Business News

China Turns to Frozen Dumplings

Alan Rappeport

Frozen dumpling sales are growing rapidly in China as rising labor costs and the increasing ranks of working mothers have made it too time-consuming to fill and fold them from scratch.

Shanghai street scene
Joseph McNally | The Image Bank | Getty Images

General Mills , the US food company, is the leading frozen dumpling maker in China, with its popular Wanchai Ferry brand accounting for 44 percent of the market. Gary Chu, head of General Mills’ China business, said that dumpling sales are growing at double-digit rates annually and topped $200m last year.

“People used to make dumplings at home but now nobody has the time because it’s messy,” Mr. Chu told the Financial Times. “Today’s woman doesn’t want to cook any more.”

Mr. Chu said that dumpling shops and restaurants are also increasingly switching to frozen fare due to rising minimum wages across China. Last year most Chinese provinces increased minimum wages by more than 20 per cent.

“labor is too expensive,” Mr. Chu said. “China is not cheap any more and you cannot tell the difference between frozen and fresh.”

Wanchai Ferry has expanded its frozen dumpling offerings with other frozen dim sum-style items such as wontons and tangyuan, a glutinous rice dessert that is traditionally filled with a sweet paste.

General Mills acquired Wanchai Ferry in 1997, nearly 20 years after Chong Kin-wo began selling her homemade dumplings from a wooden cart at the Wanchai ferry pier in Hong Kong. According to a 2010 survey by BrandZ, a consultancy, 28 percent of Chinese in the top 10 cities prefer Wanchai Ferry dumplings.

Mr. Chu said that in spite of the success of Wanchai Ferry, the company is facing stronger competition from local brands that have improved their quality. Meanwhile, he said, the Chinese government has been getting tougher on foreign companies and targeting them over health concerns.

Last year Wanchai Ferry frozen dumplings were pulled from supermarket shelves in Nanjing after health officials found bacteria in the product that they said could be life-threatening.

“Foreign brand privilege is going away,” Mr. Chu said. “The country is getting more and more competitive.”

General Mills generated $550m in net sales from China last year and projects that number will reach $900m by 2015. Mr. Chu said signs of a slowdown in the Chinese economy were a real concern but that the country’s one-party system had made it possible for the government to react quickly.

“China won’t be like Europe,” Mr. Chu said.

General Mills is looking beyond frozen food in China, increasing marketing of its Bugles crisps and premium Häagen-Dazs ice cream. Mr. Chu said that the company is also developing plans to introduce its yoghurt brands to the market.