Successful products align with unique food and beverage trends in China, which sometimes buck global norms

Fast Facts:

  • With the income of urban consumers in China projected to double between 2010 and 2020, the “mainstream”, or middle class, segment of the population is projected to grow exponentially.
  • With this shift toward greater earnings, discretionary spending patterns of the average Chinese consumer are set to change, including in food and beverage.
  • To thrive in this climate, brands must account for unique food and beverage trends in China.
  • Amidst this transition, three guiding principles are important for satisfying consumers:
    • Keep it Pure
    • Keep it Premium
    • Keep it Exciting

Households in China are growing wealthier at an exponential rate. For instance, “mainstream” households, which are characterised by an annual household income of between $16,000 and $34,000 USD, will represent slightly more than half of all households in China in 2020, according to McKinsey, up from just 6% in 2010.

This increase in income presents a lucrative opportunity for the food and beverage sector. However, China’s consumer landscape is famously unique, meaning brands can’t simply transplant successful products from their global portfolio and hope for success. To get a share of China’s one billion-plus consumers, brands need to understand the unique food and beverage trends in China that are driving purchases, including how they differ from global norms.

Here are three tips for international brands seeking to enter or scale in China:

Keep it Pure
With expanding incomes come expanding waistlines—a study in the New England Journal of Medicine said that in 2015, China had more obese children than any other country. In response, consumers in China are increasingly health-conscious and are opting for food products they consider “pure,” which mostly means they have no or low amounts of sugar, fat and preservatives.

An example of this focus on healthy foods is the popularity amongst Chinese consumers of “naked yoghurts,” which usually contain only milk, probiotics and, in some cases, sugar. There have also been successful marketing campaigns built around the freshness of foods, with bakeries advertising the shortened shelf-life of packaged baked goods as a sign of reduced preservative use and supermarkets offering same-day milk delivery straight from the production facility.

Keep it Premium
The growing ranks of mainstream, middle-class Chinese also means a growing appetite for premium food ingredients and processes. This premiumisation trend means that rare local ingredients—from the humble avocado all the way up to expensive truffles and foie gras—are in demand. As with the “pure” trend, the growing popularity of “premium” ingredients in China also places an emphasis on provenance, with consumers keen to know the origin of these ingredients as well.

Recent examples of brands that have done well by tapping into this trend are Danone’s line of Ready-to-Drink (RTD) teas, which feature exotic Yerba Mate and Rooibos blends from South America and South Africa, and a local coffee brand that recently introduced a range of RTD coffees that feature unique coffee bean origin statements as a point of differentiation.

Keep It Exciting
Overseas travel for Chinese consumers is now the norm, not the exception. According to statistics from the Chinese National Tourism Administration, Chinese residents traveled overseas on more that 131 million occasions in 2017, an increase of 7% from the previous year.

With more sophisticated and well-traveled palates, Chinese consumers are increasingly open to bold, exciting and unique tastes. This has given rise to the growing popularity of flavour blends such as Snickers’ Spicy Peanut Butter bar or bright and bold ice creams, which combine traditional tastes with overseas influences.

The search for more exciting options doesn’t stop at flavour. The dominant feature of this trend is that food and beverage brands are continually having to push the boundaries to come up with more and more “out there” concepts to catch attention. Particularly amongst younger, always-on consumers, the optics of food and its shareability on social media are as important to its success as how it tastes.

Because China is the largest social media market in the world, food and beverage loyalty is increasingly tied to the experience. China’s recent “dirty” trend—which involved creating food products such as chocolate-based breads or teas that were virtually impossible to consume without mess—is a classic example of this.

Visually exciting products will continue to perform well, and should be an important consideration for market entry. With the short lifecycle of products and food and beverage trends in China, brands looking to grow their presence should consider creating an experiential element around product launches too. Pop-up stores, particularly ones that incorporate a shareable experience, will likely be integrated into a growing number of launch strategies in China.

If you are interested in learning more about the food trends sweeping the globe, click here. 

Article sourced from https://kerry.com