"Going overseas" is one of the important trends in the catering market in recent years, so what are the highlights of the recent development of catering going overseas? What should Chinese catering brands pay attention to when going overseas? On September 26, at the site of the "2024 Catering Overseas Development Forum", the Red Meal Industry Research Institute released the "China Catering Overseas Development Report 2024".
From September 23rd to 26th, the 2024 4th China Catering Brand Festival, under the guidance of the Guangzhou Municipal Bureau of Commerce, co-sponsored by the World Federation of Chinese Cuisine Industry, CCTV, and Red Food, and jointly organized by the Red Meal Industry Research Institute and the Catering Channel of CCTV, was grandly held at Langham Place Guangzhou & Nanfeng International Convention and Exhibition Center. With the theme of "Cohesion ·and Common Good", this event will deeply interact with entrepreneurs and managers in the catering industry chain in various forms such as brand power summit, series of thematic forums, HCC catering exhibition, Red Eagle Award ceremony, and "celebrity face-to-face" interviews, so as to empower catering partners and create more effective link value.
On September 26, the "2024 Catering Overseas Development Forum" was successfully held. As one of the key forums of the 4th China Catering Brand Festival, the "2024 Catering Overseas Development Forum" brings together overseas catering experts, founders and executives of overseas brands and other heavyweight guests to conduct in-depth discussions and interactions on Chinese catering going overseas.
At the forum, the Red Meal Industry Research Institute released the "China Catering Overseas Development Report 2024" (hereinafter referred to as the "Report"), which analyzes and summarizes the overseas market, category characteristics and overseas development measures of overseas brands, and provides reference for brands, investors and supply chain enterprises who intend to go overseas.
At the forum, Lao Huahui, senior research manager of the Red Meal Industry Research Institute, gave a professional interpretation of the "China Catering Overseas Development Report 2024" on the spot. Here are some of the highlights from the report.
There is a lot of room for the development of overseas catering, and Chinese catering has entered a new stage of going overseas
Chinese catering has experienced a long period of development, which can be traced back to the middle of the 19th century. At that time, immigrants from Guangdong, Fujian and other places in mainland China who went overseas to make a living brought Chinese food overseas while working, and Chinese restaurants at that time were mainly mom-and-pop shops. To this day, there are still some descendants of immigrants who still run Chinese restaurants.
In the 90s of the 20th century, with the deepening of the reform and opening up policy, some state-owned catering brands began to explore overseas markets.
Around 2010, catering brands represented by Haidilao, Meizhou Dongpo and Huang Jihuang began a new round of overseas layout, these brands learned from the lessons of the early stage, paid attention to the accuracy of market selection, began to open stores in countries with more Chinese, and adjusted their business strategies, adjusted their menus in a timely manner according to the taste preferences of local consumers and the supply chain, and gradually integrated into the local market.
With the intensification of competition in the domestic catering industry, in order to find a broader space for development, starting in 2023, many chain brands will accelerate the pace of going overseas. At the same time, there are also many enterprises in the upstream supply chain to expand their business. Chinese catering going overseas has entered a new stage of development, and 2023 is also praised by industry insiders as "the first year of Chinese catering going overseas".
At present, there are nearly 700,000 overseas Chinese catering stores, with a market size of nearly 3 trillion yuan. Overseas Chinese restaurants have spread to more than 180 countries and regions, including Singapore, Indonesia, Viet Nam, the Philippines, Japan, Korea, United States, Canada, United Kingdom, France, Spain, U.A.E. and Australia.
Menu localization, marketing diversification, supply chain globalization, and brand implementation of localization strategy
In the past, most of the overseas stores opened by mainland catering brands were not because the brands themselves wanted to "go global", but because overseas Chinese and overseas students were looking for authorized franchise stores opened by domestic catering brands due to entrepreneurial needs.
In recent years, more and more brands have begun to take the initiative to go overseas, and even take going overseas as an international development strategy, opening up global franchise/partner programs, and taking the initiative to find partners overseas.
In addition, some domestic F&B brands are also raising awareness of internationalization, and many brands have deepened their localization strategies, innovating and adjusting their products, tastes, and restaurant environment to cater to the eating habits of local consumers. Specific measures include: menu localization, marketing diversification, and supply chain globalization.
Menu localization: F&B brands will reasonably adjust their menus according to the tastes and needs of local consumers, such as eliminating some ingredients that local consumers do not eat or are taboo, adding local ingredients and popular flavors, and making localized adjustments in terms of ingredients, tastes and even dining patterns. For example, Haidilao will provide traditional miso soup pot base and local ingredients beef sausage in Japan stores, and in Singapore stores, it will develop fragrant fish pot bases based on local traditional cuisine "fish head stoves", and in Thailand stores will launch tom yum pot bases.
Marketing diversification: In order to quickly enhance brand awareness and influence, many F&B brands adopt the "online + offline" dual-track communication strategy in overseas markets. Among them, online communication is mainly in Facebook, TikTok, Instagram, Twitter and other overseas mainstream social media to do brand communication and promotion; Offline communication methods are more diversified, such as cooperating with local well-known spokespersons, or opening pop-up stores in commercial areas with high foot traffic, or co-branding with well-known brands, or direct discount promotions, buy one get one free, etc.
Globalization of supply chains: In order to gain a foothold in overseas markets and continue to grow, more and more brands are paying attention to the global integration capabilities of their supply chains. For example, Haidilao has been preparing to build overseas central kitchens since 2016, and by the end of 2023, Tehai International has more than 1,600 overseas suppliers, including more than 900 in Southeast Asia and more than 300 in North America. Happy Lamb has established a "global procurement" supply chain; Mixue Ice City established four subsidiaries in Hong Kong, Indonesia and Viet Nam to purchase food ingredients, packaging materials, equipment and facilities, and operating materials. However, at present, it seems that the supply chain system of domestic catering brands overseas is not yet perfect, and most of the brands' raw materials rely on Chinese exports and local procurement.
In recent years, supply chain companies such as food ingredient supply companies, seasoning companies, prefabricated food companies, cold chain logistics companies, and takeaway platforms are also actively expanding overseas business to provide assistance for mainland catering brands to develop overseas. For example, Synear Food's first overseas factory was fully operational in the United States in 2018; Yihai International's Thailand factory has been put into production; Meituan's overseas KeeTa platform was launched in Al Qaji City, Saudi Arabia, in September 2024.
In general, these catering-related supply chain enterprises mainly focus on import and export trade in overseas business expansion, and there are few enterprises that have established processing plants overseas, and most of them are seasoning enterprises. With the increase in the demand for supply chain by domestic catering brands in overseas markets, the supply chain going overseas may usher in a "small climax" in the next few years.
The overseas expansion of ready-made beverages is fast
From the perspective of subdivision tracks, at present, there are more brands in hot pot, drinks, spicy hot/steamed vegetables and other tracks that have developed a certain scale overseas and gradually gained a firm foothold. The Red Meal Industry Research Institute found that these categories basically meet the following three elements: first, they have a high degree of standardization and are easy to develop in chains; Second, it has been in overseas markets for a long time, and the difficulty of market education is low; Third, it has the characteristics of Chinese cultural elements.
1. Hot pot: The brand has been going to sea earlier and has basically completed market education
As early as 1995, Chongqing Little Swan Hot Pot went abroad and opened branches in Los Angeles, Seattle, Olympia and other cities. At present, many domestic hot pot brands have set up direct stores or franchise stores overseas, among which Haidilao's Tehai International, which is mainly engaged in the international market, has opened more than 110 stores in 13 overseas countries.
Nowadays, under the publicity and guidance of many brands, hot pot has basically completed the education of overseas markets, many overseas local consumers can skillfully use chopsticks to eat hot pot, and some consumers can also accept brain flowers, fat intestines, pig blood and other offal ingredients.
At the same time, in order to cater to the eating habits of overseas local consumers, some hot pot brands have set up small pots for single consumption in overseas stores, such as Little Sheep and Xiaolongkan Hot Pot.
2. Ready-made beverages: The number of overseas stores of some brands has exceeded 1,000
In 2018, the number of overseas stores of Mixue Bingcheng exceeded 4,000. From the perspective of overseas time, most of the ready-made beverage brands that went overseas before 2018 were tea brands originating in Taiwan, China, such as Sunrise Chatai, CoCo Duke, Rest Pavilion, Chunshuitang, etc.; Most of the ready-made beverage brands originating in Chinese mainland began to expand overseas markets after 2018. After 2023, there will be a surge in beverage brands going overseas, such as Luckin Coffee, Cudi Coffee, Shanghai Auntie, Yihetang, Tianlala, etc.
From the perspective of the first stop of these ready-made beverage brands going overseas, the tea brands that originated in Taiwan, China in the early days chose Europe and the United States for the first stop of going overseas, and in recent years, beverage brands in Chinese mainland have mostly chosen Southeast Asia for the first stop of going overseas, such as the first overseas store of Michelle Ice City opened in Viet Nam, the first overseas store of Bawang Tea Ji and Aunt Shanghai opened in Malaysia, the first overseas store of Heytea and Luckin Coffee opened in Singapore, and the first overseas stop of Sweet Lala and Yihetang was located in Indonesia.
3. Chinese dinner: Sichuan cuisine and Jinglu cuisine are the main force, and Hunan cuisine and Jiangsu and Zhejiang cuisine have become a new force in going to sea
Chinese dinner is also one of the earliest categories in the mainland. In the 90s of the 20th century, Quanjude, as a representative brand of Chinese mainland, promoted Chinese cuisine to the world, and has expanded to about 8 overseas stores so far. Din Tai Fung, a Chinese Taiwan brand that also went overseas in the 90s of the 20th century, currently has more than 100 stores overseas. In addition, some Sichuan cuisine brands that went to sea earlier have also developed well, such as Chen Mapo Tofu, Meizhou Dongpo, etc.
Due to the heavy model of Chinese restaurants and the high requirements for raw materials and chefs, the brand mainly adopts the direct sales model overseas, and the scale of stores is mostly less than 10.
4. Snacks and fast food: There are many brands of Malatang/Mao Cai going overseas, and North America is mostly chosen for the first stop overseas
At present, the sub-categories of rice fast food, spicy hot/steamed vegetables, buns, noodles, lo-mei, fried chicken/fried skewers, and special snacks in the snack fast food track have brands going overseas. Among them, Malatang/Maocai has the largest number of brands going to sea, accounting for 20.8%; followed by noodle brands, accounting for 16.7%; Rice fast food, fried chicken/fried skewers and lo-mei brands also accounted for more than 10% of the overseas brands.
According to incomplete statistics from the Red Meal Industry Research Institute, the number of snack fast food brands with their first overseas stores in North America accounts for the highest proportion, at 39.1%; This is followed by Southeast Asia, with 21.7% of the total number of brands.
Southeast Asia and North America are relatively easy to develop, and there is also potential for development in Europe and the Middle East
Most brands choose Southeast Asia and North America, where there are more Chinese, for their first stop overseas. According to incomplete statistics, 34.8% of brands choose Southeast Asia for the first stop of going overseas, and 29.5% choose brands from North America, and the sum of the two regions accounts for more than 60%.
1. United States: Chinese food has great potential in the United States market, and 1/3 of Americans eat Chinese food at least once a month
The United States catering market is comparable to China's, with a market size of more than US$730 billion in 2023, and the number of catering outlets in the United States is about 830,000, of which Chinese restaurants account for about 4.8%, mainly distributed in California, New York, Texas and other places.
There are three main reasons why Chinese food has developed well in the United States. First, most of the brands that went overseas earlier have opened stores in United States, which has a sufficient foundation for market education, and United States local has also given birth to a strong Chinese food chain brand such as Panda Fast Food; Second, the Chinese population in United States is relatively large, with more than 5.7 million overseas Chinese providing a consumption base for Chinese food; Third, after opening stores in the United States, many Chinese catering brands attach importance to the localization and innovation of products, so that more local consumers can accept Chinese food.
2. Singapore: The proportion of eating out is as high as 90%, and the recovery of tourism provides opportunities for Chinese food to go overseas
Singapore's F&B market is small, about US$9.6 billion (about 60 billion yuan), less than 1% of the global market share. However, benefiting from its geographical location and the high proportion of the Chinese population (74%), Singapore has become the first stop for many Chinese food brands to go overseas in recent years, and radiates the entire Southeast Asian market through Singapore.
At present, there are about 50,000 catering outlets in Singapore, of which Chinese restaurants account for about 5%. It is understood that consumers in Singapore prefer to eat out rather than cook at home, and the proportion of eating out is as high as 90%, and some consumers even choose to eat out for three meals.
3. Indonesia: The population structure is quite young, and the catering market has great potential for development
Indonesia is the largest economy in Southeast Asia, with a GDP of US$137 million in 2023, up 5.05% year-on-year, according to the World Bank. As of December 2023, Indonesia's total population is 281 million, of which more than 7 percent are aged 15~64, providing more than 200 million labor resources.
In terms of the catering market, the size of Indonesia's catering market is about 30 billion US dollars, and the number of restaurants per 10,000 people is only 11, which is lower than that in Europe and the United States. At the same time, Indonesia's labor cost is low, and the minimum wage standard is 940~2,400 yuan/month, which has a great advantage in Southeast Asia and is also a key market for many Chinese catering brands to choose to explore.
4. Europe: The competition in the catering market is relatively low, and it is a new highland for Chinese food to go overseas
The catering market in Europe is relatively fragmented, mainly showing the characteristics of large category differences, small brand scale, and slow product innovation iteration. Therefore, many Chinese catering brands have jumped out of the "Asian circle" and attacked the European market in terms of overseas locations.
Among European countries, the cuisine of France and Italy enjoys a good reputation in the world, while countries such as United Kingdom and Germany are relatively weak, and many domestic catering brands will first choose United Kingdom or Germany when trying the European market, such as Haidilao, Happy Lamb, Hey Tea, etc.
epilogue
In general, catering going overseas is the inevitable way for chain catering brands to go to a broader market, and now is also a better time for Chinese food to go overseas. However, catering brands also need to take a rational view of the problems and risks they face when going overseas.
The Red Meal Industry Research Institute summarized the following suggestions for catering to go overseas, namely menu localization, supply chain localization, improving the talent system, and paying attention to laws and regulations and risks.
(Author: Red Meal Industry Research Institute)