Photo: Rabobank/FIS

China's new consumption trends bring opportunities to seafood industry

CHINA
Thursday, August 15, 2024, 16:00 (GMT + 9)

Recently, Rabobank released a new market report, pointing out that China's new consumption trends will bring opportunities to the seafood industry.

In recent years, China's animal protein market is experienced changes in consumption trends due to market oversupply, economic slowdown, demographic changes and shifts in consumer values. These new trends have brought both opportunities and challenges to the industry. Companies need to develop strategies for long-term market changes and actively respond to the increasingly complex needs of modern Chinese consumers.

Rabobank predicts that seafood will become one of the fastest-growing animal protein categories in China over the next decade, with seafood consumption growing 4.4% annually from 2013 to 2023, outpacing pork, poultry and eggs, and even outpacing beef consumption (which grew an average of 3.2% per year over the past decade).

The era of homogeneous products that cater to basic needs is a thing of the past

In the Chinese market, the era of providing homogeneous products to meet basic needs has ended, and China's animal protein consumption market has entered a new stage. "Today's consumers not only care about the product itself, they pay more attention to the overall value including quality service and experience," said Chenjun Pan , senior analyst of animal protein at RaboResearch . This change is due to China's rapid economic growth, market liberalization and digitalization, which has increased per capita meat consumption from 35 kilograms in the mid-1990s to 72 kilograms in 2023.

On seafood, RaboResearch said, "Consumers have a positive view of seafood. The demand for high-quality products has increased consumption of high-value seafood, including shrimp, wild fish and deep-sea fish, rather than traditionally consumed carp." Seafood suppliers need to make adjustments, not just exporting large quantities of shrimp and fish to meet China's huge market.

Animal protein consumption remains strong

Despite China's economic transformation and slowing income growth, consumer demand for animal protein remains strong. Consumers may cut back on spending in other areas, but spending on food remains stable. The focus of consumption has shifted from quantity to quality. "How to eat better, rather than eating more, has become the focus of many Chinese consumers," said Chenjun Pan.

Changing demographics are affecting consumer preferences

China's aging population and shrinking family size are subtly affecting consumer preferences for animal protein. "The market is gradually shifting from pork, which was previously dominant, to poultry, beef and seafood, as these foods are considered to be more beneficial to health," Pan said. "In addition, the elderly's acceptance of e-commerce, takeaways and convenience foods means that past consumption habits are changing".

Four major trends in the future

RaboResearch believes that China's future consumption of animal protein will be affected by the following four major trends:

• Pursuing high cost-performance : Consumers are increasingly seeking high-cost-performance products. Amid slowing income growth, consumers are becoming more value-conscious. Chinese consumers are still buying higher-value seafood, beef and poultry products, but they are increasingly paying attention to “value for money.”
• Emphasis on the "experience economy": As China becomes more affluent, consumers are spending more on dining out and services such as live streaming, the report said. While restaurants are offering deep discounts to attract cost-conscious customers, Chenjun Pan believes that large chains will eventually enjoy lower cost advantages, which could translate into higher demand for seafood.
• Health and Nutrition: People are spending more on health and nutrition, which is influencing their purchasing decisions. “Chinese consumers, especially the older generation, are more concerned about issues such as nutrition, food safety and sustainability,” Pan said . This is helping to shift market share from pork to proteins such as seafood, poultry and beef, which are considered healthier.
• Evolving distribution channels: As distribution channels continue to evolve, the way consumers access animal protein products is also changing. Currently, online seafood sales still only account for about 15% of China's seafood sales, while overall consumer product sales account for 36%. As investment in cold chain logistics expands, online sales channels will continue to grow.

Impact on the animal protein supply chain

To capitalize on these trends, animal protein companies must shift from a volume-centric approach to a consumer-centric approach. This means:

• Value growth: Companies should focus more on increasing the value of their products, especially poultry, beef and high-end seafood.
• Downstream extension: Strengthen cooperation with catering services and retailers to help companies improve profit margins and meet consumer needs more effectively.
• Sustainability: As consumer concerns about sustainability increase, the animal protein supply chain should strengthen its collaboration with retailers and food services to improve sustainability efforts.
• Standardization: The trend toward standardization in food processing and preparation offers new opportunities for supply chain innovation.

“These changes present unique challenges and opportunities for China’s animal protein market. Companies that can nimbly respond to these new consumer trends and stay consumer-centric will be the ones that succeed in this changing market,” Chenjun Pan concluded.

The graphic and text content is from the Rabobank website. If there is any infringement, please inform us in time and we will delete it as soon as possible.

Source: Zhejiang Zhoushan International Agricultural Products Trading Center 

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www.seafood.media

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