4 trillion market size of the catering industry

The new catering era driven by the new consumer body has drawn the curtain, practitioners need to consider the multi-category/multi-brand business layout, and at the same time around the value chain to the front-end of the strengthened refinement of the operation, to the back-end of the optimization of supply chain capabilities.

In 1980, China's first individual catering business license was issued to the Yuebin Hotel in Beijing's hutongs, and since then, the catering industry has followed the footsteps of China's reform and opening up and walked through a turbulent 30 years. China Cuisine Association data show that China's average annual growth rate of the catering industry continues to maintain double-digit, the current catering market size has exceeded 4 trillion yuan, is the world's second largest catering market.

China's economy is entering a new normal of relatively stable development, and its impact also affects the catering industry. The catering industry is characterized by fragmentation of categories, fierce brand competition, and regional market concentration, all of which have brought various pressures to the development of the industry. At the same time, the catering industry innovation mode continues to emerge, the industry pattern continues to change, but also bred a new development opportunities.

The huge number of post-80s and post-90s consumer groups are becoming the main consumer force in the market, and the growth environment of the new generation of consumer groups is different from that of other age groups, which makes their demand for the catering industry more complex and diversified. In order to adapt to the development of the industry and meet consumer demand, catering groups and brands need to carry out all-round innovation in business layout, food, brand, stores, business format and even supply chain. It can be said that the traditional service industry is ushering in a new round of transformation and upgrading of the catering industry, driven by the new consumer body of the new catering era has slowly opened the curtain.

The catering industry is still growing at a high rate

After a period of rapid growth driven by consumption upgrades, China's current consumer demand is slowing down along with the macroeconomic situation. In addition, rising restaurant operating costs, fierce competition in the industry, and increasing operational difficulties are all contributing to the fact that China's overall F&B market size growth will return to a steady pace, with growth estimated at around 7.9% over the next five years.

However, the overall growth rate of China's food and beverage industry is still higher than the average growth level of retail sales of consumer goods over the next five years, and there are opportunities for some categories of the market to develop, with new formats and modes emerging in first- and second-tier cities, and with the help of the Internet, the food and beverage market will still have a lot of potential in the next few years.

The power of the Internet has driven catering O2O into a phase of rapid development, bringing new opportunities for industry growth. According to Foresight Prospective Industry Research Institute released the Catering Industry Development Prospect and Investment Forecast Analysis Report statistics show that in 2012, China's Catering O2O market size just reached 41.7 billion yuan, to 2017 China's Catering O2O market size grew to 780 billion yuan, it is expected that China's catering O2O market size will reach 1954.9 billion yuan in 2022.

New Consumption Demands of New Consumption Subjects

In the past few decades, China's catering consumption has further upgraded to the experience era from the era of pursuing the fruitfulness of eating to the era of bragging about the newness, exoticism, and expensiveness.Post-80s and post-90s have gradually grown up to be the main body of the society, and at the same time, they have also become the main force of the catering consumption. According to the 2017 Annual Gourmet Consumption Report released by the China Cuisine Association, the consumption share of the post-80s and post-90s crowd exceeds 80% of the industry as a whole. As a new type of consumers leading the consumption upgrade, they have put forward more requirements for restaurant dish characteristics, brand positioning, dining environment and experience. In addition, the new consumer demand for continuous upgrading and updating will become the norm.

For restaurant operators, the new consumer body, need to be more attentive to the brand level. 80, 90 consumers are more and more attention to the quality of the restaurant brand. According to Avery Consulting consumer research results show that the restaurant's word-of-mouth evaluation has become the first factor that consumers consider when choosing a restaurant, and behind the word-of-mouth evaluation represents the consumer's demand for brand quality.

How to be bigger and stronger in the new restaurant era

Aiming at the unique industry pattern and consumer demand in the restaurant industry, restaurant industry practitioners need to think about how to optimize their business layout and innovate from the supply side in order to keep up with the ever-changing market changes. The innovation can start from three aspects: from multi-category/multi-brand business layout, around the value chain to the front-end to strengthen the fine operation, to the back-end to optimize the supply chain capacity.

1, multi-category / multi-brand business layout, or become an important way of scale expansion of the restaurant group

Restaurant group, based on the industry category dispersed and the characteristics of fierce competition, it should be multi-category brand layout, multi-flowering. Some restaurant groups continue to try, but due to this strategic choice for the group's own organizational and management capabilities require a very high, the market has not yet appeared successful cases.

2, catering practitioners around the value chain to the front end to strengthen the fine operation

In terms of meals, you can enter the single product, to create a hit. In the catering industry, single product entry is gradually becoming a popular strategy. On the one hand, based on a single product, focusing on boutique development, and thus branding, can quickly occupy the minds of consumers, to obtain the advantages of category positioning. For example, West Young Master, which specializes in meat buns, and Chongqing Noodle, which specializes in Chongqing Noodle, have been able to achieve a first-mover advantage through distinctive category characteristics.

On the other hand, the expansion of derivative dishes around the single product, but also in the development of the original category on the basis of catching the trend, and get the favor of consumers. Crawfish, for example, in the representative crawfish catering brands such as hemp small has established category advantages at the same time, other catering brands are also timely launch of crawfish category dishes. For example, Zhou Heiduck use the original brand advantage of cross-border crayfish category, to create a mixed trend; Deer Harbor town does not change the original brand positioning on the basis of the launch of a single product related to crayfish.

Brand development will also be shaping the first, pulling the important push of business expansion. Catering industry will be upgraded from the past price-driven to brand-driven. Now catering enterprises in the early stages of development can first focus on shaping the brand, enhance the brand tone, and then continue to expand and deepen the business. To hi tea as a representative of the many net red store is in the establishment of the early stage, based on a small number of stores, intensive cultivation, continue to strengthen the brand shaping, to get enough exposure and attention, to be able to further realize the expansion of the business.

In addition, boutique restaurants create segmented scenes to enhance the dining experience, which is very attractive to new consumer subjects. Boutique has become the direction that many brands try to innovate. Gluttony selectively upgraded the version of the original store to provide a more upscale dining atmosphere through modern restaurant decoration design. At the same time, Gluttony also launched an independent mid- to high-end brand, aiming to create a boutique hot pot, in the dining environment and experience to create a superior user experience. In addition, Pizza Hut to create a black gold store, Pizza Hut launched a selection of stores, are "boutique" restaurant's leading attempt.

Currently, O2O has become an irreversible trend in the industry, starting with takeout and continuing to upgrade to the innovative fusion of "retail+restaurant+takeout". Starbucks and Alibaba Group formally announced a strategic cooperation in August 2018, and the official takeaway was officially launched to cope with the competitive pressure brought by the rise of Internet brands, including Ruixing Coffee, as well as the hidden worry of the decline in dine-in performance. The takeaway business of national hotpot brand Haidilao was laid out even earlier: in 2010, the independent takeaway brand "Hi

Lao Delivery" was established, inheriting Haidilao's strengths from products to services. "Hi

Lao Delivery" has reached a revenue scale of nearly 220 million yuan in 2017, accounting for 2.1 percent of the overall revenue. It not only succeeded in bringing new performance growth points, but also further strengthened the promotion of the influence and popularity of the Hai Di Lao brand.

And the emergence of Box Ma Fresh Life marks the entry of catering O2O into a brand new mode. Taking meeting consumers' needs as its core starting point, Box Ma Fresh Life establishes a closed loop of sales by connecting online and offline, providing an innovative fusion mode of fresh food retail + catering + flash distribution, with operating results significantly better than those of traditional stores. Its average monthly repurchase rate of 4.5 times, compared with the traditional supermarket ping efficiency 3 times -5 times, online conversion rate as high as 35%. And the future of O2O will no longer be limited, dinner door-to-door customization, private kitchen door to door, **** enjoy the kitchen, prepaid express pickup and other emerging business models will become possible.

3, to the back end of the industrial chain to expand, strengthen the supply chain ability

To the back end of the industrial chain to expand, strengthen the supply chain ability, can also help catering brands to realize resource integration, business innovation and breakthrough. Taking Haidilao as an example, its Yihai International has become a model for catering enterprises to expand their industrial chain.

From the current business system of Haidilao, we can see that through the Yihai to expand the seasoning supply link, through the Shuhai to expand the supply chain services, through the Shuyun Oriental to expand the engineering services, Haidilao has been in the industry chain to expand the layout of the depth. And gluttony also by trying to set up seasoning joint venture involved in the upstream business, to create business synergies.

In short, along with the changes of the times, the future of the restaurant only based on the changes in the industry pattern, closely around the upgrading of consumer demand, and continue to carry out the supply side of the innovation, it is expected to have come to the new era of food and drink bigger and stronger.