In the first half of 2025, the "three giants of braised food" collectively faced the challenge of revenue decline, with the entire industry under pressure. Although companies temporarily stabilized profits through store closures and cost control measures, the lack of growth in their core business has become an undeniable reality.

To break through this predicament, the giants have diversified across industries. ZHOU HEI YA (1458.HK) focused on coconut water and compound seasonings, while Jiangxi Huangshanghuang Group Food Co.,Ltd. (002695.SZ) invested heavily in the freeze-dried food sector.

However, whether these new businesses can become true "second growth curves" still requires market validation. Against the backdrop of declining consumer willingness to spend, the braised food industry can only achieve long-term breakthrough by finding a balance between cost reduction and innovation.

**Cost Reduction to Maintain Profits**

The braised food market appeared somewhat sluggish in the first half of this year. Juewei Food Co.,Ltd. (603517.SH) experienced declines in both revenue and net profit in the first half of the year. While Jiangxi Huangshanghuang Group Food Co.,Ltd. and ZHOU HEI YA saw revenue declines, their net profits increased due to lower raw material costs and store reductions.

In other words, braised food products are not selling as well as before, but Jiangxi Huangshanghuang Group Food Co.,Ltd. and ZHOU HEI YA improved their net profits through "cost reduction." The driving factor behind this is the companies' proactive strategic contraction and cost cutting.

In the first half of this year, Juewei Food Co.,Ltd. achieved revenue of 2.82 billion yuan, down 15.57% year-on-year; net profit attributable to shareholders was 175 million yuan, down 40.71% year-on-year. Juewei Food Co.,Ltd. stated in its interim report that the change in operating revenue was mainly due to decreased domestic sales volume.

Jiangxi Huangshanghuang Group Food Co.,Ltd. recorded revenue of 984 million yuan in the first half, down 7.19% year-on-year; net profit attributable to shareholders was 76.92 million yuan, up 26.9% year-on-year. Among these, Jiangxi Huangshanghuang Group Food Co.,Ltd.'s meat processing main business declined 11.65% year-on-year, while rice product main business declined 1.36% year-on-year. Regarding the revenue decline, Jiangxi Huangshanghuang Group Food Co.,Ltd. stated that consumption scenarios changed during the reporting period, with single-store revenue at existing braised meat processing stores continuing to decline year-on-year. Meanwhile, the company's store expansion fell short of expectations, with store numbers showing negative growth, leading to unsatisfactory operating revenue. In the first half of this year, Jiangxi Huangshanghuang Group Food Co.,Ltd.'s total store count decreased by 762 from 3,660 at the end of 2024 to 2,898.

In the first half of this year, ZHOU HEI YA achieved revenue of 1.222 billion yuan, down 2.9% year-on-year; net profit attributable to shareholders was 108 million yuan, up 228% year-on-year. ZHOU HEI YA mentioned in its financial report that optimizing and closing inefficient stores led to a year-on-year decline in total revenue, but by improving single-store operational efficiency and driving effective growth in average single-store sales, the overall revenue decline was effectively controlled. The financial report shows that ZHOU HEI YA's total store count decreased by 167 from 3,031 at the end of 2024 to 2,864.

Fortunately, the decline in raw material market prices also prevented some braised food companies' net profits from falling in sync.

Jiangxi Huangshanghuang Group Food Co.,Ltd. stated in its interim report that in the first half of 2025, the market prices of the company's main raw materials including duck necks, duck wings, frozen new ducks, and other related duck by-products remained at low levels. The fluctuation in main raw material prices during this period brought down production costs, and the gradual decline in production costs led to a steady recovery in the comprehensive gross margin of the braised meat products business, with the comprehensive gross margin increasing by 2.23 percentage points year-on-year.

Chinese food industry analyst Zhu Danpeng told reporters that growth in the braised food sector relies on several aspects. From a macro perspective, it is based on demographic dividends from heavy consumer groups and increases in store numbers. From a micro perspective, it includes brand effects, scale effects, fan effects, as well as brand service systems and customer loyalty. Overall, from a category competition perspective, braised food prices are relatively high with insufficient cost-effectiveness. Combined with the decline in consumer willingness, capability, and confidence across the entire industry in recent years, the challenges for the braised food industry are enormous.

**Seeking the Second Curve**

The "three giants of braised food" have also realized that relying solely on their main businesses can hardly sustain good performance in the long term, and they are attempting cross-industry ventures.

Earlier this year, ZHOU HEI YA's coconut water brand "Yaya Coconut" was launched in stores. In April, ZHOU HEI YA signed a cooperation agreement with Sichuan Shentang Food to develop compound seasonings and convenient instant food products, transforming its business model into a dual main business of braised food + compound seasonings. Additionally, it partnered with Sam's Club to launch ZHOU HEI YA classic braised seasoning packets and flavored duck meat sauce.

Jiangxi Huangshanghuang Group Food Co.,Ltd. entered the freeze-dried food sector. In August this year, Jiangxi Huangshanghuang Group Food Co.,Ltd. announced plans to spend 495 million yuan to acquire a 51% stake in freeze-dried food company Fujian Lixing Food Co., Ltd., entering the freeze-dried food sector. Jiangxi Huangshanghuang Group Food Co.,Ltd. stated that Lixing Food's products and consumption scenarios have certain complementarity with Jiangxi Huangshanghuang Group Food Co.,Ltd. Through this transaction, the company can leverage Lixing Food's sales channels and market resources to enter emerging markets.

Juewei Food Co.,Ltd. opened a Juewei Plus store in Changsha this year, crossing into casual dining and selling products including fried braised food, desserts, and fruit wine.

Strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, Zhan Junhao, stated in an interview that when main business performance is under pressure, it is conventional and beneficial for long-term development for the three braised food giants to actively seek second growth curves. However, entering new fields requires caution and should align with brand positioning, with category spans not being too large to avoid damaging existing brand positioning. Before expanding, comprehensive assessment of capabilities and competitiveness should be conducted through market research, as most categories face intense competition. Blind entry not only makes it difficult to become a new growth point but may also drag down the main business, indeed posing the risk of treating symptoms rather than root causes.