General review
In the first half of 2020, affected by the COVID-19 epidemic, Chinese consumers' disposable income and consumption expenditures have declined, and long-time home quarantine has severely affected their traditional consumption habits and channels. Online e-commerce became a primary channel, and consumers put forward higher requirements for food with more focus on health, nutrition, safety, and natural ingredients.
In the first half of 2020, the epidemic has posed a severe impact on the consumption of food and beverages. However, as China returns to normality, food, and beverage industry consumption has gradually recovered, especially healthy products showing bright growth prospects.
ChemLinked sorted out some hot events and issues from the first half of 2020 in the Chinese food and beverage industry.
Wyeth launched a new super-high-end infant formula brand in China
On June 30, Wyeth officially announced the launch of a brand-new super-high-end infant milk powder brand Belsol. It is Wyeth's first new product series in nearly ten years since it launched illuma in 2011. Belsol's milk comes from New Zealand farms and is produced by Wyeth's Suzhou factory. The brand's main feature is "exclusive nutrition customized for Chinese babies.
Related:
Wyeth Launches New Super-High-End IF Brand Belsol in China
Salmons was removed from shelves in many Chinese cities
Since June 11, there have been a series of new confirmed cases of COVID-19 in Beijing. After investigations, these cases all had a history of wet market activities. According to the responsible person at the wet market, the competent authority detected coronavirus on a chopping board used to cut imported salmon. Genomic analysis of the virus showed that the virus of this new Beijing cluster is from Europe.
Affected by this, many supermarkets and restaurants across the country removed salmon from shelves. On June 13, Beijing's major supermarkets removed all salmon, and some markets have stopped supplying seafood products.
Related:
Imported Salmon Being Investigated as Fomite in Beijing COVID Cluster
PepsiCo Beijing plant reported eight confirmed cases of COVID-19
On June 21, eight COVID-19 cases were confirmed in a factory of Pepsico in Beijing. The factory was temporarily closed. In the evening, Pepsico China responded that the involved factory is unrelated to the production of any beverage products. It mainly manufactures a small batch of Lay's canned chips. It also stressed that the virus has no chance of surviving the entire supply chain, and the chips are safe.
618 mid-year shopping festival
This year's 618 Shopping Festival is of major importance in China as a metric to gauge economic health and an indicator of consumer confidence during a global pandemic. The final results reflect China's strong consumption momentum with Tmall's total GMV reaching 698.2 billion yuan and JD's GMV reaching 269.2 billion yuan. In the food sector, Tmall led snack sales, and JD did better in the sales of beverage and dairy. As for infant formula, Aptamil and Wyeth clinched the No.1 title in Tmall and JD, respectively.
Related:
618 Vol 3: 618 Mid-Year Shopping Festival Food Sale List
618 Vol.2: China Mid-year 618 Shopping Festival: News Flash
618 Vol.1: The 2020 618 Shopping Festival
Danone took full ownership of Murray Goulburn China plant
Danone and Saputo Dairy Australia (SDA) have reached an agreement to acquire 100% of SDA's Murray Goulburn Dairy (Qingdao) Co., Ltd. The factory already has several registered milk powder products in China.
Related:
Danone Takes Full Ownership of Murray Goulburn China Plant
Pepsi completed the acquisition of Be&Cheery
On June 1, Pepsi announced that its US$705 million acquisition of Chinese snack company Be&Cheery had been approved, and the delivery has completed. Be&Cheery, founded in 2003 and headquartered in Hangzhou, Zhejiang province, is one of China's leading online snack enterprises.
Related:
Competition Heating up Between China’s Top 3 Snack Food Giants
China releases the first association standard for children snack food
On May 17th, China released the "General Standard for Children Snack Food", which helped address the lack of standards developed to regulate the children's snack food market specifically. The standard defines children snacks as snacks suitable for children aged 3 to 12, proposes to reduce added sugar, salt and oil in children's snacks and requires limits on sodium chloride, sucrose, and fat. It also involves the design of food packaging to consider the safety of children fully.
Related:
China Releases First Association Standard for Children Snack Food
Snack Foods for Children in China: Market Scale and Investment Potential
Two Sessions: influence on the food sector
China's "two sessions," a key event in the country's political calendar, was held in May this year due to the outbreak of novel coronavirus. During this year's two sessions, NPC deputies and CPPCC members submitted proposals or suggestions to facilitate the development of the food sector.
Related:
China Will Formulate Regulations for Artificial Meat
Chinese Deputy Proposes Removal of Infant Formula from CBEC Positive List
Three Suggestions for Accelerating Development of China’s FSMP Sector
China Proposes New Standards for Fresh and Frozen Meat Products
Food Security Legislation Plans Outlined During Two Sessions
An Overview of Food Safety Proposals Disclosed During China’s Two Sessions
China Outlines Dairy Sector Goals during Two Sessions
NPC Deputies Earmark Increased Dairy Consumption as Key National Target
“Big-headed baby scandal”
On May 11, a TV program in Hunan Province reported that a local maternity & baby store called "Love Baby (爱婴坊)" sold a protein solid beverage named "Bei An Min (倍氨敏)." The product is an amino acid-based solid beverage falsely advertised as an alternative to infant formula for those allergic to ordinary milk powder. Five babies have been identified as having an adverse reaction to the consumption of the product. The adverse reactions appear to be similar to the bony manifestations (craniotabes) of vitamin d deficiency. On May 13, 2020, SAMR issued a notice beginning a significant investigation into the case. The involved maternity & baby store was finally fined 2 million yuan.
Related:
False Advertisement of Solid Beverage Sold as FSMP Linked to Bone Deformity in Children
KFC, Starbucks launched plant-based meat products
At the end of April, KFC and Starbucks announced the launch of plant-based meat products in China market. KFC's plant-based golden chicken nuggets used high-quality soybean protein, wheat protein, and pea protein. Starbucks launched five plant-based products, including beef pasta with green sauce, classic lasagne, American spicy sauce roll, Vietnamese Style Salad, and Mushroom cereal bowl.
Related:
Monthly Digest: China Food Sector in April 2020
Nestle revealed a potential sale of Yinlu
On April 24, Nestle released the 2020 Q1 financial report. The Chinese business was affected by the COVID-19 epidemic and suffered double-digit declines. At the same time, Nestle also mentioned the decision to "explore strategic options, including a potential sale of the Yinlu peanut milk and canned rice porridge businesses in China." A 60% stake in the Chinese food company Yinlu was acquired by Nestle in 2011 and was completely controlled by Nestle in 2018.
Related:
Despite Slowdown, Nestlé Keeps Positive on China Market
China encouraged the consumption of dairy products amid the COVID-19 epidemic
In February, the National Health Commission published its official website, "COVID-19 Prevention and Treatment Dietary Guidance", in which eating a variety of dairy products, especially yogurt, was included. Besides, four industry associations jointly issued the "Consumption Direction" to promote the consumption of dairy products in China.
Related:
China Encourages the Consumption of Dairy Products