Eliza Wong
Key Takeaways
- Zhouheiya, Huangshanghuang, and Juewei reported revenue declines in H1 2025, reflecting broader challenges in China’s braised food sector.
- Cost-cutting and store optimization helped some players improve net profits despite falling sales.
- Diversification into beverages, condiments, and frozen foods signals strategic shifts to capture new growth avenues.
- Consumer spending caution and high product pricing remain significant headwinds for the industry.
- Expert opinions caution that new ventures must align with core brand identity to avoid diluting market positioning.
Braised Food Sector Faces Headwinds as Demand Slows
China’s leading braised food companies, often referred to as the ‘Big Three’—Zhouheiya (周黑鸭, 1458.HK), Huangshanghuang (煌上煌, 002695.SZ), and Juewei Food (绝味食品, 603517.SH)—are navigating a notable slowdown in their core business. The first half of 2025 saw all three report declining revenues, underscoring challenges such as changing consumption habits, reduced consumer spending power, and intense market competition.
This trend highlights a crucial inflection point for the braised food industry. Companies can no longer rely solely on store expansion or demographic tailwinds for growth. Instead, they are being pushed toward operational efficiency and business diversification to maintain profitability and market relevance.
Financial Performance Highlights
Juewei Food experienced the sharpest decline, with revenue falling 15.57% year-on-year to RMB 2.82 billion and net profit dropping 40.71% to RMB 175 million. The company attributed this primarily to decreased domestic sales volume.
Huangshanghuang’s revenue fell 7.19% to RMB 984 million, though net profit increased 26.9% to RMB 76.92 million. Zhouheiya reported a milder revenue decline of 2.9% to RMB 1.22 billion, while net profit surged 228% to RMB 108 million.
Cost Management Becomes Key to Profitability
In response to stagnating sales, companies have turned to aggressive cost-cutting measures. Lower raw material costs, particularly for duck neck, wings, and other poultry products, provided some relief. Huangshanghuang noted that decreased input costs helped improve overall毛利率 (gross profit margin) for its braised meat products by 2.23 percentage points.
Store optimization also played a critical role. Huangshanghuang reduced its store count by 762 locations in the first half of the year, while Zhouheiya closed 167 underperforming outlets. This strategic pruning allowed both companies to focus on improving单店运营效能 (single-store operational efficiency), which helped offset broader revenue declines.
Expert Insight: Industry Under Pressure
中国食品产业分析师 (China Food Industry Analyst) Zhu Danpeng (朱丹蓬) highlighted that the braised food sector’s growth historically relied on population demographics and store expansion. Today, however, factors such as brand power, scale, and customer loyalty are becoming more critical. He also pointed out that braised foods are often perceived as overpriced, which—combined with weaker consumer confidence—has significantly challenged the industry.
Diversification: Seeking a Second Growth Curve
Faced with these challenges, the three companies are aggressively exploring new business areas. Zhouheiya has introduced a coconut water brand named “Yaya Coconut” (丫丫椰) and partnered with Sichuan Shentang Food (四川申唐食品) to develop复合调味品 (compound condiments) and ready-to-eat products. It has also launched卤料包 (braised seasoning packs) in collaboration with Sam’s Club.
Huangshanghuang is venturing into the冻干食品 (freeze-dried food) segment. In August 2025, it announced plans to acquire a 51% stake in Fujian Lixing Food (福建立兴食品) for RMB 495 million. The company believes this move will provide access to new sales channels and consumer scenarios complementary to its existing business.
Juewei, not to be left behind, has experimented with a “Juewei Plus” store format in Changsha, offering炸卤 (fried braised foods), desserts, and fruit wines—a clear foray into the casual dining segment.
Strategic Considerations for New Ventures
Zhan Junhao (詹军豪), a strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, acknowledged that seeking new growth avenues is a sensible long-term strategy. However, he cautioned that companies must ensure new ventures align with their core brand identity. Diversification into unrelated categories could dilute brand equity and fail to deliver sustainable growth.
Market Outlook and Challenges Ahead
The broader environment for consumer discretionary spending remains subdued. Factors such as economic uncertainty, shifting consumption patterns, and increased health consciousness among consumers have affected demand for braised foods. While companies are responding with innovation and cost discipline, the effectiveness of these strategies remains to be seen.
Investors and industry watchers will be closely monitoring whether these new ventures can gain traction and contribute meaningfully to revenue. The success of Zhouheiya’s coconut water line or Huangshanghuang’s freeze-dried products could set a precedent for the industry’s future direction.
Navigating the New Normal in China’s Food Sector
The braised food industry’s current struggles reflect larger trends in China’s consumer market, where companies must balance cost efficiency with innovation to stay competitive. While store optimization and raw cost savings offer short-term relief, long-term growth will likely depend on successful diversification and capturing new consumer interests.
For investors, these developments underscore the importance of scrutinizing not just financial performance but also strategic direction. Companies that can effectively pivot without losing their core identity may emerge stronger in the post-adjustment phase.
Keep a close watch on quarterly earnings reports and new product launches from these players to gauge whether their diversification strategies are gaining momentum.
