The present and future of the hottest packaged foo

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The present and future of the packaged food market

China ranks among the countries with the highest economic growth rate in the world. People are becoming richer and richer and more experienced in purchasing. The rapid increase in spending on health food and beverages confirms this development - sales of such products increased by about 50% between 2002 and 2005. Euromonitor International consulting, which pays close attention to the global health market, is aware of the great potential for further growth in this market. In this article, the main provider of Global trade intelligence will focus on the present and future, focus on market driving forces, and explore some major development trends

the awakening of health awareness in the Chinese market

the growing number of affluent consumers in major cities in China, especially in the metropolis on the east coast of China, has strongly promoted the popularity of healthy food and beverages. In addition, more rural people have left farmland, and the continuous urbanization process has also stimulated this development. With the change of consumers' lifestyle, especially in the past 20 years, the number of patients with worrying "western" diseases, such as obesity, heart disease and diabetes, is increasing. Statistics show that in 2004, 23% of adults were overweight and 7% were obese. Living conditions in cities limit the opportunities for individuals to exercise, and people's dietary intake pattern has changed from grain and vegetables to a high proportion of meat and fat intake. Most of the sales of fortified/functional foods

come from dairy products (photo source: Ko Hansen). When the government promotes healthy diet for well-educated consumers, it has to consider the two extremes of the country - the rise of diseases associated with modern lifestyles, and the continuing problems of dietary deficiency diseases, such as rickets and anaemia, especially in rural areas of China. These events, together with the outbreak of SARS in 2003, have awakened people's awareness of the link between diet and disease, and consumers have begun to turn to some traditional food and beverage products that can promote health. Euromonitor International has made a broad classification of physical and mental health products (food and beverage), i.e. natural health (such as bean products), enhanced/functional, beneficial to consumers (such as products that reduce sugar and fat), organic and food for patients with intolerance (gluten free or lactose free, special products for patients with diabetes). Health (HW) - oriented packaged food accounted for 2% of the total sales of packaged food in 2005, with a total amount of 10.4 billion yuan (about 1.3 billion US dollars). The sales volume of physical and mental health drinks was 92.3 billion yuan (about 11.2 billion US dollars), with a market share of more than 50%. The reason behind this difference is that many traditional and ordinary drinks consumed in China, such as green tea and other kinds of drinks, are generally considered healthy. Therefore, most of these drinks belong to the category of "natural health" defined by Euromonitor International Consulting. According to the sales volume of each category, the market composition of packaged food and beverage for physical and mental health can be clearly seen from table 1 and table 2 below. The great success of fortified dairy products in China in 2005, fortified/functional products accounted for more than half (56%) of the sales of Health (HW) packaged foods. This is a noteworthy proportion. Compared with more mature Western markets, such as the United States, fortified/functional products account for only 9% of the sales of packaged food for physical and mental health, while "good for consumers (BFY)" products occupy an advantage. However, for an Asian market, Tongji south new era Gold Testing Instrument Co., Ltd., where fortified/functional foods occupy the sales of healthy packaged foods, is a manufacturer specializing in the production of experimental machines, which is a quite typical situation. In general, Asian consumers feel "extra enjoyment" by adding vitamins, minerals or some other functional ingredients to their food rather than depriving them of delicious components (such as fat). Surprisingly, 85% of the sales of fortified/functional packaged foods (5billion yuan/about US $606million) came from dairy products. One reason for this high level of popularity is that the Chinese government has eliminated calcium deficiency in the diet of Chinese residents by promoting dairy foods, such as the implementation of the China student milk program. Due to the increasing consumption of dairy products, the competition among major dairy companies in China, such as Inner Mongolia Yili Industrial Group Co., Ltd., Inner Mongolia Mengniu Group, and Guangming dairy and Food Co., Ltd., is also intensifying, prompting them to enhance the added value of products through strengthening. In 2005, the sales growth rate of fortified/functional dairy products was 19%, exceeding the growth rate of the previous two years. Particularly important is fortified/functional milk powder, with sales of 3billion yuan (about 368million US dollars). Nestle ranks third in this category of products, and its milk powder brands are Inner Mongolia Yili Industrial Group and Shijiazhuang Sanlu Group. The global enthusiasm for lactic acid bacteria beverages has not yet affected China. In 2005, the total sales of all fortified/functional yoghurt was only 832million yuan (about 100million US dollars). The rules of tea beverage - natural health product differentiation enhancement - fruit juice sales considering its huge amount, fortified/functional beverages are still a dynamic category. In 2002, a large number of implanted devices of renewable organizations were undergoing clinical trials at home and abroad. By 2005, their sales had increased by 48%. The fierce competition among juice manufacturers has led to continuous and more extensive juice fortification, especially in juice drinks (more than 24% of juice). In 2005, the sales volume of this category reached 6.6 billion yuan (about 800million US dollars), an increase of 28% over the previous year. In fact, for most manufacturers, fruit juice drink fortified vitamin C has become an extension of the standard series. During this period, uni president and Dingxin international group were the most active in developing new products of fortified/functional fruit juice. In the competition of product differentiation with competitors, more fortifiers are being introduced continuously, such as B vitamins, vitamin A, calcium, dietary fiber, and the combination of multivitamins and multiple minerals. Prosperity and decline of enhanced water in 2003, enhanced/functional water appeared in the Chinese market for the first time. During the peak period of SARS epidemic, its sales increased rapidly, as consumers became more and more desperate to avoid the threat of this infectious disease. They hoped to improve their immunity by taking additional vitamins. In 2004, the sales of such products increased by 72%, but in 2005, the figure suddenly dropped to 7%. In other types of fortified/energy drinks, there was no such dramatic decline. The reason for this sudden decline in the enhanced/functional water market (the sales volume in 2005 was 1.2 billion yuan, about 148million dollars, so we must first determine what factors caused the noise emitted by the high and low temperature test chamber) is that the manufacturers are so eager to launch their bottled water, hoping to take advantage of the frenzy exacerbated by the panic, but failed to explain to consumers what health benefits their products can provide. Once the SARS scare is over, the only way to get rid of these undifferentiated products is to slash prices. Even the pulse brand with the best performance from the pioneer manufacturer Guangdong robust was forced to adopt this approach. Sports drinks rushed into the stage of fortified/functional drinks in advance. Another very successful field is sports drinks. In 2005, the sales volume was 10.3 billion yuan (about 1.3 billion US dollars). From 2002 to 2005, the stable compound annual growth rate (CAGR) was just below 6%. PepsiCo's Gatorade still lags behind the market leader Jianlibao (Guangdong Jianlibao group), but it is carrying out a strong promotional campaign to remedy the second-rate performance of the world's first sports drink. Mature fortified/functional concentrates and chocolate flavored solid drinks also showed encouraging rapid growth, with growth rates of 58% and 63% respectively from 2002 to 2005, indicating that intensification is a very effective strategy for promoting the sales of beverages targeting children. China, the hometown of natural health tea, is well known that natural health drinks occupy a dominant position in physical and mental health drinks, mainly due to the traditional reputation of various types of tea. From two aspects, natural and healthy (such as green tea based) namely drinking tea performed very well. First, its sales accounted for a very large proportion, about 19.2 billion yuan (about 2.3 billion US dollars). In addition, in the form of ready to drink, consumers are increasingly attracted by the convenience of their flavor tea (green tea, oolong tea, etc.), so in terms of sales, by controlling significant growth, the growth rate is close to 80% in the review period. Figure 1:2005 detailed classification of health drinks

(source: Euromonitor International Consulting Co., Ltd.) is good for you - but not good enough. Although the sales of packaged foods beneficial to consumers (BFY) account for almost 20% of healthy packaged foods, if we further examine it, we will find that 70% of such products (1.3 billion yuan/about 160million dollars) come from dairy products that reduce fat. The overall penetration of consumer friendly products in China is still very low. In the field of important packaged foods, such as baked products, sweet and appetizing snacks, ready-made meals, sauces, dressings and condiments, and ice cream, there are almost no physical and mental health products. Chinese consumers continue to spend the same or more money on novel packaged foods, which seems to be the reason for this deficiency, regardless of their "taste" ingredients. Lack of food consumption education for patients with intolerance in China, the sales volume of organic packaged food and beverage is relatively small, and the chaotic certification system can not help to improve this situation. The Ministry of agriculture recognizes two types of "green food", the main difference is the use level of agricultural chemicals, while the national environmental protection agency manages the certification of organic products. This problem even affects consumers. Those who are richer and able to pay extra fees tend to buy health products, but their understanding of the benefits of organic products is still in a state of confusion. Statement:

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