China is the world’s second largest buyer of imported food and beverages after the United States with total imports exceeding A$130 billion in 2016 (UN Comtrade).
Australia is China’s sixth largest supplier of food (behind the United States, Brazil, Canada, Argentina and Thailand) with exports valued at A$5.3 billion in 2016. The value of Australian exports of processed foods increased by an average more than 40 per cent between 2015 and 2016.
Euromonitor estimates that retail sales of packaged food will total RMB1.5 trillion in 2017 – and up to 10 per cent of sales taking place online. Rising disposable incomes and associated ‘lifestyle upgrades’, overseas travel, food delivery apps and increasing product choice both online and offline continue to sustain strong annual growth.
While spending and consumption patterns vary strongly by region, age and income group, consumers across China are most attracted to products that offer:
- superior food safety and higher quality
- superior taste
- better nutrition and other functional benefits
- high quality packaging
- superior freshness
Buyers of packaged foods in major cities also demonstrate a strong preference for well-known and established brands that are readily available in Australian retail outlets and promoted by worth-of-mouth.
By comparison, shoppers in smaller and regional cities are more price sensitive and less brand conscious.
Australia is generally well understood among Chinese consumers and Australian products have a reputation for being produced in a natural environment and manufactured to the highest quality standards—a feature which also appears regularly in sales and marketing campaigns of other international suppliers.
By 1 January 2019, the China-Australia Free Trade Agreement will provide most Australian processed food products, such breakfast cereal for example, an import duty advantage of up to 25 per cent against products supplied by countries without a free trade agreement (see Tariffs).
Increased investment cold chain logistics by major e-commerce companies is addressing high consumer demand for fresh produce – with annual growth in the online sales in this category increasing by 80 per cent per year (China’s E-Commerce Research Center).
Enquires received by Austrade show interest in:
- milk powders (including infant formula and adult milk powder), UHT and pasteurised milk, yoghurt, cheese and butter
- seafood (particularly saltwater shell fish such as oysters, crabs, lobster and abalone)
- fresh fruits (citrus, table grapes, cherries and mangoes)
- oats and other breakfast cereals
- chilled and frozen beef
- processed foods
- baby food
- wine and craft beer
- natural fruit juice
Continued strong growth in bakery chains and coffee consumption will also provide supply opportunities for dairy ingredients and soft drinks.