Packaged-food companies mulling the post-Covid-19 consumer will be watching China with interest. Our local columnist Peter Peverelli sets out some trends that could take hold.
As the outbreak of Covid-19 eases in China itself – with Beijing reporting just 12 new cases today (20 April) – food multinationals will be weighing up what might be the longer-term impacts of the disease on consumption habits in the country.
The best way to try to make solid predictions is to start with the changes in food consumption in China during the height of the outbreak.
Home cooking – conveniently
During much of the first quarter of 2020, virtually the entire Chinese population was home-bound. It gave a new meaning to the notion of home economy (zhaijingji), which used to refer to (young) people who work from home and order most of their food online. It was regarded as a non-Chinese way of living but became mainstream when all Chinese were ordered to stay inside as much as possible.
Buying groceries online became a safe alternative for a large part of the urban population. Many had to re-learn to cook, but were surprised how much they enjoyed it. A product that gained dramatically was flour, with sales of the ingredient more than doubling.
Many will continue to cook more at home – but will still not want to spend a lot of time in the kitchen. This will create a lasting market for ingredients that make home cooking easier: products like instant seasoning mixes, quick frozen semi-finished foods and meal kits could prosper.
Food to boost immunity
The home economy also reinforced the existing trend of healthier eating. When eating is such a great way of killing time, something that you have in abundance when homebound, and your waistline starts expanding, you need to resort to food with fewer calories.
The trend in China for ‘light eating’ or qingshi, covered in one of my previous columns on just-food, in its most literal sense (fewer calories, not making you feel bloated), has become a popular term in Chinese online discussions on the home economy.
Moreover, another existing trend towards more nutritional food has also been stimulated. Of course, fresh fruits and vegetables, fresh meat and eggs can provide some of the vitamins and minerals needed to ‘boost your immune system’ but there has been a sharp increase recently in demand for processed foods fortified with vitamins and with extracts from traditional Chinese medicine, or made with cereals. A very recent example is the launch by local ice-cream maker Zhongjuegao of a product with added calcium, plus vitamins A and D.
The Chinese word for vitamin, weishengsu, literally means ‘life maintaining substance’, so any food with added vitamins is already perceived as ‘good for you’
As the novel coronavirus is not likely to disappear soon, China could become a lucrative market for foods marketed as enhancing health.
An appetite for snacks – but make it healthy
What do you do when you are home bound and are reading through a pile of books or binge-watching your favourite TV programmes? You snack.
In two surveys of Chinese consumers carried out by McKinsey in February and March to try to understand behaviour post-Covid-19, the management consultants asked about the consumption of snacks. More than a third ate more snacks, with almost two-thirds at least maintaining their snacks consumption.
However, going forward, it is likely the greater prospects for manufacturers are to be found in the leading trend for healthier eating among Chinese consumers. When you ask Chinese about their favourite snacks using the term lingshi ‘between-meal food’, the products coming out on top will be seeds, nuts or dried berries, which are slightly processed natural foods.
Lingshi is a sub-category of the larger product group of xiuxian shipin or ‘leisure food’. A recent survey expects the value of the Chinese leisure food market will exceed CNY3bn in 2020 and further grow 10% year on year for the coming three to five years (China food and beverage consultancy Tangjiu Kuaixun, 3/3/2020).
The revival in instant noodles to heat up
One food group that has benefited from the periods of lockdown, reporting dramatic increases is sales volumes, may seem to contradict the previous section: instant foods and in particular instant noodles.
This category has also been the topic of an earlier column, in which I indicated how this industry has been fighting decreasing sales during recent years. Well, check out the increase in sales volumes announced by the top three leaders in China during the first two months of 2020, compared to the same period of 2019. Uni President saw sales more than triple, while Jinmailang and Chef Kong both saw sales more than double.
Chef Kong made a strategic move to cash in on the healthy-trend among Chinese consumers. The company launched a Buddhism-inspired type of vegetarian instant noodle in this period, branded as Ai Chi Su, which translates as ‘Love Eating Vegetarian’. Buddhist monasteries in China have a long tradition of providing nutritious vegetarian meals to travellers and Chef Kong is linking this new range of noodles to that practice. In fact, Chef Kong may not have planned it like that, but it still is a fortunate coincidence.
Manufacturers believe instant foods will continue to sell well in the post-corona era. Based on the fact instant foods were already recouping some of the lost market share with more variety and better natural flavours, I support that but, again, better opportunities could be found if products tap into the macro trend of health.
An epidemic is not a cause for joy. During the first months of this year, Chinese, like others the world over, have been postponing festivities like birthdays, weddings, graduation parties, company anniversaries.
As soon as the ban on such get-togethers is lifted, there is likely to be a surge in orders for confectionery products that Chinese eat on such occasions: cakes, biscuits, pastries, chocolate (still the perfect gift to a friend in China) and ice cream. All that partying will also give another boost to snacks like nuts, seed, dried fruits, etc.
Moreover, there could be opportunities at the premium ends of these categories. When Chinese throw a party for an important event, like a wedding, they want to show off their wealth by offering high-end products.
Two of the trends above could also be areas of opportunity – ‘good for you’ and the demand for all kinds of baking ingredients.