Key Topics Covered in this Report
- Overview of the Western-style fast food and casual dining market and notable market factors
- Product innovations and marketing highlights in the Western food market
- Dining spends in different scenarios and preferences for Chinese and Western food
- Changes in the penetration and consumption frequency of major Western-style meals
- Acceptance of and interest in Western food in different regions
- Premiumisation factors for Western food and preferences for different forms of localisation
The Western foods market is currently facing the challenge of high penetration but low consumption frequency. To break through, brands must focus on embedding themselves into everyday scenarios, stronger localisation and forging a healthy image.
Roolee Lu, Director, China Insights
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Executive summary
- Key issues covered in this Report
- Definition
- What you need to know
- Market overview
- Market factors
- Market highlights
- Consumer trends
- Key to brand success
- What we think
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The market
- Market overview
- The growth rate of the foodservice industry has slowed, and the
re is insufficient momentum to drive a recovery in the consumer market - Western-style fast food supports growth as regional Western-style casual dining brands develop rapidly
- Graph 1: year-on-year growth rate of total retail sales of consumer goods, year-on-year foodservice revenue growth rate and consumer confidence index, 2021-25
- The expansion of leading brands is driving increased concentration in the Western-style fast food sector
- Price wars intensify, and profitability faces challenges
- Social media-friendly meals and the ‘first-store economy’ help regional Western food brands expand nationwide
- Market factors
- Policies drive the further high-quality development of the industry
- Awareness of weight management is increasing in step with the inexorable rise of healthy eating
- Western-style restaurants are tapping potential in lower-tier markets
- The act of dining is invested with significant emotional value
- Personalised experiences can create headroom for premiumisation
- The craze for burger festivals is driving the popularisation and premiumisation of the hamburger
- Market highlights
- Emphasise improved processes and enhance the sense of product quality
- Optimise the structure of ingredients and dishes to create healthy products
- Funnel marketing activities toward shaping a healthy image
- Fusing Chinese and Western cuisines, leading brands focus on local flavour innovations
- Small and medium brands are also actively adopting localisation strategies
- On-premise drinks are now an important business support
- Western food brands demonstrate their innovative spirit through drinks
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The consumer
- Summary of key demographics and demands
- Intentional spending continues; health and speciality features provide a foundation for premiumisation
- Significant difference in per head spending across various scenarios; social scenarios have more premiumisation potential
- Consumers are relatively price-sensitive in everyday dining scenarios
- Late night snacking consumption patterns show noticeable differences between different city tiers
- Consumers also tend to be price-sensitive in social dining scenarios; family dining is even more subject to budget constraints
- Multi-generation families are more concerned about value for money when dining out
- Good value meal deals help increase the frequency of Western dining
- ‘Freshly made’ is the most critical premiumisation factor; both health and speciality features should be emphasised
- Speciality drinks and unique cooking techniques can drive premiumisation strategies
- 25-39 year olds particularly recognise the premium value of speciality food
- Pet owners recognise a broad range of premiumisation factors
- Couples without kids look for speed; multi-generational families seek out special meal deals
- Western food is seen as a reward, with a desire to try new things and a high-quality environment driving consumer decisions
- Western food is more often seen as a reward
- Chinese food has a firm hold on everyday occasions, while Western food is more seen as a reward
- Western food has an advantage among women; try to attract more men through their partners
- Western food risks losing young consumers to the guochao trend
- Multi-generation families have a higher preference for Western cuisine
- Lower-tier cities have as much of an appetite for Western food as Tier 1 cities do; their potential has not been fully tapped
- Experiencing foreign flavours and enjoying the ambience/surroundings are the most important selection drivers for Western food
- Fast service helps Western cuisine reach a broader audience
- Improved flavours can boost premiumisation potential
- 25-29 year olds are more likely to be driven by specific dietary needs
- Pet owners are driven by a variety of factors; Western food brands can actively leverage the pet economy
- Increasing consumption frequency is now the core engine of growth; flavours must be localised appropriately
- Consumer knowledge of each category is maturing, making increasing consumption frequency a key focus for growth
- Leverage hamburgers, sandwiches and salad/light food to precisely meet consumer demand
- Focus on the growth potential of group dining scenarios
- Women and people aged 25-29 consume Western food more frequently
- American and Italian cuisines have greater penetration; French and Russian cuisines have greater potential
- Explore the French dining market from the perspective of the 25-29 age group and dating scenarios
- Lower the threshold for experimentation, promoting the market expansion of Russian cuisine across age groups
- Consumers in Eastern China are more interested in trying Spanish and Mexican cuisine; localised flavour improvements may enhance retention rates
- Western food brands must localise or perish
- Older consumers expect more localisation of flavour
- Incorporate local ingredients to attract consumers in Eastern China
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Issues and insights
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- Concentrate on health to differentiate from the competition
- Expand into high-frequency consumption scenarios and promote the normalisation of Western food
- Enhance cultural resonance through in-depth localisation
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Appendix – methodology and abbreviations
- Methodology
- TURF analysis methodology
- Abbreviations
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