Convenience food gets boost despite continuing growth of online delivery

By RJ Whitehead

- Last updated on GMT

Related tags: Instant noodles, Food

© iStock
© iStock
China’s convenience food market has rebounded after five years in the doldrums, with over 1,800 manufacturers forecast to generate revenues of RMB390bn (US$59bn) this year.

This figure represents an increase of a little more than 5.5% over 2016 for products including instant noodles, frozen foods and packaged rice products, according to Meng Suhe, chair of the Chinese Institute of Food Science and Technology.

With food safety still a major concern for consumers, and health awareness growing, an evolving approach to ingredient selection and the introduction of more high-end products has helped the industry gain back ground at a time when sales have been lost to e-commerce and delivery platforms.

"This year, the industry has shown a trend for innovation to promote a transformation toward health and value, which is becoming the industry's new growth model​,” Meng said at a keynote at the China Convenience Food Convention in Beijing. 

Convenience food has become an important part of China's food industry after several years of retooling​.”

Convenience food manufacturers have also been forced to optimise their production processes to find economies in the face of dwindling sales.

A growing middle class has lost its appetite for instant noodles in particular, preferring healthier meals ordered online.

China’s demand for instant noodles declined 17% to 38.5bn servings in 2016, from 46.2bn in 2013, according to statistics from the World Instant Noodles Association.

Uni-President, which supplies more than a fifth of China’s instant noodles and tea drinks, recently reported a 27% decline in net profit for the first half as more consumers opt for fast, nutritious and high-quality meal deliveries.

China’s food delivery industry reached a market size of RMB152.4bn in 2016, up 232% from 2015, according to China e-Commerce Research Centre.

By the end of June this year, the number of users on food delivery apps grew to 295m, up 41.6% from the same period a year earlier.

Yet it hasn’t all been plain sailing for the online delivery platforms, and it recently emerged that a Chinese NGO is suing three prominent companies for allegedly damaging the environment.

Last month, the Green Volunteer League of Chongqing issued lawsuits against Baidu, Meituan and ele.me over their use of chopsticks and plastic packaging. 

The NGO had calculated that 1.95m pairs of chopsticks would be required to meet daily demand for food deliveries. Moreover, it criticised the platforms for not providing customers with a choice of alternative packaging materials.

Meituan has since pledged to upgrade its app to provide customers with the option of ordering food in non-plastic packaging and without chopsticks, spoons or napkins. Ele.me, for its part, has published a plan to offer a similar service and promote incentives to encourage customers to embrace the change.

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