A leading Chinese food processor and distributor is teaming up with two venture capital houses to raise CNY 100 million (USD 15 million, EUR 13 million) for investments in processing and distributing crayfish and crab.
Juewei Food, listed on the Shanghai Stock Exchange, said it set up the Guangzhou Juexiao Crayfish Industry Investment Fund Partnership (Limited Partnership) Fund with Guangzhou Juyizhuo Industry Fund Management Co. Ltd. and Huashan Technology Co. Ltd. Another partner in the fund, and a subsidiary of Juewei, Shenzhen Wangju Investment Co. Ltd., is listed as a majority partner in the fund’s filings with the Chinese securities regulator.
Juewei is keen to expand its range of offerings in the 2,000-plus franchised stores it operates, targeting China’s younger consumers with packaged crayfish and mitten crab. Both offerings have become increasingly popular among China’s younger consumers. A familiar sight in cities around China, the firm’s network of “Juewei Duck Neck” franchise stores was chosen as one of five outstanding franchise brands at the 2019 China Franchise Convention. Its braised, packaged meat range is popular among high-end shoppers and gifters.
Based in Changsha, capital of the central province of Hunan, Juewei has drawn favor from financiers keen to invest in firms with exposure to Chinese consumer spending. Early investors in the firm include Chinese venture capital firms Fosun Group and Kunwu Jiuding Capital Co. Ltd. Juewei’s financial figures have encouraged investors. The firm grew its revenues from CNY 3.85 billion (USD 573 million, EUR 491 million) in 2017 to CNY 5.17 billion (USD 769 million, EUR 660 million) in 2019, with profits growing 31.93 percent year-on-year in 2017 and 25 percent year on year in 2019.
Juewei is keen to hold an edge over its competitor, Zhou Hei Ya, one of China’s most recognizable food brands, which has been seeking to launch a year-round crayfish product to prolong the season beyond the current autumn rush on crayfish products. However, Zhou Hei Ya firm has struggled to create and launch its crayfish range, having initially planning to launch its “Ju Yi Xia” range of crayfish products for sale to Chinese consumers alongside its more familiar flavored meat range in 2017. The firm pledged to relaunch the range this year, but was delayed again by its processing facilities being located in Wuhan, the epicenter of this year’s COVID-19 outbreak.
Known by its yellow packaging and childlike logo, Zhou Hei Ya is an instantly recognizable packaged food brand, which targets local convenience stores and supermarkets with meat and seafood products prepared in local styles. However, last year Zhou Hei Ya saw its revenues slip almost one percent to CNY 3.18 billion (USD 473 million, EUR 406 million), making its hunt for competitive new products ever more urgent.
Crayfish, once a major export commodity in China, is now growing so popular that local demand is squeezing supply. A few foreign suppliers have even gotten into the mix, with Turkey-based Orvesa crediting Chinese demand for a surge in its revenue.
Photo courtesy of Zhou Hei Ya
