Focus: China’s Year of the Ox’ shows signs of confectionery market resilience
As the second largest economy in the world, China has typically attracted strong attention, and as Neill Barston reports, its markets are making a faster recovery than most
With the whole world locked in a battle against the ongoing coronavirus pandemic, the market uncertainty that has inevitably ensued is projected to continue for some period in many regions.
However, as has been widely reported in recent weeks, China’s economy appears to be rebounding at an impressive rate, enjoying positive growth across a number of segments compared to the marked declines being witnessed in some parts of Europe. When China first declared the outbreak of Covid-19 within the Wuhan province in January 2020, few could have imagined the ramifications for all spheres of life and business, with multiple events being cancelled, and markets going into near shutdown scenarios.
Notably, the country’s President Xi Jinping recently called for both greater global efforts in the fight against an unprecedented public health crisis that is threatening to linger well into this year, if not longer. “The pandemic is far from over and the recent resurgence in covid cases reminds us that we must carry on the fight,” Xi said at the virtual Davos conference.
“There is no doubt that humanity will prevail over the virus and emerge even stronger from this disaster.” Consequently, as the BBC reported this month, China suffered its worst economic performance for nearly two decades with growth of 2.3% – which in fact was far better than many economies that were dealt a sudden shock of the once in a century pandemic. So, this year it’s raised its forecast to growth of above 6% and it’s more than likely it will achieve that goal.
The food and drink sector will of course play its part in this, with a number of companies active within confectionery and bakery making notable gains in the region. As Bühler noted in its recent annual results, the country is enjoying a strong performance in China with its sustainably focused equipment and solutions for agriculture and consumer food categories.
Similarly, the likes of Gerhard Schubert packaging have opened and extended facilities in the territory, in the belief that there will be a strong market for quality equipment ranges. Within ingredients, Kerry, the global taste and nutrition company, recently announced it has completed the acquisition of the Jining Nature Group, specialising in savoury flavours and seasoning, pointing to a general pattern of investment in the region.
According to the US department of agriculture, China’s bakery sector 10 confectioneryproduction.com APRIL 2021 has continued its rapidly expansion, underpinned by the country’s rising middle class, ongoing Westernisation of lifestyles and diets, and increasing demand for convenient food options.
Furthermore, it noted that Euromonitor International estimates retail sales of baked goods (packaged and unpackaged) in China at $34 billion in 2020, comprising 9% cent of global retail sales. This makes the country the world’s second-largest baked goods retail market after the US (at $67 billion). Crucially, the agriculture department believed there was significant room for further growth, based on the country’s population and relatively low consumption base.
Per capita consumption of baked products is presently said to be 7.2 kilogrammes (kg) per year, compared to 22.5kg in Japan, and 40.2kg in the United States. Furthermore, Euromonitor International forecasts that retail sales of baked goods in China will grow to $53 billion by 2025, a 53% jump from current level, making Asia a prime regional market to observe in the coming years ahead.