In China, rising incomes and food scandals have created a nation of health-conscious shoppers.
Greater disposable income in China means Chinese consumers can afford premium food—and safety scandals have undermined confidence in the conventional food-production system. Together, this is a recipe for a nation of newly health-conscious shoppers.
Last year, in yet another of the food scandals that have blighted China, authorities seized numerous caches of dubious meat nationwide, estimated to be worth $483 million, some of which had been frozen for more than 40 years.
The danger of contaminated and substandard food has played a major role in making Chinese consumers the “most health conscious” in the world. According to a survey by the Boston Consulting Group, 73% of shoppers are now willing to trade up to premium products because they are deemed healthier.
High-end food stores are popping up as far afield as Harbin, north-east China’s portal to Siberia, where a Home Park High Quality Food Store opened in late 2014, featuring 18 food specialty areas in a spacious retail setting.
This growing desire for healthy produce is especially important to families, with safety now having a quantifiable price tag. “New affluence means people care about things they didn’t care about in the past, such as food safety,” says Julián Hernández of Geometry Global. Mothers, he says, are seeking out organic produce and imported meat and dairy foods for their children and families.
The organic food market, which barely existed until recently, has tripled in China since 2007, and accounts for 1.01% of total food consumption, although this is “still lower than the 5-8% of the market in areas like Europe and the US,” the China Business Review reports.
This indicates a lot of runway ahead for future growth as people’s living standards continue to rise, especially if the organic category can become associated with Western quality, which the Chinese are flocking toward. “Supermarkets that were usually typical places for expats to shop are now more frequented by local, affluent, middle-class Chinese,” says Hernández, citing Carrefour as a primary example.
Food scares aren’t going away in China any time soon. Along with the rise of disposable income and the advent of online grocers, the shift toward premium food is one of the most significant trends in Chinese retail today.
For more trends in Chinese and global retail, see our forthcoming Frontier(less) Retail report.