Depth: how do catering enterprises do well in prepackaged food?

This is foodplus’s 24th insight article

It is also the second special article of the ecological Conference on food and beverage prepackaged food

In the last special article of the ecological Conference on food and beverage prepackaged food, we focused on the analysis of what opportunities the Chinese market will have and how to seize these opportunities if the deep integration of catering and prepackaged food is a kind of future? You can click here to read this article.

In the second special article, we hope to explore the logic of catering enterprises to do prepackaged food through the discussion and thinking in the article, and find out the rules of the scale of prepackaged food in catering enterprises. At the same time, we hope to provide some decision-making reference for catering enterprises that have not yet carried out prepackaged food business.

[about foodplus · 2020 catering prepackaged food ecological conference] this is the first time that foodplus has held an “ecological conference”. We hope to find some neglected but important topics and topics that can represent future trends. Around these topics, we invite important companies and senior & practical guests in the industry to conduct in-depth discussion and exchange, so as to let the relevant public Companies and practitioners have the opportunity to further or even re understand what they are doing.

Catering and prepackaged food is not a new topic. However, in the past, the topic discussed more in the industry is the retail of catering, which is based on the perspective of catering enterprises. In this conference, we re-examine it from the perspective of prepackaged food. If we think about the issue of prepackaged food in the consumer goods industry, we may have different thinking and judgment, and even strategies.

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This ecological conference with the theme of prepackaged food will be held in Shanghai on August 15. You are welcome to sign up. At present, sharing guests such as the person in charge of Bu e-commerce of new hope Liuhe food, vice president of Shuhai supply chain, CEO of Sunday, and brand director of Huiji food products have confirmed their participation.

Author: foodplus Haifeng

A catering enterprise hopes to seek for revenue growth. Generally, it can take the following forms: 1. Increase the number and scale of its stores, and increase its revenue by opening new stores, which is also the core growth mode of most large-scale catering enterprises. Among them, opening stores can also be divided into different forms, namely direct marketing, franchise, etc.; 2. To improve the sales of the same store, through the creation of services, dishes and store design New to achieve; 3. Vigorously develop catering retail, the core of which is mainly takeout, which is also the focus of many brand-name catering during and after the epidemic; 4. Carry out prepackaged food business, and even enter the field of food manufacturing, so as to realize the diversified operation of catering enterprises.

After comparison, it can be found that the first three are growth strategies with catering as the core, and the fourth is the growth strategy with prepackaged food as the core. In a sense, the development of prepackaged food business for most catering enterprises needs to expand the ability circle, because the business logic of catering is quite different from that of food consumer goods. This means that the top leaders of enterprises should understand and even directly manage the business of prepackaged food. It also means that the business needs to be set up separately for the prepackaged food business in the enterprise organizational structure. It also needs to match the person in charge who understands the food consumer goods for this business. At the same time, it also needs a separate budget management and operation system.

Because it is not easy for catering enterprises to develop prepackaged food, and it is full of challenges. Therefore, as a catering enterprise, how the top leaders view the prepackaged food business and what position they occupy in the enterprise development strategy will directly determine the imagination space of this business in the future.

At the same time, from another point of view, different types and sizes of catering enterprises have different bases for doing prepackaged food business. These foundations determine the starting point for the development of prepackaged food business, which will also affect the business strategy and future imagination space.

Roadmap for catering enterprises to develop prepackaged food business, photo source: foodplus research and analysis team

No matter what type and scale of catering enterprises are, and how they view the prepackaged food business, they need a roadmap for catering enterprises to develop prepackaged food business. How to think and understand this matter at the beginning, what kind of resources and teams should be matched for the prepackaged food business, what kind of strategies should be formulated, and how to gradually develop this business Landing, and finally have the opportunity to develop into one of the company’s core business.

1. How should catering enterprises view the strategic value of prepackaged food business, and how to formulate strategies suitable for themselves?

① How do catering enterprises view prepackaged food business? To do or not to do is the first question to be considered.

How food and beverage enterprises view prepackaged food business, photo source: foodplus research and analysis team

To do means to enter the food consumer goods business as a catering enterprise. If it takes the form of self built food factory, it will enter the food manufacturing field. Once it enters the food manufacturing field, the strategic value it needs to undertake will be enhanced, both internal and external. Internally, it includes the standardization of condiments and special ingredients, while externally, it is an extension of brand service and a brand new business.

For example, Haidilao’s affiliated company, Yihai international, was first established to standardize the hot-pot/" 22375 rel="nofollow" target="_self">hot pot bottom materials of Haidilao, and then gradually developed the TOC business. Through years of development, the proportion of related party transactions with Haidilao has decreased to less than 50%, and the latest proportion in 2019 is 38.8%. Yihai International has also developed into a listed company with a market value of 100 billion Hong Kong dollars.

Meizhou Dongpo, a Sichuan cuisine catering enterprise located in Beijing, established wangjiadu food company in 2007. From the earliest standardization of condiments and semi-finished products, it has now developed into the core of developing prepackaged food in Meizhou Dongpo. In addition to condiments and special ingredients, the core of its business is brand dishes.

However, there are also challenges that need to be faced with. The investment of personnel, resources and funds has changed from big to small. Whether it has such a foundation, especially in terms of ability and capital, and whether it can bear long-term losses; if it is small, whether it is done for the sake of doing, and finally it has become a chicken rib business.

If not, we need to think about whether the business form of the company is really not suitable for the development of prepackaged food, or whether the current development stage and organizational structure are really not suitable for the development of prepackaged food business, and whether the company can focus more on the development of the restaurant itself. If these problems are confirmed, it means that the development of prepackaged food business is not a good growth strategy.

From another point of view, we also need to think, because catering and prepackaged food are now in a stage of deep integration, especially the impact of the epidemic has accelerated this deep integration. For catering enterprises, it is a good time to develop this business. On the one hand, are you willing to abandon such market opportunities; on the other hand, when the market is relatively mature in the future, does the company have any Ability to develop new business in mature markets.

② What kind of strategic logic does the catering enterprise have if it decides to do the prepackaged food business?

Strategic logic 1 is related to strategic positioning and organizational structure. What needs to be considered is the importance of prepackaged food business to its own strategy, which is directly reflected in the organizational structure of the enterprise. As many catering enterprises are developing retailing, the prepackaged food business is placed in the catering retail department, an independent food Department, or even the establishment of food subsidiaries, This is a very different strategy.

As the market of prepackaged food business and the resources, foundation, personnel and catering retailing are two different things, if we hope that the prepackaged food business will develop into a large-scale revenue business, it is not suitable to be placed in the catering retail department, but to configure the team, organizational structure, budget and operation system separately.

The second strategic logic is related to the understanding of the attributes of prepackaged food business, whether it is an e-commerce business or a consumer goods business. The core of e-commerce is traffic acquisition, selection and distribution, which is a retail property. The core of consumer goods is branding, single product and penetration, and the logic behind is consumer goods brand.

If it is positioned as an e-commerce business, the creation of the flow entrance and the operation efficiency of the flow is a big challenge. As a catering enterprise, the source of traffic mainly depends on the number and scale of stores, and the number and scale of stores are limited, so there will be a relatively obvious ceiling in the flow.

Secondly, in terms of traffic operation, it is almost impossible to expand the selection of products as unrestricted as the e-commerce platform because of the catering brand. On the one hand, it is challenging to do a good job in the flow operation on the limited selection. On the other hand, because the flow has ceiling, and the selection also has the sky board, even if the flow operation is good, the business scale will be displayed.

Therefore, if you want a larger scale of prepackaged food business, the more feasible strategy is to position the business as consumer goods business.

The third strategic logic is related to the production mode and investment size. Whether the development of prepackaged food business is trade-oriented or manufacturing oriented. The trade type determines that the initial investment is relatively small, and more budget can be put on the market and channels instead of building factories by ourselves. However, it is a challenge to find a high-quality supply chain. At the same time, some things will be lost in cost control and supply chain flexibility.

For the manufacturing type, the initial investment is relatively large, and since the initial product adjustment may be relatively large, once the product has been adjusted greatly, the investment in production facilities may be increased. However, it also has advantages. As a self owned food factory, it can not only serve as an important part of the standardization of condiments and ingredients in the catering end, but also provide a good support for the prepackaged food business. It can have a good foundation in cost control and supply chain control.

Although there are advantages and disadvantages in choosing the trade type or the production type, the core basis of the choice is the enterprise’s own strength, that is, whether the capital scale can support large-scale investment. If it supports, it is a better choice to build a factory by itself. On the contrary, the strategy of “market first, factory later” should be adopted.

Strategy logic 4 is related to product strategy, whether to adopt multi category and multi product line, or to adopt explosive product strategy. On the one hand, it is related to the strategy logic 1 and 2 mentioned above, because the logic of catering retail and e-commerce is more inclined to the strategy of multi category and multi product line, while the logic of food department and consumer goods is more inclined to explosive product strategy, the so-called explosive product strategy It can be understood as the big unit strategy of consumer goods companies.

Consumer goods is a large-scale thing. Only by realizing the scale of business can we have certain competitiveness in the market. The scale of consumer goods needs to run through the market, channel and supply chain through one or several core products. After having a large-scale foundation in the dimensions of team, capital, channel, marketing network and consumers, we can diversify the categories, thus forming a new type of product A variety of product combinations.

The fifth strategy logic is related to specific products. Choosing different products to enter the prepackaged food market will face competition from companies in different fields and different catering enterprises have different resources and foundations in different types of products. Therefore, catering enterprises have many choices in the product direction of prepackaged food, but the direction and strategy that really suits them is limited In the second part of the article, we will analyze in detail how to select categories and products.

Based on the above five strategic logics, if the catering enterprises want to develop the prepackaged food business, this is the logical line we think is suitable: set up an independent food department for the prepackaged food business and operate it in the form of a consumer goods company. If it has financial strength, it is better to build its own food factory; if it has no financial strength, it should adopt the strategy of market first and factory later, Finally, we adopt the large single product strategy, and gradually realize that we have large single product products in multiple product categories.

2. How do catering enterprises set up category and product strategy for prepackaged food business?

In the field of food consumer goods, what kind of products to choose means what kind of market to choose and what kind of competitors to compete on the same stage, and what kind of products to choose means to enter the market from what angle and establish their own advantages, what kind of crowd to attract and what kind of brand to be made.

If we take food consumer goods entrepreneurship as an example, the difference is still very obvious. Since food consumer goods start from scratch, it is relatively open in the selection of categories and products. Theoretically, industries with market opportunities can choose. However, the ability of the founding team, industry experience and industry resources should be taken into account.

However, catering enterprises do different prepackaged food, which is not from scratch. Therefore, the selection of categories and products needs to be based on a series of basis, and the best category and product strategy should be found in the limited choices.

We need to follow a certain logic in the selection of specific categories and products. We have three steps: 1. How to select the most suitable category and product for different types and formats of catering enterprises; 2. What kinds of advantages and bases do the catering enterprises with different scales and characteristics have for making prepackaged food; 3. What kind of competition will be faced with in choosing different categories and products Competition and challenge.

How to choose the most suitable category and product for different types and formats of catering enterprises. Photo source: foodplus research and analysis team

Catering enterprises of different types and formats have their own suitable categories and product choices. However, some catering enterprises can make full use of their own characteristics in a certain aspect, so as to cross over to other categories that are not so matched. For example, Haidilao’s craft beer business, a newly established barbecue company in Shanghai vigorously promoted the development of a beverage brand, wangshanzha, Now it has been separated and developed independently.

What are the business bases & advantages of prepackaged food owned by catering enterprises of different sizes and characteristics, photo source: foodplus research and analysis team

No matter what the size and characteristics of catering enterprises, have their own foundation and advantages, to do a good job in prepackaged food business, we need to make use of these foundations and give full play to these advantages.

What kind of competition and challenges will be faced when choosing different categories and products? Photo source: foodplus research and analysis team

No matter what kind and product they choose, the development of prepackaged food business of catering enterprises is to compete with the whole food industry. Therefore, if you want to establish a large-scale prepackaged food business, competitors, competitive environment and market challenges will not be ignored.

3. How to do the best thing in each stage?

From the decision to start prepackaged food business until it develops into a large-scale revenue business, we divide this process into four stages, namely: strategy carding and formulation stage, preparation stage, starting and growth stage, iteration and continuous operation stage. Each stage corresponds to the state and business scale of prepackaged food business.

Although the business scale corresponding to these four stages is different, if we want to develop the prepackaged food business into a large-scale revenue business in the future, each stage is very important. If one stage is not done well, it may lose the imagination space of this business or take many detours.

① Strategy sorting and formulation stage

The core of this stage is to deeply understand what the development of prepackaged food business means for catering enterprises, the operation logic of prepackaged food business, make strategic positioning, how to put this business into the core strategy, and then combine with the catering enterprise’s own foundation to formulate the specific strategy of prepackaged food business, including category and product strategy.

② Preparation stage

The core of this stage is to lay a solid foundation for the successful implementation of this business, so many preparatory work should be carried out in the early stage. The most important thing is the positioning and vision of brands and products, as well as the R & D and testing of products.

③ Start up and growth stage

The core of this stage is to let the prepackaged food business survive and develop, and truly become one of the core strategies of catering enterprises. In order to seek long-term and healthy growth, the polishing and shaping of brand power and product strength is the most core prerequisite work. If these two points are not available, the long-term survival and development of prepackaged food business will be affected.

④ , iteration and continuous operation stage

The core of this stage is that the prepackaged food business already has a certain scale foundation. At this time, it is necessary to challenge a larger business scale. At this time, many strategies need to be iterated. At the same time, in order to continuously expand the scale, it is also necessary to improve the ability in many aspects, especially the comprehensive ability behind the cross category.

4. What kind of strategic position of prepackaged food business may be in catering enterprises in the future?

In the previous insight article, we analyzed the evolution of the relationship between catering cooking and prepackaged food and the forms of integration in different stages. The convenience of cooking will become a very core development trend of catering and prepackaged food in the future. This is not only an opportunity for catering enterprises, but also an opportunity for packaged food enterprises and upstream supply chain enterprises, and even retailers meeting.

Food and beverage cooking and prepackaged food at different stages of the same fusion, photo source: foodplus research and analysis team

For the powerful and capable catering enterprises, it is a complete opportunity to seize this opportunity to establish a large-scale business that can be developed for a long time. This also means that catering enterprises will develop into diversified operation, which may involve catering service, food manufacturing and supply chain management. CJ Xijie and pumido in South Korea may be many domestic catering enterprises The two companies have a number of prepackaged food brands, but also operate multiple brand restaurants. The characteristics of both companies are that the prepackaged food business far exceeds the catering service business.

For example, the food business of Guangzhou Restaurant far exceeds that of catering business, and the food business covers multiple brands, including Guangzhou Restaurant, likoufu, taotaotaoju, qiuzhifeng, liangfengyuan, etc. in 2019, the revenue of the food sector is 2.29 billion RMB, the revenue of catering enterprises is 667 million RMB, and the scale of food business is about 3.4 times of that of catering business.

For companies that have established a large-scale catering business, it is relatively difficult for the prepackaged food business to surpass the catering enterprises. For example, Haidilao’s revenue in 2019 is 26.5 billion RMB, and its affiliated company Yihai international, whose main food manufacturing business is Yihai international, has a revenue of 4.28 billion in 2019, accounting for about 14% of the total.

Another large catering enterprise, Xibei catering, has a revenue of about 5 billion RMB in 2019. If the proportion of food business exceeds 10%, it means that the scale of food business is about 500 million RMB. However, judging from the operation situation of Xibei food business, currently it mainly covers two online channels: tmall and wechat. It is already challenging to maintain the scale of more than 100 million RMB, let alone 500 million RMB.

Therefore, for companies that have established scale in catering business, prepackaged food business is likely to become the main business outside catering enterprises. Keeping the proportion of revenue at about 10% belongs to the basis of certain food business. If the proportion of revenue reaches 20% or even 30%, it indicates that the food business has the potential for further scale-up. If it continues to operate well, there will be opportunities to cooperate with the food business The catering business was flat.

For some catering enterprises that have the ability, have certain characteristics but have no scale basis, the food business is an opportunity for the company to develop into a large-scale business revenue company, and finally develop into a state: “food business scale, catering business brand”.

At present, some catering enterprises have found their own path in the development of prepackaged food business. More and more enterprises have just begun to try and are still in the early stage of exploration, and many enterprises have not done so. Next, when the enterprises that have explored the path further expand their scale and those in the early stage explore their own path, those catering enterprises that have not started to carry out prepackaged food business will vigorously enter this field, such as grandma’s home, KFC, golden arch China, etc.

We are waiting for the arrival of the era of prepackaged food in China’s catering industry. If you are a catering enterprise and have not yet carried out the prepackaged food business, or are already in the early stage of exploration, we are looking for further exchanges with the foodplus team. If the prepackaged food business has been relatively mature, look for further breakthroughs and regulations in this business We also welcome further communication with foodplus team.

We hope that our research in this aspect can help different types of catering enterprises, and we will also carry out in-depth research and analysis of catering prepackaged foods in the near future. It is expected that the in-depth research and analysis report on relevant topics will be released in mid and late September. Please look forward to it.

Insight is an article column launched by foodplus from time to time. It is mainly our insight into food entrepreneurship, subdivision categories or star food companies. It is characterized by deep and long articles, and is worth reading carefully.