Catering consumption will usher in another spring

Catering consumption will usher in another spring

Under the policy, the catering industry has also ushered in a new turning point. What kind of recovery pace will the domestic catering industry show? Which categories will recover faster?

Xue Yuan, chief analyst of the food and beverage industry at CITIC Securities, judged that after one to two quarters, domestic catering consumption will rebound relatively strongly. It is expected that the categories that will recover faster will be snacks, fast food, drinks, hot pot, etc.

Judging from the number of store openings, in the first quarter of 2021, the number of restaurant openings dropped sharply, and the number of restaurant closures was relatively large. Since then, the number of stores opened in the catering industry has shown a growth trend. By the third quarter of 2022, the number of newly opened restaurants in the catering industry will reach 850,000, which is also the quarter with the largest number, and then gradually decline quarter by quarter. With policy support and opening to the outside world, we believe that the panic among consumers will gradually dissipate. After one to two quarters, consumption in the catering market will rebound relatively strongly. It is expected that after the liberalization, the categories that will recover faster will be snacks, fast food, drinks, hot pot, etc.

In the past three years, the entire catering industry has gone through a period of difficult trials, and now it has finally ushered in an inflection point. On the one hand, we should grasp the pace of recovery after the epidemic; on the other hand, we should strengthen our confidence and bring our business thinking back to the long-term trend of industrial development.

For this reason, we also need to think about the long-term driving force of the catering industry. We all know eating is big business. We combed and found that due to differences in eating habits and supply chain conditions, the catering industry in different countries has formed its own characteristics and development paths. Next, we will focus on pre-made dishes. Prefabricated dishes are dishes with different degrees of cooking produced through industrialized batches, which solve different pain points at the B-side and C-side. We believe that prefabricated dishes will definitely have a broad development prospect in the future.

On the B side, prefabricated dishes can help catering companies reduce the demand for labor, reduce the area of the back kitchen, increase the speed of meal delivery, establish a standardized operating system, and ultimately achieve cost reduction and efficiency increase. If this can be done, there is hope for an increase in the chain rate of the catering industry.

On the C side, prefabricated dishes mainly solve the pain points for consumers that cooking at home takes a long time and is difficult to cook. We have noticed that the epidemic has accelerated the penetration of C-end prefabricated dishes in the short term. But after the epidemic, the B-side is still in demand, and it is also the main direction of the company's efforts, while the C-side prefabricated dishes have to go through a process of uniform cultivation and release.

In 2020, my country's per capita frozen food consumption will only be 3.7kg, equivalent to Japan's level in 1975. In Japan, in 2020, the per capita frozen food consumption has reached 22.6kg, which is equivalent to 6 times the current level of China. The per capita consumption in European and American countries is generally above 36kg, which is 10 times that of China.

According to our calculations, in 2021, the scale of my country's prefabricated vegetables will be about 350 billion, and the trillions in the future prefabricated vegetable market can be expected. In the short term, the growth certainty of B-end prefabricated dishes under the matching of supply and demand is higher. C-end prefabricated dishes depend on the emergence of good supply, and are still at an early stage of maturity.

At present, there are many participants in the prepared vegetable industry, about six categories, but the revenue of leading companies is generally less than 1 billion yuan, and the market share they occupy is less than 1%.

At the same time, after players enter the industry, they quickly promote capacity expansion in the short term, and homogeneous competition is also obvious. Now, the prepared vegetable industry is still in the stage of competing for market share, and there are not too many people who are particularly concerned about profits. In the future, the market competition for prepared dishes will intensify, and the industry will usher in a reshuffle. In the end, the B-end market may be the first to give birth to larger companies.

At present, the entire prefabricated vegetable industry is in a stage of development with categories but no brands, and an undecided pattern. Each enterprise needs to select corresponding products and channels based on its own genes and resource endowments to achieve rapid growth, and constantly iterate business models to establish itself in the development. Long-term barriers and brand power.