China’s expanding middle class means room for growth in a number of categories, especially food and beverage. That growth of Chinese consumers offers a lucrative market for U.S. based companies looking for international growth. Not only are Chinese consumers becoming more aware of the pollution and supply chain problems affecting their local farms and processors, but they are also looking for healthier, more convenient items that fit their busy lifestyles. These factors offer a wide range of opportunities for California food producers.

Chinese consumers are modern, urban and busy individuals who are looking for ways to stay healthy while saving time, and they are willing to pay a premium for it. Seventy-three percent of Chinese consumers are prepared to pay a premium for products they deem healthier (BCG) with one-fourth of wealthy families’ household budgets spent on health and well-being (Hurun).

The drive for health has affected foreign players as well as local established players. For example, China’s frozen dumplings makers have been reducing the amount of meat and upping the veggies in their offering, winning new sales and staying relevant.

Identifying the demand for specific products or ingredients allows room for growth. Understanding the concerns and requirements of specific segments is vital to staying ahead in China’s competitive market. An easy example is the different requirements among women and men. Women, for example, are more focused on the fat content, sugar and sodium of a product, whereas men pay more attention to additives/preservatives and genetically-modified ingredients (Mintel).

Across all urban consumer groups, the need for convenience is growing with the increase in urbanization and busier lifestyles. Chinese consumers in their 20s and 30s have a very different lifestyles, mindsets and shopping habits than their parents. They are busy young professionals and when they aren’t working they aim to spend time with friends, leaving gaps for convenience items to fit into their lives. Additionally, they are not as cost-conscious as their parents. They are spending more on groceries than previous generations favor high quality, convenient products.

According to Bain and Company, a rising number of food and beverage purchases are being consumed outside the home, raising the need to tailor products for out-of-home consumption such as smaller single serve portions and packaging that aids quick eating.  

California products fit the needs for healthier and more convenient food demanded by Chinese consumers. In a competitive market such as China, where an average of 160 products launch daily, tailoring for specific markets and trends is a must.

This article was written by Ann Bierbower, Director of Business Development & Strategic Partnerships for China Skinny.

China Skinny
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• Mintel: http://www.mintel.com/press-centre/social-and-lifestyle/chinese-consumers-more-focused-on-overall-fitness