This is an English adaptation of a FoodBud historical article originally published on November 1, 2021.
Juewei Food disclosed in its third-quarter report that revenue for the first three quarters of 2021 reached RMB 4.847 billion, up 24.74% year on year. Net profit was RMB 964 million, up 85.39%.
Within its core business, revenue from marinated food products was RMB 4.4 billion, with fresh products exceeding RMB 4 billion. By region, Central China, South China, and East China contributed 28%, 22%, and 21% of sales, respectively.
The clearest highlight in the quarter was Juewei’s investment portfolio. Cash-outs from Hefu Noodle and Qianwei Central Kitchen had a combined RMB 210 million impact on net profit.
Qianwei Central Kitchen listed on China’s A-share market on September 6, 2021. Its market value was RMB 1.9 billion at listing and had risen to RMB 5.27 billion by the time of the article. Before the IPO, Juewei’s Shenzhen Wangju held 5.13%; after the IPO, its stake was 3.85%.
According to Juewei’s interim report, it had invested RMB 50 million in Qianwei Central Kitchen for the 5.13% stake.
Hefu Noodle was another significant investment. Shenzhen Wangju Capital invested RMB 230 million in total and held 23.08%. On October 25, 2021, Juewei announced that it had cashed out RMB 179 million in Hefu’s latest funding round. Shenzhen Wangju Capital still held 16.9%.
Investment income for the first three quarters of 2021 was RMB 268 million. Juewei’s third-quarter filing showed long-term equity investments of RMB 2 billion.
Through Shenzhen Wangju Capital, Juewei has reached more upstream and downstream projects across the industry.
Beyond Qianwei Central Kitchen’s listing, Yaomazi was also preparing for an IPO track, having signed a listing tutoring agreement with CICC in the prior year. Juewei invested RMB 130 million in Yaomazi for a 13.68% stake. Reported figures cited in the article showed Yaomazi Food’s 2019 revenue above RMB 400 million and profit in the tens of millions of RMB.
Hefu Noodle was also viewed as a likely listing candidate. In the first half of 2021, it generated RMB 850 million in revenue and turned from loss to profit.
Another high-profile project was Shengxiangting in Hunan. Juewei entered through two funds. One was Hunan Siyiwuwu, in which it contributed RMB 297 million and entered during the Series A round. The other was Hunan Chongxi Leisheng, through which Juewei’s disclosed investment was RMB 28 million, with a 77.35% stake in that vehicle.
When Hunan Chongxi Leisheng invested in Shengxiangting in 2019, it held 11.53%. After Shengxiangting later increased capital, Hunan Chongxi Leisheng’s stake rose by another 14.47%, reaching 26% in total. The entry valuation may have been about RMB 140 million. After Tencent entered in Shengxiangting’s latest round, the company’s valuation had reached around RMB 1 billion.
Juewei’s investment logic combines defensive investment around marinated foods, supply-chain-side investment, and financial investments extending toward the front end of foodservice stores. The company’s stated advantage is its nationwide factory network, supply chain, cold chain, and franchisee resources, which can be shared with portfolio brands including Liaoji Bangbangji, Jingwu Duck Neck, and Lujiangnan.
In meeting notes dated June 23, 2021, Juewei described market expansion as closely tied to traffic flow. Expansion was still concentrated in first- and second-tier cities or fifth- and sixth-tier cities, while third- and fourth-tier cities grew more slowly because traffic was more stable.
The company said its earlier channel strategy moved from fully penetrating first- and second-tier cities to third- and fourth-tier cities, then to fifth- and sixth-tier cities. In site mapping, some locations were treated as basically confirmed based on nearby store revenue stability. Store opening was not described as blind expansion.
Juewei also described its franchise protection radius as dynamic. If franchisee B opened near franchisee A and affected A’s business, the company could coordinate a sale of B’s store to A, aiming for a combined result better than the two stores operating separately.
Juewei described the prepared-dish market as large but fragmented, similar to China’s leisure snack market more than a decade earlier. It noted that Weizhixiang was the first listed prepared-dish company, and that many companies of similar scale existed in Hunan.
The company linked its investment in compound seasonings to a “light meal” logic: light meals include prepared components, and prepared components include compound seasonings.
Juewei distinguished marinated foods and prepared dishes. Brands such as Liaoji Bangbangji and Ziyan Baiwei Chicken were categorized as fresh-food products rather than prepared dishes. Fresh foods have short shelf lives, short production cycles, and short consumption cycles, while prepared dishes have longer shelf lives.
Prepared dishes emerged because restaurants cannot make every item onsite when menus are broad. Items such as pork knuckle and pig trotter are often prepared in advance, and the practice was already mature in foodservice.
Juewei also separated marinated foods for the dining table from leisure marinated snacks. Leisure marinated products were described as an incremental-growth category within an expanding market. Table-service marinated products, by contrast, were described as a large but fragmented existing market where brands with strong enough supply chains could replace older players.
Juewei said its signature flavor is consistent nationwide, while other products vary by region. Its supply chain is largely one-to-one, with a factory within a 300-350 km range. Hangzhou and Hunan flavors may differ, but the signature flavor remains unified because flavor recognition matters.
The company cited examples of national flavor differentiation among leading players: Huangshanghuang’s saucy-spicy profile, Zhou Hei Ya’s sweet-spicy profile, and Juewei’s numbing-spicy profile.
Products were grouped into authority products, regional products, and local specialties. Crab claws sold in Jiangsu and Zhejiang were not sold in Hunan; crayfish formats also differed between north and south. Guangdong sold shrimp tails mixed with garlic, while Beijing sold shrimp tails by the piece. The one-to-one supply chain helped support such regional differences because non-national items are not produced in high enough volumes for centralized manufacturing.
Juewei identified three issues facing leisure cooked foods: flavor fatigue, brand aging, and consumer cohort change. Regional flavors were generally stable, while short-term crossovers between local categories could address periodic flavor fatigue. Sichuan cuisine was cited as a national flavor base, while Guizhou and Yunnan cuisines were described as more regional.
Juewei began building its own factories in 2009. Because it sells fresh products, it needed frequent contact with franchisees. From a logistics perspective, the most economical distance was initially 300-350 km, allowing same-day delivery and return with one truck and one driver.
Around 2010, cold-chain development accelerated. With changes in transport networks, packaging and freshness-preservation technology, and cold-chain logistics, Juewei upgraded factories and cold-chain systems. By 2012, after achieving 80%-90% vacuum packaging, the company believed same-day delivery and return could reach 600 km.
In 2012, Juewei planned nine core factories nationwide. Core factories radiated in a ring structure, while non-core factories extended outward in an umbrella structure. Some factories were later consolidated, including a Sichuan-Chongqing factory combination. Jiangsu-Zhejiang-Shanghai retained two major factories: a new Nanjing factory under construction and Shanghai Jinshan.
Juewei described ongoing revisions to its factory network. Beijing-Tianjin-Hebei had one core factory; the Pearl River Delta had Dongguan; the central triangle had Hunan and Wuhan; the western triangle had Sichuan-Chongqing and Xi’an; and Northeast China had Liaoning. The company later canceled Xi’an’s core-factory status because Sichuan-Chongqing and Henan were also core factories. Liaoning was downgraded to non-core status after a factory was built in Harbin, partly because return logistics in Northeast China could be difficult, such as snow-related road closures between Heilongjiang and Liaoning. Liaoning became an emergency factory for Beijing-Tianjin-Hebei.
Juewei expected the industry to enter a period of stronger regulation, with tighter food safety oversight. The company said many small and medium brands would face higher pressure and might exit early. It noted that environmental protection facilities alone could cost several million RMB when building a food factory.
The company said it had pursued gradual capacity renovation, improvement, optimization, and process upgrades, rather than raising capacity by 30% at once, to reduce risk from new standards.
Its view was that cold storage at retail needed to be addressed first, followed by cold-chain distribution and low-temperature processing. Most branded companies had already handled those areas, leaving production as the heavier investment challenge. Juewei said this was also one reason it did OEM manufacturing: from an investment perspective, it could reduce competitors and occupy the front end of the industry.
Juewei described its model as sitting between leisure snacks and foodservice. It also invested in many restaurant targets, while recognizing that restaurant brands iterate quickly.
The company said Chinese foodservice is more complex than Western foodservice, using McDonald’s and KFC as examples of lower-complexity models. It cited Panda Restaurant as a larger overseas example of Chinese foodservice moving toward lighter meals, but said it did not believe Chinese foodservice would become highly light-meal-oriented to the point where everyone eats a bowl of noodles.
Juewei viewed Tai Er Sauerkraut Fish’s direction as correct: strong enough supply-chain capability can support multi-brand operations.
For Chinese foodservice, Juewei expected a light-meal trend, with different brands developed under the same supply chain. It said cuisine taste has inherent stability, but restaurant brands do not have especially strong loyalty. From a light-meal industry perspective, Juewei favored multi-brand operations.
For portfolio companies, Juewei said supply-chain support is relatively straightforward, while operational support takes time. It was helping Liaoji optimize its operating model. For Hefu, which is concentrated in first- and second-tier cities, Juewei described a “six shared” model: shared procurement, shared warehousing, shared distribution, shared production, shared sales, and shared governance. Shared production was considered the hardest; shared procurement the easiest. Shared governance required joint research and model testing because light-meal chains such as Hefu have longer service chains, including dine-in and longer service time.
Note: IPO, valuation, investment, and forward-looking figures above are historical, based on the article dated November 1, 2021.