Global Food Service is the name for a fledgling frozen bakery company based in Hangzhou, given by its Dutch shareholder in 2006. The shareholder left the company three years later, as the business had a difficult time scaling up, at a time the concept of frozen dough was little heard of in China.
In 2012 GFS started seeing some glimmers of hope. Supplying frozen dough to Metro in 2012 the company discovered that the ultimate customers of its frozen dough selling in Metro were small bakeries and even many individuals. So it started zeroing in on individual consumers while continuing to serve the catering channel.
In 2014 it registered shops on Alibaba's Tmall, JD.com, Eleme, etc, and was pleasantly surprised by the market reaction. Since then it has added fillings for pizza, biscuits, frozen bread, and as of mid-last year prepared meals, said Song Nan, the company's deputy General Manager, in Bakery China 2018 （Shanghai) which lasted 9-12 May.
Last year it made sales of some RMB 80 million (USD 13 million) on the online channel. The goal for this year is RMB 100 million, said Song, who believes the goal should be fairly easy to accomplish.
"Every year one or two million electric ovens are sold in China so the potential market for this individual consumer segment is not too small," said Song, who did high school in Singapore, got his bachelor degree in electronics engineering in the University of Southampton in 2006, and obtained his MBA from Zhejiang University last year.
The company is studying the feasibility of launching vending machines that can store its prepared meals in a refrigerated condition and heat in a microwave oven, all in one machine.
The company also sells frozen dough and frozen bakery products in the catering channel, where the ever increasing cost of labour and rental space has forced its clients to demand more of par-baked goods and completely baked goods instead of frozen dough.
"The trend in the catering channel is that people want what is raw in the past to be completely baked so that they only need to heat them up before serving," he said, adding that par-baked and completely baked goods saw their proportion in the company total rise from ten per cent originally to some 50 per cent now.
This change forces the company to add equipment and adapt and extend its production procedures, which has kept him, specifically responsible for production, rather busy.
Last year the company made sales exceeding RMB 200 million, a figure that put it behind market leaders such as Namchow of Taiwan, Delifrance, which owns two factories in Dongguan of Guangdong Province, and Guangzhou Aokun, which was acquired by a baking ingredient company known as Guangzhou Ligao in end 2015. Guangzhou Ligao was restructured into a shareholding company end of last year and is in preparation for an IPO.
GFS's history could be traced back to a production line producing egg tart bases in 2003. It is probably the country's largest egg tart base producer, churning out around one million egg tart bases a day, first supplying to KFC in China, and then started in 2009 supplying to KFC's outlets in South Korea, Thailand, Singapore and Malaysia. It also exports to North America, the Netherlands, Israel and Australia. Export accounts for around ten per cent of its overall sales. ###