Richard Craggs left a successful career to pursue his dream: to provide quality and healthy canteen food to factory workers and schoolchildren all over China. Shenzhen Party sat down with the British entrepreneur to discuss his company NomNom and his unlikely Chinese food revolution.
Richard Craggs, founder and CEO of NomNom, moved to China 12 years ago. Previously he had been a Managing Director of one of the world’s largest retail gift companies, which took him all over China sourcing and setting up new factories. It was during this time that he witnessed factory canteen meals first hand.
“I’ve visited hundreds of factories, many of them in remote locations where there was nowhere else to eat, and the food was lousy,” he said. “I love Chinese food, but the factory meals were terrible, and I was touched by the workers who constantly complained about their meals each day.
Walking away from a successful career of 20 years, Craggs pivoted 180 degrees and set about on a mission to revolutionize the food served to factory workers and schoolchildren in China. In the beginning, it was tough.
Proving The Concept Works
“I was on my own with my life savings dwindling, and now I had to prove to investors that his model could be successful in Asia. I set about purchasing two loss-making restaurants with the business model to utilize their kitchens to prepare meals for schools and factories.”
“Factory budgets can be as low as RMB6 per full meal and my supply chains at that time could never achieve that budget, so I started visiting farms and large wholesalers to bring prices down. In the meantime, I won a contract with ISNS, an international school based in Nanshan, and a small Emerson factory located in Bao’an. Although our revenue tripled, the factory canteen was losing money, and fast.”
Unwilling to compromise on quality, Craggs understood that it was possible to purchase the ingredients within budget. It did require an increase in purchasing volume by over ten times, however, and as vegetables are perishable, holding inventory was not an option.
Burning through his savings and unable to increase his factory customer base, Craggs thought outside the box. He contacted 13 other small caterers supplying factories nearby and offered to consolidate and distribute ingredients at cost so to achieve his own food cost target.
Low-budget canteen catering is one of the toughest food and beverage markets, but he had a proof of concept; RMB5.9 for a full meal that includes a meat dish, two meat & vegetable mix dishes, and vegetables with unlimited rice and soup. The meals were of restaurant quality and he was able to extract a fair margin.
Craggs then approached investors in Asia. He told them, “There are hundreds of thousands of factories in China, and they all have the same problem: lousy food and unhappy workers. If we can provide a solution for that, then this could be huge.”
The demands of the factory worker have evolved with rising wages, improving living conditions, more benefits, and further support from the government. This has trickled down into their expectations within their canteens.
Land reforms lifted production of grains like rice and wheat, and millions started to enjoy more vegetables and pork as well as want luxuries such as beef and milk. This presented challenges with production capacities in farming. As part of NomNom’s food revolution, however, they have tackled the complex supply chains and accelerated their volume requirements to drive down costs. These and other savings are added back into the meals.
Giving Back To Factory Workers
In the past, factory caterers usually served up a lousy buffet where the menu never changed. In a typical NomNom factory food court, however, they have created a variety of meal options from their Pick ‘n’ Mix Buffet, Hot Pot, Noodle Station, Steam Varieties, BBQ, Fusion Set Meals, Clay Pot Rice, and blended Japanese, Korean, and international fusion. The food courts take into account the wide range of palates given that the workers come from all over China.
“Factory workers work very hard, on minimum wages, and live away from their hometowns in isolated locations. The least we could do to support them was to provide them with a quality meal and an abundance of variety at each serving time. Let’s not forget that these workers are responsible for manufacturing almost everything we use each day. They are the unsung heroes of China’s industrial revolution, and we wish for them to enjoy our food revolution as a token of thanks,” explained Craggs.
The time and investment spent on NomNom’s supply chain bode well for their other customers as now there is additional investment that can be injected into recruiting quality chefs, training staff, introducing more automation, and other scales that help efficiencies that we can pass on to our customers in terms of quality and price.
Improving The Food Diet Of Schoolchildren
NomNom’s focus quickly migrated from factories to international schools, where parents had contacted Craggs to see if he could help with their children’s’ school meals. This led to the USD750,000 acquisition of McCawley’s Fine Foods, which was operating a number of schools in the area. It was a brave move for an early-stage catering startup, given additional funds were required to upgrade the personnel, equipment, central kitchen, and cold and hot chain delivery vehicles.
“What really burns my toast is that there are a lot of catering companies simply going through the motions without really listening to the customers. Be it the schools, the parents, or the children themselves. Listening and blending this into our expertise has helped design our recipe-managed menus that are constantly evolving. Variety had always been a core initiative to cater to the differing palates of our customers, and now we offer both an International and Chinese buffet, as well as Korean, Chinese, Vegetarian, Organic, and Premium set meals. We have recently rolled out salad bars, fruit stations, freshly baked bread for breakfast, and ensured that all our menus are handmade using only ingredients from government approved suppliers,” said Craggs.
What Does The Future Hold For NomNom?
When asked about the future, Craggs explained, “We wish to continue to support healthy and quality meals within existing budgets throughout China. The plan is to continue to expand our school, factory, and office customers in South China, and eventually further afield. We still have some exciting new projects to launch from food trucks to vending and our own delivery app for homes and offices.”
“One important part of our model is to be transparent to encourage and inspire others to join our food revolution. We strongly believe that the consumer deserves this and we wish to support the government drive to ensure food production is safe, so we can rebuild the trust the people have with food.”
“Not one caterer holds even 1% of the catering market share in China, so one must not be concerned with competition as the market is huge. The overall demand trend is there for quality for price meals. If you can put quality first and offer value, the market will come to you. We currently do not have a sales team as we have been fortunate to have the majority of our customers reach out to us directly.”
International Awards and Recognition
The NomNom food revolution has been well-received in the market with phenomenal progress over the past two years. NomNom serves high profile international and local office cafeterias, provides for multiple factory food courts, and has become the largest international school caterer in South China. All of which has resulted in being nominated for the prestigious British Business Awards in two categories; Company of The Year and Entrepreneur Of The Year for their founder, Richard Craggs.
With international recognition and with more and more businesses and schools signing up, NomNom’s food revolution is just getting started.
Check out the video below to see just how the food revolution is sweeping over the canteens of schools, offices, and factories all over South China.
Office workers queue eagerly at a canteen catered by NomNom
NomNom’s state of the art, High Tech Central Kitchen in Nanshan
NomNom’s Factory Food Court Concept designed to upgrade the lives of workers across China