The market researcher attributes this swing in tastes to the increasingly fast pace of life in the country that has led more consumers to value convenience over preparation.
Despite a weak global economy, China’s prepared meals segment is expected to grow rapidly to the point that it is ranked among the top ten food sectors in the country.
Indeed, the country should expect to see a compound annual growth rate of 10.3% by value for the forecast period from 2012-2017. Volume is projected to grow at 7.4% for the same period.
But while these look like strong growth rates, they are coming from a very low base and limited selection, said Canadean analyst Ronan Stafford.
“Prepared Meals are rarely consumed in China and account for only 0.5% of food markets by value.
“This is less than half the value share prepared meals have in Thailand, Hong Kong and Australia, and far below the 3.6% share they enjoy in Japan. This low share is the result of the lack of variety in prepared meal formats in China,” he explained.
The prepared foods category is led by ready meals, which took the highest share of value (93.4%) and volume (93.8%) in 2012, and this trend is expected to continue up to 2017.
“Xiamen Yinlu and Hangzhou Wahaha are the leading brands in ready meals in China, but the market is still highly fragmented beyond them,” added Stafford.
The category is also expected to show the slowest rate of growth over the next five years, with a projected CAGR of 7.3% by value and 10.3% by volume up to 2017.
The increasingly Western nature of food and drink products in the country has helped pizza to become the fastest growing category of the prepared meals sector, with a value and volume CAGR of 11.2% and 8.1% respectively up to 2017.
But of the nine segments in the three prepared meals categories Canadean’s report covered, just one accounted for three-quarters of the market: ambient ready meals.
“This reflects the dominance of brands like Xiamen Yinlu and Hangzhou Wahaha in selling products like congee,” said Stafford.
“Consumption of prepared meals in China will be limited until consumer acceptance of chilled and frozen ready meals and pizza increases.”
Hypermarkets and supermarkets, and convenience stores show high growth potential as channels for prepared meals.
The former category has held the majority share of the distribution channel for prepared meals up to 2012, and this trend is expected to continue until 2017.
Convenience stores, meanwhile, have increased their share of the sector and are growing in popularity at the same rate as hypermarkets and supermarkets.
Food and drink specialists have also gained a smaller share of the sector over the same period.