China health trend continues
Healthy, convenient consumer products targeting a growing middle class will be the winners in China’s new economy, but long-term success relies on adapting to rapidly changing consumers, says expert.
To succeed in China, brands could no longer rely solely on Australia’s clean and green image with mass market strategies, said Andrew Kuiler, who specialises in food and beverage in China.
Kuiler is founder of The Silk Initiative, a Shanghai-based brand, product and market consultancy connecting brands and products with Chinese consumers.
“For food and beverage brands to succeed into the next decade they need to spend time understanding and segmenting consumers in an increasingly fragmented market,” Kuiler said.
“The Chinese consumer is becoming more discerning. They want quality products that help them achieve a more balanced, healthy and family-focused life. We’re seeing premium segments outrun traditional value segments and an increasing amount of money spent on experiences, rather than products.”
Ongoing issues with food safety and quality, rising incomes, effects of urbanization and an ageing and stressed population is expected to see China’s growing health and wellness market hit almost $70 billion by 2020. Chinese consumers are some of the world’s most health conscious with 73 per cent prepared to pay a premium for products deemed healthier – 12 points higher than the global average, according to Boston Consulting Group (BCG).
Fifty per cent of Chinese are now focused on eating healthy and nutritious foods, and food safety is a growing concern with 72 per cent now worried the food they eat is harmful (up from 60 per cent in 2012), according to a report by McKinsey.
“However, country of origin and Australia’s clean and green image are no longer enough –the Australian made logo is not widely understood and, while there are moves afoot to introduce a text and graphic ‘lock-up’, consumer suspicion means there still needs to be a credible reason to believe.” Kuiler said.
Unique preferences and regional differences also have to be taken into account in what is believed as “China health trend.” For instance, while fresh fruit stands are found nearly every corner, there is huge demand for higher quality, safer fruit products, like cold pressed fruit juice and fruit sold in pouches.
“Consumers are looking for more convenient solutions both in snacking and read-mademeals. We’re seeing the appearance of a number of ready to eat meal solutions in reheatable or microwaveable pouches where all you need to do is microwave or boil and add meat and rice.”
“As urbanisation continues to grow at rapid pace consumers are looking for quick, easy and convenient solutions,” Kuiler said.