According to a research report from Guosen Securities, the short-term industry consolidation will focus on capacity absorption and price recovery. In the medium to long term, there is significant room for increased industry concentration. The rise in chain penetration and stricter food safety standards will accelerate the exit of small and medium-sized enterprises, with leading companies possessing broad product categories and dense distribution channels continuing to gain market share. Attention should be paid to the breadth of the sector and clarity of positioning, where brand owners in naturally broader sectors and category champions have higher scaling potential. The main views of Guosen Securities are as follows:
Foodservice Supply Chain at a Critical Inflection Point for Capacity Absorption and Restructuring
The fixed asset turnover ratio is expected to stabilize and recover in 2025, while the decline in per-ton prices for major categories is narrowing, and the gross-to-sales margin difference is systematically improving. The price wars triggered by demand contraction and supply redundancy over the past three years are nearing an end. With over 8 million catering outlets in China, mostly small and medium-sized participants, downstream demand is shifting from single-product procurement to comprehensive demands for stable capacity, joint R&D, and integrated solutions. Meanwhile, upstream agricultural production remains fragmented, processing lacks standardization, and the distribution system is multi-layered and redundant. This core mismatch between supply and demand is driving the industry from fragmentation towards consolidation.
Four-Quadrant Framework Clarifies Competitive Logic and Moat Differences, Exploring Ecosystem Evolution in China
Based on two dimensions—growth drivers and value creation—this report categorizes foodservice supply chain enterprises into four types: brand owners, manufacturers, suppliers, and service providers, each with distinct financial characteristics. Due to highly regionalized tastes and high cross-regional logistics costs in China, it is difficult to birth a single, all-encompassing national giant. However, forming a healthy and orderly industry ecosystem through complementary advantages, resource sharing, and collaborative evolution among different types of enterprises remains the path with the highest probability of success. Bargaining power is continuously shifting from factories to distributors and consumers. Compared to the US and Japanese markets, this process is essentially the inevitable result of the transfer of value chain power from the production end to the consumption end.
Leading Companies Evolving into Integrated Supply Chain Platforms via Three Paths
Suppliers are expanding from deep to broad, transforming their R&D and quality control capabilities for large B-end clients into infrastructure for small and medium-sized restaurants. For example, the proportion of Qianwei Central Kitchen's distribution channels has increased to 52%. Manufacturers are leveraging their existing capacity layouts and distributor networks to expand into more categories or channels. For instance, Anjoy Foods rapidly entered the prepared food category and supermarket channels through acquisitions. Brand owners are reusing their channels to introduce new categories to existing terminals without incurring additional network costs. For example, Foshan Haitian Flavouring & Food Company Ltd. has achieved horizontal category expansion relying on its 6,702 distributors. While the starting points of these three paths differ, the ultimate goal is highly consistent—to become platform-type enterprises possessing brand premium, cost efficiency, customer stickiness, and multi-category delivery capabilities. Cases such as Qianwei Central Kitchen, Anjoy Foods, and Foshan Haitian Flavouring & Food Company Ltd. have preliminarily validated the feasibility of this direction.
Risk Warnings
The pace of industry consolidation may fall short of expectations. The increase in catering chain penetration may be slower than anticipated. Expansion into categories and regions may not meet targets. Raw material cost fluctuations may exceed expectations. Risks related to food safety and regulation. Applicability risks of the classification framework.
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