How China’s Jamie Oliver is changing factory canteen food and dreams of feeding nation’s growing middle class

Hong Kong-raised Richard Craggs ate in enough southern Chinese factory canteens to know much of the food was awful, and set out to revolutionise it from his Shenzhen base. Now he’s moving into upscale meal delivery

PUBLISHED : Friday, 09 December, 2016, 5:47am
UPDATED : Friday, 09 December, 2016, 5:46am

As a teenager, Richard Craggs got his kicks leaping across rooftops and scrambling up buildings – long before parkour went mainstream in Hong Kong, where he grew up. Now 42, and based in Shenzhen, he’s taken another leap of faith: this time into one of the toughest food and beverage markets in the world.

The Briton moved to China 10 years ago, working in the retail gift industry, so has eaten his fair share of canteen fare. “I’ve visited thousands of factories, many of them out in the sticks where there’s nowhere else to eat, and the food is so lousy,” he says. “I like Chinese food, but this is greasy, it’s terrible. It’s like animal feed.”

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With most workers eating meals provided by the factory, and earning a minimum wage, they’re often faced with no alternative, he says. “The working and living conditions are pretty tough. They’re the unsung heroes of China’s industrial revolution; the least we can do is improve their food.”

So, inspired by celebrity chef Jamie Oliver’s transformation of school canteens in Britain, Craggs embarked on a mission to revolutionise the food served to factory workers and schoolchildren in China. Since launching his low-cost catering company Nourish 2½ years ago, its revenue has grown to US$12 million a year, and the venture is serving close to a million meals a month in southern China.

When he first touted his plan for Nourish to others, however, “they all thought I was nuts”, says Craggs, joking that his only previous experience in the food industry had been “eating and drinking”.

“They asked, ‘How are you going to cook a full meal for six to eight yuan (HK$6.50 to HK$8.75)?’ That’s what workers pay for unlimited rice, unlimited soup, two meat and vegetable mixes, and some vegetables.”

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Craggs had started out in 2012, buying two loss-making restaurants, then sought out safe ingredients from vetted suppliers.

Unwilling to sacrifice on quality, he needed to find a way to buy in bulk to bring prices down.

[Factories] all have the same problem: lousy food, unhappy workers. If we can provide a solution to that, then this could be huge
Richard Craggs

“There are a lot of great farms in China, growing organically, working really hard and taking care of their land,” he says. “There’s actually a lot of great produce you can get here, so it’s really about vetting which ones are good, and making sure that we’re buying from them.”

He began contacting factory canteens, offering to sell them food at cost price, and ended up supplying 13 factories, proving that he could generate a margin, even from a six yuan meal.

He then approached investors in Hong Kong, telling them: “There’s hundreds of thousands of factories in China, and they all have the same problem: lousy food, unhappy workers. If we can provide a solution to that, then this could be huge.”

Before long, Nourish was signing contracts with the likes of FAW-Volkswagen, Foxconn and Stanley Black & Decker. Cragg’s partner, Australian Chinese restaurateur Gordon Tse, oversees recipe creation and trains chefs in the factories.

Food safety scares in recent years gave him confidence that the venture would be a success, he says. “No one really trusts food in China: melamine in milk, gutter oil being used in more than 10 per cent of restaurants, fake eggs. You never know what’s being injected into meat – sometimes it’s a fairly safe sort of gel, other times its plastics. Anything to make it heavier and make more money.”

The government is working hard to improve food safety in China, he says, and is continually improving legislation and standards, imposing stricter quality controls and inspections, as well as raising public awareness.

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While the prohibitively low food budgets of factory workers was the first hurdle Craggs faced, another difficulty was dealing with an entrenched system. A handful of big caterers scoop most of China’s canteen contracts, then subcontract them to small operators, keeping a cut for themselves. This squeezes the budget further, and perpetuates poor food quality.

“The way it’s set up – with subcontracting, hong bao [red packet money] and greedy decision makers who aren’t the owners of the factories – means the person cooking at the end of it is not a trained operator,” says Craggs. “And because they’ve effectively bought the contracts, they don’t really feel they’ve any risk of losing it. So they just have to put out something on to those plates. And the benchmark is that if the workers don’t riot, it’s OK.”

With increasing awareness of labour rights over the past 10 years, workers have begun to complain and even strike over the poor quality of food provided in factories, he adds. Contractors get around this by simply changing suppliers, “hoping the food will be better, and inevitably it’s not”.

Unsurprisingly, he has knocked a few noses out of joint. “I’ve had a few hairy experiences in China,” he admits, laughing. “I’ve been held at knifepoint by one of the old canteen providers that was getting replaced by us. One of our staff was kidnapped at one point.”

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One worker, who’d been paid to sabotage Nourish’s business, put a cigarette butt in some soup, but they installed CCTV cameras and carried on.

“There are inherent risks – there’s a lot of money going around in the catering business. Of course, there’s going to be someone unhappy on the other side,” says Craggs, adding that Nourish always offers jobs and training to employees of suppliers being replaced.

Looking to add further value, Nourish recently started offering more variety by emulating a food court at the factories, including spicy, noodle, steamed, and fried sections, and a barbecue station.

Craggs also found schools facing problems with food quality and safety, and Nourish is now catering to seven schools and kindergartens, two of which are international. How are his healthier, tastier meals going down with the children? Nourish’s first big contract saw them competing on-site with Chartwells, the China arm of the world’s biggest canteen caterer, Compass. Nourish outsold its rival three meals to one, he says.

Now, Craggs wants to feed middle-class families in China, with the launch of food tech start-up NomNom. The idea is to leverage the company’s two central kitchens, and the vetted ingredients, but while Nourish meals are cooked on site at the factories, with NomNom, based in Shenzhen’s Nanshan district, the food is cooked centrally and delivered.

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“The goal is to put out restaurant-quality meals, but at a lower cost than what families would spend if they bought the ingredients at the supermarket. Save them some money on their monthly food budget,” says Craggs. “And with delivery times of under 20 minutes.”

The goal is to put out restaurant-quality meals, but at a lower cost than what families would spend if they bought the ingredients at the supermarket
Richard Craggs

It’s a tall order, but he’s already found a solution. They’ve set up multiple distribution pods in different areas. The food is prepared, blast-chilled (to retain its nutritiousness better than freezing it would) and delivered via cold storage trucks to the pods, which also have cold storage. Uber-style delivery bike riders can be recruited to zoom the meal, hot or cold, from these hubs to schools, offices, factories and homes.

“We have our own delivery riders too, but to avoid having an army of thousands, we’re creating the tech that allows us to have freelance bike riders (of which there are a lot in China) who we can vet and sign up, and they can run the final leg of the journey,” says Craggs. “They can download an app onto their phone, and it will identify the hub which has the food that needs delivery, and make their way there. So we can empower riders to have their own business.”

NomNom was launched in September with seed capital of about US$1.5 million, invested by Singapore fund Raging Bull and food and beverage professionals in Hong Kong. It is already serving 1,000 meals a day, has signed agreements that will lead to more than 10,000 meals a day in the coming months, and is expanding the two central kitchens to be able to produce 50,000 meals a day.

Maintaining trust and quality control is crucial to both businesses, says Craggs, who visits farms the wholesalers buy from to inspect the land, chat to farmers and collect soil samples for testing.

As for his future plans, Craggs plans to enlist a butcher and a baker, and add wines and beers for NomNom deliveries. For now, he will continue to focus on southern China, although he hopes eventually to expand north. “My dream is to have thousands of little pods all over China, all doing something good,” he says. “There’s a lack of trust in China’s produce nowadays, so we really want to build that trust back.”