This is an English adaptation of a FoodBud historical article originally published on August 24, 2021.
Image credit: Pexels
Yuyuan Culture Food & Beverage Group accelerated the rollout of Songhelou noodle shops in the first half of 2021, signing nearly 50 locations.
On the evening of August 23, 2021, Yuyuan Inc. released its first-half 2021 results. Revenue reached RMB 22.724 billion, up 12.68% year on year, while net profit attributable to shareholders of the listed company was RMB 1.409 billion, up 31.10%.
Its catering management and services business generated RMB 410 million in principal revenue in the first half, with business costs of RMB 140 million.
During the 2021 “55 Shopping Festival,” in coordination with the “515 Fosun Family Season,” Yuyuan Culture Food & Beverage Group used product, channel, marketing and promotion efforts to lift all-channel sales across its restaurant and food-and-beverage brands above RMB 150 million, up about 150% year on year.
Cultural dining and food-and-beverage are among Yuyuan’s priority sectors for its next phase of growth. Its cultural dining business ranks among China’s top 100 restaurant companies and spans full-service restaurants, casual dining, food courts, and trend-led entertainment formats.
The portfolio includes Shanghai famous trademarks, century-old Chinese heritage brands, and intangible cultural heritage projects, including Lubolang, Shanghai Old Restaurant, Songhelou, Dexingguan, Songhelou Su-style Noodle Shop, Nanxiang Steamed Bun Restaurant, Chunfeng Songyuelou, Ningbo Tangtuan Restaurant, and Lao Chenghuangmiao Snack Plaza.
Image credit: Yuyuan Culture Food & Beverage Group WeChat account
In the first half of 2021, Yuyuan Culture Food & Beverage Group continued its chain-development strategy and accelerated Songhelou noodle shop expansion, signing nearly 50 stores.
Songhelou noodle shops had entered core commercial districts in eight cities: Beijing, Shanghai, Suzhou, Nanjing, Ningbo, Hangzhou, Wuxi, and Shenzhen. As of June 30, 2021, the chain had 32 stores in operation and 37 signed but not yet opened, with an expected push toward 100 stores by year-end. First-half Songhelou sales approached RMB 200 million, with nearly 50% coming from the chain noodle-shop business.
According to CEIBS Business Review, Songhelou’s noodle shops were seeing average daily table turnover of 6 to 8 times, with the highest-performing store above 10 turns, meaning more than 10 groups of guests used the same seat in one day. Comparable restaurant brands in the same sector may see only 5 to 6 turns.
For the “two buns” business, Nanxiang steamed buns and Songyuelou vegetarian buns continued to refine single-store operations and explore future expansion models.
At the store level, in the post-pandemic first half of 2021, 11 stores across brands including Lubolang, Songhelou, and Songyuelou set single-day historical sales records during holidays. New stores under Songyuelou, Shanghai Old Restaurant, and Dexing Restaurant also opened after upgrades. In the first half, Yuyuan Culture Food & Beverage Group’s catering business rose 15 places in industry rankings and entered China’s top 60 restaurant companies.
Yuyuan’s food-and-beverage business had also been integrated and upgraded, gradually forming a traditional Chinese food-culture product matrix centered on the “Lao Chenghuangmiao” brand. Legacy products such as spiced beans and pear-syrup candy were being refreshed, while the company also expanded into leisure snacks, restaurant food products, herbal drinks, and specialty alcoholic beverages, aiming to connect the food value chain from farm to table.
The company also held a 55.50% stake in Ruyiqing Biotechnology Co., Ltd. Ruyiqing focuses on R&D, industrialized cultivation, and sales of fresh edible mushrooms. Its annual sales volume ranked among the top three in the sector, with a sales network covering 25 provinces, municipalities, and autonomous regions in China.
In 2018, Yuyuan acquired 100% of Songhelou Food Culture and 100% of Songhelou Catering for a total price of RMB 1.638 billion. Songhelou Food Culture held a 20% stake in Suzhou KFC Co., Ltd., participating in the development of fast-food chains while also operating several Suzhou heritage brands, including Suzhou Wufangzhai and Xinjufeng.
In February 2021, Yuyuan added one new external investment: Suzhou Desheng Catering Management Co., Ltd. Through Desheng Catering, Yuyuan held the 20% stake in Suzhou KFC.
Image credit: Qichacha
In August 2020, Yum China acquired a 25% stake in Suzhou KFC for USD 149 million, increasing its ownership to 72%. As a result, Suzhou KFC’s results began to be consolidated into Yum China’s financial statements.
According to Yuyuan’s 2021 interim report, Desheng Catering had period-end net assets of RMB 117 million and net profit of RMB 38.455 million. Suzhou KFC’s period-end balance was RMB 710 million, with investment income of RMB 14.028 million.
Suzhou KFC contributed RMB 600,000 in recognized rental income to Yuyuan during the period, compared with RMB 450,000 in the same period of the previous year.
Note: Store-count targets and transaction, equity, and financial figures are historical as of August 24, 2021.