China Food

Where is the fragrance of the noodles cooked by capital?

The rapidly expanding catering Star project of
has a positive impact on the industry, but there is also the motivation of capital “making the game”.
“More stores lose money, less money.” A ramen chef of Shanghai’s new beef noodle brand “Zhang Lala” revealed that his store loses at least 60000 yuan a month. “Listen to the masters of Chen Xianggui and Ma Jiyong, they are the same – they have made a great momentum and lost money as a whole.”
The master said that even if she lost money, Zhang Lala was still recruiting a lot of people. A large number of apprentices often enter the store to learn Ramen technology and conduct skill assessment in the store. “Because there is financing, the purpose here is not to make the store profitable, but to let the company go public.”
In 2021, the Chinese fast food track represented by noodle restaurants will become the new darling of capital. Ma Jiyong, Zhang Lala and Chen Xianggui are the three loudest names. They are all registered in Shanghai and take the high-quality route. A bowl of Lanzhou beef noodles sells for about 27 yuan, and they have also won the popularity of capital – behind them are star institutions such as Sequoia, Gaorong and Jinshajiang. According to incomplete statistics, in the Shanghai market, Chen Xianggui has 98 stores, Ma Jiyong 76 stores and Zhang Lala 51 stores, all of which are direct stores; At the same time, they have also expanded to many cities across the country.
Over the years, many Lanzhou beef noodle brands such as dongfanggong, Chenji, ximaxiang, sipohu and wumule have been born in Gansu. Most of them have developed in the province and a few have expanded to the whole country, but they are only concentrated in the northern market. Today, Shanghai’s rising stars have surpassed the “old generation”.
Before the emergence of new players in Shanghai, it was difficult for old brands and old diners to imagine the effect of a bowl of beef noodles combined with capital. Ma Jun, general manager of Lanzhou dongfanggong halal catering group Co., Ltd., said in an interview with Caijing, “Lanzhou beef noodles has not won a round of financing in the northern market, but has won the attention of capital in Shanghai, which shows that the financial giants in the south are sharper than those in the North. This forces the northern market to speed up the transformation and combine with capital.”
Capital’s interest in the opposite restaurant is not just Lanzhou beef noodles. In the past three years, the speed of investment and financing in the traditional pasta field has significantly accelerated. According to the enterprise survey data, since 2014, 42 financing events have occurred for instant noodles, physical noodle restaurants and other noodle brands. Among them, only 1 – 2 financing events occurred each year in the first three years; In 2018, the number began to increase rapidly to 6. By the time of publishing in 2021, 18 financing events had occurred, with a year-on-year increase of 125%.
Although these capital investments are in full swing, they are kept secret in the face of the interview requirements of Caijing reporters. Not only the management, but also the three brands of Ma Jiyong, Chen Xianggui and Zhang Lala maintained a rather mysterious attitude. By coincidence, they did not establish an official website and refused to interview.
An unnamed investor told Caijing that as the catering supply chain industry becomes more mature, raw and auxiliary materials are distributed from the central kitchen to the store, which can support the large-scale efficiency of terminal catering brands. For the management, rapid expansion means that the investment opportunity has come.
He added that with the end of the bonus period of online traffic, the cost of getting customers is getting higher and higher. Entrepreneurs and investment institutions have re focused on offline. In offline tracks, catering projects, especially those with both north and South tastes and highly standardized production processes, naturally attract attention.
However, the investor also pointed out that the capital behind some rapidly expanding star projects has no lack of motivation to “make a game”. “The playing methods of these noodle shops are essentially no different from those of online brands in the past, that is, rapid expansion and cutting leeks.” He said, “if the head organization invests 100 million, it can drive 1 billion. The capital investment is not noodles, but this game.”
In recent years, the market value of the company has been upside down after listing in the United States or Hong Kong. In addition, the road of overseas listing has become narrower and narrower in recent one or two years, resulting in many institutions that originally invested in late stage and pre IPO projects pouring into early investment. However, the number of high-quality early projects is limited, and once there is a suitable one, it will be sought after by institutions, which is another reason why noodle projects are popular in the capital market.
Shanghai people transform Lanzhou noodles
At noon on a weekday, Chen Xianggui, located in Meiluo City, Xujiahui, Shanghai, was full at the door of Lanzhou beef noodles. Customers waiting at the door crowded the narrow aisle. This noodle restaurant, located in the core business district, has a total of more than 30 seats. Customers come in an endless stream, and it is inevitable to fight for tables.
Chen Xianggui’s open kitchen. Photography / Caijing reporter Yang Liyun
Jia Zhen is a regular guest of this noodle restaurant. In the past two months, he has eaten beef noodles for more than 30 times, half of which are in Chen Xianggui’s house. Jia Zhen told Caijing that he is from Longxi, Gansu Province. Chen Xianggui’s beef noodles are authentic Lanzhou beef noodles with the flavor of his hometown, “different from Lanzhou Ramen on the street”.
Jia Zhen, a Shanghai drifter, is engaged in home appliance sales. His customers are in Meiluo city. They often visit here on weekdays. Every time they don’t know what to eat, “first linger near Hefu Laomian, but the queue there is too long, and a bowl of noodles is more than 40 yuan. Then they go to Chen Xianggui, and a bowl of beef noodles is less than 30 yuan”.
Chen Xianggui’s bowl of beef noodles is 26 yuan. The noodles are divided into eight choices: capillary, thin, three thin, two thin, three prism, leek leaf, wide and wide. Although these classifications are only the normal operation of old brand beef noodle restaurants such as Dongfang palace, many southern consumers will still regard it as a new thing.
Most Shanghai consumers have no way to judge whether Chen Xianggui follows the tradition and whether the soup has the taste of Lanzhou; For them, the biggest difference is the environment. The decoration of these new noodle shops is bright, the environment is clean and tidy, and the service is relatively standard and in place.
Overall, the service level of these chain brand noodle shops is higher than that of traditional street stores. In Ma Jiyong of Shangjia center, the reporter of Caijing observed that a customer chose “capillarity” when ordering. When the waiter brought the noodles, the customer found that he underestimated how thin the “capillarity” was. “Do you think ‘capillary’ is too thin? OK, I’ll make you a bowl of ‘fine’.” With that, the waiter took away a bowl of ramen that had just been served and went to the kitchen to tell the master to redo it.
Ma Jiyong of Shanghai Shangjia center. Photography / Caijing reporter Yang Liyun
Qin Wei, deputy general manager of Lanzhou chenzuolin Chenji Catering Service Co., Ltd., said in an interview with Caijing that the new brand in Shanghai has too many places worth learning from traditional beef noodle restaurants. “They have redesigned everything, introduced SOP product production standards, digital system, purchase, sales and inventory system, and even the way tableware is placed, which makes customers feel fresh as soon as they enter the store. We have done little in these modern management.”
Chenji beef noodles was born in Xigu, Lanzhou in 1985. At present, there are more than 200 stores in China, mainly in the central and western regions centered on Gansu. Qin Wei said that Chen Ji’s revenue in 2021 is expected to reach 900 million yuan.
On Qin Wei’s notebook, he carefully wrote 34 learning notes on the modern catering management system: “technical middle desk, SOP product production standard, SOC service process standard, digital operation system, cashier system, purchase, sales and inventory system, supply chain system, membership system, SKU product quantity specification, central kitchen, equity structure…”.
In addition, he also drew the whole flow chart from brand exposure of Internet social platform to store transformation and transaction transformation. This is a new problem faced by an old diner who started as an apprentice and has been making Lanzhou beef noodles for 11 years.
In Shanghai and Shenzhen, Qin Wei had many in-depth exchanges with Jiang Jun, the founder of Chen Xianggui, and song huanping, his angel investor. He was amazed at the new model of the new brand and praised these latecomers. He believed that their emergence was good for the industry and promoted the development of beef noodles.
Qin Wei said, “in May 2020, song huanping said that Chen Xianggui would open 100 direct stores. I was half convinced. As a result, there are already more than 100 stores. I heard that the future plan is 1000.”
Due to the stimulation and pressure of new brands, Chen Ji also plans to step up its expansion from the current central and Western markets to East and South China. At present, Chen Ji has greatly transformed the supply chain. “Without a supply chain, the product stability of each store is not enough. We fully cooperate with Shuhai, a supply chain enterprise of Haidilao, and Shuhai provides beef, noodles and condiments. We also need to solve the problems of supply chain, management and equity, build a modern management framework, and then copy it to all stores.”
“We are still the thinking of traditional catering people. Our strength is to make products, which is completely different from the road taken by the new brand.” Qin Wei believes that no matter Chen Ji or Dongfang palace, old brands have not really formed brand influence, nor can they be called head brands.
To achieve brand influence, marketing ability is one of the key elements. Ma Jun believes that the new brand does not have greater advantages in products and processing technology, but its marketing ability is not possessed by the old catering. “The aroma of wine has to be shouted frequently – the Chinese are implicit and can’t enlarge the advantages of the brand. This is the aspect that old restaurants should learn from the new brand. With the same processing technology, the new brand enlarges them and becomes the core selling point. Consumers who are not familiar with Lanzhou beef noodles seem to have gained a new understanding. They will think this is the standard and establish a high degree of trust in the brand.”
For example, he said, there is a brand that focuses on hand tearing beef, which means that hand tearing can be achieved only by selecting high-quality beef, so as to reflect the quality of food materials, which is in fact completely inconsistent with the traditional beef processing technology in Lanzhou; Another brand claims to have been inherited for 200 years. In fact, Lanzhou beef noodle has only been inherited for 106 years – but it can’t stand consumers’ buying.
Facing the new competition, Ma Jun maintained an open mind. “A single branch is not a spring. The development of them (new brands) has brought pressure to us and strength to the industry. Only competition, cruel competition and repeated competition can make the industry develop and grow.”
The same noodles are sold to different people
Caijing reporter observed that whether these new beef noodle businesses are hot or not depends almost not on the brand itself, but mainly on the location. Although Chen Xianggui in Meiluo city is full, there are few people in another Chen Xianggui in Changning International Plaza near Shanghai’s inner ring, as is Zhang Lala.
A Zhang Lala store in Shanghai. Photography / Caijing reporter Yang Liyun
In majiyong, on the second floor of Shangjia center, Changning District, some young people eat during lunch on weekdays, but half of the seats are still empty. Although international luxury brands such as Louis Vuitton and Prada have settled in this mall, it is not popular because it is far from the city center.
From the site selection and customer base, although the old and new brands sell Lanzhou beef noodles, they take two different ways. Most of the traditional beef noodle restaurants are opened on the street for the public, while the new brands in Shanghai open their stores in shopping malls and office buildings, targeting white-collar workers.
Qin Wei believes that the strength of the new brand lies in site selection and land acquisition. “Recently, Chen Xianggui and Ma Jiyong won 17 stores respectively in Shenzhen, which can’t be done by other small brands. Shopping malls don’t care about small-scale brands. Outsiders don’t know how they won these stores.” In addition, the epidemic has also added fuel to the expansion of new brands – “after the epidemic, there are many shops in Shanghai. At this time, it is a good time to enter the mall. If you want to enter the mall next year, there will be no chance.”
Ma Jun also observed that most of Shanghai’s new brands open shopping malls, which means higher rental costs. “They (Shanghai’s new brands) go in the upper half of the pyramid.”
The rent is high, and it is more difficult to maintain profitability. At present, Chen Xianggui, Ma Jiyong and Zhang Lala have not released financial data, but according to the reporter of Caijing, most of these brands are at a loss.
Ma Jun added that for any brand to develop continuously, survival is the first factor and profitability is needed. “If you just want to do the game quickly and let more people enter the game, this is a strange circle in the capital market.”
Some owners of traditional street stores complained to Caijing that business was becoming more and more difficult. In a beef ramen shop near Yongde community, Minhang, Shanghai, which has been operating for 20 years, the boss said he had never heard of Ma Jiyong, Zhang Lala and other brands, but the boss observed that about five years ago, there were a lot of ramen shops opened by Qinghai people, but they have decreased significantly in recent years.
“It’s hard to do business now. The profit is barely enough to support the family. The rent is also high, and the price is also high. Today, the beef has risen another dollar, and the gas is rising, but my Ramen can’t rise. Some customers go away as soon as they see the price rise.” He said.
However, such street stores and chain noodle shops in shopping malls do not target the same group of customers. The boss said that what he does is the business of old customers around him. “Most of them eat from the opening of stores to now, especially migrant workers will eat more.”.
Liang Shunjian, chairman of Gansu jinweide Ramen cultural industry group, also said, “the two types of noodle restaurants target different people.” He said that in the beef Ramen industry, mom and pop stores, franchise chains and direct stores will coexist and will not be monopolized by a certain brand or model.
Ramen master becomes a fragrant pastry
With the influx of capital, ramen master has now become the most scarce resource in the industry. A large number of ramen masters migrated from Gansu to Shanghai and entered new brands from old brands such as Dongfang palace and Chenji.
Ma Jiyong’s Ramen chef told Caijing that all chefs here are from Lanzhou. Chen Xianggui and Zhang Lala’s employees said that all Ramen masters came from Gansu.
Ma Jiyong’s chef said that he made Ramen in his hometown, earning 5000 yuan a month and 8000 yuan in Shanghai. Most of them come to Shanghai one after another through the way of fellow villagers leading fellow villagers, because the welfare here is higher than that of individual noodle restaurants – Ma Jiyong can rest for four days a month, while individual noodle restaurants don’t rest for one day. In addition, if Ma Jiyong’s store achieves certain performance, the Ramen master still has a commission.
The recruitment of new brands has undoubtedly raised the cost of competitors. Qin Wei said that old brands need to do the right things in order to attract and retain talents. “The traditional salary structure is base salary + bonus. The accommodation is better. This way can’t keep people. Chen Ji wants to adopt the employee stock ownership model and lock people through shares.”
Ma Jun is calm in the face of competitive pressure. “The flow of talents is the trend of social development. It is normal to dig people from Dongfang palace or from other places. New brands can meet the development needs only by digging people from the market at high prices. We should face it calmly. Without the three brands of Shanghai, we may not know the value of Lanzhou beef noodle technicians. The society should give them corresponding benefits Status and salary, so as to attract more talents to enter the industry. “
“This is benign competition. If the mentality can not catch up with social development and changes, it can only be eliminated by nature.” He said, “the latecomers have come in front of us. We should congratulate them. Otherwise, it’s not good for us to have no goals and opponents.”
Will Shanghai dig out Ramen masters in Gansu? Liang Shunjian said in an interview with Caijing:“ (digging people to Shanghai) has an impact on Gansu, but it is not so serious. When the old group leaves, new people will join the industry. Shanghai has raised the salary of ramen masters, and the salary of Lanzhou has also increased. Now there are no Ramen masters under 5000 yuan in Lanzhou. This can attract more high-level talents to this industry, which is a good thing for the upgrading of the personnel structure of the industry. “
Liang Shunjian said that if the Lanzhou beef Ramen company in Beijing, Shanghai and Guangzhou is listed in the future, it will undoubtedly hit the regional brand influence in Northwest China. “But this is not to blame for its (new brand) development. It can only be said that the Gansu government needs a sense of urgency and should speed up its efforts to support the industry. Otherwise, if the local people don’t get up, they will let all the outside take away, and it will be difficult to get it back in the future.”
“Ramen can be learned in a month, but it is more important to learn modern kitchen management.” He said that catering is a worry business. The new brands in Shanghai are doing well, but the rapid expansion will show problems. The biggest problem is that talents can’t keep up. “The sporadic personnel in the market can’t meet its standardization and lack highly professional personnel. Once there are more branches, there will be not enough people.”
Therefore, the new beef Ramen is also “digging the foot of the wall” in the Japanese Ramen restaurant. A store manager of Ma Jiyong told Caijing that he used to work in a Japanese Ramen restaurant. “The revenue, customer unit price and basic salary of Japanese Ramen are much higher than those of Chinese ramen, but he can have a commission and the overall income is higher than before.”. He also revealed that his company, Ma Jiyong, has not yet made a profit because the rent in the mall is very high, and the hall food business is not good after the epidemic.
investors call “don’t understand”
According to the enterprise survey data, there are 73800 existing enterprises with beef noodles as the keyword on the market, and the number of newly registered beef noodle enterprises has stabilized at more than 10000 since 2019, 2020 and 2021.
Lanzhou beef noodles are not only popular in the noodle shop track. From the perspective of investment and financing, the noodle track has raised a total of 29 cases since 2019, with a total amount of more than 2.094 billion yuan. Wuye noodles, Hefu noodles and Xiaomian have completed several rounds of financing in the past year.
In addition, Lu Zhengyao, former chairman of Ruixing coffee, also created “fun noodles” after a period of silence due to financial fraud, focusing on Chongqing noodles. Caijing reporter learned that many store managers are old employees of Ruixing and trust Lu Zhengyao very much. Although the financing situation was not announced, in October 2021, the registered capital of tongue tip technology (Beijing) Co., Ltd., a subsidiary of “Qu Xiaomian”, increased from 10 million yuan to 198 million yuan, an increase of nearly 19 times. A month later, “Qu Xiaomian” was renamed “Qu Bayu”.
Fun noodles Beijing Chaoyang Gate Galaxy SOHO store. Photography / Caijing reporter Yang Liyun
Xiaomian met two consecutive rounds of strategic financing in March and July 2021, including country garden venture capital, xijiade dumpling catering company, etc. Huo Yingnan, senior vice president of country garden venture capital, said that it was not just the pasta track that caught fire. Since 2020, the overall catering track has received more attention. Whether the hot-pot/" 22375 rel="nofollow" target="_self">hot pot, snacks and fast food contained in the “meal” or the tea and coffee contained in the “drink” have attracted more capital attention.
He believes that pasta catering can refer to Western fast food, which needs process standardization, operation digitization and membership systematization. Start up brands will focus on one region at the beginning, and it will take time to verify to solve cross regional challenges.
There are also many investors who are not optimistic about capital, flocking to noodle shops and saying “I don’t understand”. Investor Chen Ke (pseudonym) told Caijing that she was not optimistic about the model of noodle shop and capital binding. “Catering is generally not good-looking in the secondary market. It is not a good target to deduce the primary investment direction from the performance of the secondary market. Chinese people eat too many kinds and their loyalty is very low. It is difficult to produce large companies and companies with high valuation on this track.”
Especially for Lu Zhengyao’s comeback with “fun noodles”, Chen Ke frankly said, “we will still mind his historical stains. Early investors who invested in this project knew that there would be people in rounds C and D, so they didn’t worry about not being able to quit.”
Fang Ming (a pseudonym) is a consumer investor of a domestic head angel investment fund. In an interview with Caijing, she said that the thrust of capital may make emerging catering brands have no time to grow steadily. “The development and growth of Haidilao does not depend on capital. After a lot of ups and downs, we continue to practice martial arts and keep ourselves alive. In this process, employees and brands grow together.” Fang Ming said frankly: “but capital will distort the law of enterprise development. It is good for a brand to open three stores, but capital wants to promote it to open 300 stores, which is a great challenge to its business ability. There is no time to practice hard.”
However, they all admit that the expansion of noodle shops boosted by capital has some positive effects on the industry. Chen Ke believes that “traditional noodle shop owners generally have low educational background and do not have refined and standardized thinking and ability. Capital entering these projects will give them some new knowledge, provide networking resources and technical resources to help them do standardization.” On the other hand, capital strictly controls the wind direction of the project and is extremely cautious about food safety. Therefore, it can play a role in supervising the supply chain of noodle restaurants.
Ma Jun believes that the pursuit of capital for beef noodles is a good thing; And called for more capital to enter people’s livelihood catering, such as steamed stuffed bun, fried dough sticks and soybean milk, which should be favored and pursued by capital, so that people’s livelihood catering can achieve greater development. “Only the real economy can bring about the revitalization of the country. The offline market is the guarantee for prospering the market and promoting employment.”
According to him, Dongfang palace is actively contacting some well-known investment institutions, and the new competition has also accelerated the financing pace of Dongfang palace. “At present, the northern financial market is also very serious, hoping to make great efforts to do a good job in the beef noodle industry. It is expected that new actions will appear in the beef noodle track in the north in 2022.”
“What needs more investment is actually basic industries, such as talent training and supply chain construction.” Liang Shunjian said, “if capital wants to make fast money, we only want red and big fruits that are ripened on the surface, but in fact we need to consolidate the foundation. This industry needs standardized and international factories, but capital is not interested in this.”
Authors: Yang Liyun, Yang Fan; Source: caijingeleven (ID: caijingeleven), reprint authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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