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China's Evolving Animal Protein Market Signals Strategic Shift for Global Suppliers

China 29.10.2024
Source: DairyNews.today
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China's animal protein market is undergoing a significant transformation, driven by both structural and cyclical changes that are redefining consumer demand, according to a recent report from Rabobank. The shifting landscape presents substantial opportunities, particularly for beef producers, as Chinese consumers seek diverse, high-quality protein options that cater to their evolving preferences.
China's Evolving Animal Protein Market Signals Strategic Shift for Global Suppliers
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The report, authored by Chenjun Pan, senior animal protein analyst at RaboResearch, highlights key factors influencing this shift, including economic pressures, demographic changes, and a growing emphasis on health and lifestyle among Chinese consumers. Pan notes that China's rapid economic expansion, market liberalization, and digital adoption over the past decades have more than doubled the country's per capita meat consumption—from 35 kg in the mid-1990s to 72 kg by 2023. "This growth has drawn significant global investment, but the market’s expectations are shifting," Pan stated.

Despite slower GDP growth, China’s expanding middle class continues to demonstrate strong purchasing power. However, an oversupply of animal protein in the past year has put pressure on prices, leading to a sluggish supply chain. Still, overall demand remains steady as Chinese consumers increasingly seek high-value protein options that align with their lifestyle and health priorities.

The report underscores a move away from traditional pork consumption, once the dominant protein in China, toward alternatives like poultry, beef, and seafood, which are gaining favor for their perceived health benefits. Moreover, e-commerce and food delivery are reshaping purchasing patterns, especially among older demographics, signaling the end of one-size-fits-all products in the market. “Today’s consumers expect more than just a product; they seek a comprehensive value proposition that includes quality service and valued experiences,” Pan added.

Demographic shifts also play a critical role in shaping consumption. With China’s population expected to decline from 1.4 billion to 1.3 billion by 2050 and with those aged 65 and above projected to exceed 20%, there is a clear indication that dietary preferences will adapt to the needs of an aging population, moving towards convenient, health-focused products.

From an export perspective, this trend is promising for New Zealand, China’s second-largest beef supplier, which accounted for nearly a third of New Zealand’s beef exports in the 2023/24 season. RaboResearch senior analyst Jen Corkran highlights that New Zealand’s animal protein companies must pivot from a volume-centric approach to one that emphasizes consumer value, focusing particularly on poultry, beef, and high-value seafood.

“New Zealand’s animal protein sector has the opportunity to align more closely with foodservice and retail, engaging in ‘downstream extension’ to better meet Chinese consumers’ expectations,” Corkran remarked. This approach, she suggests, will help secure margins and foster closer integration with end consumers, maximizing both satisfaction and profitability.

As China’s animal protein market continues to mature, companies within the global supply chain are encouraged to align their strategies with the nuanced demands of Chinese consumers, who now prioritize quality, convenience, and health benefits in their protein choices.

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