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Rapid economic growth and rising incomes mean Chinese consumers are demanding more processed foods, which should fuel double-digit growth in the industry for the foreseeable future.
In fact, Chinese consumers are buying more processed foods at grocery stores and restaurants.
China and its 1.3 billion population consume about half of the world's pork, one-third of rice, 19 percent of ice cream and poultry and 12 percent of beef. Currently, less than one-third of food in China is processed, compared to about 80 percent in western nations.
The market for processed foods is growing in China especially in urban areas where higher concentrations of wealth and busier lifestyles have led many to seek out more convenient alternatives to cooking with fresh ingredients.
Recent food poisoning incidents have also increased consumer concern over food safety and many are now looking towards big-name brands that they feel they can trust. |
China's food processing industry is mainly located in eastern coastal regions of Shanghai, Guangzhou and Beijing. In 2003, according to official statistics, there were 19,022 food-processing ventures with total combined sales of $122.9 billion. However, that official data may not include thousands of smaller processing businesses.
The industry grew 16 percent between 2001 and 2002, and grew 23 percent from 2002 to 2003, according to official government data. "These numbers are staggering but many industry insiders feel that it is safer to assume double-digit growth in excess of 10 percent.
In fact, some estimates believe that the output of the food industry by the year 2010 may double from that of the year 2000, when it was valued at about $102.7 billion.
Packaged foods, especially baked goods, dairy products, oils and fats, baby food and ice cream have all shown "exceptional" growth. Fast-food chains such as Yum Brands Inc.'s KFC (YUM.N: Quote, Profile, Research) and McDonald's Corp. (MCD.N: Quote, Profile, Research) are also expanding in China to meet consumer demand.
In coming years the industry will focus on shipments of corn and wheat goods, dairy products, food additives and seasoning essentials.
Demand for imported poultry, cereals, fish, nuts, soybeans are expected to continue while U.S. exporters may find new markets in baking ingredients and fruit flavorings.
"good prospects" includes baby formula, oranges, frozen french fries, hazlenuts and seafood.
China is also likely to be a "healthy market" for American beef products when the country lifts its embargo on imports.
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