Changing tastes

Hangzhou’s finger lickin’ new look

Golden Jaguar, originally a Taiwanese KTV operator, first opened in mainland China in 2003 and quickly became a favourite spot for buffet lovers. The restaurant’s fare included delicacies from abalone to steak and even crocodile for a little over Rmb200 ($29.5) per head. By 2014 the brand was running 29 restaurants across 19 cities in China with each location occupying roughly the same area as an American football field.

In 2011 it was acquired by the private equity firm Apax Partners for Rmb1.5 billion. The buffet chain said at the time it planned to open 50 restaurants by 2015. However, Golden Jaguar has since been hard hit by Xi Jinping’s austerity campaign. In 2015 the brand was sold to the Hong Kong-listed Carnival Group for roughly Rmb300 million. Its new owner decided last week to cull all of the 13 Golden Jaguar shops across the country.

The abrupt closure has left employees in the lurch, with one staffer telling Shanghai Daily he was owed three months’ salary: “I trusted the company for a long time. I understood it was facing difficulties and because of that I did not complain about delayed wages.”

In fact, a few days before Golden Jaguar’s fate was sealed, a dozen suppliers had protested outside its flagship store in Beijing, demanding the restaurant settle debts worth about Rmb20 million.

Some long-time customers were being punished for their loyalty as well. Having acquired up to Rmb10 million worth of pre-paid loyalty cards, they are now demanding their money back too.

Poor management was partially to blame for Golden Jaguar’s demise, the Beijing Morning Post reckons, but so were changing consumer demands. Zhu Danpeng, an expert on China’s food industry, told the newspaper: “Golden Jaguar’s high-end buffet model was already unable to satisfy the mainstream consumer’s need for relaxing and sociable dining experiences.”

China’s fast-food industry has raced to adapt to this new consumer focus too. For example, McDonald’s has started offering table service, aiming to hire over 70,000 waiters to meet the challenge, and is personalising its menu options.

Meanwhile KFC has revealed its first significant revamp since its parent company Yum Brands spun off its China division. This month it launched a new brand in Hangzhou targeting an increasingly health-conscious demographic.

At the time of the spin-off an analyst at Mintel told Forbes, “KFC is facing difficulties in upgrading their menu and dining environments. Although they know that they need to be healthier and trendier, they could face cost, time and logistics issues when executing the changes. By spinning off the China unit, it can raise more money to invest in menu upgrades and food-safety control programmes.”

This proved an astute prediction. The new outlet is called K Pro and, rather than buckets of chicken, it pushes salads topped with crayfish (a curiously popular crustacean in China, see WiC371), freshly squeezed juice, paninis and beer. And to prove their produce is fresh, K Pro has open kitchens, where the ingredients are displayed in a style similar to a deli.

K Pro’s branding is distinct from KFC’s too. There’s no portrait of Colonel Sanders; the colour scheme emphasises green rather than red, appealing to the environmentalism of these new consumers; and plastic table-tops and trays have been replaced with wooden ones. KFC’s logo does appear throughout the shop, but now framed by a stylised graphic of an apple, and it’s not “finger-lickin’ good” it’s “tasty, fresh, ready”.

Whether K Pro will become a more prominent force in China remains to be seen. A representative from KFC told Sohu that the new brand is just being trialled in Hangzhou, and there won’t be further news about expansion until next month.

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