1. The health craze continues
Chinese consumers are increasingly focused and aware of their health, choosing food and beverage products with keywords related to “low calories”, “low fat”, and “low sugar”. In fact, an estimated 57% of consumers will investigate nutrition information provided on fat, sugar, and calories prior to purchasing a food or beverage product. Many brands are capitalizing on this trend and producing new products that appeal to the desire for health among consumers. Examples include beverage brands releasing zero-sugar or zero-calorie options, snack brands with low-fat or low-sugar alternatives, and dairy brands producing low-fat and zero-sugar milk and yogurt products. The health craze among Chinese consumers has continued to gain momentum over the past few years, making new product development in this direction essential for F&B companies wanting to expand into the country.
2. Functional foods to meet Chinese consumer needs
With increased urbanization and more Chinese consumers living fast-paced, work heavy lifestyles, the demand for functional foods has also risen. To deal with work pressures and high workloads among Chinese consumers, many have turned to functional foods to help sustain their irregular lifestyles. Products within this category include probiotics to help with digestive health, sleep aid products to assist with insomnia, skin, and beauty products to maintain physical appearances, and energy boosting or stress relief products. In fact, the market size for health and functional foods in China is estimated to have reached 207.9 billion RMB in 2022.
3. Staying alert through caffeine
The coffee culture within China has expanded rapidly over the past few years. Heavy workload leading to stress and lack of sleep has resulted in many consumers becoming reliant on the beverage to help them with regulating their mood and staying alert. Many brands within this sphere, such as illy, Starbucks, Manner, Luckin, etc. are seeing fierce competition, even as they rapidly expand across the country. In May 2022, there was an estimated 117,300 coffee stores in China, an increase of 15,000 compared to the previous year.
4. Almost home-cooking through pre-made food
As a trend that picked up speed during COVID-19, pre-made food has come about due to increased interest in home cooking combined with a desire for efficiency and convenience. Pre-made meals often just require heating up or very simple cooking methods, offering the idea of a homecooked meal with a fraction of the prep and cooking time. Although COVID-19 restrictions have been lifted, pre-made food products are continuing to see growth due to the shifts in consumer habits. The market size of this category is predicted to grow from 345.9 billion RMB in 2021 to 510 billion RMB in 2023, which is a YOY growth rate of more than 20%.
5. A digital world of food
Although the food category has seen digital shifts over the past few years, with delivery platforms such as Eleme and Meituan seeing massive surges in usage during COVID-19, individual brands are building up their own digital tools. As a result of lockdowns, many restaurants turned to takeout and selling through livestreams to attract customers. Moreover, several brands are expanding beyond having their own digital apps and offering takeout options, to creating virtual spaces and characters that customers can interact with and experience on their phones. One example is Heineken’s virtual brewery.
Many of these trends have been gaining momentum over the past few years, seeing increased growth and traction among customers. As a result, brands need to rethink their strategy when it comes to new product development and selection of unique selling points that will capture customer attention. Moreover, learning how to navigate and participate in the digital sphere has become essential for long term success, especially as competition continues to rise with new brand entries every day.
Source: redfern.com.cn
