On September 7, Chongqing Caishixian Supply Chain Development Co., Ltd.
saw workers operating in an orderly manner on the production line in a ready-meal processing workshop.
On October 13, the China Hotel Association released the “2023 Annual Report on China’s Catering Industry” at the 2023 China Catering Industry Brand Conference. The report noted that under the combined effects of market forces, policies, and standards, the ready-meal industry is entering a new phase of regulated development.
From upstream raw material supply in agriculture, animal husbandry, and fisheries, and processing machinery, to midstream production and manufacturing, and down to the cold chain logistics connecting catering and retail—the entire supply chain impacts the quality of the products. Catering enterprises like Xibei, Guangzhou Restaurant, and Haidilao have long-term experience in storefronts and advantages in product flavor development; specialized ready-meal manufacturers like Weizhixiang, Zhenwei Xiaomeiyuan, and Maizi Mom have achieved differentiated competition in some categories and have formed significant scale advantages; channel platform companies like Hema and Dingdong Maicai have advantages in consumer big data and can better understand consumer trends. The ready-meal sector is currently a hotbed of activity with many companies competing fiercely.
B2B and B2C “Dual-Engine Drive”
Opening a packet of ready-to-cook fish dumplings, users scan a QR code on an intelligent cooking device, which then displays the cooking time and counts down. In 3 minutes and 50 seconds, a steaming hot dish is ready to be served. At the Third Space Food Innovation Center at Qingdao North Station, ready-meals and intelligent devices have replaced the traditional manual kitchen model. Diners can self-select pre-packaged foods like family-style dumplings and shrimp wontons from the cold storage, with cooking devices precisely preparing the meals under algorithmic control, focusing on “intelligent” cooking.
These ready-meals and intelligent cooking devices come from Qingdao Vision Holdings Group Co., Ltd. “Different ingredients require different heating curves,” said Mou Wei, Chairman of Vision Group, to Liaowang Dongfang Weekly. The cooking heating curve for the fish dumplings was developed through multiple experiments to achieve the best taste.
“The degree of flavor restoration directly affects repurchase rates,” Mou Wei explained. Addressing the current issues of few popular ready-meals and product homogeneity, flavor restoration is a critical issue. Compared to traditional microwave or water bath reheated foods, new ready-meals produced with intelligent cooking devices maintain convenience while significantly improving flavor restoration, with stewed and braised dishes restoring up to 90% of the original taste.
“Intelligent cooking devices and digital operations not only enhance efficiency and experience but also drive innovation and evolution in the catering business model,” Mou Wei said. He believes that there is enormous catering demand in many non-catering scenarios such as scenic spots, hotels, exhibitions, convenience stores, service areas, gas stations, hospitals, stations, bookstores, and internet cafes, which align well with the convenient and fast attributes of ready-meals.
Founded in 1997, Vision Group’s overall revenue grew by more than 30% year-on-year in the first half of 2023, with innovative business growth exceeding 200%, demonstrating a balanced development trend between B2B and B2C.
Internationally, Japanese ready-meal giants like Nichirei and Kobe Bussan exhibit characteristics of “originating from B2B and solidifying in B2C.” Industry experts point out that Chinese ready-meal companies have similarly risen in the B2B sector first, but given the changing global market environment, Chinese companies cannot afford to wait decades for the B2B sector to mature before developing the B2C sector. Instead, they need to pursue a “dual-engine drive” approach in both B2B and B2C.
A representative from Charoen Pokphand Group’s food retail division told Liaowang Dongfang Weekly: “Previously, ready-meals were mostly B2B businesses. We have over 20 factories in China. B2C and B2B channels and meal scenarios are different, requiring many changes in the business.”
“Firstly, regarding branding, Charoen Pokphand Group did not continue with the ‘Charoen Pokphand Foods’ brand but launched a new brand ‘Charoen Chef,’ aligning brand and category positioning with user experience. After entering the home consumption scene, ready-meals need more precise categorization into meal categories like side dishes, premium dishes, and main courses, further divided into appetizers, soups, main courses, and desserts to build product lines based on these categories,” the representative said.
To attract B2C consumers, many companies are striving to create popular products.
A company in Shandong specializing in ready-meals began building its own factory in 2022 after years of development. “The quality of OEM factories is inconsistent. To provide more stable and reliable ready-meals, we built our own factory,” said the company’s representative. The company has a popular product in the market—signature fish fillets. “From selecting black fish as raw material to developing boneless fish meat and adjusting the taste to meet consumer satisfaction, we have repeatedly tried and adjusted this product.”
The company is currently setting up a research and development center in Chengdu to prepare for developing spicy and aromatic ready-meals favored by young people.
Consumer-Driven Production
The “production base + central kitchen + cold chain logistics + catering outlets” model mentioned in the National Development and Reform Commission’s “Measures for Restoring and Expanding Consumption” is a clear description of the ready-meal industry’s structure. The last three elements are key components connecting production bases with end consumers.
In April 2023, Hema announced the establishment of its ready-meal department. In May, Hema partnered with Shanghai Aisen Meat Food Co., Ltd. to launch a series of fresh ready-meals featuring pork kidneys and liver. To ensure ingredient freshness, these products are processed and stored within 24 hours from raw material entry to finished product warehousing. Within three months of launch, the “offal” series of ready-meals saw a 20% month-on-month sales increase.
Producing “offal” type ready-meals requires strict freshness requirements. “Our fresh ready-meals are usually sold within one day. Protein ingredient pre-processing has the highest time requirements,” said Chen Huifang, General Manager of Hema’s ready-meal department, to Liaowang Dongfang Weekly. “Because our products have a short shelf life, the factory radius cannot exceed 300 kilometers. Hema workshops are localized, so there are many supporting factories nationwide. We are exploring a new supply model centered on consumer demand, with a focus on both independent development and collaborative creation with suppliers.”
The problem of de-smelling freshwater fish in ready-meals is also a challenge in the production process. Hema, He’s Seafood, and Foshan University of Science and Technology have jointly developed a temporary storage system that successfully removes the fishy smell from freshwater fish, resulting in a more tender texture and no fishy taste after processing and home cooking.
Cold Chain Logistics is Key
Ready-meals start racing against time as soon as they leave the factory. According to San Ming, General Manager of JD Logistics Public Business Department, over 95% of ready-meals require cold chain transportation. Since 2020, China’s cold chain logistics industry has experienced a growth rate exceeding 60%, reaching an unprecedented peak.
Some ready-meal companies build their own cold storage and cold chain logistics, while others opt to collaborate with third-party logistics companies. Many logistics and logistics equipment manufacturers have introduced specialized solutions for ready-meals.
On February 24, 2022, staff at a ready-meal company in Liuyang City’s provincial agricultural science and technology park moved ready-meal products in a cold storage facility (Chen Zeguang/Photo).
In August 2022, SF Express announced that it would provide solutions for the ready-meal industry, including trunk line transportation, cold chain warehousing services, express delivery, and same-city delivery. At the end of 2022, Gree announced a 50 million yuan investment to establish a ready-meal equipment manufacturing company, providing cold chain equipment for the logistics segment. The new company will produce over a hundred specifications of products to enhance efficiency in logistics handling, warehousing, and packaging during ready-meal production.
In early 2022, JD Logistics established a ready-meal department focusing on two service targets: central kitchens (B2B) and ready-meals (B2C), creating a large-scale and segmented layout.
“The biggest problem with cold chain logistics is cost. Compared to ordinary logistics, cold chain costs are 40%-60% higher. Increased transportation costs lead to product price inflation. For example, a box of sauerkraut fish might cost only a few yuan to produce, but long-distance cold chain delivery adds several yuan, resulting in a retail price of 30-40 yuan at supermarkets,” a ready-meal production company representative told Liaowang Dongfang Weekly. “To expand the ready-meal market, a broader cold chain transportation system is needed. As more specialized and large-scale participants enter the market, cold chain costs are expected to decrease further. When cold chain logistics reach a level as developed as in Japan, the domestic ready-meal industry will advance to a new stage, bringing us closer to the goal of ‘delicious and affordable.’”
Towards “Chain Development”
Cheng Li, Vice Dean of the School of Food Science and Engineering at Jiangnan University, said that the ready-meal industry involves all upstream and downstream segments of the food sector and integrates almost all key technologies in the food industry.
“The standardized and regulated development of the ready-meal industry relies on close cooperation between universities, enterprises, and regulatory agencies. Only through industry-wide collaboration and effort can the ready-meal industry achieve healthy and sustainable development,” said Professor Qian He from Jiang
