Recently, KASSY STEAK, the home RTC (ready-to-cook) steak brand, completed A round of financing in the amount of nearly 100 million yuan The funds will mainly be used for product research and development, supply chain upgrading, brand marketing, etc.

Founded in 2013, KASSY STEAK targets young families, providing consumers with western-style semi-finished food materials, including steak, pizza, pasta, egg tart, etc. The brand has made a presence in major offline chain stores such as Yonghui Superstores, Lianhua Supermarket, and Freshippo (Fresh Hema), and has even become a top steak brand on e-commerce marketplaces, including Tmall, JD, Douyin, and Pinduoduo. It has set a record of selling tens of thousands of units in two minutes during Li Jiaqi’s (one of the Chinese top live-streamers) live-streaming.

Home RTC (ready-to-cook) steak brand KASSY STEAK

What can we learn from KASSY STEAK’s success?

Healthy eating as a prominent trend

According to the 2020 Tmall Food Consumption Trend Report, raw meat/meat products is the fastest-growing segment among the health-and-quality-oriented consumer group. High in protein and low in fat and cholesterol, beef has become a prior choice for fitness diet and healthy weight loss. Statistics¹ show that the share of beef consumption in China has risen from 4% in 1990 to 10% in 2014, while the share of pork consumption has dropped from 81% to 65% in the same period.

The rise of home cooking

The COVID-19 epidemic has accelerated at-home consumption. Young people pursue a quality and healthy diet, as well as a decent lifestyle. However, they live a busy life and tend to choose a lazy lifestyle in their leisure time, which means home cooking should be convenient and time-saving for them.

The young generation’s demands have led to the thriving of home-cooking categories, including instant noodles/rice, compound condiment, quick-frozen food, baking materials, pre-cooked or semi-finished meal.

According to Freshippo data, 54% of post-95s consumers often cook themselves. Pre-cooked or semi-finished meals are popular among them. The percentage of post-95s consumers buying pre-made or semi-finished meals is twice that of post-65s.

RTC (ready-to-cook) is a crucial positioning for KASSY STEAK. The brand’s core consumer groups are mainly two types: mothers of children aged 3-12 and white-collar workers aged 25-28. The pre-cooked mode exactly meets the two groups’ needs of convenience and premium. For example, KASSY STEAK’s steak just needs to cook for 3 to 5 minutes without seasoning, which balances between convenience and taste.

Consumption upgrading

Beef is the main direction for meat consumption in China's middle-class families. For now, China's per capita beef consumption is less than one-third of that of the United States, implying a vast market potential.

Chinese people prefer imported steaks. On Taobao², steaks implying foreign origin such as "import", "Australia" and "New Zealand" in the product title account for 71.5%, and Australian steak is far ahead of imported steak with a share of 78%.

According to China Import Food Industry Report 2020, Brazil, Australia, and Argentina were China’s top 3 bovine import origins by import value in 2019. Compared with Brazil and Argentina, Australia is a more preferred choice in the eyes of Chinese consumers with over 60 kinds of cattle breeds, including famous varieties such as Angus. The upgrading of Chinese consumption has brought massive opportunities for imported beef. According to the General Administration of Customs³, China imported 2.118 million tons of beef in 2020, up 27.65% year on year, hitting a record high for domestic beef imports.

Future steak consumption opportunities

Steak consumption in China has transformed from western-style restaurants to family tables.

Western steakhouse used to be popular among Chinese consumers with elegant environment and good dining atmosphere as the selling point. However, with the rise of domestic fashion catering in recent years, a good environment is no longer a stunt, and therefore, many western steakhouse chains are going downhill.

In contrast, steak sales in online e-commerce channel are remarkable. Emerging channels such as community group buying and O2O (online to offline) mode are also noteworthy. A number of emerging online fresh brands represented by KASSY STEAK and Daxidi have boosted the expansion of the online steak market. Yum China, the parent company of KFC, also launched its "SoulFun" flagship store on Tmall at the end of 2018, selling imported steaks. In past two years, it ranked among the top 5 steak brands on Tmall by monthly sales.

The trend towards premiumization and segmentation is another direction for steak consumption in China.

High-end steak is the next growth driver for the steak market. Beef and lamb are relatively niche segments in the Chinese meat consumption landscape compared with pork and chicken. But compared with pork and chicken, beef contains higher-quality protein, and the fat amount is lower, which is a superior choice for daily nutrition intake. Different with Chinese people, the average physique of Westerners is more muscular, which can be greatly attribute to their consumption of beef all year round. As Chinese people pay more attention to healthy life and diet, they are willing to pay for premium food products. How to consume high-quality protein in an adequate and balanced manner is one of the most concerned nutrition issues for them.

Children's steak is a prominent piece of segmented steak consumption in China. In China, parents are attuned to a full range of nutritious diets for their children, leading to the emergence of various children-oriented food segments, such as children’s cheese sticks, children’s yogurt, to name a few.

KASSY STEAK’s children’s steaks

As children's chewing and digestive systems are weaker than adult’s, filet with more lean meat and little fat is usually selected as children's steak. There are also some steaks marketed as "developed for children," which are flavored with vegetable juice to make them more healthy and nutritious. The popularity of children's steaks is mirrored in e-commerce sales. Among the top 10 steaks sold on Taobao, 7 are children's steaks.

The continuous expansion of China's beef consumption market is inevitable. In the future, steaks that better cater to Chinese tastes and eating habits would be more sought after.