Foreign caterers eager to invest in nation

Supporting role

In July, construction started in Jiading district, Shanghai, on Yum China's supply chain management center, the company's largest greenfield supply chain center project to date. The 61,000-square-meter facility — scheduled for completion in 2024 — will serve as the headquarters for supply chain operations.

Wat said: "Our world-class supply chain is one of our key business enablers, and has helped us mitigate the disruption brought by COVID-19. As our supply chain capabilities go from strength to strength, we believe the center will better support more stores, sales channels and products, while helping drive long-term growth."

As of the end of March, Yum China had 32 logistics centers. It plans to expand its logistics network to 45 to 50 centers over the next five years.

As part of its goal to achieve net-zero value chain greenhouse gas emissions by 2050, Yum China launched KFC's first green pioneer stores in Beijing and Hangzhou, capital of Zhejiang province, in April.

Wat said: "We are committed to driving meaningful change and steering the restaurant industry toward net-zero emissions. We will continue to explore the use of innovative technologies in restaurant construction and operations to promote sustainable development and contribute to the low-carbon economy."

In addition to fast-food chains, high-end restaurants are setting foot in China to meet local customers' rising demands for fine dining and service.

This month, luxury brand Louis Vuitton opened The Hall restaurant in Chengdu, the Sichuan provincial capital — its third restaurant globally. The others are in Paris and Tokyo.

Meanwhile, Wolfgang's Steakhouse from New York is opening a branch in Shanghai, its sixth on the Chinese mainland.

Peter Zwiener, who owns Wolfgang's Steakhouse, has flown to China several times in the past three years to check on his stores as business expands. He inspects each of his 35 outlets worldwide to ensure that they operate on the same level.

"China is growing rapidly. We opened in Shanghai, then Beijing, Shenzhen and Hangzhou. We want to be in all the nation's major cities," he said.

Zwiener said the pandemic has changed the entire catering industry, and in addition to food being served in the restaurant, he has to consider how to bring food to customers at home. One of his solutions is the takeout market.

"It's harder for high-end restaurants to do deliveries. You must make sure the packaging is correct, and you have to rely on the riders to deliver the food quickly and to avoid it being shaken too much during transit," he said.

Besides launching deliveries, the business uses a trailer in Beijing as a portable kitchen to cook its steaks.

"We're collaborating extensively with other partners such as high-end hotels, where we can perhaps open a pop-up on weekends, or we could maybe take over part of their kitchen," Zweiner said, adding that the portable kitchen will enable the business to join many outdoor events.

He also plans to take the portable kitchen to a city where the business doesn't yet have a restaurant.

Zweiner said more Chinese customers are enjoying top-quality steak, and Wolfgang Steakhouse's best-selling steak worldwide is the porterhouse, which is also a popular choice in China.

"A porterhouse is too big for one person, so we slice it so that more diners can share it. Such sharing is really suitable for Chinese customers," he said.

The business also has a wide range of wine and whiskey to pair with steaks, and Zwiener said Chinese customers are highly knowledgeable about wine and have sophisticated tastes.

The company's new branch in Shanghai is set to open in April, and Zwiener is already looking to expand in Chengdu, Suzhou and Nanjing, capital of Jiangsu.

He doesn't think that the pandemic will change his plans in China. "People have to eat, and eventually this coronavirus will go away one day," he said.

Coffee fever

According to the 2022 China Coffee Consumption Insight Report released by the food delivery platform Meituan in July, the market size of the made-on-site coffee industry in China was 8.97 billion yuan in 2021, a year-on-year rise of nearly 42 percent, and it is expected to reach 15.79 billion yuan in 2023.

Lu Yongchen, CEO of Tim Hortons China, senses that the Chinese coffee market is developing rapidly. "I think that with the increasing demand from Chinese consumers, this market will be more vigorous," he said.

He said about 200 to 300 cups of coffee per capita are drunk annually in the United States and Europe, but the corresponding figure for China is about 10 cups. "With consumption habits changing, the latter number will rise from 10 to 100," he added.

Since opening its first branch in Shanghai in 2019, Tim Hortons has launched more than 500 stores in some 30 Chinese cities.

"We initially opened our stores in first-tier cities, as they have a large population base and a more mature coffee consumption market," Lu said.

Taking Shanghai as an example, he said that as of June 30, there were 7,857 cafes in the metropolis, making Shanghai the city with the most cafes in the world, with 3.16 per 10,000 people.

"This situation is quite favorable for us, so we have more than 200 stores in Shanghai," he said, adding that the city's coffee consumption atmosphere is more personalized and diversified than elsewhere, as it includes major brands and independent cafes.

"We are also expanding to third- and fourth-tier cities. In the second quarter, we temporarily slowed the pace of expansion due to the pandemic, but since August, we have stepped it up by opening stores in many cities, including Jinan, Jiaxing, Wuxi, Yangzhou and Zhuhai," Lu said.

By the end of 2025, Tim Hortons' China unit plans to have opened 2,750 stores in the nation, according to Lu.

Tim Hortons' Chinese business went public on the Nasdaq Composite Index in the US at the end of September. Lu said that since entering China in 2019, the company has attracted several rounds of investment from enterprises such as Tencent, Sequoia Capital and Eastern Bell Capital.

"We achieved revenue of 404 million yuan in the first half of this year, a rise of more than 70 percent year-on-year. Despite the strong impact of the pandemic in the first six months, revenue growth remained strong," he said.

Collaboration is one of the ways in which Tim Hortons reaches targeted customers. In August, it opened Tims x Easy Joy cafe in Beijing with Easy Joy coffee. Since 2020, the Canadian chain has collaborated with Tencent E-sports to open co-branded coffee stores in Shanghai and Shenzhen, Guangdong province, providing a new experience for gaming fans.

Ready-to-drink coffee products in velvet coco and chestnut flavors will be jointly launched by Tim Hortons and Freshippo next month for sale at the grocery chain's 300-plus stores.

Lu said, "Our co-branded coffee products will fully exploit the dual advantages of our high-quality products and Freshippo's multiple sales channels to serve a wide range of consumer groups."