With a 2018 population approaching 1.4 billion according to the World Bank, China is a key market for the F&B industry. However, recent economic developments have boosted unhealthy eating lifestyles; snacking and on-the-go eating have also increased health issues. This explains the rising demand for healthier food products that answer the “better-for-you” trend and have less of an impact on the environment. Companies entering the Chinese market should also be aware that ethical concerns and traceability issues are at the heart of the Chinese population who use modern technologies such as blockchain to ensure the quality of the food and drinks they buy. Mike Hughes from FMCG Gurus details the main key factors to take into account for any company seeking to enter the Chinese market.
How are Chinese consumers habits changing? How is it influencing the F&B market?
“Consumers are trying to take a more proactive approach to health as they embrace the concepts of holistic health and healthy ageing, looking to stay fitter in life until as late as possible. At the same time, consumers recognize that their current lifestyles could lead to health problems later in life. An FMCG Gurus survey of 1,000 consumers in China conducted in Q3 2019 found that whilst only 18% of consumers in the country deem themselves to be unhealthy, a total of 45% say that they have looked to improve their health. As a result, consumers are taking more interest than ever before in the food and drink that they eat, looking to avoid dietary evils such as sugar and seeking out food that they believe offers genuine nutritional value. For instance, a total of 58% say that they research how to lead a healthier lifestyle, and this is something that will make purchasing habits within the food, drink and supplement markets more considered.”
What food categories are getting momentum in China at the moment? How is that linked to Chinese culture and modern way of life?
“Two product categories that offer opportunity – and are interlinked – are the high protein market and the on-the-go snacking market. Despite wanting to lead a healthier lifestyle, consumers admit that there are several challenges when it comes to doing so. For instance, an FMCG Gurus survey of 1,000 consumers conducted in Q3 2019 found that 26% of consumers in the country say that attempts to eat healthier are hindered by the fact that they eat on-the-go a lot, whilst 47% say that time-scarcity means that they are very dependent on convenience food. As such, when it comes to such occasions, consumers are seeking out better-for-you options when it comes to snacking (such as high protein/low sugar product offerings) to alleviate feelings of guilt associated with such consumption habits.”
How do Chinese consumers evaluate how transparent and trustworthy their food brands are?
“Consumers in China are not fully trusting of brands. For instance, an FMCG Gurus survey of 1,000 consumers conducted in China in Q3 2019 found that 81% of consumers say trust is important when buying food, yet only 47% of consumers are trusting of food brands and 27% say that they have become less trusting of food brands over the last two years. Concerns about misleading ethical and environmental claims are a key reason why consumers are not trusting of brands. As such, consumers want maximum transparency when it comes to marketing claims and nutritional information. One way of helping enhance transparency and trust is through blockchain technology that allows consumers access to information about the supply chain of companies. Indeed, a total of 64% of Chinese consumers said that they would use such technology to analyse food, drink and supplement brands if it was available.”
What health concerns are most apparent? And how are Chinese consumer responding to these issues in terms of food they choose?
“Modern lifestyles in China are creating several health concerns due to changing dietary habits, greater levels of inactivity and pressure to succeed both personally and professionally. For instance, only 30% of consumers in the country say that they are satisfied with their waistlines, an FMCG Gurus survey of 1,000 consumers in Q3 2019 reveals. This reflects how non-essential consumption occasions continue to rise, as does the amount of processed food that is eaten. Meanwhile, a separate survey conducted in the same period and with the same sample size found that 40% are dissatisfied with their sleeping habits and 34% with their mental wellbeing. Cognitive health is a major issue and is driven by cultural issues relating to success, meaning little rest time and feelings of stress. As a result of this, consumers are increasingly embracing the concept of holistic health, realizing that all aspects of health are interlinked and impact on each other. As such, they are engaging in activities such as changing their diets, trying to get more sleep and trying to exercise more in order to improve physical and emotional wellbeing.”
What opportunities exist from a product perspective in Chinese market?
“High protein products such as bars and snacks present a major opportunity within China, as the sports nutrition market continues to witness rapid growth. This is being driven by health-conscious consumers saying that they are making conscious decisions to switch from traditional snack products to high protein/low sugar offerings. Indeed, a total of 62% of consumers say they have done this in the last twelve months, an FMCG Gurus survey of 1,000 consumers in Q3 2019 shows. When it comes to such opportunities, the key is ensuring that products offer taste and nutrition simultaneously. For instance, 48% of Chinese consumers say that they are concerned about the aftertaste of high protein snacks. If products are associated with compromised indulgence, consumers will be less willing to turn to them.”
What are your predictions for the Chinese market in 5+ years?
“FMCG Gurus forecasts that cognitive health will be a major focus in the food and drink market over the next five years. This is because consumers will continue to suffer from feelings of stress and sleep deprivation. Consumers are looking to cram as many activities into the day as possible. They are also trying to take advantage of economic opportunities that exist as well as trying to settle down with a family, which can impact on pressure to look good or achieve an image that cannot be achieved. As a result of this they will have little time to rest and unwind, all of which will impact on their cognitive health. FMCG Gurus research shows that 29% of consumers in China have looked to improve their mental wellbeing in the last two years, and we expect this figure to grow. This will create opportunities for products and ingredients positioned around rest and relaxation, such as botanicals. The key is reassuring consumers that such products are natural and effective.”