China Consumer

Pots of cash

There are 350,000 hotpot restaurants in China. Why?

Hot pot

Can you guess which side is spicy?

Swiss fondue originated near Zurich in the 17th century when fresh food was scarce during long, cold winters. Villagers had to count on home-produced fare – cheese, wine and homemade bread – to survive. They discovered that their hardened cheeses tasted better when mixed with wine and flour, and then heated up. They named the dish fondue, from the word fondre, to melt.

Chinese hotpot has similarly humble origins. Called huo guo, which means fire and pot, it was traditionally eaten in the winter. A recent report by Meituan, a Chinese group-buying platform, calculated that there were more than 350,000 hotpot restaurants in China last year. That accounts for 7.3% of all the restaurants in the country, and stands out as the largest segment in the industry.

Chongqing boasts some of the country’s greatest hotpot enthusiasts: one out of five restaurants in the metropolis serves it, according to a separate report released last year. People from Sichuan are also fans, with hotpot restaurants making up about 15% of the eateries in the province. Guizhou ranked third with 13%, while Shanxi and Yunnan are both tied for fourth with 11%.

So why is it so popular? As mentioned in our Fast Food column in issue 47, one reason is that eating hotpot is truly a social event.

For those who are not familiar with hotpot, here’s how it works: a pot of broth is brought to the table, set on an electric (or gas) stove, and heated until the soup boils. Meanwhile, platters of raw ingredients (beef and mutton tend to be most popular) are set around the stove. Patrons choose their own food and cook it in the boiling broth.

There are practical reasons, mind you, why more hotpot restaurants have sprung up. Unlike eateries that must employ chefs trained in steaming, deep-frying and braising, hotpot restaurants are much more straightforward to operate.

The only thing the kitchen actually cooks itself is the broth and that’s pretty simple to prepare. Different restaurants offer different recipes but most stick with broadly the same tried-and-tested flavours.

For instance, one of the most popular bases is mala – which means spicy and numbing – which features fermented bean paste, Sichuan peppercorn, dried chilli and a mix of dried herbs.

Another popular choice is bone broth – usually made of chicken and pork – seasoned with ginger, scallions and salt.

Some restaurants like to claim their broths are one-of-a-kind. A more honest owner confessed to CBN that it’s much more straightforward. “There isn’t much secret to the broth. It’s just a little more of this and a little less of that. It’s more or less the same, to be honest,” he told the newspaper.

Also, the cost of running a hotpot joint is generally lower than other types of restaurant. For a start, the kitchen space tends to be smaller and requires less equipment. Another cost advantage is that key ingredients such as beef and mutton can be frozen, meaning less wastage and simpler inventory management.

Moreover, a hotpot restaurant also saves money from not having to hire that many chefs. “At most restaurants you will find at least a hundred dishes on the menu all requiring different ingredients, seasoning and cooking techniques. That means every restaurant needs to have at least a few chefs that can cook decently well,” CBN says.

For hotpot, the customers do much of the work. Indeed, when Bill Murray sampled it in Japan in Lost in Translation, he quipped: “What kind of restaurant makes you cook your own food?”

That also explains why some of the country’s largest dining chains – apart from fast food outlets – are hotpot restaurants. For instance, Shabu Shabu, a popular hotpot chain, has over 500 stores.

“This phenomenon has everything to do with the fact that it is much easier to franchise a hotpot concept. With hotpot operations being so easy to standardise, it is as easy as fast food to attract franchisees and maintain the quality,” says CBN.

Hotpot bosses are looking to cut costs further in Chongqing, however. In another innovation, one chain has been introducing even more self-service. Sitting around a sushi-like conveyor system, diners now take plates of meat and vegetables off the belt, rather than order. The result: even fewer waiters, and another boost for the bottom line…

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