The industry debates prefabricated dishes: the reshuffle is imminent, and the growth rate is not reduced

After three years of savage growth, the concept of prefabricated dishes has been clarified at the national level for the first time. The State Administration for Market Regulation and other six departments recently jointly issued the "Notice on Strengthening the Food Safety Supervision of Prefabricated Dishes and Promoting the High-quality Development of the Industry" (hereinafter referred to as the "Notice"), clarifying that clean dishes, staple food products, and dishes made in the central kitchen do not belong to the scope of prefabricated dishes. The regulation of not using preservatives puts forward higher requirements for the quality control of prepared dishes than ordinary foods.

What are the considerations for defining the scope of pre-made dishes in the notice? What is the significance of choosing this time node to be introduced? What impact will it have on the industry? Can consumer misconceptions about pre-made dishes be reversed? What inspiration does the notice bring to the formulation of unified standards for prefabricated dishes? After the scope is "shrunk", can the scale of the trillion-dollar industry of prefabricated vegetables be realized? The Beijing News reporter invited industry experts and representatives of production enterprises to discuss together.

【Roundtable Guests】

Zhang Chunhui, Chief Scientist of the Institute of Agricultural Products Processing, Chinese Academy of Agricultural Sciences

Liu Rui, associate researcher of the Institute of Food and Nutrition Development, Ministry of Agriculture and Rural Affairs

Wang Hongtao, Vice President and Secretary-General of China Chain Store & Franchise Association

Liu Pengdelis, Deputy General Manager and Secretary of the Board of Directors

Li Huang, General Manager of Guangzhou Snow Brand Food Co., Ltd

For the first time, the concept of pre-made dishes was clarified

Beijing News: What are the considerations for the definition of the scope of prefabricated dishes in the notice? Why did you choose this node to be introduced?

Zhang Chunhui: The prefabricated vegetable industry has been hot in China in the past two years, and the output value has exceeded 500 billion yuan last year, but the main body of production is still small, scattered and chaotic, resulting in a mixed market and the industry needs to be standardized. The "Notice" clearly defines prefabricated dishes, emphasizes the industrial production subject, and also clarifies the regulatory subject. Secondly, the requirements of "pinching the head and removing the tail" of the scope of prefabricated dishes, highlighting the attributes of dishes, and not using preservatives put forward higher requirements for the quality control of prefabricated dishes than ordinary foods. In general, the new regulations have clearly divided the boundaries between the food and prefabricated food industries, fully responding to the concerns of the market and helping to prevent many problems caused by "prefabricated food is a basket and can be filled with anything".

Liu Rui: Before the notice was issued, there was a wide range of pre-made dishes, but there was no problem of overuse. Prefabricated dishes refer to an industry and should not be a type of product. At present, what the public is discussing is more like the product definition of "pre-made dishes". The notice was issued at this juncture because many consumers have misunderstandings about prefabricated dishes, which has formed resistance to the development of the industry. Prefabricated dishes are an important path for the standardization and industrialization of dishes, and an inevitable trend in the development of the industry. The notice puts forward higher requirements for prefabricated dishes, and it is also a recognition of the industry.

Wang Hongtao: Previously, there was no clear concept of prefabricated dishes, and all parties defined and interpreted them from their own perspectives. Intuitively, everyone recognizes that prefabricated dishes are a new concept and a new outlet, so in the past two years, many local standards and group standards have been issued, but none of them have been recognized by all parties in society. The issuance of the circular solves the problem of inconsistency in basic concepts.

Liu Peng: In the past, the definition of prefabricated dishes was relatively vague, which brought different degrees of difficulties to industry supervision, consumer cognition construction, and healthy competition of enterprises. Consumers' concerns about pre-made dishes mainly focus on whether the credibility of producers and operators is guaranteed, and whether preservatives and additives are added to products, which have not been reliably resolved before the notice is issued. The notice is conducive to raising the "entry threshold" for prefabricated food production, standardizing the development of the industry, dispelling market doubts, and boosting market confidence.

Beijing News: The scope of prefabricated dishes is clear, what impact and changes will it bring to the industry?

Zhang Chunhui: This time, I personally think that the division of the category of prefabricated dishes is very clear. In the past, net vegetables, central kitchen products, staple foods such as steamed buns, dumplings, and glutinous rice balls cannot be classified as prefabricated dishes according to the new definition. At the same time, higher quality requirements are also put forward for the processing, circulation and sales of prefabricated food enterprises. The "Notice" will bring a restructuring to the prefabricated food industry, help production enterprises "travel lightly", and have the importance of standardizing guidance and guiding services for the industry.

Liu Rui: The notice will play a more standardized role in the development of the prefabricated food industry, and put forward higher requirements for product production and circulation. For businesses, I don't think the impact will be particularly significant. If the company's products have been recognized by consumers and channels, and the product quality is good, it will continue to develop even if it is not called prefabricated dishes. Some companies that have been excluded from the scope of prefabricated dishes can no longer take advantage of the popularity of prefabricated dishes in the future, and their financing may be affected.

Wang Hongtao: The clarification of the scope of prefabricated dishes will help clarify the development direction of the prefabricated food industry. From the perspective of the industry, it will help to promote the establishment and improvement of product standards, promote the standardized management of product quality and safety, improve the overall production level, and standardize food production and operation enterprises to engage in prefabricated food production and operation activities in accordance with the requirements of prefabricated raw materials, processing technology, product range, storage and transportation, and edible methods.

From the enterprise level, the clarification of the scope of prefabricated dishes will help enterprises optimize supply chain management, realize effective coordination of raw material procurement, production and processing, logistics and distribution, reduce costs and improve efficiency. By explicitly using pre-made dishes, restaurants will further protect consumers' right to know and choose. In the future, the popularity of pre-made dishes may gradually change consumers' eating habits and cooking methods, and companies have the opportunity to guide market trends and form new consumption patterns through products and services.

Liu Peng: This is a very good opportunity for enterprises and industries. To a certain extent, the notice solves consumers' concerns about the food safety of prefabricated dishes and the lack of protection of the right to know, bringing new market opportunities. The disorderly competition in the industry will be regulated, the entry threshold and industry concentration will be improved, and the development goals of enterprises will be clearer. The notice puts forward requirements for the prefabricated vegetable industry chain and policy side from four aspects: raw materials, technological innovation and research and development, production technology, and industrial development environment, which can stimulate the enthusiasm and innovation of practitioners.

Li Huang: Under the industry norms, consumers will no longer talk about the color change of prefabricated dishes, which will help restore market demand and promote the high-quality development of the prefabricated food industry. For example, the same sauerkraut fish, the process, equipment, input is different, the quality is very different, in the absence of a unified standard consumers are difficult to distinguish, the market will produce bad money to drive out good money. After the notice is issued, the market will have the effect of good money driving out bad money.

Removing preservatives has become an industry consensus

Beijing News: If preservatives are not added to prefabricated dishes, will it promote the technological transformation and upgrading of the industry and reverse consumers' misunderstanding of prefabricated dishes?

Zhang Chunhui: In addition to preservatives, technologies such as high-temperature sterilization in production, quick-freezing and fresh-locking, and cold chain logistics in transportation can also ensure the freshness of products. The prefabricated food industry equipment and processing technology pay attention to two points, one is "three transfers and one guarantee", cooking to technology, chefs to workers, kitchens to factories, and quality maintenance; The second is the "synchronization of the four modernizations", the digitization of culinary arts, the standardization of technology, the equipment of production and the traditionalization of quality. How to solve the "three transformations and one guarantee" and "four synchronizations" in the production process of prefabricated dishes is a common key problem faced by the industry, and it is also the key direction we need to study.

The "prefabricated dishes into the campus" incident and the "plum vegetable button meat" incident have brought negative public opinion to the industry. There are 4 dimensions of pre-made dishes in the industry - delicious, convenient, nutritious, and safe. Now everyone pays more attention to the safety of pre-made dishes, and the notice proposes not to add preservatives and other content, which solves the public's concerns to a certain extent.

Liu Rui: Not using preservatives is not a problem for enterprises from a technical point of view, the key lies in the cost, such as the selection of higher quality raw materials, improving safety management in the production process, more advanced freezing technology, ensuring the whole cold chain to avoid decooling, etc., will increase the cost. In this case, many companies may continue to use preservatives, but avoid using "pre-prepared" in product names.

Wang Hongtao: No preservatives are added, and the emphasis is on ensuring the safety and freshness of prefabricated food products. It is not difficult for enterprises with more standardized cold chain management. There are indeed challenges for individual category manufacturers, but it is also an opportunity to promote the technological transformation and upgrading of the industry. For example, the use of high standards of hygienic production processes, or the improvement of formulations, the search for natural and effective preservative methods or food additives, or the preservation of freshness through cold chain or flash freezing to extend the shelf life, etc. Reversing consumers' misconceptions about pre-made dishes requires long-term science popularization.

Liu Peng: "Preserved dishes without adding preservatives" is an inevitable trend in the development of the industry, which is in line with consumer expectations. On the one hand, the foothold of pre-made dishes is the dishes, and the dishes are generally not prepared with preservatives. On the other hand, in the process of production, storage, transportation and sales, prefabricated dishes have higher requirements for environment, temperature, humidity and light, and different types of prefabricated dishes should strictly meet the corresponding requirements for freezing and refrigeration. At present, it has become an industry consensus that preservatives are not used in prefabricated dishes, and this requirement will further promote the development of cold chain technology for prefabricated dishes.

Li Huang: No preservatives are added, which means that the entire production process must reach the standard of near-sterility, and this kind of high-standard equipment investment may be a threshold for some small enterprises. If the business finds it difficult to implement, it can choose not to enter the pre-made dishes. Consumers' misunderstanding of pre-made dishes mainly stems from the addition of preservatives and concerns about "overnight dishes". Under the new regulations, enterprises can choose advanced technologies such as liquid nitrogen freezing to preserve freshness and lock freshness, and physically (not chemically) to inhibit the reproduction of microorganisms, ensure the freshness and food safety of pre-made dishes, and also dispel everyone's concerns.

Solidify the definition with standards

Beijing News: The report shows that the national standard for prefabricated dishes has been submitted at the end of 2023, what problems do you think the national standard should solve most in prefabricated dishes? What difficulties or controversies may exist in the formulation process?

Zhang Chunhui: This notice is an origin that clarifies what is a prefabricated dish and what kind of prefabricated dishes should be made. The national standard is to anchor the radius of the origin, and use the standard language, standard framework, and standard paradigm to solidify the definition and industrial requirements through the standard. With the national standard, the original problem of multiple standards for one product and the problem that supervision is not easy to determine and implement can be solved to a certain extent. Combined with the requirements of no added preservatives, it will better serve the development of the industry and meet the market's demands for delicious, convenient, nutritious and safe prefabricated food products.

Liu Rui: I still think that there is no need for a national standard for prefabricated dishes. If the national standard is formulated, it is guessed that the final foothold will be in food safety, covering some relevant subdivision standards. Once the national standard is introduced, the relevant industry standards and local standards for prefabricated dishes must be revised.

Wang Hongtao: The national standard needs to clearly classify and define prefabricated dishes to facilitate supervision and consumer identification. In addition, labelling and disclosure are also a key point. Representatives of different actors, such as producers, regulators, catering companies, consumer organizations, etc., may have different expectations and needs for the content of the standard, and it is a challenge to reconcile these differences and reach a consensus.

Liu Peng: The formulation of the national standard for prefabricated dishes should coordinate the two dimensions of government supervision and enterprise production. On the one hand, it is necessary to strike a balance between the standardization and differentiation of prefabricated dishes, and on the other hand, it is also necessary to take into account the fact that some enterprises may have backward technology and equipment and small production scale. A scientific and reasonable transition period should be given to avoid one-size-fits-all. The diversity and complexity of Chinese dishes themselves, as well as how to ensure the follow-up implementation effect, are all things that need to be considered in the process of formulating the national standard.

Li Huang: First of all, I hope that the national standard will clarify the definition of prefabricated dishes, and it would be better if it could be raised to the requirements of the whole cold chain. With national standards, enterprises and industries can put forward higher standards on this basis and promote the development of the industry. In my opinion, this notice is to give the industry a transition period and a buffer period for public opinion before the introduction of the national standard.

The growth rate of the industry has been improving for a long time

Beijing News: After the scope of prefabricated dishes is clear, will the construction of "prefabricated food capitals" and prefabricated vegetable industrial parks in various places cool down?

Liu Rui: "The capital of prefabricated vegetables" and industrial parks will continue to be done, but they need concept packaging, such as changing to food industrial parks and agricultural industrial parks. Prefabricated vegetable industrial park is a kind of name, which will not have a decisive impact on corporate investment.

Wang Hongtao: The construction of the "capital of prefabricated vegetables", whether the supervision of industrial parks in relevant areas is standardized, whether the services are in place, and whether industrial clusters can be formed are all key factors affecting its development. In the long run, a clear range of prefabricated dishes can help guide industrial parks and enterprises to focus on technological innovation and quality improvement, rather than relying solely on conceptual hype. Under the guidance of clear industrial policies and standards, investors may more rationally assess the investment value and risks of the prefabricated food industry, resulting in the cooling of some overheated investments. Enterprises with core technologies, strong production capacity, and good management may see more development opportunities and be favored by investors. Some industrial parks with low standards and low-cost competition may face challenges.

Li Huang: In the short term, the new policy on prefabricated vegetables may have an impact on the industrial parks, for example, some agricultural products themselves have the advantage of geographical indications, but their popularity will decrease after they are transformed and processed into prefabricated dishes. The land-selling industrial park is built in combination with consumer demand and is not greatly affected by the policy. In the long run, the construction of prefabricated vegetable industrial parks may increase. On the one hand, prefabricated dishes have become a rigid demand among some young consumer groups due to their convenient attributes. On the other hand, pre-made dishes are an international trend that occupies an important position in some overseas markets.

Beijing News: How to judge the development of the prefabricated food industry in 2024? Can the forecast of the domestic trillion market size be realized?

Zhang Chunhui: At present, the average annual growth rate of the prefabricated food industry is about 20%. After the new regulations come out, the industry will be reshuffled, and some entities that are not within the scope or whose processing technology level, production equipment level, and quality control level do not meet the standards will be eliminated, so as to make more market space for compliant production enterprises and accelerate the development of the industry.

Liu Rui: The development of the prefabricated food industry is not a policy behavior, but a market behavior, and a product of industrial development driven by consumer demand. I have reservations about the forecast of the trillion market size of domestic prefabricated dishes. In Japan, where the prefabricated food industry is developed, the convenience store system is also developed, while its takeaway system is relatively backward, and the Chinese market is the opposite. In Japan, the convenience store system is used to solve the problem of convenience for residents, and convenience stores introduce pre-packaged food, which has high requirements for product standardization and a long shelf life. The mainland takeaway system is very developed, and the corresponding takeaway dishes do not need to be pre-packaged and are not in the category of pre-made dishes. Therefore, it is inaccurate to use Japan's national conditions to benchmark the domestic prefabricated food market environment to forecast the prospects.

Wang Hongtao: Judging from the data, the prefabricated food industry has maintained a stable growth momentum in the past few years, and it can be judged that the growth rate of the industry will not be affected in 2024. It's more about clarifying the classification and seeing the market changes more clearly. According to the new concept and scope, when the domestic prefabricated food will reach the trillion market size, it is necessary to take into account many factors such as the macroeconomic environment, changes in consumer preferences, and fluctuations in raw material costs.

Liu Peng: The long-term trend of prefabricated dishes will not change, and the industry will change from scale and speed to quality and efficiency. In 2024, there will be more prefabricated food companies to build brand minds through omni-channel competition. Policy support, market demand, network marketing, cold chain logistics, etc., have become an important force for the continuous expansion of the prefabricated vegetable market. With the continuous improvement of the relevant systems of prefabricated dishes and the effective support of local governments, the industry will usher in long-term and high-quality development. In the above process, consumers' recognition of prefabricated dishes will be further improved, bringing incremental prospects to the industry.

Li Huang: At present, the development of the domestic prefabricated food industry is still in the stage of "having categories and no brands", and the future development of the industry will give birth to subdivision leaders in the industrial chain links such as raw materials, production, and channels, as well as one-stop service providers that can connect logistics and distribution. At present, prefabricated dishes account for about 10% of China's catering industry, according to this volume estimate, combined with the growth rate of the industry and the development of overseas markets, I think it should reach a trillion scale in three years. Referring to the penetration rate of prefabricated dishes in the catering industry in some developed countries, there is at least 20% to 30% of the growth space of domestic prefabricated dishes in the catering market.

Beijing News reporter Guo Tie and Wang Siyang

Photo courtesy of the interviewee

Edited by Li Yan

Proofreading by Yang Xuli