In recent years, the surge in the popularity of pre-prepared meals, widely referred to as "ready-to-eat" or "prepackaged" foods, has sparked considerable discussion within societyWhile many criticize this trend, viewing it as a departure from traditional cooking and dining experiences, it is essential to recognize that the concept of pre-prepared meals is already well-established and widely accepted in developed nationsCountries like the United States and Japan showcase a staggering acceptance rate, with 60% and 70% of their food market comprised of these convenient meal options, respectively.

Interestingly, even in China, numerous restaurants have adopted pre-prepared meals for quite some timeNotable establishments such as Haidilao, Xibei, and even fast-food giants like McDonald's rely heavily on pre-prepared food itemsThis practice allows them to maintain a consistent flavor profile across a multitude of locations, enhancing consumer experience and operational efficiencyThe growing prevalence of pre-prepared meals signifies a broader trend where the market has not merely opted for them out of necessity but embraced them as a contemporary choiceAs such, projections suggest that while China's current penetration rate for pre-prepared meals hovers between 10% to 15%, this figure will likely rise to 20% by 2026, with an anticipated market scale reaching a staggering 10.7 trillion yuan.

Statistics indicate an overwhelming presence of over 64,000 enterprises engaged in relevant industries related to pre-prepared meals, with a remarkable influx of over 5,000 new registrations in the sector in 2023 alone, marking an impressive 152.9% year-on-year increaseThis data underlines the significant and enthusiastic market response to pre-prepared food products and solutions.

The burgeoning market of pre-prepared meals is anchored in three primary growth factors: demand, supply, and technological advancementsFrom a demand perspective, the ongoing urbanization trend has attracted an increasing number of individuals to high-paced lifestyles in first and second-tier cities

Advertisements

The rapid tempo of urban life has boosted the popularity of pre-prepared meals and takeaway options, both seen as convenient dietary alternativesFor example, between 2018 and 2023, China's takeout industry blossomed from 482.6 billion yuan to 1.5136 trillion yuan, reflecting a compounded annual growth rate of 20%. This segment is projected to hit 1.9567 trillion yuan by 2027, solidifying its role as a critical driver of growth in the overall catering marketConsumers, grappling with limited time upon returning home from work, find the allure of a quick 15-minute stewed fish or a five-minute pork burger undeniable.

On the supply side, the rise of pre-prepared meals aligns with the industrialization of cateringOut of cost considerations, the application of pre-prepared meals within business-to-business (B2B) markets is on the upswingThe leading Chinese catering companies in 2023 experienced notable increases in three primary cost areas: raw materials surged by 23%, labor costs grew by 18%, and rent saw a 9% hikeThese rising costs pressure the catering sector to seek optimization through industrialized food strategies, with the integration of meal kits allowing for a significant reduction in food ingredient expenses—up to 17% less.

Furthermore, the ease of heating and serving pre-prepared meals has reduced reliance on kitchen staff, decreased necessary kitchen space, and led to a 60% decrease in labor and rental costs, simultaneously boosting net profit margins by 14%. Technological advancements also facilitate this growth; pre-prepared meals necessitate higher freshness standards and shorter shelf lives compared to traditional meal kitsImprovements in China's cold chain logistics technology, particularly in recent years, have empowered timely delivery and ensured the freshness of food products, thereby enhancing the potential for nationwide distributionThe investment in cold chain infrastructure reached approximately 58.55 billion yuan in 2023, marking an 8.2% year-on-year rise

Advertisements

As of late 2023, the total capacity of cold storage facilities reached around 22.8 million cubic meters, representing an 8.3% increase and a significant uptick in high-standard cold storage facilities, now accounting for about 62%.

The pre-prepared meal industry occupies a vital mid-to-lower tier position within a complex supply chainUpstream agricultural and fisheries industries are strategically positioning themselves in the pre-prepared meal sector to leverage their raw material cost advantagesFor instance, companies like Longda Delicious Foods have expanded their supply chains from pork production and processing to deep-fried pork products, while Guolian Aquatic Products is capitalizing on shrimp and fish by developing pre-prepared offerings such as stir-fried crayfish and pickled fish.

Additionally, midstream frozen food companies are diversifying into the pre-prepared meal marketTraditional frozen food processes overlap with the pre-prepared food industry, allowing for shared distribution channels and operational synergiesKey players in this transition include Anji Foods, Qiwei Central Kitchen, and Sanquan Foods, all enhancing their pre-prepared meal business models through a mix of self-production, acquisitions, and contract manufacturingHowever, the long-term viability of their operations relies on their ability to develop flexible and standardized production lines.

Traditional pre-prepared meal manufacturers have also been enhancing their technical expertise over time, although their limited store coverage and fragmented end-consumer bases tend to drive logistics costs upwardIn contrast, restaurants and retail chains are beginning to integrate their pre-prepared meal offerings, motivated by a desire to enhance operational efficiencies while stabilizing flavor standardsSome of the larger chain restaurants, such as Haidilao and Guangzhou Restaurant, have set up their central kitchens, not only to provide fresh ingredients and semi-finished products for their businesses but also to create end-consumer offerings.

Among the many players in this expanding arena, Anji Foods stands out as a notable leader within the pre-prepared meal sector

Advertisements

Of the thirteen enterprises associated with the industry, Anji Foods, Guangzhou Restaurant, Ligao Foods, Qiwei Central Kitchen, Hai Xin Foods, and Babi Foods reported positive revenue growth in the first three quarters of the yearIn particular, Anji Foods has demonstrated remarkable performance, with revenues rising from 6.965 billion yuan in 2020 to 14.045 billion yuan by 2023, and net profits soaring from 604 million yuan to 1.478 billion yuan during the same period.

In the first three quarters of 2023, Anji Foods maintained a growth trajectory, with reported revenues of 11.077 billion yuan, marking a 7.84% year-on-year increaseNotably, their net profit attributable to shareholders reached 1.047 billion yuan, though this represented a slight decline of 6.65% compared to the previous year, largely due to increased promotional and marketing expenses that eroded overall profitability.

The company's climb to success in such a competitive marketplace raises a fascinating question: What has allowed Anji Foods to emerge triumphantly? The answer lies in agility and operational foresightAnji Foods was notably the first frozen food company to enter the pre-prepared meal market, distinguishing itself early onSince 2018, Anji Foods has allocated a separate section in its financial reports to the pre-prepared meals segment—an industry first among publicly traded companiesDuring the upswing of the pre-prepared meals sector amid widespread health concerns, Anji Foods rapidly gained recognition as a leader in this niche.

Currently, the market remains fragmented with low concentration levelsCompetitors like Hai Xin, Qiwei, and Guangzhou Restaurant exist on different scales compared to Anji Foods, indicating that this industry will likely witness an increase in competitive consolidation in the futureAs of 2023, Anji Foods captured a market share of 10.88%, positioning itself as the leading player in China's frozen food sector.

In conclusion, the trajectory of the pre-prepared meal industry is shaped by various converging factors including market demand, industry trends, collaborative supply chain dynamics, brand development, and savvy marketing strategies

Advertisements

Advertisements