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On April 8th, Mr. Alick Zhou, CEO of Ipsos China attended the food innovation summit themed �2016 global food & beverage innovation tasting� in Shanghai. From 10 aspects: food safety, health, green /organic, packaging information, globalization, innovation, new channels and energy supplement, snacks, personalization, he explains the emerging trends of China�s food & beverage consumption and consumer insight.

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NewsBy Ipsos

Food SafetyOver the past few years, all kinds of food safety scandals are testing the endurance of consumers. All these scandals are making consumer fears so much about food safety.

According to the survey, food safety has become the most important factor when consumers are choosing and buying food. 86% of the consumers when choosing and buying food would consider the factor of food safety. 52% of the consumers said food safety is the primary factor when they choose and buy food. Food safety scandals have seriously frustrated consumers’ confi dence in the brand reputation. Whenever a branded food scandal happens, 81% of the consumers said their trust in the brand declined. And 59% of the consumers even said their trust in the whole category of the food declined.

In addition, nearly ninety percent (88%) consumers in fi rst and second-tier cities hold an antagonistic attitude towards food additives, with nearly a quarter said they can accept higher price but not food additives.

Consumers would consider food safety when they are purchasing food

Consumers see food safety as their FIRST priority when they are purchasing food

Food HealthFood, getting into human’s body system, is vitally related to people�s health.

With the improvement of people�s living quality, health has become an inevitable need.

The survey found, next only to food safety, consumers have further increased their attention to food health. 82% of the consumers in the fi rst and second-tier cities when choosing and buying food would prefer healthy food.

At the same time, 53% of the consumers said they are very sensitive to their body weight. 47% of the consumers said when they eat, they would pay special attention to food calorie.

Therefore, more and more food companies launched healthy food product with no artifi cial additives, organic material, low calorie and diet function, to meet the demand of diff erent consumer groups.

In 2011, China surpassed the United States to become the world�s largest food market.

As China keeps taping into its potentials in consumers’ demand, and people’s consuming idea keeps changing, Chinese consumers have become the VIP of almost the whole world�s food manufacturers.

Therefore, when it comes to eat, drink, cooking and food shopping, no matter on which side of the equation we are standing, nothing is the same as that of decades ago. This time we conducted an online research upon 900

consumers.

Through data collection and analysis, we found several major trends among Chinese consumers on food & beverage: safety, health, green and organic, personalization, tradition and innovation.

These trends are shown in diff erent aspects of people�s life.

This is not so much the status quo of China’s consumption upgrading, as the vast majority of these trends is to make us better in diet.

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86% >>

52% >>

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Green/Organic FoodIn the survey, more than ninety percent of the consumers in the fi rst and second-tier cities said they would buy green/organic food at ordinary times. 32% of them will buy green/organic food in a more frequent way.

Families with higher income/ children show a signifi cantly higher purchase frequency than those with lower income/without children. And they are more willing to pay higher prices to buy green/organic food. What we say green/organic food, we are not talking about those green/natural labels on food in markets. In fact there is a variety of worrying problems about counterfeit products with green/natural labels, which is the main reason why 73% of the consumers said they would not buy green/organic food at ordinary times.

The Packing InformationThere’s no doubt that more and more consumers’attitude towards what will get into our body system has changed.

Paying special attention to food packaging information has become a habit of quite a number of consumers. Production date/shelf life (88%) is the main focus of food packaging information for consumers in the fi rst and second-tier cities, followed by ingredients/nutritional information (67%) and green/organic product ID (47%). In addition, during the journey of the food packaging innovation, food manufactures have been exploring the use of consumer habits: from tetra pack tin, tetra pack pillow, tetra pack cup, to holding bottle shape, convenient bags, mini pack, healthy eco pack, all these have become the innovative directions what food manufactures are actively exploring and where their continuous eff orts go to.

Dairy products Alcohol Beverages Candy/pastryChildren�s food Nuts

19%24%27%36%40%49%

88%

67%47%

Production date/shelf life

green/organic product ID

ingredients/nutritional information

GlobalizationGlobalization helps breaking the barriers between countries, enable a lot of global food entering the global market.

And therefore the traditional diet and taste is being challenged. The vast majority of Chinese consumers (81%) think food globalization is something good instead of bad to happen. More than eighty percent (81%) of the consumers in the fi rst and second-tier cities often/sometimes buy imported

food products. Families with higher income show a signifi cantly higher purchase frequency than those with lower income.

Dairy products (49%) is the most bought imported food category by consumers, followed by children�s food (40%), nuts (36%), alcohol (27%) and beverages (24%) and candy/pastry (19%). The frequency to buy imported dairy products (51%) and children�s food (49%) by consumers with

children is signifi cantly higher than those with no children.

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InnovationDemand is the mother of innovation. In fact, most innovations are made because of our love for food and beverage.

Compared with many other countries of the world, Chinese consumers are more willing to try new style food.

Over half (53%) of the Chinese consumers think among all his/her friends, he/she is usually the fi rst to try new food. A growing number of brand manufacturers have been trying so hard about the transformation, breakthrough and innovation of their products.

The New ChannelOnline shopping is no longer something new to consumers. More and more consumers have switched to the online food shopping mode.

According to the Chinese EC Fresh Market Research Report, the GMV of Chinese EC fresh market has reached RMB 28.98 billion Yuan in 2014, increasing by 122.6% from a year earlier. The GMV number is expected to exceed RMB 140 billion Yuan in 2017. Research shows that nearly eighty percent of the consumers in fi rst and second-tier cities choose to buy food/beverage products online. At the same time, EC channels are further bolstering local food market. The popularity of EC and Wechat business in rural area has set up a new path between

rural and urban consumers.

Alibaba 2016 Spring Festival Shopping Event covers special local products categories of 359 cities from 31 provinces and regions across the country, among which, food product accounts for most of the share.

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China Fresh E-commerce Market Size in 2017 (predicted)

China Fresh E-commerce Market Size in 2014

Growth compared to last year

billionRMB

billionRMB

%28.98 140122.6

Energy SupplementThe popularity of running and fi tness lifestyle stimulates the demand of functional drinks.

34% 51%

34% of the consumers in the fi rst and

second-tier cities said they are having a

running lifestyle at ordinary times.

And 51% of them said almost every

time when they run, they would

drink sports functional beverage.

Si�nian_Flower series Rice DumplingsFor example, after an in-depth insight research into segmented market consumers’ psychology and taste preferences demand, Synear group launched the petal Tangyuan series for young female consumers aged 25 to 35 who enjoys dessert and with the spirit of trying new stuff . Thus Synear who is specialized in traditional taste food has kept up with the trend of product innovation and created something new and awesome for the subdivided market.

McDonald�s_“I create my taste”McDonald�s launched a campaign titled I create my taste, which is not only bold but also innovative, bringing a personalized, closer to human nature and digitalized future-style dining experience to its consumers.

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SnacksSnack has become a new developing trend of food industry, as snacking has become a way of lifestyle for people.

New concept that spreads across the traditional categories of food makes it more convenient and quick for people to eat. Constantly-created new niche and category, single-package for travel use, and snack food is no longer confi ned to any time period. Gradually it has become a popular afternoon snack and meal replacement.

PersonalizationMore than ever, consumers are hoping to express themselves by food they are taking.

80% of the Chinese consumers prefer personalized food brands while 72% of the consumers are willing to pay more for attractive food brand image.

Coca Cola

in Israel launched to the local market two million bottles of diet coke with diff erent packaging, to

shout out to the world that they take personalized food culture very seriously. Coca Cola did this by

combining diff erent colors and shapes, and let the computer automatically generate millions of

identical bottle labels, hoping to deliver the concept that everyone who chooses diet coke is unique.

Oreo

3D-printing function helps its customers to create personalized color and special fl avor according

their own preferences.

Chocomize

Consumers can choose from a variety of ingredients, and decide the type and shape of chocolate on their own. We can say that,

personalization or customization is not only a beautiful appearance that protects the product

from the loss of customers; it is much more important in terms of marketing for lots of

enterprises, to impress potential consumers, make them fall in love with the brand.

We can say that, personalization or customization is not only a beautiful appearance

that protects the product from the loss of customers; it is much more important in

terms of marketing for lots of enterprises, to impress potential consumers, make

them fall in love with the brand.

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