Business
3R food industry sees great potential in Chinese and overseas markets
By Zhang Shasha  ·  2022-05-23  ·   Source: NO.21 MAY 26, 2022
An exhibitor from Yunnan Province introduces ready-to-cook rice noodles, a Yunnan specialty, to visitors at a 3R food fair in Fuzhou, Fujian Province, on December 2, 2021 (XINHUA)

When considering how to maximize the value of a chicken, if your suggestion is to send it to a chef, you may not be up to date with the latest developments in the food industry. These days, it's not just chefs who can turn chickens into high cuisine.

Meizhou Jinyuan, a food processing company in Meizhou, Guangdong Province, is helping novice cooks bring their culinary dreams to life. The company's frozen rendition of salt-baked chicken, a local specialty in Guangdong, was developed with consideration of the age of the chicken, the cooking temperature and cooking time. Once the perfect recipe was formulated, the selected ingredients were assembled in a production line that integrates cooking, cooling, packing and testing into one process. With ultralow temperature quick-freeze technology, the ready-to-heat salt-baked chicken products can be stored for up to six months.

"I believe the industrialization of food production is an irresistible trend," Huang Junpeng, general manager of the company, told Meizhou Daily. "Despite the heavy financial burden the pandemic has placed on us, we have still invested 6 million yuan ($885,600) in developing new products since 2020."

The ready-to-heat chicken is a category of what has come to be known internationally as 3R food: ready to cook, ready to heat and ready to eat. It has become increasingly popular with Chinese consumers in recent years.

According to a report released by iiMedia Research, a consulting agency, China's 3R food market value hit 345.9 billion yuan ($51 billion) in 2021, and is estimated to surpass 1.07 trillion yuan ($160 billion) by 2026.

 

Bright prospects

Novice cooks and time-poor professionals are not the only fans of 3R food. Restaurants are also making increasing use of these time and labor-saving products.

"Restaurants have needed fewer chefs in recent years," Qin Bin, who has been in the food and beverage industry for almost 10 years, told Beijing Review. "Instead of raw materials, these days we prefer to purchase and cook semi-manufactured dishes."

He attributed the change to the rising cost of labor and increased demand for consistent flavor.

The recent resurgence of COVID-19 in many places has also boosted the growth of the 3R food market. Nationwide sales increased 100 percent year on year in March, and the sales in Shanghai in the first half of April, when most parts of the city were under closed-off management to curb the spread of Omicron, jumped 250 percent year on year, according to China Central Television.

Although 3R food is gaining popularity among individual consumers and businesses, its market potential is yet to be tapped. According to a five-year plan issued by the China Cuisine Association in 2021, the current penetration rate of 3R food in China is 10-15 percent while that in Japan exceeds 60 percent.

The gap explains why capital is pouring in and why food processing enterprises are vying to take a share of the spoils. Additionally, famous restaurant brands such as hotpot giant Haidilao and restaurant chain Xibei are seizing the opportunity by launching their own take-away ready-to-cook meals.

Regions with complete food production chains such as Zhaoqing and Zhanjiang in Guangdong and Shouguang and Zhucheng in Shandong Province are busy competing for the title of Capital of 3R Food.

The Guangdong Provincial Government released guidelines on March 24 to bolster local 3R food development. Measures consist of building industrial parks, establishing import and export trade zones and hosting international fairs. An industrial alliance was also established between several cities in the province.

"The boom of 3R food mirrors Chinese consumers' updated demand for a healthier and more nutritious diet," Li Jikai, chief economist of AEEC, a Beijing-based think tank, wrote in an article published on Weifang Daily on April 9. "Its growth will also foster integration between agricultural production and food and beverage consumption. This is beneficial to the whole value chain and is conducive to rural revitalization."

However, a lack of leading enterprises is one of the challenges facing the industry, according to Li. "It's difficult for small enterprises to drive the upgrade of industrial standards and technology," he said.

"Chinese meals usually require complicated cooking processes, which makes industrialization difficult," Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation, told Beijing Review. "But every coin has two sides. This feature suggests pre-made Chinese food will save more time for consumers."

Overseas market expansion

Evergreen Conglomerate, an aquaculture company in Guangdong, has been transforming its business since 2019, with its total 3R food sales rising from zero to 300 million yuan ($44.6 million) over the past more than three years.

"Our export volume stood at $11.28 million during the same period, with tax rebates for exports totaling 8.56 million yuan ($1.27 million)," Li Qiuguang, general manager of the company, told Chinanews.com.

The company has also received 8.6 million yuan ($1.27 million) of extra tax deduction for research and development costs, he said, adding that its product line expansion is gaining pace.

Evergreen Conglomerate is just one of many companies gaining a foothold in the 3R market overseas, catering to tastes around the world.

Jewish Americans have had the tradition of eating Chinese food at Christmas since the end of the 1800s. When being questioned on where she was on a particular Christmas Day, the then U.S. Supreme Court nominee Elena Kagan replied, "Like all Jews I was probably at a Chinese restaurant."

"Many people in the U.S. and Britain love Chinese food. But the most popular dishes that they love are not the best of Chinese cuisine, nor are they the most representative ones. From this point of view, authentic Chinese food culture is underappreciated overseas," Fuchsia Dunlop, a British food writer specializing in Chinese cuisine told China News Service.

"3R food creates ample opportunities for the Chinese food industry in overseas markets, especially for those struggling restaurants during the pandemic," Mei said.

According to the American Chinese Restaurant Association, there were about 54,000 Chinese restaurants in the United States in 2019, and two years after the outbreak of COVID-19, there were less than 40,000.

"The reasons lie in skyrocketing prices and the rising cost of labor," Wang Tieniu, head of the association, told Hong Kong-headquartered broadcaster Phoenix TV in February. "Since the outbreak of COVID-19, the cost of Chinese food has risen 22 percent and the price of meals in Chinese restaurants increased 10 percent."

"In this case, 3R food can be an alternative for crisis-ridden Chinese restaurants and a way to rescue the Chinese food industry in overseas markets," Mei said. At the same time, 3R food means the variety of dishes available overseas is not constrained by the capabilities of local chefs, meaning the most authentic Chinese cuisines will be available for overseas consumers.

(Print Edition Title: Industrial Revolution of Food)

Copyedited by G.P. Wilson

Comments to zhangshsh@cicgamericas.com 

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