The public feud between Chinese tech personality Luo Yonghao and Jia Guolong, founder of restaurant chain Xibei, has come to a halt.
On September 15, Xibei posted a public apology letter, stating it would shift more of its central kitchen pre-processing back to in-store preparation. It also welcomed suggestions from customers to improve operations.
In response, Luo said he would drop the matter but stressed that he does not oppose pre-prepared dishes. His main argument is that restaurants should give consumers the right to know what they are eating. He believes pre-prepared meals should not be presented as freshly made food.
Despite the argument and widespread consumer distrust of pre-prepared meals, capital markets remain largely unaffected.
On the same day as Xibei’s announcement, companies specializing in pre-processed food saw stock market gains. Delisi Food, a producer of frozen meat products, hit its trading limit. Shares of Weizhixiang, Sanquan Food, and Hifirst Food also rose, as did those of Qianwei Yangchu (QWYC), Guolian Aquatic, Longda Meishi, and Fortune Ng Hung Food, all of which supply Xibei.
The uptick may be linked to draft national standards for the food safety of pre-prepared dishes, which recently passed review by the National Health Commission. According to Yicai, the draft will soon be open for public comment. It could lead to a unified definition for pre-prepared meals and, for the first time, require disclosure on how and whether restaurants use them.
At the heart of the public dispute was the distinction between a central kitchen and pre-prepared dishes.
Jia insisted that Xibei does not use pre-prepared dishes, likely because of the chaos and safety problems tied to the unregulated industry. Public opposition surged in 2024 after a CCTV program exposed some manufacturers using “lymphatic meat” to make dishes such as steamed pork with preserved vegetables. Common consumer concerns include excessive preservatives, lack of fresh ingredients, and nutrient loss.
Lymphatic meat commonly consists of fatty tumors, thyroid glands, and lymph nodes from animals, and is regarded in China as a low-cost meat substitute. Some restaurants have reportedly used it in place of more expensive cuts of meat.
The industry’s definition of pre-prepared meals also differs from public understanding.
The most cited reference point is a notice from the State Administration for Market Regulation (SAMR). In March 2024, six government departments, including SAMR, jointly issued a notice on strengthening food safety supervision of pre-prepared dishes. The document defines them as pre-packaged meals made from agricultural products without preservatives, consumed after industrial pre-processing and heating or cooking. It explicitly excludes dishes made in central kitchens.
So how should central kitchens be understood?
According to Jia, pre-prepared dishes are finished products that are processed, frozen, and reheated before serving. A central kitchen, by contrast, is a facility for pre-processing. It provides stores with cleaned ingredients or semi-finished products that require further cooking. Semi-finished products from Xibei’s central kitchen, he said, are more like what a prep cook handles than “meal kits” that only need a few minutes of reheating.
Skepticism remains, especially after revelations that Xibei’s kitchen uses frozen broccoli preserved with “fresh-locking technology.”
The growth of central kitchens, however, appears inevitable.
In the 1980s and 1990s, when KFC and McDonald’s entered China, local restaurants began adopting fast food practices and freezing food for preservation. Around 2010, the chain restaurant boom accelerated, driven by commercial real estate growth, and central kitchen use surged. China Entrepreneur reported that Xibei began building its own supply chain system in 2014, including production bases and central kitchens across China, integrating factories and stores.
Pre-prepared dishes help address challenges such as the lack of open flames in shopping malls. They also reduce food safety risks in small family-run eateries. Over time, central kitchens allow companies to control supply chains, improve efficiency, and manage profit margins.
But times have changed. As consumers pursue more affordable dining, higher-end chains that rely heavily on pre-prepared dishes face growing pushback.
In contrast, Home Original Chicken has been praised for openly using pre-prepared and semi-prepared processes while lowering prices and pursuing an IPO. Similarly, customers noted that dumpling chain Xijiade recently covered up slogans in its stores that had opposed pre-prepared food.
As Luo argued, consumers are not against business or service innovation, but against losing choice and being denied the right to know. The controversy is expected to push leading chain restaurants toward greater transparency in their use of pre-prepared dishes and central kitchens.
Still, China’s pre-prepared dish industry is in its early stages and is often compared with Japan’s more developed market.
In Japan, growth took time. The industry began in the 1970s with the business-to-business segment. As the population aged and single-person households increased, demand for convenience fueled the consumer market. According to the Japan Ready-made Meal Association, the country’s pre-prepared dish market reached JPY 11.29 trillion (USD 76.1 billion) in 2024, up 2.8% from the previous year.
In the broader context, Japan’s retail food market was valued at JPY 53.4 trillion (USD 36 billion) in 2024. Pre-prepared dishes accounted for nearly one-fifth of total sales.
At a more granular level, the popularity of such products can be illustrated by 7-Eleven’s “freshly made curry bread,” which sold 76.98 million units in 2023 and earned a Guinness World Record. The product falls within the pre-prepared dish category.
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China’s industry follows a similar trajectory but differs in two key ways:
- First, Japan enforces strict standards for raw materials, additives, and storage temperatures. Chilled products last only a few days to a week, while frozen items can be stored for months. China’s industry, by contrast, still depends heavily on restaurants and delivery services, with national standards still under development.
- Second, cold chain logistics in China remain concentrated in coastal and major cities, limiting nationwide distribution. As a result, most pre-prepared food companies are small and regional.
Several listed companies have addressed the controversy.
Qianwei Yangchu told investors it recognizes the trust issues facing the industry and has adopted measures such as new quality management systems.
At a results conference, Weizhixiang chairman and general manager Xia Jing said the industry is growing rapidly but faces challenges including inconsistent standards, food safety, and regulatory gaps. He believes brand reputation will become the key factor in consumer choice once new standards are in place.
A Guolian Securities research report projected that China’s pre-prepared dish market could reach RMB 674.9 billion (USD 94.5 billion) by 2030, with a compound annual growth rate above 10% over the next decade.
As the industry expands, it seems likely that China’s dining landscape will undergo significant transformation.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xie Yunzi for 36Kr.