Analysis from Shanghai-based DDMA Market Research & Consulting reveals that food safety scandals continue to have a significant impact on the grocery shopping behavior of wealthier households in China. Findings from a recent study reveal that affluent consumers are buying more imported foods and frozen products than ever before.
Initial results of the study, available at the DDMA website (www.ddm-asia.com), show that as consumer demand increases, import, distribution, sales and marketing systems are also evolving. Compared to a year ago, foreign food companies have much greater choice in terms of how they present and market themselves to Chinese consumers. More importantly, they can play a greater role in the marketing and communication of their brands, as much of the demand is coming from channels that are outside the realm of large scale, traditional food distributors in China.
Dumplings top the list of foods bought in a frozen form by rich and upwardly mobile Chinese households. Beef and fish are also significant categories purchased, and frozen prepared foods are taking market share from the fresh sector, according to DDMA.
Convenience and safety concerns are driving the growth in sales of frozen groceries in the PRC. Approximately 65% of wealthy households are reportedly buying more frozen food for home consumption than was the case one year ago. Almost 50% of all households have purchased frozen beef in the past month, while a large portion bought pre-prepared, pre-flavored beef. This also the trend for purchases of lamb, fish and, to a lesser extent, pork.
Much of DDMA’s China projects involve identifying suitable distribution and retail partners for foreign food companies in the PRC, as well as providing consumer insight for marketing strategy development. Over the past 12 months the research and consulting company has conducted numerous distribution and consumer studies for foreign food producers that are either entering the market or restructuring their Chinese operations. The largest structural change is the development of strong cold chain distribution networks.
In an increasingly competitive sector, DDMA has identified common characteristics that successful foreign food brands have in common. Future reports will focus particularly on essential elements of ingredient branding and how to best present the country of origin. The bottom line is that well positioned foreign food brands can attain a very steep premium at point of sale if presented in the right manner and format to wealthy Chinese customers.
