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With over 1.3 billion population to feed, China’s food and beverage industry is enormous and plays a vital role in the country’s economy. Since 2011, China has surpassed the United States to become the world’s largest consumer market for Food and Beverage (F&B) products. The increasing number of middle class population with more purchase power, as well as the growing attention on the food safety and food quality are believed to be the main reasons to drive China’s food and beverage market moving forward.
According to a recent industry report from EMIS, the production volume growth in China’s food and beverage sector has slowed down since 2015, while the production of sugar, beer, meat and candy has witnessed some most significant declines. However, positive growth rates have achieved by the dairy, canned food, soft drink, liquor and refined tea segments. The real growth of food-manufacturing value added moderated in 2015 to 8.5% year on year, down from 9.3% year on year in the previous year, and remained generally steady in 2016, with value-added rising by 8.6% in the first ten months of the year. Beverage manufacturing, on the other hand, increased by 7.8% year on year in 2015. As of October 2016, the growth of beverage sector in China totalled 9.5% year on year.
Over the recent decade, the domestic food and beverage market in China has become increasingly relying on imports, as consumers in China are increasingly looking at foreign brands as a source of quality and trustworthy food products, following several severe food safety scandals in China from 2008 to 2010. A 2012 Pew survey found that 41% of Chinese people were deeply concerned about food safety, compared to just 12% four years earlier. According to the official statistics, China’s import value of food and beverage totalled US$ 58 billion in 2015, while China’s food and beverage import market is expected to increase more than 15% annually, reaching a projected value of US$71 billion by 2018.
Currently, milk products, seafood, fresh fruits, processed foods, baby foods, alcohol are some of the most popular imported products in China’s food and beverage market. While China’s top 10 importing sources for food and beverage products include the EU, ASEAN countries, New Zealand, the US, Australia, Brazil, Canada, Russia, Argentina and South Korea. Since 2014, these areas accounted for over 82% of China’s imported food and beverage trade. The EU remains as the largest food and beverage supplier for China, with food and beverage imports to China worth over US$ 10 billion annually.
The future of China’s food and beverage market is expected to grow bigger, driven by factors such as the rapid rise in middle class population and average household incomes, improvements of infrastructure for food and beverage distribution, and the increasing sales of E-commerce for food and beverage. China’s Association of Food Industries predicts that China will be the world’s largest consumer of imported food by 2018. Euromonitor also forecasts that the Chinese food service sector will remain as the largest in the world in near future.
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