The Rise of Online Ready-to-Eat Meals in China: Addressing Health Concerns and Alleviating Anxiety
Introduction
In recent years, China has witnessed a significant rise in the consumption of online ready-to-eat (RTE) meals, driven by urbanisation, changing lifestyle habits, and the boom in the e-commerce industry. However, this growth accompanies health-related concerns and food safety anxieties among consumers. This report provides an overview of the industry’s current state, explores consumers’ concerns, and suggests ways to alleviate these concerns to sustain the growth of this emerging market.
Robust Growth in China’s Ready-to-Eat Meals Market
China’s Ready-to-Eat (RTE) meals market has thrived over the past few years. As per the data, in 2019, the RTE market’s revenue was CNY244.50 billion (US$34.57 billion), which rose to CNY288.80 billion (US$40.83 billion) in 2020 and CNY345.90 billion in 2021. The forecasted revenue for 2022 to 2025 is CNY419.60 billion (US$59.32 billion), CNY516.50 billion (US$73.02 billion), CNY697.20 billion (US$98.57 billion), and CNY906.10 billion (US$128.10 billion), respectively. This trajectory illustrates a steady year-on-year growth rate, ranging from 18.09% to 34.99%.
Currently, the user penetration rate of the pre-packaged food industry is only 10.00%-15.00%, and pre-packaged food in China accounts for less than 10.00% of the overall food ingredients. In contrast, Japan’s market share of pre-packaged food products has already exceeded 60.00%, indicating a significant growth potential.
In terms of purchase channels, the majority of consumers in 2022 prefer e-commerce platforms (61.99%), followed by food service industries (19.52%) and traditional retail stores (18.49%). However, according to the Forward Industry Research Institute data, the pre-packaged food industry in China has yet to form dominant players. The CR10 (the combined market share of the top 10 companies in terms of market ranking) accounts for only 13.70%. Even the market leader in the pre-packaged food industry, “Wei Zhi Xiang,” has a market share of only 1.80%.
Leading RTE meal industry companies have demonstrated strong sales performance and diverse product offerings. With its signature dishes and over one thousand Stock Keeping Units (SKUs), Dingdong Maicai achieved sales exceeding CNY900.00 million (US$127.24 million) in Q4 2021. Freshippo, with around 200 SKUs, recorded a 70.00% sales increase in 2021. JD.com, hosting many brands and offering over 5,000 SKUs, reported a 156.00% increase in RTE transaction volume year-on-year in 2021. Although detailed sales performance and SKU information are unavailable, Yonghui Superstores promotes its “Mama’s Home Cooking” line.
Given the current market trends, Hema, JD, and Dingdong Maicai are all expected to invest further in the pre-made meals sector, which is rapidly growing in China. The data suggest that Hema and Dingdong Maicai, with their self-operated models offering a wider variety of meal categories, may have a competitive edge by maintaining direct control over product quality and offering unique products. Therefore, self-operated businesses could become more competitive in the future. Meanwhile, JD should consider developing its line of pre-made meals to establish a unique selling proposition and increase its market share.
In conclusion, the RTE meal industry in China has shown strong market potential with steady growth, and the e-commerce platform has emerged as the most popular purchasing channel. The key industry players have exhibited robust sales performance with diverse product ranges, and the market forecast suggests a promising outlook for the industry.
The Rising Consumer Preference May Lead to a Growing Market
Mr Wang, who lives in Nanning, always brings lemon duck and braised pork with preserved vegetables he purchased online to his parent’s home for weekend meals. “My parents are getting older, and when we have family dinners on weekends, it’s convenient and quick to have some pre-packaged, easily heated dishes. The taste is also good.”
Ms Zhu has been buying pre-packaged meals for several years. She said, “I buy them three to five times a year, usually during the Chinese New Year. I don’t usually buy them during regular holidays.” She mentioned that the pre-packaged meals she buys are relatively fixed, mainly including braised pork with preserved vegetables, braised pig trotters, and eight-treasure rice. “Because these three dishes take a lot of time and effort to prepare, buying them ready-made is very convenient. Just heat them, and they taste good. Besides, there are too many dishes to prepare during the Chinese New Year, so buying pre-packaged meals is convenient.”
Ms Hao started buying pre-packaged meals two to three years ago. On the one hand, it’s convenient for her to process them after work; on the other, it’s for hospitality during holidays. She said, “Some dishes require ingredients I don’t have at home, and I can’t adjust the taste properly, like crayfish and boiled fish in hot chilli oil.”
When we delve into why consumers purchased RTE food in 2021, a majority (69.80%) indicate convenience as the primary factor. Other causes include delicious taste (46.70%), experiencing novelty (36.00%), affordable prices (30.70%), and a healthier option compared to takeouts (28.00%). Interestingly, the pandemic also plays a role, with 24.30% of consumers preferring RTE meals to avoid dining out. However, consumers paid more attention to RTE food safety in 2022; 47.80% of them considered that when making their options, which suggests consumers are more likely to care about food quality and be strict with them.
The ready-to-eat (RTE) sector is growing in poultry, prepared aquatic foods, and sub-categories such as rice, pasta and vegetables. Consumer preference for higher protein RTE foods is increasing, and this category accounts for over 50.00% of RTE foods. In addition, most consumers, 51.00%, purchase RTE meals between one and three times per week. This frequency shows an apparent demand for these products and portends a vast market opportunity.
Furthermore, data on the frequency of purchasing RTE meals per week suggest that most consumers, 51.00% buy RTE meals between 1 to 3 times per week. 14.00% of consumers purchase RTE meals more than once a week, while 27.00% buy them 4 to 6 times weekly. Interestingly, 8.00% of consumers purchase RTE meals daily.
In conclusion, the RTE meals market in China exhibits healthy growth, with consumers valuing the convenience, taste, and health aspects of these products, which expanding market and positive consumer sentiment indicate the vast potential for RTE meals in China.
Current Situation and Consumer Concerns
Consumers’ transparency demands in the ready-to-eat (RTE) food industry are increasingly pronounced. A case study involving several brands offering the popular Chinese dish “Suan Cai Yu” (Sour Cabbage Fish) reveals varied levels of information transparency.
Only some brands fully meet consumers’ transparency expectations. For instance, only five brands –CP Zhengda, Zhongyang Fish World, Chaowei Dock, Hema, and Weizhixiang — provide ingredient lists, nutritional information, and fish species confirmation (Black Fish), and allow a clear view of the product when buying. Zhongyang Fish World also possesses BRC and HACCP certifications, reinforcing its food safety and quality commitment. It is worth noting that most brands indicate the fish species used, while nutritional information and ingredient list disclosure are less common. There also seems to be a lack of certifications across most brands.
Regarding RTE meals, consumers are most concerned about food safety issues, accounting for 29.03% of concerns, including the ingredients’ freshness and the production process’s cleanliness. Some consumers have reported spoilage, non-fresh ingredients, foreign objects in the food, and expiry issues in the RTE meals they’ve purchased. Moreover, only 34.36% of consumers are delighted with the taste of RTE meals, stating that the meals are more delicious than expected, while 62.32% consider the taste average. According to the Town Thistle Research Institute statistics, the current proportion of pre-packaged food products containing limited additives in the pre-packaged food industry is 43.40%. Among them, the balance of pre-packaged food products containing 1–3 limited additives is 29.30%; the ratio of pre-packaged food products containing 4–6 limited additives is 13.10%; and the balance of pre-packaged food products containing 6+ limited additives is 1.00%.
Most consumers have needed clarification on labelling information when purchasing RTE meals. The survey shows that 27.54% of consumers indicated that the RTE meals they bought did not label the dish name and main ingredients, while 23.61% reported that their RTE meals did not show the portion size.
In conclusion, the current situation reveals a significant opportunity for RTE brands to enhance their transparency and traceability measures. Consumers demand more clarity in food content, sourcing, and production processes. Brands catering to these demands could enhance their market reputation, consumer trust, and market share. These trends suggest the continued influence of the RTE meal industry in China.
Regulation in the Ready-to-Eat Market
RTE market regulations increasingly focus on ensuring food safety, quality, and product transparency. National regulatory bodies and leading companies in the industry, such as JD, Hema, and Dingdong, set these standards.
Jingdong (JD), Hema, and Dingdong Maicai, leading companies in the ready-to-eat industry, enforce rigorous regulations and standards for product safety and quality. JD plans to release detailed standards for various food categories and regulates five significant health and safety categories at all sales stages. Hema demands high product verification and safety standards, including third-party inspection reports and quarantine certificates for imported goods. The company also updates its strict shrimp product standards almost weekly. Dingdong Maicai enforces sensory standards for various fresh products and packaging and labelling standards for its self-operated new products.
Different vital players must adhere to the following regulations and standards:
JD has set up some specific RTE food regulations, encompassing a comprehensive management specification ensuring health and safety in food additives, heavy metals, hygiene, physical and chemical properties, and microorganisms.
Hema implements rigorous regulations for its ready-to-eat (RTE) food, including requirements for third-party inspection reports, business and operating licenses, customs and quarantine certificates for imports, relevant product certifications, and specific standards for shrimp products involving 15 steps and 34 parameters updated regularly.
Dingdong Maicai enforces sensory standards for fresh products like pork, beef, mutton, and poultry, along with packaging and labelling standards for all self-operated new products.
At the national level, the Chinese RTE Industry Alliance and the Agricultural and Rural Department Food and Nutrition Development Research Institute have proposed measures to promote high-quality development of the pre-made food industry in Guangdong. In addition, the Fujian Provincial Health and Health Committee issued a local standard for Buddha Jumping Wall, a popular Chinese dish. This standard defines the word, dictates the broth, and sets strict guidelines for ingredients, quality grades, technical requirements, and production processes.
Moreover, the Jiangsu Consumer Protection Commission published a consumer survey report on February 18 highlighting several consumer concerns, including dissatisfaction with taste, unclear labelling information, and logistical issues related to delivery and pickup. The survey collected valid questionnaires from 13,069 participants, showing that regulations must address these concerns to protect consumers better and promote the development of the RTE industry.
In conclusion, as the pre-made food industry grows, stricter regulations and standards will be crucial to ensure product safety, quality, and integrity, thereby increasing consumer confidence and promoting market development.
Future Directions: Government and Industry Initiatives
Adapting to the rapid evolution in consumer preferences, especially around ready-to-eat food, governments and industry players are devising strategic plans to cater to the new demands. The industry’s primary focus is to ensure that these meals remain fresh and high quality, which has necessitated the development of innovative technologies. Additionally, businesses are taking strides in creating clear procedures and standard operating practices for producing and distributing such products.
Food Safety Management
Government bodies are working on the sidelines to develop comprehensive standards and regulations to guide the industry. Learning from global best practices, they study case examples from countries such as Japan, where the ready-to-eat food industry has thrived.
In the following assumption, I seek to analyse the sodium intake from Ready-To-Eat (RTE) foods, particularly given the concerns around high sodium content and the potential health implications, such as an increased risk of hypertension.
Our investigation follows the World Health Organisation’s (WHO) guidelines, which recommend a maximum sodium intake of 2000.00mg daily for adults. We looked at various RTE foods available in the market. The sodium content in these RTE products, as well as the frequency of consumption based on a survey, were taken into consideration. The frequency of RTE consumption per week is as follows: More than once per week, 14.00%; 1–3 times per week, 51.00%; 4–6 times per week, 27.00%; daily, 8.00%.
Given these products, we assumed that when a person consumes RTE food, they take one serving per meal and finish another meal with around 1000.00mg of sodium (half the recommended intake by WHO). We then calculated the percentage by which the person exceeds the daily recommended sodium intake, using the formula: ((Sodium intake from RTE meal + Sodium intake from other meal — Daily recommended intake) / Daily recommended intake) * 100%.
Some meals exceeded the recommended sodium intake by a staggering 412.00% for people who eat RTE food daily, as in the case of Zhengda Pickled Fish.
Those consuming RTE food 4–6 times a week, assuming an average of 5 times a week, also exceeded the recommended daily intake, but at a lesser rate. In this case, the highest was again Zhengda Pickled Fish, exceeding the recommended intake by 173.57%.
For those consuming RTE food once a week, the excess intake was significantly lower but still present for certain meals. In this category, Zhengda Pickled Fish again topped the list, exceeding the recommendation by 24.29%.
In conclusion, the assumption suggests that the sodium content in RTE foods is high. Regularly consuming these foods, even once a week, could lead to sodium intake beyond the recommended levels. It could increase the risk of hypertension and other associated health issues over the long term. More comprehensive research would be valuable to understand these findings’ impact on public health.
The merchant must display the list of nutritional ingredients and recipes for a product on the sales platform. Consumers need to be aware of the nutritional content of RTE foods before purchasing them. Also, should we adjust the relevant food additive ingredients and ratios for restrictions? As we have previously analysed, 49.00% of people consume RTE foods four times a week or more, so it is essential to ensure that consumers who consume RTE foods with high frequency remain healthy over time.
The government is actively promoting the development of the RTE food industry, which means that the frequency of RTE foods on people’s tables will gradually increase and may even be at three meals a day.
Customisation and Personalisation on RTE Foods pre-package
In China, Dingdong plans to launch a series of pre-made meals that align with the brand’s emphasis on health. They have targeted products such as low-oil, no-oil, low-sodium, no-sodium, and low-carb meals. This initiative is a testament to their strategic approach to understanding and catering to current dietary needs.
For example, some pre-packaged food vendors will use advanced equipment such as automatic cooking machines to produce pre-packaged food on-site based on consumer demands and preferences. With the support of leading companies like Gree and Galanz, it only takes a few tens of seconds to prepare a pre-packaged dish, and with the packaging process included, the production process is at most 2 minutes.
For instance, customised cuisine corresponds to specific regions. The Guangdong region, for example, may have a great fascination and preference for soups. Therefore, medicinal cuisine or stewed soup dishes may have significant prospects in Guangdong. Jingdong has launched medicinal cuisine products from Guangzhou Restaurant: Ginseng Duck Soup and Ginseng Polygonatum Chicken Soup, adding medicinal herbs to the meat soup. Additionally, Huifa Foods has introduced pre-made medicinal dishes developed according to the 24 solar terms: Five-Season Black Chicken Soup, Ginseng, Millet and Sand Ginger Baked Chicken, Flower Ginseng South Milk Meat, Li Zhong Mung Bean Hoof Flower, Ginseng and Poria Cocos Old Goose Pot. These dishes are starting to cater more to consumer needs.
Hema, another prominent player in the industry, has pioneered innovative strategies in the fresh food pre-made meals segment. They have collaborated with consumer brands to launch an array of new pre-made meals. A notable instance is the noodles they introduced in collaboration with Moodles, which employs 3D printing and molecular gastronomy techniques. These products have gained significant consumer traction, high in protein and low in carbohydrates.
Supply Chain Management in Actual Applications
Moreover, Hema places substantial importance on supply chain coordination, product development, and innovation. They have partnered with Guolian Aquatic Products to deepen their customisation efforts, leading to product transformation and the development of new goods. This strategy leverages consumer insights and raw material supply advantages to fuel new product development.
Furthermore, JD.com has focused on improving the freezing capacity and efficiency, considering that many pre-made meals require freezing for preservation.
Aside from these industrial endeavours, government regulation and oversight are paramount in maintaining food safety, from supply to production, pre-sale, post-sale, and every stage.
In Japan, the Ministry of Health, Labour, and Welfare has set stringent standards to ensure the safety and quality of ready-to-eat food. They include Maximum Residue Limits for various substances used in food production, strict labelling requirements for food additives, and comprehensive standards for Foods for Specified Health Uses (FOSHU) and Foods with Nutrient Function Claims (FNFC).
Similarly, they have established guidelines for frozen foods, particularly those intended for raw or post-heating consumption. They stipulate the acceptable bacterial count and storage conditions, among other factors.
Furthermore, the guidelines govern food packed in containers and sterilised by pressurisation and heating, focusing on the sterilisation method’s effectiveness and the absence of viable bacterial cells.
Conclusion
As we stride into the future, it is evident that both government and industry stakeholders will continue to adapt and innovate to satisfy the evolving consumer demands and maintain the highest standards of food safety. Their joint efforts promise an exciting future for the ready-to-eat food sector.
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