Roaaaring in the year of the Tiger 🐯 with breakfast 🍩 - the McDonald's of noodles 🍜 - Is Pet food F&B? - Do you want to see their kitchen 🤳🏻? and some more...
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Hello, I’m Greg, founder of NextStep [F&B] Studio. FoodTech Confidential is a newsletter to share innovations, trends, and big news about the Food and Beverage industry with F&B professionals, FMCG experts, tech entrepreneurs, and investors.
Basically, this newsletter will be sent every other week for now, with different topics, news, and formats.
I mostly focus on news from China, and Asia, but will be keeping an eye on what’s happening elsewhere that could have an impact on our business.
🔄 Following the first publication, we got tremendous feedback that generated a dozen calls with M&A funds from Europe and Asia who are looking into knowing more about what’s coming next from the East… I decided to make things easier for anyone who would like to get on a call and get to know me and see how we could work together on your project, research, investments, due diligence,... You can book me here 🔄 .
🌶️ THE SPECIALS OF THE DAY
In this publication, we will be going through more recent news across the board. We will try to keep a focused topic, like the last publication, when the news allows it.
But overall, the Chef, this week, can propose the following :
🍜 Who could be seen as the Chinese version of McDonald’s? We got an idea!
🐾 Should Pet Food be considered as part of F&B? When I’m looking at the current trends, I’m sure some will make the shift and surf on this growing opportunity.
🌱 Is China ready for plant-based food yet? Apparently, it will be within 5 years.
🎁 Why not go for a limited edition of your offer? A buzz is a buzz! It is…!… Right?
🤳🏻 Since people are more concerned about hygiene than ever, should you be offering live streaming from your kitchen? It could be good beyond accountability purposes.
💕 How low can loyalty go? Do you think customers will stay faithful to your brand?
🧧 Should you be having a Lunar New Year offer? Or a season-specific one based on your customer base.
🍩 What are you having for breakfast? With the year of the Tiger and the fact I just finished the Dunkin’ Donuts book, I could not stop thinking about breakfast as a business opportunity.
But wait, first of all, I wish you all a great year of the Tiger!
🔴 WHAT’S NEW IN CHINA?
1 - 🍜 Could a beef noodle store chain be the Chinese McDonald’s?
Hefu-Noodle 和府捞面 has been buzzing a lot over the past few years, and if you haven’t heard of them yet, you will soon, since they are now working on being publicly listed outside of China. LI Xuelin dropped selling mobile phones in 2012 to start making traditional beef noodles out of Jiangsu province in 2013, near Shanghai. Hefu-Noodle has now over 450 locations and is valued at over 7b RMB (over $1b USD) after raising another 800m RMB (~$125m USD) in series-E in 2021.
But beyond this, with 1,500 high-quality/high-level malls across the country, LI Xuelin has been expanding his concepts and brands to make sure he found suitable spots everywhere with “Hefu Small Noodles & Wine”, ready-to-it products, and more to come…
Like in other markets, traditional, very well-organized, processed, and scalable F&B businesses are getting very hot for professional investors in China too.
2 - 🐾 Pets are celebrating the New Year with dim sum and seafood. What are you having?
Thanks to Douyin (TikTok) and Taobao, Gen Z and millennials are discovering niche products like meal set to share among cats and dogs going easily over $60 USD per set. Some others will offer different dumplings for 49.9 to 108 RMB ($7 to 15 USD), with various combinations of meat dumplings, rice dumplings, rice cakes, biscuits, dried fish, and dried sesame-flavored cheese strings, including a Spring Festival couplets – two-line poems written on two pieces of red paper that Chinese people put on their front doors for good luck. In 2025, China’s pet food market is expected to reach 42.8b RMB (~$6,7b US) is forecast to increase 10% annually on average over the next 2 years, compared to 4% in the United States.
3 - 🌱 China puts “Future Foods” on their to-do list for the next 5 years, and that’s kind of a big deal.
This took the food tech community by storm. On Jan. 26, China’s Ministry of Agriculture and Rural Affairs released its official 5-year agricultural plan. China included cultivated meats and other “future foods” like plant-based eggs as part of its blueprint for food security going forward. And that’s kind of a big deal since China is the largest consumer of eggs and meat. This will likely create more investment opportunities and drive more research. This is also a smart way to reduce greenhouse gas emissions and meet the UN’s pressure on climate change.
4 - 🎁 People could go nuts for limited editions!
Snickers just released a Snickers Creamy Peanut Butter bar in Australia and they will be available while stocks last. Last year it was Pizza Hut who launched a limited red and white pizza following popular trends in F&B set by McDonald’s nasi goreng flavored burger, yes, you read that right… (it was a couple of years ago, but I will likely have no other chance to place a nasi goreng burger in a post ever again…).
But if you’d decide to do it, do it right!
More recently, KFC China made the top news with their special Popmart’s Dimoo blind-boxes with a fan spending over $1,600 USD to put his hands on each of the 6 Dimoo figures (with a 1-72 chance of obtaining the rarest toy in the lot)… which sparked a lot of bad buzz in reference to China’s anti-food-waste law.
📝 Note: If like me you have no idea “who or what” is DIMOO and why it matters to KFC and to many other fans, here is an article about the founder and how he made millions selling toys in blind-boxes.
🔵 WHAT’S HAPPENING IN THE WORLD?
1 - 🤳🏻 Should you be live streaming from your Restaurant Kitchen?
While in China the local FDA has asked for restaurants to put a live direct CCTV feed from the kitchen to be broadcasted on a screen to the restaurant room for diners to see for years, it could be a way for you, anywhere you are to show transparency on your process and hygiene processes. At least they think it could be a nice “marketing” tip to follow during the spread of Omicron: “Live streaming kitchen operations is one way that many restaurants have adopted to generate confidence among their customers. Restaurants also hold themselves accountable for their operations when they put their kitchen on display. Being live in front of the audience shows customers in real-time that the food is being prepared in the kitchen with the highest level of sanitation and hygiene.” So, where do you stand on this?
2 - 💕 How low can brand loyalty go?
The Loyalty Paradox report has shown that US and UK customers’ behavior has been changing a lot with the pandemic. The research shows that brand loyalty has shifted significantly with over a quarter (27.4%) of U.K and U.S. consumers showing no “brand loyalty” at all across any sectors. But, consumers expressed the most loyalty (21.5%) in brick-and-mortar retail food and drink. This compares to only 6% of consumers who claim loyalty to brands within all e-commerce sectors. The report is also insisting on the little tweaks that are definitely bringing the customers back for more.
3 - 🧧 Should you think about a Lunar New Year menu or product for next year?
“14% of global products tracked with “Chinese New Year”, “Spring Festival”, or “Lunar New Year” between Jan 2021 to Jan 2022 were launched outside of Asia” according to Innova Market Insight with the top categories being in Bakery and Soft Drinks.
4 - 🍩 Are you offering a breakfast option?
“With 95% of consumers reporting to eat during the morning an average of six times a week, the breakfast occasion is a big business with several consumer trends shaping the future of the category” reports IRI. Breakfast items, in the US, represent almost 20% of groceries budget, but it comes in different formats and sizes such as: mini/small breakfast, full breakfast, morning snack, or morning fuel up. This means room for variations in your offers.
While recently finishing the book “From around the corner to around the world - A Dozen Lessons I Learned Running Dunkin' Donuts by Robert M. Rosenberg”, I learned that Dunkin’ Donuts was the pioneer in offering breakfast away from home. But is there room for Breakfast on-demand (and time-sensitive) delivery? Maybe under a subscription model offering a new set every morning (since 22% of the people are open to trying new products for breakfast)?
💡 I could not find any example, so if you know one, leave a comment! I would be curious to look into it.
🔄 Are you looking for specific info? Let’s talk about it!
🔥 That’s it and now, it is your turn!
What was the one piece of news you never heard about?
What would you like to start exploring for your business?
If you are already working on one of those topics, any feedback you could share with our community? We will keep it confidential…🤫
Also, 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 💬, or just reply to this email directly.