During the last decade, China has been battling a health problem. Today, one in five children, and tens of millions of adults, are overweight or obese. To help tackle this growing issue, the Chinese Government introduced ‘Healthy China 2030’ in 2016. A blueprint and action plan designed to integrate health into every aspect of day to day life. From exercise to diet and lifestyle choices, this vision puts a healthy population at the centre of the country’s social and economic prosperity.
The COVID-19 pandemic has shone a spotlight on public health at large and prompted many to adopt healthier eating and lifestyle choices. Almost three quarters (72.3%) of Chinese consumers say they developed healthier eating habits during lockdown, with data from Tmall showing that sales of fresh fruit and vegetables were up 72% year on year in February.
This shift in buying habits has created a surge in demand for all brands in this sector. International brands stand to particularly benefit, bringing with them a reputation for safety and quality. To put this into context: while a British consumer might look to buy vegetables from a local farm shop to ensure they are getting the freshest possible produce, a Chinese consumer looks to Britain to provide them with the most nutritionally beneficial cereal bar, meal replacement shake or alternative milk.
There are two key trends shaping consumption within the sector, which present significant opportunity for British brands looking to connect with a new and discerning consumer group, to boost recovery and growth in the wake of the pandemic.
Supercharged demand for dairy-free products
China has a history of lactose intolerance—more than 90% of adults suffering from this in some form. Alternative milks were already starting to become more popular pre-lockdown, though their well-documented health benefits have seen demand skyrocket in recent months.
British brands that have been able to capitalise on this demand include market leaders Oatly, as well as East London based Minor Figures, both of which are currently vying for their share of the oat milk category. This sub-category accounts for 24.2% of the total alternative milk market. Oatly has been particularly successful in recent months in selling not only to consumers but also in entering into a partnership with Starbucks. Oatly milks are now used in more than 4,000 Starbucks stores across China.
There is even higher growth in more alternative milk choices, such as pea, banana and even hemp milks. These already currently account for 64% of the market and are expected to continue to gather market share as consumers are drawn by their low calorie, highly nutritional credentials.
Healthy snack market surges
Snacks are big business in China. The country’s snack market is estimated to reach 3 trillion yuan (£330 billion) this year and 71% of consumers said snacks are equally as important to their psychological health as their physical health.
Driven by the millennial generation (accounting for 350 million consumers), they are looking to consume healthy nutritious snacks that fits into their hectic schedules - more than 40% of adults work a 50+ hour week in China. This has created a spike in demand for products such as meal replacements bars, supplements, and shakes, all of which offer high nutritional content and low-prep individual portions.
British brand success stories include Myprotein, Slimfast, and emerging brand Exante, which make everything from shakes to cereals bars, to help consumers enjoy a balanced diet alongside their busy lifestyles. These brands have contributed towards a meal replacement subcategory that is expected to grow by another 30% this year and be worth a 120 billion yuan (approx. £13.8bn) by 2022.
Just as snacks are favoured for their ease of consumption while on the go, supplements are also increasingly popular, offering similar nutritional benefits in tablet or sweet form. British supplement brand Vitabiotics has been particularly successful in China by launching products with very specific health benefits. For example, through its Visionace supplements not only does it serve consumers on the go - it also improves eye health quality, tapping into the broader healthy lifestyle trend.
Taking on the China challenge
China’s hunger for health has created an exciting climate for ambitious health food brands looking to grow internationally. Businesses planning to enter the market should plan carefully and be aware that there is no single approach that will grab the attention of all consumers at once. Close tracking of Chinese consumption habits, and clever use of digital tools and technologies will be key for British brands to reap the rewards of China’s insatiable new appetite.
Zarina Kanji is Alibaba’s health, food and beverage market specialist for the UK and Nordics