China offers good prospects despite tangled health food regulations
“Chinese consumers would more than welcome any of the products that are coming out of the US and from Europe that are innovative and effective—or services for that matter,” said Jeff Crowther, executive director of the US-China Health Products Association (US-C HPA).
“But we are having problems with getting companies to actually get involved with China because they have reservations [about China’s regulations], and that’s a big sticking point.”
Little by little, though, it seems that the Chinese Food and Drug Administration is opening up to imports by reviewing its regulations, and recently released a draft reform of its food safety law for interested parties to comment on.
A long way to go
Though Crowther sees the draft as “a step in the right direction”, there is still some distance to go before the system is made workable in terms of time and expense for companies looking to register and gain approval for new products. In May, the US-C HPA published a report stating that potential exports to China from the United States worth US$8.37bn—equating to 2,791 jobs—have been missed over the last last year.
“Unfortunately, the regulations [until now] have been keeping the industry at bay and have essentially been stalling the explosive growth of the industry that one would expect,” he said.
There is little doubt of the potential demand of China’s health food and supplements market, with the country Crowther represents being at the top of public estimation.
“Especially in the dietary supplement and health food industry, foreign products are really sought-after, and each food industry segment has its own famous area that a product should come from. For example, with wine, Chinese consumers are going to think about France straight away.
“In dietary supplements, the US is by far the strong leader in that category, followed by Australia, New Zealand, Japan and Europe.”
Infant products are a good example of the demand for foreign goods, with milk formula among the best noted, especially in the years following the melamine scandal of 2008 that made consumers more wary about the products they consumed.
“Consumers here are just wanting milk powder and infant formula that looks foreign. The point of difference between brands is the ones point out ‘We’re made overseas’. That suggests foreign-made milk products will always sell.”
Probiotics and omega 3 are both in strong demand, although local products are “far behind” those that are made overseas, according to Crowther.
“Omega 3 and probiotics could all be very beneficial to China. Omega 3 products are available here but they’re not very widespread. Krill oil was only recently approved here so that’s not really in the market at this point.
“Anything to do with children would be more than welcome. Probiotics are a global growth area, but here in China they’re mostly only available through yoghurt, but beyond the dairy industry you’re not going to find probiotics in capsules here, or things that can be digested more easily by people. Dietary supplements like probiotics are really undeveloped.”