China's food industry is entering into rapid-transformation period, according to CCM. The demand for healthy and nutritious products is growing. The R&D and innovation capability of healthy and nutritious products will determine the development outcomes of enterprises.
On 18 Jan., 2016, a forum on healthy and nutritious food development was held by the Nutrition and Healthy Food Committee (NHFC), Chinese Institute of Food Science and Technology in Beijing. Experts and business representatives reached a consensus that the food industry experienced a difficult time in 2015 because of dramatic declines in business growth rates or even negative growth occurred throughout the industry. However, nutrition and health-care products witnessed double-digit growth, which demonstrated that Chinese food industry will accelerate its transformation towards healthy and nutrition products.
Health and Nutrition have become the preferred choices for Chinese consumers.
Dr. Li Yongjing, Vice President of Chinese Institute of Food Science and Technology, expressed that when Chinese consumers shop for food and drinks for family, they tend to purchase high-end and high-quality products because health and safety is the most important factor to consider. In recent years, the income level and consumption ability of Chinese consumers have substantially improved with the acceleration of Chinese urbanization. Higher income levels have increased disposable incomes and have raised domestic consumers’ demands for high quality products.
According to new research conducted by Nielsen, consumers in China demand high-end and high-quality food and drinks for their families. In 2015, the demand for healthy and functional drinks and natural food consistently increased. According to data from Nielsen, in 2015, functional drinks and juice respectively recorded YoY increases of 7.6% and 4.7%. In addition, the research also suggested that the Chinese consumption and demand for high quality and healthy products will continuously increase. This boosts the further sales increase of safer, more natural and healthy products.
Dr. Li stated that modern consumers consider the following when shopping for healthy and nutritious food:
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Whether it uses genuine natural ingredients
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Whether there is scientific evidence behind the purported health benefits
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Whether it fits their consumption habits
Chinese consumers are undergoing a transformation of food nutrition needs.
Professor Ma Guansheng, from the School of Public Health, Peking University, said that China is undergoing a transformation of food nutrition needs. On 30 June, 2015, the "Report of Chinese Residents Nutrition and Chronic Disease Status (2015)" was officially issued. The report highlights that in the last ten years, the life expectancy has increased every year because of economic and social development and the improvement of health services. However, many factors are affecting the overall health of society, including the ageing population, urbanization and industrialization, and unhealthy lifestyles.
Unhealthy lifestyles result in chronic diseases in China. Professor Ma stated that the chronic disease rate is increasing. In 2012, the rate of hypertension among adults aged above 18 in China was 25.2% while the rate of diabetes was 9.7%. Meanwhile, the death rate from chronic diseases is also quite high. In 2012, deaths caused by chronic diseases accounted for 86.6% of total deaths. The main death causes are cardio-cerebrovascular disease, cancer and chronic respiratory disease. Also, the proportion of people with high blood pressure reached 25%, and 10% had diabetes.
He pointed out that it is an imperative social responsibility for food processing enterprises to produce healthy and nutritious food. Enterprises should increase R&D and to produce food products that comply with nutrition scientific requirements and food safety standards.
In addition, he also suggested that food enterprises should pay more attention to undeveloped regions, because malnutrition is still a problem for people in undeveloped regions. They should provide products which are healthy and affordable. Furthermore, it is also important to cater the needs of old people and pregnant women.
Whole grain food is becoming trendy internationally
Convenient food is increasing in their prominence. The Chinese population is aging and lifestyles are becoming faster. Fewer people are cooking and less time is being spent on cooking. More people are opting for processed food or eating out. Therefore, convenient food has huge potential. Tan Bin, a researcher of Academy of State Administration of Grain, analyzed the situation.
He pointed out that with the stronger demand for better health and the government policy of precaution against chronic disease, convenient food can become healthier.
Tan elaborated that at present, whole grain food has raised significant attention in international markets, and are worthy of consideration. Whole grain food preserves the endosperm, bran and germs from grain. Take wheat as an example, 70% of the nutrition is eliminated during the fine processing of flour in China. However, the domestic consumers have become accustomed to food made from fine-processed flour compared with food made from whole grain flour. Besides, their insufficient awareness of nutrition means that whole grain food is not totally accepted by Chinese consumers at present.
Tan also introduced that the US and European countries attach great importance to whole grain food development. In 2010, the European Union specifically established a healthy grain program. 19 countries jointly established an organization to promote whole grain food. Oct. 24 is celebrated as Whole Grain Day in Denmark. The US Whole Grains Council in 2012 organized a group of catering scholars to encourage the production of whole grain food.
According to the statistic of the US Whole Grains Council, in Sept. 2015, there were over 10,500 whole grain products. This represents rapid growth in the volume of products.
Tan mentioned that China has a late development of whole grain food. The government is implementing policies to encourage the development whole grain food. At present, there is a standard for whole wheat flour. In addition, there is a standard for the use of brown rice grain in convenient food.
R&D and innovation capability of nutritious and healthy products will determine the development of enterprises in the future
Wang Xingguo, Deputy of the National Standardization Technical Committee of Grain and Oil and Professor from Jiangnan University, suggested that food processing companies should devote more effort into R&D and innovation. If enterprises do not do this, they will find it hard to compete in the future.
Meng Suhe, President of Chinese Institute of Food Science and Technology said that before 2014, the Chinese food industry maintained fast development. Extending the mature period of products was the best way for enterprise to gain profit. This has had the effect of reducing the motivation to innovate in large enterprises.
Meng Suhe suggested that since 2014, the growth rate of the food industry slowed down to single digit growth, and this tendency extended to 2015. Some industries and enterprises have recorded negative growth. The rapid growth of healthy and nutritive products is driving food industry to transform towards producing these products.
The food industry is confronted with difficulties in innovation. Meng believes that related enterprises must innovate, which requires two conditions: strategic positioning of entrepreneurs and persistence. Innovation in the food industry requires tremendous investment, and it is likely that successful products will be copied by other companies. However, enterprises that are persistent and are able to develop high quality brands will be successful.
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