This is an English adaptation of a FoodBud historical article originally published on November 20, 2021.
When capital markets cool, Juewei Foods has tended to move quickly on higher-quality foodservice assets, with more room to push down valuations.
FoodBud’s view in November 2021 was that among China’s three major duck-neck and braised-snack players, Juewei Foods, Zhou Hei Ya, and Huang Shang Huang, Juewei had built the strongest executive bench. Its advantage came from three connected capabilities: a scaled supply chain, a disciplined franchise system, and an increasingly active investment platform.
According to Juewei Foods’ 2021 interim report, the company had participated in nine funds through its investment platform Shenzhen Wangju. Two of those funds had not yet begun investing: Juele Crayfish and Juele Phase II. Across direct and extended investments, FoodBud estimated that Juewei had exposure to roughly 50 projects.
Juewei’s stated strategy was consistent: deepen its duck-neck core business while building a broader food ecosystem.
Juewei’s store expansion supported continuous supply-chain iteration. FoodBud argued that in the big-data era, first-mover advantage in supply chain becomes scale advantage.
Juewei’s management background mattered. Some executives had previously worked in pharmaceuticals, while many older food entrepreneurs in China had come up through restaurant tables and kitchens. The pharmaceutical background brought stronger marketing discipline and a higher sensitivity to traceability and safety systems.
FoodBud highlighted two implications of stronger food-safety regulation and end-to-end traceability:
For ready-to-eat braised snacks, freshness, taste, safety, and timely supply are critical. Juewei used production subsidiaries as regional manufacturing bases for its national sales network. The operating model was built around optimal cold-chain delivery distance: production close to points of sale, fast replenishment, and maximum freshness.
Juewei’s supply-chain layout used a 300-500 kilometer radius. As of June 30, 2021, the company had built a network centered on 21 production bases, including two under construction, and worked with nearly 2,000 cold-chain logistics vehicles. The operating target was same-day order, same-day production, same-day delivery, and sale within 24 hours.
The economics depend on matching production efficiency with supply efficiency. Same-day round trips are the most economical model; drivers are the largest cost. More stores improve route density, raise supply-chain efficiency, and lower unit cost.
Juewei general manager Dai Wenjun had previously said that after more than a decade, the company’s core advantages were chain-store management capability, franchisee capability, training, and information systems.
Juewei built a franchise management mechanism around three elements: product mix, single-store model, and franchise system. It used franchisee magazines, franchisee conferences, owned media, micro-courses, and model-franchisee recognition to align goals, rules, and behavior.
In 2012, Juewei established its first franchise committee and began integrating franchisees into governance. The system later expanded into four levels: national, branch, regional, and local battle-zone committees. FoodBud said the battle-zone level was especially important for lower-tier market penetration.
By 2021, Juewei had built 128 battle zones, with around 100 battle-zone franchise committees supporting channel expansion. The broader franchise committee system included more than 3,000 franchisees.
From the franchisee side, FoodBud summarized the requirement as presence, commitment, and contribution:
The incentive system was direct: strong franchisees could continue opening stores; weaker performers could be blocked from new openings. Each year, Juewei sent a group of franchisees to Singapore for training, reimbursing 80% of the cost for those who graduated.
By the time of the article, Juewei had reduced its franchisee base to around 3,000 and improved franchisee quality. New franchisees needed to be introduced by existing operators. Older franchisees opening new stores already had more operating experience. On store management, around 50% of stores could be tracked in real time, while the rest were updated daily.
FoodBud noted that restaurant brands tend to have low consumer loyalty, so store density matters. Juewei was expanding by 800-1,200 stores per year. For site selection, franchisee plans and Ele.me recommendations were useful, but FoodBud said Juewei’s own information system had proved more valuable because it reflected long-term accumulated operating data.
After reviewing adjacent industries, Juewei focused its investment strategy on companies that were past the earliest stage. FoodBud described the approach as avoiding 0-to-1 and 1-to-10, and instead helping companies scale from 10 to 100.
The opportunity had two parts. First, foodservice and food together represented a market worth more than RMB 10 trillion, with brand formation and rising concentration as long-term trends. Second, once an industry becomes scaled, standardized, and formalized, its ability to access capital increases.
Juewei invested through Shenzhen Wangju and through partnerships with external investment institutions. The focus was on sectors closely related to its core strategy, with the aim of exploring second and third growth curves.
According to Juewei Foods’ 2021 interim report, Shenzhen Wangju directly invested in 13 companies, including Hefu Noodle and Yaomazi.
Through Shenzhen Wangju’s role as an LP in Tomato Capital, Juewei extended into two funds. One portfolio company, Wangjiadu Food, the supply-chain company associated with Meizhou Dongpo, was planning a listing.
Juewei also formed two funds with Ele.me. Juele Capital was actively investing, while Juele Phase II had not yet started. The Juele Capital portfolio was mainly focused on restaurant brands.
FoodBud also described three other funds. One appeared designed to diversify equity participation, including an investment in Shengxiangting. Wuhan Lingdian, already consolidated into Juewei’s financial statements, mainly supported Juewei’s online prepackaged-product sales and channel development. Another fund, linked to Jingubang, was mainly used to control companies inside the Liaoji Bangbangji brand system.
A newer Chengdu Xinjin fund included participation from Qiaqia Food, Tencent-linked capital, and CATL-linked capital. Its first project was Lujiangnan. Based on Shenzhen Wangju’s stake in Lujiangnan, FoodBud estimated Lujiangnan’s valuation at RMB 910 million.
Another fund appeared more focused on supply chain. Yaomazi, one of its investees, had begun IPO tutoring. Qianwei Gaotang was compared with Dufengxuan, a similar company listed on China’s New Third Board.
Juewei’s investment path began with braised-snack formats, moved into light foodservice, and then uncovered the compound-seasoning segment.
The investment model relied on Juewei’s existing supply chain and franchise system. The company used industrial investment plus value-added services to lift portfolio-company valuations. FoodBud described this through Juewei’s “six shared capabilities”: procurement, warehousing, capacity, delivery, sales systems, and intellectual resources. Shared procurement was the easiest; shared production was the hardest.
Juewei’s strongest contribution was supply-chain enablement. Its supply chain covered procurement, production, warehousing, delivery, sales, and digital intelligence. Each part could be separated and applied to portfolio companies. The more supply-chain sharing there was, the stronger the synergy. Hefu Noodle and Happiness Cake were cited as companies that had used Juewei’s supply-chain system.
For Liaoji Bangbangji, Juewei mainly experimented with brand enablement. Liaoji’s stores had previously been located in malls, which meant higher labor, rent, and operating costs. Juewei helped create smaller community-store formats and braised-food counters inside supermarkets, then used its franchisee system to support opening more locations.
Juewei had previously said that by 2025, 70-80% of its energy, resources, and capital would still go into its core duck-neck business. FoodBud’s reading of the financial reports, however, was that investment had already become one of the company’s main businesses.
In the second half of 2021, Juewei’s funds were still active. When the restaurant market was hot, investing in supply-chain companies let Juewei sell infrastructure services to foodservice entrepreneurs. When capital markets cooled, the same platform could acquire better restaurant projects at lower valuations.
Juewei’s 2020 annual report showed long-term equity investments of RMB 1.56 billion. By the third quarter of 2021, that figure had expanded to RMB 2.0 billion. FoodBud expected the 2021 annual report to reveal more investment projects. The broader logic was to use investment leverage around the core industry to buy into sector growth.
FoodBud also saw overseas markets as a possible next growth engine. It divided overseas demand into four groups: tourists, overseas Chinese immigrants, Chinese consumers abroad, and non-Chinese consumers influenced by Chinese consumers.
Juewei began entering Singapore in 2017 and started developing the Hong Kong market in 2018. FoodBud said overseas single-store revenue was higher than in mainland China and had strong development value. In Canada, Juewei’s strategy was to consolidate and acquire existing duck-neck stores. The open question in November 2021 was whether overseas expansion would become more attractive once the pandemic stabilized.
Note: IPO plans, valuations, investment amounts, 2025 guidance, and other forward-looking figures are historical references from the 2021 source article.