Four major food trends driving growth in China: Fonterra

By Lester Wan contact

- Last updated on GMT

Meyer said young Chinese consumers are looking out for more natural products and from trusted sources. ©GettyImages
Meyer said young Chinese consumers are looking out for more natural products and from trusted sources. ©GettyImages
Dairy giant Fonterra says four major trends are driving growth in China — and all of them are stemming from the nation's rapidly-growing middle class.

Geoff Meyer, global channel director of foodservice, Fonterra, said that by 2030, 66% of world’s middle class will reside in Asia and just 7% in North America.

“It’s just staggering,” ​said Meyer.

“A lot of the trends that are coming this way would be driven by this new-found wealth.”

Four major food trends

Meyer said that Fonterra has noticed four trends in China.

The first is premiumisation. He said these affluent people in China are willing to pay more and want to pay more, particularly for something that is natural — which leads to the next trend.

“There’s a big shift towards natural,” ​he said.

Meyer said these consumers are looking out for trusted sources. Online, if manufacturers or importers can claim where the product is coming from and it is from a natural or ‘safe’ source, there is a greater value placed on the imported product.

The third major trend is personalisation or having products “in a format for customisation”​.

“We’re seeing this trend in China where you can customise your food or your beverage, how you want to see it,” ​he said.

Jason Yu, general manager, Kantar Worldpanel Greater China, had also previously shared with FoodNavigator-Asia on how customisation has won market share​ among young Chinese shoppers for brands such as Mondelez’s Oreo cookies.

Meyer, however, added, the biggest trend they are seeing is the changing of eating behaviours in China.

“Snacking before and after dinner is now bigger than dinner. The total consumption within that period is now massive,”​ he said.

“For traditional Chinese restaurants that are 60% of China’s restaurant economy, they have to change the way they serve. They need items that are able to be snacked upon.”

The same goes for food manufacturers or importers looking to gain market share in China.

Staying relevant to China

Meyer said developing new applications and disrupting traditional Chinese food was key to staying relevant in the sector.

In addition to snacking, on-the-go, delivery and click-and-collect are also growing segments.

“We’re now seeing that people just won’t wait. They can get it delivered to their desk and their home,”​ said Meyer.

“It’s interesting that one of the things we’re seeing here is having good food is just typical play now. It’s the experience. How it’s consumed, where it’s consumed and the story behind that food — people are interested in it.”

Ecommerce for food safety?

Meyer also pointed out that the young, educated and rich in China who are after high quality, safe and more nutritious food are going online to search for more information about products and the source.

“Sites like Dianping have 600 million users. That’s where they find their information about products. It’s almost self-regulating,” ​said Meyer.

He said that the younger people in China aged below 30 — including the growing sub-class of the young, educated and rich — spend hours and hours on their mobile devices.

“That’s where they are learning about quality and food safety. This sort of information has never been available to them before,” ​he said.

He said for companies such as Fonterra “out of New Zealand”​ that are clean and green, many people in China are interested in them.

“More and more, this is what we’re seeing the young, educated and rich are interested in. Firstly, is it good for me? Is it good for my family?

“But also, is it farmed sustainably? Is it something that’s going to be green for the future?

“That’s an increasing area where I think regulation and also in retailing and online (retailing), that that’s something they’ll have to face.”

These views were shared at Food & Hotel Asia 2018.

 

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