Agriculture, Food and Drink
China’s growing appetite for British food and drink products is underpinned by provenance and premium quality. As Chinese consumers have grown wealthier and ventured further afield to visit new places and explore new cuisines, they have developed new tastes for imported delicacies and remain convinced a premium price is the right price to pay for produce that bears the mark of food safety and years of craftsmanship.
A string of food safety scandals and anecdotal media stories about “glow-in-the-dark” chops in domestic stores have heightened Chinese public’s awareness of the links between the country’s fragile environment, supervision of food supply chain and health hazards. These have seriously undermined the trust of Chinese consumers in domestic food safety and guarantees, adding in turn to the appeal of British food and drink as trustworthy products of a countryside defined by green land and blue skies. The designation of ‘made in Britain’ is increasingly one of the biggest assets for British food and drink businesses.
China’s attraction as a destination for food and drink exports has grown in tandem with Chinese consumers demand for imported food on the supermarkets’ shelves.
China will become the world's largest market for imported foods by 2018, predicts the country’s National Bureau of Statistics of China. China is already the largest grocery market in the world with an estimated value of £1 trillion, according to grocery industry researchers IGD. In 2013 China imported £5.65 billion of food products, whilst for the first eight months of 2014 from January to August 2014 the import of foods had already reached £4.6 billion, representing a 15% increase on the same period in 2013 (China National Bureau of Statistics).
For food companies with the right branding and strategic patience, China offers a genuine chance for future expansion.
Retail and Online scene
Imported products are now commonly seen in both international and domestic retail outlets in Chinese cities and appearing online on e-commerce platforms.
Large foreign chains like Walmart, Metro and Carrefour all have operations in China and they often compete directly in cities with Chinese equivalents like Lianhua and Jingkelong supermarkets. In boutique store-chains, like Ole and City Shop, often more than half of the products are imported and these high-end shops hold international cuisines promotional events and tastings.
E-commerce’s importance in grocery shopping is growing with traditional retailers moving online and specialist grocery sites expanding their range of imported products. While the online market is dominated by specialist sites such as Yihaodian, even marketplaces such as Alibaba and Amazon are now introducing dedicated sites for imported food products. Latest IGD research indicates that the Chinese online grocery market - already the world’s largest, will be worth almost £115 billion by 2020 – nearly five times its current value of £26 billion.
There are a number of regulations and practical processes involved in exporting food and drink to China. CBBC urges companies to research the relevant policies before despatching products to market.
It is not possible to export certain products to China, such as beef, lamb and processed pork products. Sea fish, shellfish, pork meat and dairy products require export health certificates and in some cases plant registration via the China National Certification and Accreditation Administration (CNCA ). Defra and the Animal Health and Plant Agency issue updates on and changes to the export requirements through Twitter; they will support companies in submitting data for assessment by their Chinese counterparts on a quarterly basis.
China has specific labelling requirements, and there are regulations relating to organic produce and nutritional / functional foods.
All imported foods and beverages have to show a white label attached to the individual bottle, can or packet in Chinese. The required labelling information includes the list of ingredients as percentages in descending order, with ingredients such as “herbs” or “sugar” stating the specific types. They must also show production dates and best before end dates. In addition to nutrition, food must also be labelled with: the name of the manufacturer, the name and address of the distributing importer, storage dates and instructions and the country of origin.
These labels must be approved by the China Inspection and Quarantine Services (CIQS). To facilitate the process and reduce the number of products rejected due to non-compliance CIQS allows on-site labelling at approved bonded warehouses in China. The ability to provide this labelling service in China is something that exporters should discuss with potential partners or distributors. Some companies like China Certification and Inspection Company (CCIC) provide dedicated labelling services.
Export opportunities for organic produce are growing but as the Chinese organic certification and regulatory system does not yet have mutual recognition with other international systems, inspection and certification of all operational aspects, such as farming, handling, processing and packing, must comply with Chinese organic standards, even if such operations have already been certified as organic by other UK or international control bodies. CBBC has been working closely with Defra, UKTI and industry associations such as the Food and Drink Exporters Association (FDEA) and the Soil Association to support more British food and drink producers in overcoming the regulatory hurdles and exploring the opportunities for export to China.
Exporters are also required to register online with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), detailing the full contact information of their Chinese distributor or partner.
CBBC can assist companies in registering with AQSIQ.
Failure to comply with registration requirements will see products rejected at the port of entry. China Inspection and Quarantine (CIQ) conducts regular checks on shipments into China and may conduct tests to ensure compliance with China’s relevant food standards.
The benefit of working with an experienced distributor or importer in China that already understands the market cannot be underestimated. CBBC can conduct detailed market research to help UK companies find the right distributors that fit with their unique products.