Sinking Your Teeth Into China’s Imported Food Market
The Chinese food market has whetted the global appetite with its fertile terrain, ripe for opportunity and development. Fuelled by expenditure growth and resource insufficiency, China is predicted to become the world’s largest importer of food and agriculture by 2018. This upswing has set the stage for Canadian firms to capitalise on the scale of demand in return for lucrative contracts. Canadian exports of beverages, food and agriculture to China increased by 58 percent in 2010 reaching $2.7 billion, generating a trade surplus of $1.7 billion.
The Beijing-Tianjin corridor eclipsed its neighbours with a dominant influence as the region with the greatest customer purchasing power for food products within the territorial expanse. Secondary cities such as Dalian and Shenyang also offer prosperous markets which aren’t as infiltrated but retain a strong desire for imported products.
Canadian exporters should be conscious of technical obstacles to commerce that may be relevant. Customs delays have been rife due to rigid quarantine inspections of imported food products in China’s bid to boost security. The differentiation of sanitary standards between China and the international community can act as a blockade as the Chinese standards don’t always correlate with global protocol. This is especially the case with Chinese ports who notoriously apply phyto-sanitary standards according to their own conditions. There are also certain standards which are restrictive towards active ingredients in health food products and as a result, long approval periods are commonplace. The local quarantine authorities are now in charge of labeling approvals for retail products which can translate into further paperwork and delays. Nevertheless, recruiting the appropriate support can prove beneficial in helping to iron out the above issues. It is therefore crucial to choose a consultancy with a firm grasp of the Chinese commerce landscape who are also equipped with solid experience.
China’s food processing industry greatly favours certain Canadian products such as frozen berries, milk/whey powder and yellow peas. This favourability is advantageous for Canadian firms that specialize in manufacturing and procuring these products. China has sufficiently modernised its processing sector where food is produced for both the domestic and international markets. Western companies have yet to achieve widespread success in North and West China with its functional foods and ingredients, which highlights a densely populated market that is untapped. There is great potential for a Canadian firm that specializes in functional foods to conquer this regional niche. The food service industry is steeped with potential for Canadian suppliers of value-added goods. Chinese consumers are eating out more often as a result of rising income levels with an increase of 20% since 2008. The Chinese hospitality industry caters to customers who demand higher protein in their diet. Meat, seafood, fish, cooking oils and beverages are highly sought after by hotels and restaurants.
Canadian companies have ample manoeuvring room within the Chinese Imported Food Market. In the current climate, North American imported processed products are relatively expensive and are found predominantly in high-end supermarkets that cater to the wealthy Chinese and expatriate community. This is indicative of disproportionate and inadequate distribution, a gap in the market which Canadian companies can monopolize on. Products with high potential such as wine, maple syrup, natural health products and cooking oils will flourish within the Chinese market providing Canadian companies can adhere to cultural trends and taste. This is especially relevant with regards to processing and packaging as it’s important that your brand is communicated across effectively. Most importantly, have the right local support in place to assist your transition to the Chinese market.