China's meat consumption growth to be based on added value products
A new analysis by Rabobank shows that China's meat consumption will slow down in terms of volume in the next years. Nevertheless, Chenjun Pan, Senior Analyst - Animal Protein, belives that the value of the market will increase thanks to the added value in products and service.
"The Chinese animal protein market will continue to be a growth story, but growth will be driven by value rather than volume. Meat consumption will change in three dimensions, related to where, what, and how meat is consumed. Meat companies have three avenues to success – regionalisation, finding new markets, and adding value/providing a service", explained the analyst.
Changes inside the Chinese society have a great impact on Chinese consumer behaviour and the truth is that the country's animal protein consumption has been volatile over the past two decades, with little evidence of a consistent growth trend.
A better understanding of the current trends helps to predict what will happen in the coming years. Three changes are most relevant: demographics, trading up or down, and new retail and foodservice channels.
While China’s population is expected to peak soon, the demographic dividend will continue to drive value growth in the meat market. o capitalise, meat companies need a regionalisation strategy. They will see greater growth opportunities by expanding into ‘new tier-one’ cities and surrounding areas, where the population is younger", said Pan.
The changes in China’s consumer market provide excellent opportunities for developing a value-driven strategy. Animal protein companies need to identify what new attributes consumers are looking for. Traditional products – such as frozen meat, hot (just slaughtered) fresh meat, and cooked meat products sold in traditional agriculture markets – will likely see a decline, while branded chilled meats in small packages, meat-based snack food, freshly cooked convenience food, and meal kits will see strong growth. These products reflect the new consumer values of convenience, food safety, freshness, variety, and service. Frozen convenience food and Chinese-style/western-style meat products may need to broaden their marketing focus, away from tier-one and tier-two cities to lower-tier cities and rural areas.
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