Workers from Shandong Nichirei Foods Co Ltd process chicken for premade food in Yantai, Shandong province, in May. [Photo/China Daily]

Shandong, Henan, Guangdong tops in firm counts, offer huge export potential

Early in October, workers at a food processing workshop of Shandong Lufeng Group were busy processing chicken into convenient prepackaged meals, which would soon be sold across China and also overseas.

Lufeng, located in Anqiu, Shandong province, produces over 600 types of premade food products, including frozen meats, cooked meats, frozen vegetables, canned goods, flour-based food, seasonings, and salted vegetables.

These have been sold to more than 10 countries and regions, including Japan and Germany.

The company, which recently participated in food expos in Canada and Germany, where its products garnered great interest, is keen to expand its global presence, according to Yun Shujie, deputy general manager of Lufeng.

"Several people have shown great interest in our products, and there is potential to secure more orders from overseas markets," he said, adding that overseas sales accounted for half of the company's total sales last year.

China has distinct advantages in developing its premade food industry as the country's agriculture is rich in food variety, which, in turn, provides abundant raw materials for the industry, Yun said.

An increasing number of Chinese premade food companies are eyeing global expansion by producing a wide variety of high-quality products to meet diverse consumer needs.

The premade food industry has developed rapidly over the past few years, with the number of such companies surpassing 70,000 in 2022, according to a white paper on the development of China's premade food industry released during the International Pre-cooked Food Industry Conference in Foshan, Guangdong province, in March.

Shandong, Henan and Guangdong are the top three provinces in terms of the number of premade food companies.

Diverse tastes

According to standards released by the China Cuisine Association, premade food can be classified into four categories in terms of form — ready to eat, ready to heat, ready to cook and ready to mix.

Yun said different regions have different food demands, and diverse agricultural products allow premade food companies to meet those needs.

For instance, Shandong's abundant agricultural resources have provided a solid foundation for companies in the province to produce rich varieties of premade food. Production of grains, fruits, vegetables, meat, eggs, dairy products and aquatic products from Shandong has ranked among the top in the country for many years.

In addition, Shandong has been the top province in terms of agricultural product exports for 24 consecutive years. Among the exported agricultural products, deep-processing products account for 47.7 percent, according to statistics from the Shandong Provincial Department of Commerce.

Over 8,500 companies are engaged in premade food production in the province, data from the Shandong Provincial Department of Agriculture and Rural Affairs show.

To develop customized foods, Lufeng has more than 10 employees dedicated to research and development, some of whom have majored in food nutrition engineering.

Other companies are also prioritizing foods that cater to varied tastes.

Shandong Nichirei Foods Co Ltd, a joint venture located in Yantai, studied roadside vendors in Japan and successfully rolled out frozen imagawayaki, a type of Japanese pancake.

"We selected five flavors of imagawayaki based on customer preferences," said Koizumi Minoru, general manager of Shandong Nichirei.

The red bean, egg yolk and matcha flavors are particularly popular in Japan, and the company plans to introduce peach, milk tea and mango flavors in the next phase.

To enrich its product profile in Japan, the company has introduced South Korean food products, including cheese rice cakes and spicy white cabbage.

As a pioneer in the export of premade food to Japan, Shandong Nichirei has made its products available in major supermarkets and convenience stores across Japan. Its products are also exported to North America.

In Dalian, a coastal city across the Bohai Sea from Shandong, premade aquatic food products are gaining popularity overseas.

"The export volume of our premade aquatic foods has increased every year, especially seaweed salad, which has always been popular," said Gai Quanhong, chairman of Dalian Gaishi Food Co, which is based in Lyushunkou district of Dalian, Liaoning province.

A leading company that specializes in prepared appetizers like seaweed, mushrooms and seafood salad, Gaishi has exported its products to more than 60 countries and regions, including Japan, the United States, Europe and Southeast Asia.

The company's exports to countries and regions involved in the Belt and Road Initiative last year exceeded 30 million yuan ($4.1 million), accounting for about 16 percent of its total export value. Last year, Gaishi spent 5.87 million yuan on market research and developing foods that meet consumer demand.

Employees at Dalian Gaishi Food Co deal with seaweed for premade dishes at the company's factory in Dalian, Liaoning province, in January 2021. [Photo/China Daily]

Quality matters

"Quality is crucial to premade food companies," Yun of Lufeng said.

Lufeng implements comprehensive quality and safety control management throughout the production process, from sourcing raw materials to packaging.

The company has developed over 300 hectares of standardized farmland to produce fruits and vegetables and 22 high-standard farms for raising poultry.

"By developing our own farms, we are able to guarantee food safety from the raw materials," said Yun.

Gai also emphasized the importance of food quality.

"Food has different attributes compared to other industrial products, and each country has specific standards for food imports," he said.

Companies looking to export must conduct thorough research on the food quality standards of different countries, he added.

While expanding overseas, premade food companies have also started to tap the domestic market with quality products as Chinese consumers are increasingly demanding premade foods.

China's premade food market reached 419.6 billion yuan in 2022, a year-on-year increase of 21.3 percent. It is estimated that the market will reach 1.072 trillion yuan by 2026, according to the white paper released at the Foshan conference.

"The premade food industry has just started. We have been developing overseas markets with advanced management and production techniques for three decades, which gives us an advantage to tap the domestic markets with quality products," said Shandong Nichirei's Koizumi.

"In the future, we will expand the domestic market by offering products of the same quality as those (that are) exported," Koizumi said.

Gaishi started developing the domestic market several years ago, which has contributed to the overall growth of the company's business.

Gaishi's semiannual report showed a total revenue of 226 million yuan for the first half of 2023, a year-on-year growth of 28.79 percent.

In 2018, the company contributed to the revision of a national food safety basic standard for seaweed and edible fungi, aligning the "seaweed salad" product standard with international standards, allowing seaweed salad to be sold domestically.

Gai said having a bestselling single food item greatly contributes to building brand influence, and its seaweed salad holds great significance for the company.

Sources from the Dalian Administration for Market Regulation said that the city has formed eight premade food clusters, covering various categories, such as seafood, fruits and vegetables, poultry and livestock.

Among these, aquatic products account for 46 percent of the total, with seaweed being the largest single product.