In the restaurant industry, is "lack of innovation" actually the biggest competitive advantage? Five founders answer this question.

Ask AI · How can restaurant brands build long-term competitiveness through conservative strategies?

As restaurant brands rush to innovate, what exactly allows those that survive long and thrive to hold their ground?

The restaurant industry is accelerating from “scale-driven” to “efficiency-driven,” and the underlying logic is undergoing a profound restructuring.

Faced with these changes, every restaurant professional faces a question: when innovation becomes the norm and competition intensifies, how can brands ensure they move quickly but also stay steady?

At the 2026 China Restaurant Industry Festival, hosted by “Brother Qiang Talks Dining,” founder Li Qiang moderated a deep discussion with柴标, founder of Feifei Shrimp Village and vice president of Wuhan Restaurant Association;曹银苗, founder of Mountain Dwelling Catering Group;谢永亮, CEO of Mai Ji Milk;李俊云, co-founder of Fat Beef Hotpot; and孙嘉伟, founder of Rice Warehouse Canteen, on the topic “Category Innovation and Risk Prevention: How to Build a Competitive Barrier?”

1. The key to innovation is creating “new value,” not just novelty

Li Qiang: Over the past two years, consumers have become increasingly difficult to please—freshness is consumed too quickly, today’s hot item is forgotten tomorrow. I want to ask everyone: when you innovate now, is the biggest hurdle coming from consumers or from within your own organization?

Li Junyun: Yiwei Fat Beef Hotpot is a rotating hotpot brand, mainly doing single-serving hotpot. Now, there are over 100 stores in Hunan, Guangdong, Shanghai, and other places.

I think consumers aren’t becoming harder to please but smarter, better at recognizing what they truly want. Why do many fleeting viral hits appear? Because some only deliver “freshness” without providing “real value” to consumers. Freshness and real value are two different things.

Yiwei’s hotpot isn’t new; some customers might think it’s just a more impressive spicy hotpot. But we just improve the space, experience, quality, and service slightly—everything a bit better. We create a perceivable new value for customers—that’s innovation.

△Yiwei Fat Beef Hotpot Co-founder Li Junyun

For all restaurant peers, we face the same consumers and social environment. So, the real challenge in innovation is internal.

Internally, there are two main difficulties: first, making a viral product isn’t hard; sustaining systematic innovation is. Innovation in dining mainly involves monthly new products, from user insights to product R&D, testing, even including supply chain bulk procurement, store implementation, training, member engagement, online and offline marketing, etc. Without this entire implementation system, long-term continuous innovation of viral products is impossible. Innovation isn’t a one-person effort; it requires systemic capability and collaboration across many departments. If you only focus on one viral product, it might bring freshness but won’t sustain long-term cycle-crossing ability.

Second, the difficulty lies in how brands can scale while maintaining meticulous management. We have over 50 stores in Hunan, more than 30 in Guangdong, 19 in Shanghai, and 4 in Hangzhou. We are a cross-regional brand. For long-term business, precise store management is crucial. If you want to create viral hits or sustain innovation, cross-region chain brands must figure out how to maintain meticulous management at scale. We haven’t done very well in this yet because our headquarters is in Changsha, and many of our team members are from Sichuan, Chongqing, and Hunan, focusing more on local markets. We haven’t localized the menu and flavors well in Hangzhou, which is an area for future effort.

孙嘉伟: I believe that the logic of restaurant innovation, if limited to flavor innovation, is superficial. Innovation should follow long cycles. For example, after the pandemic, more consumers gather for meals, so group dining projects have exploded. Is innovation necessary here? Not necessarily—you can meet many needs by slightly enlarging traditional products.

In the future, with the rise of the single economy, one-person dining will become more common. Should innovation involve creating a new category or brand? I think that’s unnecessary—you can simply narrow the category. This is all driven by economic cycle logic.

△Rice Warehouse Canteen Founder Sun Jiawei

From today’s perspective, it’s not necessary to please young people specifically. Now, the silver-haired economy is the biggest market; China adds two million elderly people each year.

I believe innovation should be based on customer groups and scenarios, empathizing with consumers and tailoring many offerings for them. The founding team’s empathy is very important. We can’t do vegetarian because we lack empathy for that. But I see that the brand Sumanxiang is truly great—they made a bold decision to focus on vegetarianism, because the founding team can empathize with vegetarians.

2. Innovation should start with conservatism; doing deep is more important than doing broad

Chai Biao: Feifei Shrimp Village has stores in Wuhan, Shenzhen, Hefei, and Xi’an, with the most in Wuhan.

A brand still needs a few durable core products. Take Feifei Shrimp Village as an example: shrimp is the core product, accounting for over 50% of sales. We felt this ratio was too high and aimed to increase sales of side products. Over the years, we developed new products and improved supply chains to boost side product sales. Now, shrimp’s core product accounts for over 40% of sales.

I always tell my team: innovation can slow down; first, focus on perfecting existing products. Upgrading old products is also a form of innovation.

△Feifei Shrimp Village Founder, Wuhan Restaurant Association Vice President Chai Biao

In our daily operations, we also innovate a lot. For example, we started offering peeled shrimp service—previously, customers peeled their own shrimp, but many women have manicures and find peeling inconvenient. So, we began providing peeled shrimp service.

Now, we also do single-serving meals. Many people eat alone, like during “special forces-style travel.” But a serving of shrimp costs nearly 200 yuan, and ordering one means you can’t order a second dish. So, we created single-serving options. That’s also innovation.

曹银苗: Chunyá has just opened over ten stores. I come from a big meal background and now do Hangzhou-style mixed noodles.

Our biggest internal challenge is the market and R&D teams, whose age groups differ. For example, older R&D staff think this point is good, while younger staff prefer others, leading to internal debates.

We focus on Hangzhou pepper beef, with innovation mainly around that. For instance, this year we collaborated with a research institute to cultivate a Hangzhou pepper base, making the peppers less bitter and more fragrant, with a slight spiciness. In different seasons, we pair seasonal ingredients with Hangzhou pepper beef, like in spring and summer, we make chive stir-fried beef.

△Mountain Dwelling Catering Group Founder Cao Yanmiao

We still stick to tradition—mainly Hangzhou pepper beef—and use fresh ingredients to pair with it, allowing for repeated seasonal innovations. Too much innovation confuses customers about what to eat. We also do localized innovations, like exploring spicy and sour flavors popular among young people, and plan to visit Thailand to see if we can develop similar toppings.

In summary, tradition forms the foundation, innovation is the pairing. Versatile but rooted, always revolving around mixed noodles and Hangzhou pepper beef, making customers feel you’re both consistent and evolving.

I think innovation also relates to categories. For example, Hangzhou mixed noodles is more about delivery mode innovation—conventional fast food involves crowded tables and quick service. When I created Chunyá, I wanted a more relaxed atmosphere, but still stylish. You don’t necessarily need large investments in decor; changes in table layout, space presentation, and delivery models are also innovations. Different categories require different approaches to innovation.

谢永亮: Mai Ji Milk is a new-style Chinese dessert brand with over 1,000 stores nationwide. Last year, we expanded to the U.S., and this year, we plan to open in Australia and Canada.

Currently, many brands talk about category innovation, but I believe conservatism is more important. Some brands innovate every month—if they truly do that, I’d be confused. What has Coca-Cola innovated over the years? Ten years ago, the price was the same; ten years later, it’s still the same. KFC occasionally reintroduces seasonal products, but the best-sellers are spicy chicken burgers.

Looking at global restaurant brands that have crossed cycles, they are mostly good at conservatism and depth. I tell my team: focus on depth in products rather than breadth. Chain brands involve cross-region and large-scale development, and standardization is crucial. If you innovate every month, how do you standardize? So, that’s a false proposition.

△Mai Ji Milk CEO谢永亮

Recently, I’ve been observing a brand—Wei’s Cold Noodles. They’ve perfected their product. Wei’s Cold Noodles makes hamburgers—no groundbreaking innovation, but they do deep work. A 25-yuan burger is thick, with healthy beef. Their decor is simple, location not prime, no delivery, but business is good.

So, I believe the premise of innovation is conservatism—deep cultivation first, then moderate innovation to add sparkle.

As a new Chinese-style dessert brand, Mai Ji Milk’s innovation is based on small improvements and iterations. We follow the “a little more” principle—try to do a little more, go a little deeper, today more than yesterday, better than yesterday.

A problem with desserts is standardization. No dessert brand has exceeded 800 stores, but Mai Ji Milk reached over 1,000 in a year. Why can’t desserts break past 800? Because of regionalization and SKU complexity, making standardization difficult. Once crossing regions, chaos ensues.

Our products haven’t changed dramatically—just two main adjustments. First, we simplified. Traditional Cantonese desserts have over 100 SKUs; we cut it down to 20. That’s our innovation.

Second, we pioneered “Milk + Natural Goodies.” Desserts include Taiwanese, Cantonese, Hong Kong styles. Mai Ji Milk is a representative of Chinese-style desserts; milk is universally accepted, with no regional cultural differences. Natural Goodies like peach gum, cassava, grains are healthier ingredients—another micro-innovation.

3. The real difference in brand positioning lies in the supply chain behind the scenes

Li Qiang: You said future hotpot brands will be “category leaders at the top, regional dark horses meeting niche needs.” Is Yiwei Fat Beef Hotpot currently a leader or a dark horse? If you want to truly become the absolute leader, what’s the most critical shortcoming to address?

Li Junyun: If “leader” means the absolute top, and “dark horse” means strong potential, I think Yiwei is currently on the way to the top, practicing long-termism as a dark horse. We now have over 120 stores. In terms of store count, we’re not number one in the category; in profit, we’re still far from the top. But our goal is to be number one, and we’re on that path.

Our advantage is supply chain. Although Yiwei has only been established for over two years, our company has over a decade of experience in hotpot, with supply chain and organizational strength. The ability to quickly replicate a successful model across many stores depends heavily on supply chain accumulation.

To become the absolute top, a crucial area to improve is deeper user engagement and brand awareness. Whether an internet celebrity brand or large-scale, surviving to the end is what makes a winner.

△Image source: Yiwei Fat Beef Hotpot

A good measure of an absolute top brand is whether your brand name can represent your category. For example, Maotai is the top Chinese liquor; when you mention cola, only those two brands come to mind.

李强: Crawfish is a highly seasonal and scenario-dependent category, with fierce competition and淘汰. Feifei Shrimp Village has been operating for 18 years and still maintains competitiveness. What do you think are the true barriers in this category? What’s the most critical capability to turn a seasonal category into a year-round business?

柴标: There are two barriers: supply chain and sourcing.

Our supply chain was built in 2018 in partnership with a state-owned enterprise. All Feifei Shrimp Village stores have no warehouses; in Wuhan, we deliver two to three times daily to ensure freshness.

The essence of restaurant food is deliciousness, which depends on good ingredients. Without good ingredients, even a five-star chef can’t make tasty crawfish. Over 50% of Feifei Shrimp Village’s revenue comes from crawfish, so sourcing is critical. Ten years ago, we started building bases nearby, working with state-owned enterprises to control our supply.

Our strength in competition is also in sourcing. Many think crawfish fishing season is only in summer. In December 2025, local governments held the first winter crawfish harvest festival, promoting year-round crawfish industry development, aligning with our goal to serve crawfish all year.

△Image source: Feifei Shrimp Village

Many competitors only operate crawfish in summer, then stop. We chose to operate fixed stores from the start, believing in long-term persistence. If a competitor focuses on big single products, I advise them to invest heavily in supply chain before opening stores.

4. Don’t blindly compare with industry giants; focus on your niche to break through

Li Qiang: Chunyá became a phenomenon in just over a year. Have you ever worried that such rapid growth might be a risk? Now, Chunyá is doing version 2.0—are you consolidating your foundation or trying to accelerate before the hype fades?

曹银苗: The risk doesn’t come from traffic explosion but from ourselves. The category of mixed noodles is just starting to gain traction; the risk is mainly about doing it well enough.

We are also iterating ourselves. I visited Korea and found many cafes there feel very relaxed. I wondered if noodle shops could also be relaxed, so Chunyá is optimizing and iterating to give customers a feeling of dining in a chef-led restaurant.

△Image source: Red Restaurant Network

Self-iteration prevents market淘汰—being淘汰d by the market means being淘汰d by customers. Every new store has shortcomings, so we constantly adjust and improve.

We don’t obsess over quantity. I have a good friend who’s been in the restaurant business for 20 years, with three stores, each earning about ten million profit annually. We often say that’s the best way to operate. So, we don’t chase numbers; steady progress and compound happiness are the strongest. We want each Chunyá store to thrive.

李强: Mr. Xie, you predicted that with many players entering and models being quickly copied, the industry will soon undergo a reshuffle, possibly leading to a “winner-takes-all” situation. Do you think Mai Ji Milk can be that winner? From your perspective, what core capability are most milk dessert brands truly lacking today?

谢永亮: In March 2025, I gave a brand presentation in Shanghai with over 50 stores, saying we aim to be the “Number One Chinese Milk Dessert Brand.” Last year, we became the top in the milk dessert track—not just in scale, average store performance, repurchase rate, praise, and传播, but also expanded internationally, opening our first store in the U.S.

We keep reviewing and iterating. Whether we can continue leading and how to maintain advantages is what we need to think about.

△Image source: Red Restaurant Network

This year, we proposed “Steady and Far-reaching.” Someone asked how many stores Mai Ji Milk plans to open this year. I said no target for store count—my goal isn’t quantity but to ensure each store can survive well and go far.

To reach this goal, iteration is key. I believe in the “a little more” cultural iteration—staying conservative, leveraging our strengths, making products better and more standardized. We keep deepening these efforts. We also continue to seek natural good ingredients, bringing raw materials outside the traditional dessert realm into the dessert world and before consumers.

李强: More consumers are pursuing “affordable and beautiful meals.” But “affordable” and “refined experience” are inherently contradictory in cost structure—they either cut ingredients, labor, or sacrifice space efficiency. Where does Rice Warehouse Canteen cut costs? What are the sacrifices consumers don’t perceive?

孙嘉伟: If we talk about true cost-cutting, today’s restaurant industry mainly cuts labor. Rent can’t be cut; ingredients have little bargaining power. But if you pay employees low wages, they won’t stay. So, the only way is to improve labor efficiency.

By increasing labor productivity, we can maintain a competitive edge. Our stores’ labor costs are generally below 17%. When we opened the first three stores, we adopted McDonald’s model—an effective way to save labor costs.

I believe every brand’s rise is built on the downfall of others. Essentially, industry leaders are not doing well, giving others a chance to compete and leapfrog. In the 50-60 yuan per customer segment, once dominated by tea restaurants, their popularity waned after Hong Kong cultural trends faded. That’s how we got our opportunity.

Many are willing to challenge the giants. My logic is: we never challenge the strong, only the weak. When the top of a category weakens or the sector shows clear fatigue, then we compete.

△Image source: Rice Warehouse Canteen

Rice Warehouse Canteen is profitable because we have modest ambitions. First, we don’t dream of thousands of stores. Our model is designed for China’s A and S class shopping malls—focused on survival in such malls. We focus on one thing—affordable and high-quality. In all A and S malls, Rice Warehouse Canteen offers extremely high cost-performance.

Consumers vote with their feet. In recent years, fancy restaurants were popular, with per capita spending over 100 yuan. Rice Warehouse Canteen’s per capita is just over 50 yuan, with decent experience, leading to frequent repurchases—that’s a reasonable logic.

You say Rice Warehouse Canteen can’t beat many fast-food brands. We can’t compete on volume, but our revenue isn’t bad. We’ve asked successful brands with low prices and high performance—they queue up fiercely, but their sales are similar to ours because a single customer in Rice Warehouse Canteen spends twice as much as theirs. We can only excel in the 50-60 yuan per person segment—too low or too high isn’t our game.

This transcript is from the “2026 China Restaurant Industry Festival” roundtable, compiled and published by Red Restaurant Network, with some edits.