China’s youth create a stir in pork industry
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China’s youth create a stir in pork industry

Posted by | June 30, 2017 |

China’s frozen dumpling makers are finding a quick route to winning new sales – increase the vegetable content and cut down on the meat.

This departure from traditional pork-rich dumplings is a hit with busy, young urbanites trying to reduce fat in their diets often heavy in fast food.

“They [consumers] like trying new healthy products once a week or fortnight. It’s a big trend for Chinese mainland consumers, especially those aged 20 to 35,” said Ellis Wang, Shanghai-based marketing manager at US food giant General Mills, which owns top dumpling brand, Wanchai Ferry.

For pig farmers in China and abroad, this is a difficult trend to stomach. The producers and other market experts originally expected pig meat market growth to continue until at least 2026.

In the wake of this prediction, Chinese hog farmers have been on a building spree, constructing huge modern farms to capture a bigger share of the world’s largest pork market, while leading overseas producers have been changing the way they raise their pigs in order to meet Chinese imports standards. Some have, for example, stopped using growth hormones, which are banned in China.

Despite recent changes, China still consumes significantly more meat than any other country. People here will eat about 74 million tons of pork, beef and poultry this year, around twice as much as the US, according to US agriculture department estimates. More than half of this number constitutes pork consumption. For foreign producers, this has caused a big growth in the market, especially for Western-style packaged meats.

But pork demand has recently hit a wall, well ahead of most official forecasts. Sales of pork have now fallen for the past three years, according to data from London-based research firm Euromonitor International.

Last year, they hit three-year lows of 40.85 million tons from 42.49 million tons in 2014. Euromonitor predicts they will fall slightly in 2017.

In China, hog prices have come down approximately 25 percent since January, even though official numbers suggest supply is lower compared with last year.

Less meat is better?

Since China began opening up to the world in the late 1970s, pork demand expanded by an average of 5.7 percent every year until 2014. This was due to the booming economy allowing hundreds of millions of people to afford to eat meat more often.

Now, growing concerns about obesity and heart health have shaped a variety of shopping habits, fueling sales of everything from avocados to fruit juices and sportswear.

“Market demand remains very weak. I think one factor behind this is people believe less meat is healthier. This is a new trend,” said Pan Chenjun, executive director of food and agriculture research at Rabobank in Hong Kong.

Sales of vegetable-only dumplings grew 30 percent last year, compared with around 7 percent for all frozen dumplings, data from global marketing research firm Nielsen also shows.

“Demand for vegetable products keeps rising, giving us large room for growth,” said Zhou Wei, product manager at No.2 dumpling producer Synear Food.

Guangzhou-based Harmony Catering says that for the approximate 1 million employees eating at its 300 canteens every day, concern over health has become the core reason for reduced servings of meat.

Harmony’s chief clientele – that is, staff members from technology companies, banks and oil majors – are consuming about 10 percent less meat today than they did five years ago, whereas they are consuming around 10 percent more green vegetables, according to Harmony’s vice president Li Huang.

“This is mainly because of media messages, the concept of health has entered popular consciousness [through mainstream communication channels],” he said.

For now, it’s mostly urban and white-collar workers paying closer attention to their diets. There’s been, for example, a sharp rise in vegetarian food stations at university campuses.

Besides, the government wants a nationwide shift in eating habits.

Childhood obesity in China is rocketing, and the country also faces an epidemic of heart disease, Harvard researchers warned last year. They blamed the growing consumption of red meat and high salt intake for these problems.

In April, the health ministry kicked off its second 10-year healthy lifestyle campaign, urging citizens to consume less fat, salt and sugar and instead, aim for a ‘healthy diet, healthy weight and healthy bones’.

By 2030, China wants to see a noticeable increase in nutritional awareness, a 20 percent cut in the per capita consumption of salt and slower growth in the rate of obesity, according to a recently published “Healthy China 2030” pamphlet.

Meeting healthy demands

Some companies have been urgently changing the mix of products they sell by going for higher-margin meats rather than volumes. Sales of traditionally less popular lamb and beef have also been increasing.

Li of Harmony Catering says, although servings of pork are down, the firm is including more beef and lamb in meals for diet diversity purposes.

“People usually eat lean beef or lamb, like beef brisket, while pork has both fatty and lean parts, like in ‘hong shao rou’,” said Beijing-based nutritionist Chen Zhikun, referring to the widely consumed braised pork dish.

China’s top pork producer, WH Group, has been going up market by selling more expensive, Western-style products in China, such as sausages and ham. Such products are commonly imported from Smithfield, the largest US pork producer, which was acquired by WH in 2013.

Some producers say that the recent drop in pork consumption can also be partly explained by sharply lower output. A prolonged period of losses during 2013 to 2015 forced farmers to cull millions of hogs, hitting supply and sending pork prices to record levels in 2016.

But for a growing portion of Chinese consumers, price tags on food items are becoming less and less important. A spate of safety scandals in recent years, many of which were related to meat, has made urban Chinese highly sensitive to food quality.

More than 80 percent of people in China surveyed by Nielsen last year said they were willing to pay more for foods without undesirable ingredients, much higher than the global average, which is 68 percent.

“China is in a new stage where consumption of pork and other foods is no longer a simple matter of ‘more is better’,” said Fred Gale, senior economist at the US agriculture department.

Source: Global Times Date: 2017-06-29