When kids start to cook their own veggies, you know something has changed...
Shanghai is now finishing its third week of city-wide lockdown. Things have not changed much in our day-to-day, and some announcements of some kind of improvements have been made, but for now, people are still going crazy with the only way for everyone to get food and water: group-buying, as I detailed in the previous newsletter.
But this week, I am focusing on the changes… and when you see kids that are starting to cook their own veggies, you can tell something is up…
Let’s see what else is changing…
— Greg
If you’d like to know more about what Shanghai is going through, reach out to me or leave a comment.
Hi, I’m Greg, founder of NextStep [F&B] Studio. We help F&B brands and companies in China grow by implementing new F&B trends & innovations.
The FoodTech Confidential Newsletter is my way to share what’s happening in the Food and Beverage industry with F&B professionals, FMCG experts, Tech entrepreneurs, and Investors with a focus on China and Greater Asia. Contact greg@nextstepstudio.co.
TODAY’S SPECIALS
1 - Young Chinese had to stop ordering and start cooking, and they are now realizing a few things.
2 - The chain-restaurant model is growing in China but will it take over traditional restaurants?
4 - Getting your fan base to talk about your products
5 - “Hi my name is Alexa, and I will be your waiter tonight.”
And now…, let’s dig in!
WHAT’S NEW IN CHINA?
1 - Young Chinese are now cooking, storing vegetables, and even growing them!
With stores closed, and food delivery reduced to group-buying, young Chinese are also relying on government care packages containing fresh veggies such as cabbage, carrots, potatoes, or bok choy,.. They don’t have much choice but to start cooking fresh food during the city-wide lockdown.
“Some didn’t own pots and pans, while others indulged in online orders. Now they’re either learning to cook or just struggling.” reports interviewees for Sixthtone
“The COVID-19 pandemic is changing how and what we eat. This is most obvious during and after lockdowns, as young, takeout-dependent Chinese like me have little choice but to cook at home. But the longer the pandemic drags on, the more people I’ve noticed embracing cooking for its own sake.” says Feng Jing for Sixthtone
Young customers are realizing that among the obvious benefits, eating in is significantly cheaper than eating out all the time. It is also viewed as a stress reliever to be able to work on something they actually can control, in comparison with the situation outside.
While cooking at home, they are also starting to understand the flip side of the delivery industry.
“Once you start cooking at home, the more glaring the problems with China’s takeout industry become. From cheap, unsanitary packaging to the excessive use of oil, salt, and other additives, takeout offers a quick high and a harsh comedown. And that’s before accounting for plastic waste: Chinese scientists found the country’s takeout industry produced 1.5 million tons of plastic waste in 2017, up nearly eightfold in just two years.” continues Feng Jing
This gives everyone a chance to understand better the whole journey of our food, and people are becoming cautious of “near-expired food” (growing trend explained previously here).
The next trend showing positive signs is balcony gardens and vertical farming at home.
2 - How China is slowly moving from traditional restaurants to nationwide chains
According to industry reports, restaurant chains represented only 15% of the foodservice business in China in 2020, compared to 61% in the United States and 53% in Japan.
The most famous of them is Haidilao with 935 outlets and overseas expansion, though it still accounts for just 5% of China’s hot pot market.
Even though chains are not a new concept in China, their management is very different than independent franchisees, with little control, resulting in a lower degree of consistency than western-style chains following models like McDonald’s.
Now, the use of central kitchens has enabled the brand to offer a much higher level of control and standardization.
“These facilities are essentially factories where ingredients purchased by the chain’s headquarters are prepared, either partially or completely, according to a standardized procedure before being sent to restaurants.” says Zhong Shuru, researcher at Sun Yatsen University.
Advantages are obvious: chains will save on raw materials, labor and rent, and the standardization makes expansion a matter of copy-and-pasting.
And for these reasons, many customers are afraid that the McDonaldization of society could hurt traditional Chinese restaurants. Still, it is worth noting that central kitchen-reliant chains are concentrated in a handful of cuisines, such as hot pot. And a good mom-and-pop noodle store will very likely outlive many of those chains.
If you don’t know much about HaiDiLao Hot Pot Chain, watch this Youtube video.
WHAT’S NEW IN THE REST OF THE WORLD?
3 - How ethnic e-grocers are using shoppable recipes to engage with their customer base
The ready-to-eat category has been growing over the past years, and every retailer around the world has been surfing that wave.
But for grocers specializing in ethnic cuisine that thrive on social communities, many of them have decided to turn to paid user-generated recipes, and contests to engage with their customers.
Here is an example of what Weee, which focuses on Asian and Hispanic food, has been doing :
“Shoppers on Weee's site or app can favorite shoppable videos or individual ingredients. Users can also share the content, write comments and view more from the person who posted it.
The e-grocer's app has shoppable videos on individual product pages and in the “Community” part of its app, where users can find content uploaded by other users or by Weee. In that “Community” section, users can find limited-time, themed contests for shoppable videos, with gift cards offered as prizes ($5 for every featured video and $20 for five winners selected by Weee).” reports Grocery Dive
Umamicart, another e-grocer focusing on Asian ingredients, will use shoppable recipes to not only help people cook and plan meals, but also to drive product discovery, particularly for small-batch or artisanal brands.
There is definitely a way to leverage your fan base to interact with your brand.
4 - What if Alexa was now taking your order at a restaurant?
Companies have been working hard on Artificial Intelligence and Alexa-like voice assistants to help online stores deliver a service with all the attention and personality a waiter at your beloved restaurant would do.
“Paytronix CEO Andrew Robbins acknowledged that it’s tempting to skip ahead to metaverse avatars ordering on our behalf, which is certainly on the menu from other restaurant tech providers, but he said this spreading wave of technology is more likely to be centered on voice technology and guest profiles extending beyond the four walls of a restaurant. Referencing Alexa-like voice ordering, he said it’s now possible for voice-activated relations to feel “very human” compared to earlier iterations, and allow brands to project warmth and humanity, while providing personalized guest recommendations.”
Existing technology makes it possible to change the way you interact with customers depending if you were in a trendy burger place, a quiet Asian restaurant or a busy Subway store.
“When ordering through digital channels, “recommendation engines” can now go beyond basic upselling to offer personalized recommendations that are similar to a waiter showing their own personality and matching suggestions to the people seated before them. That ability is possible with artificial intelligence, which is especially valuable as an increasing amount of orders are coming through online channels.” says Robbins
This is probably a good time to rethink the way we interact with customers.
Talk to me about these stories and what it means for your business!
The FoodTech Confidential Newsletter is supported in part by:
Stcavish + Co is an F&B market intelligence company, specializing in firsthand research and other data-driven information about restaurants, hotels, and more in China.
For information about our services, please contact stcavish@stcavish.com or see us on LinkedIn.
That’s it for now
As you can imagine, while doing my research, I am finding a lot more things that didn’t make the cut here (and some are going straight to LinkedIn). Let me know if you’d like to know more and drop me a comment, just reply to this email directly or contact greg@nextstepstudio.co.