Group meal business is a trillion-level market, but money is not easy to earn

2024-06-05

Group meals are essentially an outsourcing service, not much different from some familiar outsourcing services (such as accounting, legal or IT outsourcing services), and they all belong to the type of B2B service outsourcing. In different social catering, group catering companies target groups of people including various companies, institutions, schools and hospitals.

According to public information, at present, Chinese group catering enterprises are mainly divided into two modes: entering Party A and group catering.

The former refers to group catering companies serving large enterprises, schools, institutions, etc. in the form of contracted canteens. Representative companies include Qianxihe, McGindy, Jianliyuan, Wanxi, etc. The latter is a central kitchen built by itself or in cooperation with a third party to centralize the preparation of meals and then deliver them to Party A, which means that the company has delicious meals.

These group catering companies often need to use bidding to obtain contracting rights. Taking colleges and universities as an example, group catering companies are usually selected through public bidding. After the winning company obtains the right to contract canteens, it can choose to rent the stalls to various catering merchants in the form of rent or mention, or choose to operate itself.

According to public data, as of 2020, the number of group meal companies in China has exceeded 100,000, and the group meal audience is about 670 million people, which is close to half of China's population at that time. China's group meals have a stable customer base. In 2021, China's group meals market will reach 1.77 trillion yuan, and it is estimated to maintain a growth rate of 10%. In 2023, it will reach 2.25 trillion yuan.

Until the outbreak of the epidemic in 2020, governments in many places encouraged companies to make reservations to order meals to solve the problem of "difficulty eating" for employees after returning to work. A group of social catering companies and some companies in other fields have set up group meal business across borders, such as Poly Property, Jin Branch services and so on have been laid out successively.

Small profits but quick turnover, single operation, leading scale. "Comparing the best catering brands on the market, Zhengxin Chicken Chop, Wallace, Michelle Ice City, including Shaxian snacks and Lanzhou ramen, are they basically all in line.

Whether a group catering company is doing well or not, on the one hand, tests whether it can interact well with Party A and meet the needs of consumers; To achieve a high degree of control, including the ability to plan ahead or adjust operating strategies in a timely manner in the face of unexpected situations such as regular seasonal changes and rising food prices brought about by the school season. According to the "Research Report on China's Group Catering Industry in 2018", the procurement costs of group catering companies account for as much as 40%-45% of total revenue, which is much higher than the 20%-25% procurement costs of social catering. Taking the upstream supply side as an example, raw materials need to pass through multi-layer dealers and distributors from manufacturers to canteens. During this circulation process, each link will increase the price by about 10%, making the raw material terminal purchase price of the catering terminal about the ex-factory price. 1.3 times.

In addition, since group meals are aimed at universities, government agencies, and enterprises, the canteens of these units are more for providing dining services to employees rather than making profits, so the gross profit of group meal companies will also be controlled to a certain extent.

The "2020 China Group Catering Development Report" shows that about 40% of group meal companies still only operate in a certain province and city, and only 21.61% of them operate across provinces across the country. The concentration reaches 60%~80%. Since the market is far from mature, the market structure has not yet been determined, which is also the reason why some players are attracted to the influx.

It’s just that the group catering industry is not a profiteering industry. Those who enter the game want to take root in this industry for a long time and need to test their conscience.

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