The Greater Bay Area is leading the nation in the pre-cooked food business as more enterprises enter the market amid changing lifestyles caused by the pandemic. Zhou Mo reports from Shenzhen.
A Freshippo deliveryman collects pre-cooked food for customers in Shenzhen. (PHOTO PROVIDED TO CHINA DAILY)
COVID-19 has turned the pre-cooked food industry in the Guangdong-Hong Kong-Macao Greater Bay Area into a booming business as local governments and enterprises jump on the bandwagon.
The market is fueled by a more efficient industry chain, as well as people’s rapidly changing lifestyles amid the nearly three-year-long pandemic.
In March, the Guangdong government initiated the country’s first provincial-level policy to speed up high-quality development of the pre-cooked food sector. Ten measures are to be taken to achieve the goal, including creating a joint research-and-development platform, as well as a regulatory system for food safety and quality; expanding the industrial cluster; nurturing talent; exploring international markets; and providing enterprises with financial support.
Several Guangdong cities in the 11-city Greater Bay Area have also launched similar policies and steps since early this year.
Zhuhai unveiled its blueprint for beefing up the industry last month, with the aim of generating 30 billion yuan ($4.2 billion) in output value by 2025. The city plans to invest 7.4 billion yuan to build an 84-hectare industrial park. The park will have five function areas covering financial services, research and development, production and processing, cold-chain logistics and cultural experience as part of efforts to establish a comprehensive industrial system.
Pre-prepared Chinese dishes are on display in a supermarket. (PHOTO PROVIDED TO CHINA DAILY)
Jiangmen issued 12 measures in March, with the local government mulling the setting up of a research institute for the pre-prepared food business. By applying advanced production technologies and building up databases, the institute will conduct a comprehensive study of the industry and help foster the transformation of technological achievements.
In Shenzhen, the market supervision and regulation bureau has completed research in the pre-cooked food sector and is drafting “Shenzhen standards” for pre-made dishes.
“In terms of government support, the scale of enterprises and the level of completeness of the industry chain, the Greater Bay Area is leading in the nation’s evolving pre-prepared food industry,” says Zhang Tianbing, lead partner of Deloitte’s Asia-Pacific consumer products and retail sector.
He notes the region has unique advantages in fostering the industry, given its multiple strengths in agriculture, food production, home-appliance manufacturing and cold-chain logistics.
“In the raw materials upstream supply chain, the first phase of the Greater Bay Area raw materials trading center for fishery and pre-cooked food in Zhaoqing has come into service. In the midstream, a number of food-making, packaging and equipment-producing enterprises, including Zhuhai-based home-appliances giant Gree Electric Appliances, have joined the industry. And, for the downstream, the GBA has rich resources, such as catering and cold-chain logistics companies,” says Zhang.
Packvertising for pre-cooked mantis shrimps seasoned with salt and pepper. The dish, which would be time-consuming to make from scratch, only requires a few minutes in a microwave or air fryer before it is ready to serve. (PHOTO PROVIDED TO CHINA DAILY)
Lifestyle adjustments
The Chinese mainland’s pre-made-food market has accelerated in the past few years as the pandemic forced more people to stay at home and cook their own food. A report by market consultancy iiMedia Research says the industry’s market reached 345.9 billion yuan last year, having grown 19.8 percent year-on-year. The trade is expected to hit 1.07 trillion yuan by 2026.
“The major consumption force in first-tier and second-tier cities is gradually turning from people born in the 1970s and 1980s to the younger generation, who have a high level of acceptance of pre-cooked food because it can save them a lot of time in their hectic lives,” says Liu Yongzhong, head of the Shenzhen Cuisine Association.
“The pandemic has changed people’s lifestyles, making pre-cooked food more popular as it can satisfy their needs for food storage and also meet their more stringent demand for food safety,” he says.
According to iiMedia Research, there were 6,116 pre-cooked food-related enterprises in Guangdong province at the end of June. Shenzhen had the biggest number of such enterprises at 2,037, followed by Guangzhou and Foshan, with 1,808 and 661, respectively.
Guangzhou, Zhanjiang and Foshan took the top three spots in the province in the first half of 2022 with the highest level of development of the ready-to-eat meals segment, the report says, taking into account the number and scale of the enterprises, the construction of industrial parks, government support and their reputation.
“At the same time, the entry threshold for the mainland’s pre-made food sector is relatively low. Although many companies are already in the business, most of them are small workshops, with only a few large industrial enterprises,” Zhang points out.
Ready-to-eat salads are on offer at Freshippo in Shenzhen. (PHOTO PROVIDED TO CHINA DAILY)
According to Zhang, at present, there are 30 publicly-listed companies on the mainland engaged in the pre-cooked food business, with three of them in the Greater Bay Area. Leading players also include six in Hunan province, five in Shandong and three in Henan.
“The concept of pre-cooked food is nothing new as many catering enterprises, especially restaurant chains, have long used pre-made dishes or pre-made materials to enhance the level of standardization,” says Fu Lihong, South China head at Freshippo Kitchen — a brand of e-commerce giant Alibaba’s retail unit Freshippo that focuses on fresh and chilled food, as well as those with a short shelf life.
“But thanks to the development of the whole industry chain, there is now increased awareness among consumers. The pandemic, people’s growing preference for dining at home, as well as the lack of time for them to cook, have fueled the industry’s growth,” says Fu.
Sales of pre-prepared dishes at Freshippo in Shenzhen in the first 10 months of this year had doubled compared with the same period a year earlier, according to Fu. “People aged 30 to 45 and those above 50 with small families make up the biggest group of consumers. Freshness and varied food combinations, as well as cooking convenience, matter most to them.”
Dingdong Maicai — another online grocery platform — entered the fray in 2021. Ou Houxi, who’s in charge of the company’s pre-made food business, says the market saw “explosive” growth last year. “There were a lot of changes in the entire supply chain last year. Many factories that only supplied such types of food to businesses, joined the mass consumer market too,” he says.
Despite the huge market potential, Shenzhen Cuisine Association’s Liu warns that problems like homogenization, nonuniformed standards and substandard food quality need to be addressed.
He urges market players to step up research and development to create their own characteristics for growth, based on various types of cuisine.
Zhang from Deloitte says the pre-cooked food market is going through rapid development. Besides strict controls on the quality of food and promoting product innovations, greater efforts should be made to formulate industry standards and strengthen regulations throughout the process to ensure the industry’s orderly development, he says.
Contact the writer at sally@chinadailyhk.com