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The Coronavirus has affected all industries in China, and the food and beverage industry has not been spared. As China’s leading B2B event for the health and food ingredients industry, we are keeping track of how the industry has been affected. We have teamed up together with leading market experts ChemLinked to prepare an overview of the market in China, how it has affected consumers purchasing behavior, and how the food and beverage industry has been affected.
Health and wellness have been a key trend inthe Chinese industry in recent years, but since the start of the virus, it has become even more important. Chinese consumers are now, more than ever before, aware about the importance of health, and the sale of health products have seen an increase. This demand is expected to remain steady after the virus, making Hi & Fi Asia-China together with Healthplex Expo, Natural & Nutraceutical Products China(HNC) even more important than ever before.
These events taking place together from 22-24 June in the National Exhibition and Convention Centre (NECC), Shanghai are the meeting place for the health and food industry, from ingredients to finished health products. Onsite at the event, we will once again be teaming up with ChemLinked, when they join us in the Innovation & Content Hub to present about food regulations and laws in the Chinese market. A topic not to be missed. Register for free today to learn more onsite in June.
The novel coronavirus epidemic has proven to be a headache for the country’s economy, which also brings large demands or certain opportunities for some sectors like supplies of goods, logistics/delivery and new retail. ChemLinked has summarized related questions & answers below to interpret what is going on and what will happen next.
Chinese government has proposed many restrictions on citizens to prevent the spread of the disease, especially for some cities with a severe outbreak. Currently, according to some leading social media, such as Weibo, Wechat, etc., the majority of the people’s daily life is quite similar:
The situation differs. For people living in China’s first and second cities, online channels such as comprehensive e-commerce platforms (Taobao and Jingdong, etc.) and O2O delivery platforms (Eleme, Fresh Hema, etc.) have become their main choice. But for people living in lower-tier cities, rural areas and hardest-hit areas like Hubei, the neighborhood supermarkets, convenience stores and other small offline community businesses have become their primary choice because of the lockdown of the streets and disruption of logistics.
As the outbreak occurred in close temporal proximity to the Chinese Spring Festival, celebrations and festivities were reduced or even cancelled altogether. Purchasing of gifts suffered significantly, translating to significant reductions in sales of alcoholand beverages. Restaurants and the service sector have suffered considerably. Conversely, demand for frozen foods, and convenience food has increased. The epidemic has had little influence on dairy products and condiments yet.
In fact, the whole supply chain is suffering significantly. Currently, China has put several major urban hubs on lockdown and placed restrictions on transport. For upstream links, these restrictions will noticeably impact output and production capacity. Raw materials supply is expected to suffer a rapid decline. As a result, other links in the supply chain associated with processing, production, blending, canning, etc. will also be severely affected as the government has placed restrictions on the dates when employees are permitted to return to work.
On the other hand, bricks and mortar businesses are expected to be the most affected by the epidemic. In some major cities, there are rules in place that restrict the movements of families. Under these restrictions, families are only allowed to send one person out every two days to purchase essential goods. Consequently, traffic and sales of those offline stores showed a sharp decline.
Frozen food and convenience food: because people have to stay at home for a long time during the epidemic, they would choose to purchase some life necessities and stock some food. Frozen food and convenience food with longer shelf life become their priority selection.
Fresh food e-commerce: Fresh food e-commerce also becomes popular since people couldn’t go outside to buy fresh food such as vegetables, fruits and meat while the demand for this kind of food increased during the epidemic. During the Spring Festival, the daily online ordersof vegetables and fruits in SuFresh(a new retail fresh food e-commerce owned by Suning) increased by more than 200%. Besides, Suning Food Market, a part of the Suning Small Store(Suning’s community-based convenience store), saw a 245% increase in online orders.
Health foods: due to people’s concern about health, the demand for health foods, like nutraceuticals, also increased in this period.
Since more people realize the importance of health and immune ability, the demand for health foods has increased. It is expected to remain steady after the epidemic, especially those that can help improve people’s immune ability. Nutraceuticals like Vitamin C and Vitamin A are worth attention.
Here are 4 points which can be predicted:
Based on some enterprises’ outstanding performance in this outbreak, ChemLinked has some recommendations:
During the epidemic, many companies will donate money, but sometimes doing charity is not only about giving money but also about what brands do in this particular moment.
Sorry, there isn’t such a list, but we can find the regulatory references to support the usage, including:
The enterprises can apply for new raw food materials.
It’s similar to the EU regulation that it allows for up to 5% non-organic ingredients. According to the Administrative Measures on Organic Product Certification, “Processed products with equal to or higher than 95% of organicingredient content (weight or fluid volume, excluding water and salt, the same below) shall, after obtaining organic product certification, label "organic" as word on the product or product package as well as organic product certification mark,.” GB/T 19630.2-2011 also states that “When the organic ingredients cannot meet the demand, non-organic ingredients can be used, but should less than 5% of the total amount of ingredients. Once the organic ingredients are available, the organic ingredients should be used.”
It depends. Raw material and auxiliary material should be discussed separately:
Raw material: animal or plant materials permitted to be applied in health food are listed in 2 catalogues, which are "Catalogue of Substances Used as Both Food and Traditional Chinese Medicine" and "Catalogue of Substances Used in Health Food" (they are attached in the No.51 announcement issued by MOH). If this raw material is listed in Chinese pharmacopoeia while not in the lists mentioned above, it should apply for new raw food material in China before it is applied in health food.
Auxiliary material: some non-functional and necessary pharmaceutical auxiliary materials without consumption risk, including conventional excipient and filling agent, can be used in health food production, such as polyethylene glycol.
According to FAO and WHO, probiotics should be active and good to humanhealth. But currently in China, probiotics can be active and inactivated bacteria and their metablites. In a consultation draft of health food, probiotic health food refers to health food whose working ingredients are active probiotics, meaning the definition of probiotics in China is aligned with international standards.
Because liquid probiotics are not as stable as the powder type.
There is no requirement for the total amount of active probiotics in heat treated products. And if it is heat treated, you need to label “heat-treated flavoring fermented milk” or anything along those lines.