this theme, I also looked back on the development of the brand.
Today, the multi-mouth meat and crab pot has gone through nine years. Nine years ago, when we decided to go long, the original intention was actually very simple, we did not plan to be a national brand, but just wanted to be based in the Northeast market.
At that time, Northeast catering was relatively lagging behind in terms of fashion. We wanted to take advantage of the east wind of commercial real estate to choose a fashionable and high-quality food category, and finally we chose meat and crab pot, and we are committed to providing cost-effective products.
△ Image source: Multi-mouth super meat crab pot
But the market environment nine years ago was very different from what we find ourselves in today, and the environment was probably better back then. Therefore, in 2021, we decided to move the battlefield from Northeast China to Shanghai, and we were faced with the problem of re-selection.
At that time, we considered two categories: Northeast cuisine and Northwest cuisine. The reason for choosing these two categories is to consider that they have similar advantages: first, they are relatively easy to use as raw materials; secondly, they all have obvious regional attributes; Finally, from the consumer side, consumption downgrade, these two tracks can create the ultimate cost-effective brand.
But in the end, we chose Northeast cuisine. The main consideration is that Northeast cuisine is easier to achieve the ultimate cost performance in Shanghai. At the same time, our team partners predict that Northeast cuisine will be the next outlet. Facts have proved that we made the right choice, and the craze in Harbin at the end of last year has indeed pushed Northeast cuisine to new heights in Jiangsu, Zhejiang and Shanghai.
In the process of choosing a track, I always adhere to the principle of only doing what I know. The initial choice of Northeast cuisine also had the factor that I was a Northeast person, and I had a deeper understanding and affection for Northeast cuisine.
In this process, we did not choose to cook Northeast cuisine in the Northeast, because we considered that in the Northeast, consumers may be entangled in the question of whether it is authentic or not. But I think this is a false proposition, because everyone's definition of authenticity or not is different.
Huang Qingjie: Broad category cognition,
But tracks with unclear brand awareness have more opportunities
Chen Hongbo: Podian Feiha is a well-known barbecue chain brand in China, while Wang Zhan focuses on Guizhou sour soup beef hot pot. Mr. Huang, why did you choose to turn around and enter Guizhou sour soup beef hot pot from the beginning? What do you consider when choosing a track?
Huang Qingjie, founder of Broken Shop Feiha/Wang Struggle: First of all, in the big picture, we should choose a track with broad category awareness but unclear brand awareness. In the case of Guizhou sour soup, for example, almost everyone knows that this kind of sour soup exists, but it is difficult to immediately answer which one does it best. This means that Guizhou sour soup may be a good option.
Second, each F&B founder has different expectations for F&B. If you only want to open one or two stores, choose any project you like and put your heart and soul into it, just do the basics of products, services, hygiene, etc.
However, if you're looking to build a national chain brand, there are more factors to consider, especially the repurchase rate. Choosing addictive categories, such as sour, spicy, smelly, and other flavors, often attracts consumers to come back for more.
Regarding the tuyere and product selection logic, I think there is no absolute tuyere. When selecting products, we need to consider how to get traffic more effectively, and choose products with lower traffic costs and wider traffic channels. This may give you a head start, but ultimately success depends on operational and execution capabilities.
I started in the barbecue industry, but then I chose Guizhou sour soup hot pot. Why didn't I make hot pot in the first place? This is because in the early years, while the Sichuan-Chongqing hot pot market was hot, the competitive pressure was also very high. But now, with the continuous development of the cultural tourism industry and the rise of Yunnan-Guizhou culture, Guizhou sour soup is gradually accepted by more people, and the hot pot track has ushered in an opportunity for differentiation.
By launching the Wang Zhan Sour Hot Pot brand in Shanghai, we have attracted a large number of consumers and achieved the expansion of more than 60 stores across the country, and we hope to ensure the healthy development and smooth operation of the brand.
△ Image source: Wang Fenfeng Guizhou sour soup beef hot pot
Why do you say that the catering industry is "volume"? Because you're just like everyone else. When you are different from others and have a differentiation, in fact, you will find that the industry is not so volatile.
I changed my career to catering, and it has been relatively smooth in the past few years, which is also inseparable from the selection of products. Hotpot is the first major track, standardization, supply chain, talent system is very mature, if I deeply cultivate the Sichuan-Chongqing hot pot track, compared with internal strength, resources, than anything is difficult to compare with competitors. But when I make Guizhou sour soup beef hot pot, I have found differentiation and opportunity.
In addition, as for how to discover new categories and tracks, I recommend that you still go out and have a look, and you should start with your legs first, rather than doing it behind closed doors.
Liu Min: Full-time, omni-channel, all-population strategy,
Make the pancake lane stand out
Chen Hongbo: Why did Mr. Liu choose the category of pancakes? How have pancake tracts been made over the years? Please share some of your experiences with us.
Liu Min, founder of Pancake Road: The category we are engaged in is actually very special, and it has always been a state of "having categories, no brands".
I am a native of Chengdu, and the brand Pancake Road was born in Chengdu, but it is actually an attempt of pancakes from the north in the southern market, and I also combined my 14 years of entrepreneurial experience to establish this pancake road.
In the past, the pancake category has been stuck in a very traditional stage, not only not favorable, but even incomprehensible.
The emergence of pancake road, focusing on full-time, all-channel, all-group snack fast food, undoubtedly brings a new interpretation to the pancake category. Omni-channel means that we cover three service forms: dine-in, take-out and take-out; The whole population means that our customer base is very wide, from children to seventy or eighty years old are our target customers; Full-time, it is reflected in the fact that we can achieve 24-hour uninterrupted operation.
In addition, we are constantly exploring and innovating. We have made pancakes+, studied the combination of pancakes, and are also exploring organizational construction and deep cultivation of the supply chain.
△ Image source: Pancake Road's official Little Red Book number
The choice of pancake category actually has two sides, on the one hand, it lacks mature references and head brands to learn; On the other hand, it also gives us huge space and opportunities for development. In the development process of the brand Pancake Road, from the product to the organization, from the supply chain to the marketing, we all relied on our own exploration.
Now, Pancake Road has gone through 12 years of direct sales history, and we will gradually open up to join from 2022. At present, the total number of stores in operation and the stores under renovation is close to 400. In the past, we didn't do much marketing, but now we are learning and experimenting with various marketing strategies.
In terms of product selection and brand differentiation, there is actually no choice for me, because from the very beginning, I entered the category. Admittedly, I was hesitant about whether this category would be viable at first, but with the passage of time and the accumulation of experience, I became more and more confident. Now, I still focus most of my energy on the front line, while also constantly learning and refining our brand.
At present, the internal operation of Pancake Road has been relatively stable, but we also realized that we still need to further improve and improve in terms of brand building and marketing. Therefore, we will continue to work hard to learn and explore, and constantly improve the brand building and marketing strategy of Pancake Road.
Wang Yibo: Continuous innovation around the "4P",
Only then can the enterprise obtain excess profits
Chen Hongbo: Why did Mr. Liu choose the category of pancakes? How have pancake tracts been made over the years? Please share some of your experiences with us. Please share with Mr. Wang Yibo, how did you choose the fried chicken category and maintain the competitiveness of the Huya fried chicken brand?
Wang Yibo, co-founder of Huya Fried Chicken: I am Wang Yibo, a 98-year-old catering newcomer and a person who is committed to making the world fall in love with Chinese fried chicken. Our brand Huya Fried Chicken started in 2020 during the epidemic and now has nearly 300 stores and has become the leading brand in the fried chicken subcategory.
Regarding the logic of category selection, I very much agree with Huang Ge (Huang Qingjie)'s point of view. He mentioned that it is necessary to choose categories with "roots", that is, those categories that have completed basic category awareness education. Fried chicken is such a category with deep roots. In the Henan region, there are 7-8 fried chicken restaurants in almost every community, but for a long time, there has not been an influential brand in this category. When we realized this, we decided to innovate in this category and break the tradition.
Bear Peter talked about the "law of innovative profits" and put forward the concept of "4P", believing that enterprises can only obtain excess profits when they continue to innovate. Therefore, we are also focusing on the "4P", that is, product, price, marketing, channel four aspects of comprehensive innovation.
In terms of product delivery, we have changed the attributes of traditional fried chicken to make it more in line with the tastes and needs of modern consumers.
In terms of price, we have launched a preferential activity of 58 yuan for two people fried chicken, so that consumers can enjoy the food while also feeling the value for money. Just imagine, at the core point of a core shopping mall, you can eat a fried chicken meal for less than 30 yuan per person, which is a very affordable thing.
On the channel side, we have also carried out upgrades and innovations. Originally, most of the fried chicken was operated in community stores and mom-and-pop shops, but we chose to introduce it into the shopping mall channel and became the only fried chicken restaurant in the entire shopping mall. This choice not only enhances our brand image, but also exposes us to less competitive pressure.
△ Image source: Huya fried chicken
When it comes to how to maintain the company's continued competitiveness, there is no skill to speak of. We are simply optimizing our internal organization, strengthening our supply chain management, and promoting digitalization to reduce our internal costs.
At the same time, we focus on synergies with external partners to reduce external costs. These efforts translate into excess profits, which we pass back to consumers and frontline workers, creating a virtuous cycle of growth.
Everyone says that the next decade will be the most difficult decade, and I very much agree with it, because the challenges of consumption downgrading and business coldness are indeed facing us, but I also think it is also the best decade. Because this is the best opportunity for companies that are ambitious, bold and dare to invest in brands and organizations.
In fact, the history of some developed countries such as the United States and Japan has proved that in difficult economic times, it is often the period when the brand chain rate increases the fastest. I'm sure every brand here can seize this opportunity.
Hongbo Chen: Thank you very much for your sharing. Today's catering industry is a huge market of 5 trillion yuan, and the support of this market is more than 8 million stores, which is the status quo and foundation of the catering industry.
However, there is also a view that the number of restaurants in the catering industry may shrink to 5 million in the future, because such a volume is a more benign development trend.
This also means that the catering industry will face a lot of elimination and competition in the future. Only those companies that can persevere, innovate and improve, are likely to go on for a long time and ultimately win.
That's why we also say that catering is a "leftover (winner) is king" competition. I hope that every guest here will continue to improve their core competitiveness and become the "leftover" and "winner" in this competition.