Major Upheaval in the Prepared Meals Market: Industry Under Pressure, Sector Restructuring

Market under stress

China’s prepared-meals sector — the fast-growing “pre-made meals” market known domestically as 预制菜 — has hit a turning point. Leading players report slowing top-line growth and shrinking profits as rapid expansion gives way to tighter regulation and frayed consumer trust after last year’s Xibei (西贝) controversy. Anjoy Foods (安井食品, 603345.SH / 02648.HK) posted 161.93 billion yuan in revenue for 2025, up 7.05%, but net profit slipped 8.46% to about 1.359 billion yuan and gross margin fell to 21.60%. Huifa Foods (惠发食品, 603536.SH) fared worse: revenue of 1.384 billion yuan, down 27.16%, and a net loss of roughly 70 million yuan. Qianwei Central Kitchen (千味央厨, 001215.SZ) and Weizhixiang (味知香, 605089.SH) also showed weak profit recovery despite modest revenue gains.

Why the pain?

Multiple pressures have converged: tougher supervision and calls for clearer standards after consumer scandals, channel shifts between B‑end (restaurants) and C‑end (retail/instant consumption), cost inflation on key inputs, and intensified competition that squeezes margins. Who wins in this environment? Scale and channel breadth. Anjoy’s BC strategy and wide distributor network helped it grow frozen product lines and new‑retail channels even as costs — from small‑lobster inputs to depreciation and currency translation — hit profits. By contrast, firms focused narrowly on either restaurants or one retail region have struggled as large chain buyers exert purchasing leverage and regional demand softens.

Restructuring and outlook

The industry is moving from chaotic growth to structured consolidation: national brands leading, regional champions deepening, and mid‑small players seeking niche differentiation. The market still expanded to about 617.3 billion yuan in 2025 (up 27.3% year‑on‑year), with B‑end estimated at 420 billion yuan and C‑end at 197.3 billion yuan — the latter driven by young consumers and instant retail. It has been reported that some institutions project the sector could exceed 749 billion yuan in 2026, but growth will be more selective and quality‑driven. Expect the next phase to reward firms that combine rigorous compliance, diversified channels, and product innovation — and to punish those that cannot adapt quickly to higher standards and fiercer buyer power.