Slowing rates of economic growth and shifting consumer priorities are altering demand for food and beverage products in China, with consumers prioritising value-for-money, convenience, and health.
The cautious approach to spending is occurring as disposable income growth slows and financial uncertainty rises. At the same time, sustainability and experience-driven purchases are gaining importance, particularly among younger consumers. These shifts are driving long-term changes in the Chinese food and beverage market, with implications for the way brands approach product development, pricing, and engagement.
With China’s economic growth underperforming expectations – growing 4.7% in the second quarter of 2024, according to official Chinese data cited by Reuters – consumers are exercising more caution in their spending habits. The focus on value for money is as important as ever, as many shoppers pivot from big-ticket purchases towards essential categories like food and drink.
However, consumers’ understanding of value has evolved. Mintel reports that for many Chinese buyers, especially younger generations, value for money does not just mean low prices. Instead, they expect a balance of quality, efficacy, and affordability. This shift is particularly evident in product categories such as beauty, personal care, and food, where Gen Z consumers seek products with added health benefits, such as natural ingredients and long-lasting performance.
An August report from RaboResearch on evolving consumption patterns in China echoes these findings, noting that the demand for value extends to the animal protein market, where healthier, leaner proteins such as poultry and seafood are favoured over pork, which has seen its share of the protein market steadily decline. The challenge for brands lies in balancing price and quality while offering added value, such as health benefits or convenience, to meet consumer expectations.
Despite economic uncertainty, health remains a top priority for Chinese consumers across demographics. RaboResearch highlights that consumers are becoming more selective about their food choices, prioritising proteins like seafood, beef, and poultry for their perceived health benefits. Freshness and health claims are particularly important in driving purchasing decisions, as is the demand for products that are perceived as more digestible or support weight-loss.
Mintel consumer surveys, meanwhile, show that Gen Z and parents are especially focused on health benefits. These groups look for products that offer both convenience and nutrition, such as ready-to-cook meals that save time but still meet their health goals. This trend is also visible in beverage categories. A June consumer insights report from Innova Market Insights shows an increased demand for bottled water due to its healthy positioning. Innova also finds that consumers are actively seeking beverages that promote wellness, such as those with reduced sugar or fortified with vitamins.
Urbanisation and fast-paced lifestyles are leading consumers to prioritise convenience, with ready-to-eat and pre-prepared meal options becoming increasingly popular. This trend is particularly strong among time-pressed consumers, including young professionals and parents. RaboResearch notes that ready-to-cook and pre-packaged meals have grown in popularity, as they offer both time savings and consistent quality.
Gen Z consumers, in particular, are drawn to convenient shopping experiences, with Mintel reporting that this group is highly influenced by digital shopping channels and live-streaming platforms. These platforms, which allow consumers to engage with brands and purchase products in real time, are reshaping the retail landscape in China. For brands, this means that digital-first engagement strategies are increasingly important, especially when targeting younger consumers looking for both convenience and experiential shopping.
Such experience-driven purchasing is becoming more significant across China’s food and beverage market. RaboResearch highlights the growing popularity of live-streaming platforms, where consumers can watch product demonstrations and engage directly with brand. Sales generated this way increased by 85% on a compounded annual growth basis between 2019 and 2023. While only a small proportion of online sales (4.3%) came from live-streaming in 2019, by 2023 they accounted for almost a third (32%) of online sales. This interactive shopping experience appeals particularly to Gen Z and high-income earners, who prioritise novelty and are willing to pay more for premium experiences.
Innova Market Insights also points to the rising demand for novelty and variety in food and beverages. Consumers are looking for new and exciting product offerings, especially in categories like snacks and beverages. Premium products, such as those with claims of natural ingredients or unique flavours, are increasingly popular as consumers seek indulgent, high-quality options. This is further emphasised by Innova’s findings in the alcohol sector, where the consumption of premium beer, wine, and pre-mixed cocktails has grown as consumers seek more luxurious experiences.
Sustainability is becoming a crucial consideration for Chinese consumers, especially those with higher incomes. RaboResearch notes that demand for sustainably sourced seafood is on the rise, with products like shrimp gaining popularity due to their perceived environmental benefits. As awareness around environmental issues grows, consumers are looking for products that align with their values, particularly those with clean labels, ethical sourcing, and natural formulations.
Innova Market Insights similarly points out that product safety, natural ingredients, and local sourcing are key drivers in the dairy and plant-based food categories. Consumers are increasingly prioritising sustainability and health together, seeking out products that offer both functional benefits and a positive environmental impact. Brands that can clearly communicate their sustainability efforts, especially in relation to ingredient sourcing and production processes, are likely to build stronger connections with these values-driven consumers.
As economic conditions in China continue to shift, consumer behaviour is evolving in complex ways. Brands in the food and beverage sector must navigate a market where value for money, health, convenience, and sustainability are paramount.
