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A report into China’s food processing sector makes for some comforting reading for those betting on growth of premium health-focused seafood like sablefish and salmon.

Sales of food and drink, particularly functional categories, enjoys higher growth than overall fast moving consumer goods (FMCG) in China, according to an annual report by OC&C Strategy Consultants which ranks the top 50 FMCG food groups. Growth is stronger in food categories with ‘healthier’ or functional connotations – including salmon, sablefish and forms of whitefish and crustaceans marketed for their health benefits.

Increasing household incomes are driving a trend for premium products like seafood, according to Jack Chuang, Partner, Greater China, OC & C Strategy Consultants. Growth is largely attributed to price, not volume, as emerging middle class consumers look to trade up to higher quality food products.

Consumers have shown shifting shopping habits, with online channels becoming more prevalent. E-commerce continues to be a large growth channel, growing at approximately 35 percent, with lower tier cities seeing the strongest growth. Low-tier cities continue to show stronger growth (7 percent) in FMCG spending than tier one and two cities growth (2.9 percent), driven by increasing average household incomes.

There is however a striking absence of Chinese brands on the list which is headed up by Nestle and includes only two Chinese companies: pork processor WH Group (18) and 47th placed maker of convenience-themed drinks and snacks, Tingyi. Yet, while consumers are keen on imported food products, domestic players appear to have a better handle on distribution as well as responsiveness to local taste trends. The report shows local brands have managed to capture trends such as “premiumisation” more effectively than their global counterparts.

MadelynKearns

Contact Madelyn Kearns

Associate Editor
mkearns@divcom.com
CliffWhite

Contact Cliff White

Editor
cwhite@divcom.com

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