Seafood suppliers are set to benefit from shifts in Chinese dietary trends toward more healthy proteins, as well as changes to the country’s foodservice sector, according to a new report from Utrecht, Netherlands-based Rabobank on China’s meat protein market.
Titled “New Consumption Trends in China Offer Opportunities for Animal Proteins,” the report outlines why seafood traders, who have been gloomy recently about soft demand in China caused by weak economic growth and consumer sentiment, have cause to be more optimistic about the near future.
That optimism is mainly due to Chinese consumers catching on to a global healthy eating trend, which has seen them turn from red meat toward products including seafood, according to the report.
Leading that trend in China are value-seeking urbanites, who caused China's per capita seafood consumption rate to rise an average of 4.4 percent annually between 2013 and 2023, while during the same time frame, consumption of pork rose only 0.3 percent per year.
Rabobank’s findings, along with findings in a recent U.S. Department of Agriculture report predicting a rebound in China's demand for seafood imports, indicate a shift is underway in the Chinese market. Chinese seafood imports fell 11.5 percent year over year in value terms over the first five months of 2024.
However, because current buying trends favor value offerings, opportunities for seafood traders are limited to lower-priced species, according to Rabobank. Value is the top priority for Chinese consumers in making purchasing decisions on proteins, followed by functionality, Rabobank found.
“Chinese consumers want higher-value goods but at reasonable prices,” Rabobank said.
The opportunity created by the shift extends to China’s foodservice sector, according to Rabobank. Recently, fast-casual dining chains have undergone rapid expansion in China, particularly those serving low-priced whitefish species like pangasius, tilapia, and snakehead. According to Rabobank, a price war is occurring among these large restaurant chains, which will lead to consolidation in the sector. The winners of this war will most likely be the chains who can eke out the most gains from their low-cost seafood offerings, it said.
Major players in the space, like Guangzhou, China-based catering group Jiumaojiu, have reported lower per-customer earnings due to discounting, while another chain, Yu Ni Zai Yi Qi, which also operates under the name Together With Fish, has opened a new U.S. outlet in an attempt to find revenue and better margins outside of China.
The report said this trend will also result in a shift of kitchens away from individual restaurants to large central kitchens where items are pre-cooked or prepared before dispatch to individual outlets. Suppliers who can secure contracts and satisfy large protein orders in bulk will be best-off in this scenario, according to Rabobank.
Some Chinese seafood firms have already bet on the rise of foodservice chains and are reaping the benefits as trends align with their business strategies. For example, Guolian Aquatic has, over the past decade, expanded into the processed and pre-prepared space, supplying fast food chains with breaded shrimp and fish burgers from its central kitchens.
Rabobank's report advised seafood traders to stay updated on the constantly shifting trends in Chinese food demand, as those who do are more likely to reap the rewards.
“We expect seafood imports to maintain an upward trend in the coming years, despite the slowing economy,” the report said.
One other growing trend Rabobank noted in China was rising direct-to-consumer sales through social media. Sales of seafood via live-streaming social media platforms have resulted in big tech companies like Wechat and Pinduoduo growing their share of online fresh food sales in China from 4 percent in 2019 to 32 percent in 2023. Consumers use the channels for advice on food preparation as well as to make purchases of food, modernizing the industry in the process, according to Rabobank.
