Resilient food sector rebounds in Q1, sets sights on markets abroad

China's food sector, which encompasses, among other things, dairy, ingredients, beverages and drinks, as well as processing and production, returned to positive growth in the first quarter.

Revenue surged 26 percent year-on-year to 2.11 trillion yuan ($330 billion), yielding a profit of 162 billion yuan, up 41 percent year-on-year.

Commenting on data from the China National Light Industry Council, industry insiders attributed the first-quarter growth to the rebound in domestic demand amid COVID-related disruptions.

The food sector's first-quarter profit was more than half of that of the entire "light industry", which also includes textiles, tobacco processing and paper manufacturing.

"The food sector has shown strong resilience, and helped bolster domestic demand," said Zhang Chonghe, president of the China National Light Industry Council.

"We shall further explore emerging markets and advance international cooperation to ride the dual-circulation development wave," he said.

Efforts already made included hosting trade events like the Food Ingredients China 2021 earlier this month in Shanghai, where 1,500 exhibitors from home and abroad showcased a variety of food additives, ingredients and solutions as Chinese consumers aspire for quality and healthier dining options.

Novozymes, a leading biological solutions provider and expert in enzymes and microbes, displayed multiple biological enzyme-based solutions that can be applied in bakery, plant-based drinks and food offerings featuring less sugar and oil.

China's trade-up trend in the food and beverage－F&B－sector is likely to expedite the adoption of biotechnologies like enzymes, said Chen Xiaohui, president of Novozymes in China.

"We are doubling down on businesses in the consumer, agriculture and industry, and human health segments, as China's quality-driven growth patterns provide a lasting vote of confidence," Chen said.

NZMP, the dairy ingredients and solutions brand of New Zealand company Fonterra, is betting big on healthy food ingredients to advance growth, through ingredients for protein-fortified beverages and yogurts, probiotics for immunity and digestive health applications, and new milk phospholipids for stress management.

Teh-han Chow, CEO of Fonterra China, recognized the China market to be Fonterra's largest and fastest-growing in the world, taking up more than a quarter of the company's global revenue. On average, in every large supermarket, there are more than 500 kinds of foods containing NZMP dairy ingredients.

As consumers adapt to the new normal, amid COVID-19, health and immunity have risen in importance. In China, 47 percent of consumers are now looking for foods that will boost their immunity more frequently, according to a survey by F&B-focused market researcher FMCG Gurus.

The company also introduced a carbon-zero organic butter to meet rising consumer demand for products made using sustainable processes.

To receive this title from an independent certifier, suppliers need to measure greenhouse emissions across the entire supply chain of an ingredient. This includes emissions from sourcing raw materials, manufacturing, distribution, packaging and disposal.

"We can highlight the possibilities we can bring to our customers, with our insights to local market dynamics as the trusted dairy expert," Chow said.

New food ingredients and additives are nurturing new types of products like meal replacements and new-style teas exemplified by tea drinks with cheese toppings.

For instance, the China market for new-style teas grew from 44 billion yuan in 2017 to 102 billion yuan last year, according to consultancy CBNData.