Hong Kong-founded DayDayCook has become a social media and e-commerce success in China, where it has 60 million active viewers and 3.5 million paying customers.
The Asian cuisine business describes itself as a “leading content-driven consumer brand”, offering ready-to-heat, ready-to-cook and ready-to-eat products.
Starting out as a content platform featuring cooking demonstrations and recipes for quick-to-prepare meals, DayDayCook has developed into a food business that now has the ambition to become a global player.
The 100-employee business has backing from venture capital, private equity, family offices, high-net-worth individuals and industry.
And on the back of its recent US IPO, DayDayCook has revealed an aggressive growth strategy based to a large degree on acquisitions. Founder and CEO Norma Chu told Just Food why she is so confident of success.
Just Food: Following your listing on NYSE American in November you have completed two acquisitions in short order – US Thai food specialist Yai’s Thai in December and Italy-based Asian cuisine business GLI a month later. Is doing deals the cornerstone of your growth strategy?
Norma Chu: Our growth strategy focuses first on growing our footprint internationally, with a primary focus on the US. The second part is a multi-brand product portfolio. There’s a lot of terminology in this category but the focus is definitely to consolidate in the space of Asian convenient meal products. These are products that enable you to cook something authentically Asian in under ten minutes. It also plays into industry trends. Some 43% of consumers globally say they are cooking more at home than 12 months ago. It’s much different to pre-pandemic. And people want to go on a discovery journey and as they become more adventurous, Asian cuisine and east Asian cuisine is one of the fastest growing categories.
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Just Food: What differentiates DayDayCook’s products other than the region from which the cuisine originates?
Chu: There is also another focus which is more qualitative which is around product development. The clean-label argument is very important. That differentiates us from other Asian brands out there. Clean-label is the way forward.
Just Food: How has becoming a public company aided your ambitions for the business?
Chu: Going on the listing journey has been very rewarding. Now that we have a listing platform that’s a great start for us and for what we are trying to build here. We are producing the future General Mills for Asian food. It is a multi-brand strategy, promoting Asian cooking to the world. The IPO gives us flexibility and tradeable currency so we can make acquisitions more easily.
Just Food: DayDayCook released its first set of results last month for the third quarter of 2023. Revenue was up 25.5% year-on-year to $23.7m while EBITDA moved from -$10.1m a year earlier to a profit of $0.6m. Were you pleased with these results?
Chu: These are for the pre-IPO quarter. We are very happy with top-line growth of 26%. As we increase our exposure to markets like the US, we expect profitability to improve going forward. Profitability has already improved because the gross margin is a lot healthier. We have got a great executive team in place which will help to make it profitable going forward.
Just Food: DayDayCook has traditionally been seen as an e-commerce business but, through acquisitions, you are moving more into the retail channel. Is this part of your strategy?
Chu: Going into new markets is the first step and then going deeper into that market. Channel coverage is important to us to go deeper into the markets we are operating in. Then it comes down to how deeply we are penetrating in the channel, ie four SKUs or ten. You can also find efficiencies in warehousing, production etc when you scale up.
Just Food: Which distribution channel do you think will be the most important moving forward?
Chu: It depends on the brand we are bringing aboard. It’s a good healthy mix at the moment for online and offline. It has been a conscious decision to shift a bit towards traditional retail networks. In terms of the brands in our portfolio, it depends on the product’s nature. We have to make sure the product/channel mix makes sense.
Just Food: What are DayDayCook’s plans for the businesses you have acquired?
Chu: We don’t really shift the product focus but we ask them [the previous owners] about their next products and what they have always wanted to do. Perhaps it was creating cup noodles but they didn’t have the resources. Cup noodles, a shelf-stable product, is a big category in the e-commerce area.
Just Food: Are you talking about Nona Lim, the San Francisco-based producer of fresh, better-for-you noodles, you bought back in August?
Chu. Yes. The product we are launching is clean-label cup noodles which are very rare. We may be the first to do it.
Just Food: Cup noodles are a very competitive area with some big players in it. Is that a concern?
Chu: There are a handful of big players in there but it is still a growing product category and it is a category where there has been very little innovation. Our next product launches will be similar in trying to remove the limitations of the brands. It may be through things such as squeezy sauce bottles. It is about being open-minded about what is happening in the market and looking at opportunities with a positive mindset and then moving in and acting on those opportunities. It’s also about being nimble and being able to adapt to new environments. In the broader market generally the category [Asian cuisine] is underserved.
Just Food: Take me back to 2012 in Hong Kong. You were head of research at HSBC Private Bank. Cooking was just a hobby at that stage but then you created a culinary-focused content platform featuring quick-preparation meal solutions and it just took off.
Chu: I wanted to create something to demonstrate Cantonese and Hong Kong home cooking. That was the start of DDC, which then expanded into mainland China. In 2017, we started to incorporate product innovation. In 2019, we decided that instead of promoting other people’s products we would launch our own. That was a good and important decision and we saw a complete take-off in demand for these type of product solutions.
Just Food: But with the sort of take-up you saw in Hong Kong and China, why the need to expand further?
Chu: The vision for the company has always been global. Bringing Asian cooking culture to the world is our mission.