Analysts at the bank have been trying to make sense of the world’s biggest meat consumer’s notoriously complex protein market, and their latest report has found that its total value has grown on average more than 15% each year over the last 10 years.
At the same time, the Chinese are eating less pork now compared to the amount 30 years ago, as better standards of living and greater awareness of nutrition and food safety have given consumers there a taste for more beef, lamb and poultry, according to the latest Rabobank China meat consumption report.
Changing consumer palates, greater affluence leading to higher-value consumption, and the rise of supermarkets are all contributing factors that have led to strong demand for high value meat products such as beef, lamb and poultry.
According to a separate Rabobank report, China may double its beef imports by 2018 to in excess of 500,000 tonnes as domestic output fails to meet demand.
A gain in China’s demand for higher-priced meat will help beef producing countries including Australia and Brazil, and benefit processors such as Tyson and Smithfield Foods, which is now owned by Hong Kong-based Shuanghui International.
Chinese authorities last month said they were seeking an agreement to resume US beef shipments by July 2014 after they were banned in 2003.
Volume and value
Rabobank’s senior analyst and author of the report, Pan Chenjun, explained that market growth is shifting from volume alone to both volume and value growth.
She said: “Supply volume growth is expected to maintain a 2% growth rate over the coming decade, while market value will grow much faster—an estimated annual rate of 10% over the same period, due to growing consumer affluence and desire for safe, premium meats.
“Value-added products such as packaged chilled meat and ready-to-eat meat have seen the fastest growth [around 20% per year], largely due to consumers spending relatively more on these types of products as incomes rise.”
Looking ahead, the growth in meat volume is forecast at a compound annual growth rate of 2%, while value growth is expected to remain above 10% each year for the next three to five years.
Rabobank believes there will be opportunities for meat companies to take advantages of this trend towards high-value products.
“China’s market for consumer meat currently offers excellent potential for value-added meat products, especially for meat producers and distributors who can tap into the shift in consumption patterns,” Pan said.