Monthly Digest: China Food Sector Review | Feb 2024
BY Rita BaoMar 01, 2024


  • Market Condition

  • Company Dynamics

  • Financial Results

  • Regulatory Compliance

Market condition

1. Coriander-flavored product innovations have once again seized attention, with Huiyuan and Pizza Hut introducing coriander juice and coriander pizza, respectively. Before this, brands like Baixiang and McDonald's have also launched coriander-flavored products. Due to the controversial nature of coriander flavors, products featuring this flavor often spark debates, ultimately achieving a public communication impact. It is important to note that such products primarily serve the purpose of enhancing brand exposure and facilitating consumer communication, typically having a short product lifecycle.

Coriander-flavored products

2. The Chinese sugar-free tea beverage market exhibits a duopoly with Oriental Leaf and Suntory commanding a substantial 70% market share in 2023. The remaining market share is distributed among brands like Chi Forest, Master Kong, Naixue, Uni-President, etc. Notably, the top 10 players altogether hold an impressive market share of 98%.

Oriental Leaf and Suntory

3. Over the past year since the implementation of new GB standards for infant formula, a total of 1,127 recipes have been approved for registration, including 926 domestic recipes and 201 overseas recipes. Another 441 recipes failed to meet the registration requirements. It is noteworthy that heightened requirements imposed by the new GB standards have led to the elimination of enterprises with weak research and development capabilities. Approximately 20 enterprises have either not submitted or withdrawn their registration applications.

Company Dynamics

1. C100, the Vitamin C beverage under Nongfu Spring, has introduced a new flavor—blood orange, a decade since the launch of the calamansi flavor in 2014. Featuring a notable Vitamin C content exceeding 100mg per bottle, the resurgence in C100's popularity can be attributed to the growing consumer preference for products high in vitamin C, fueled by enhanced health awareness.

C100 blood orange flavor

2. Holiland has unveiled its pet baking brand—Holiland Pet, focusing on pet birthday cakes. The brand emphasizes the use of pure ingredients and human-grade raw materials with zero preservatives or enhancers. China’s pet market is witnessing steady expansion. According to Deloitte, China's pet food market size was 51 billion yuan in 2021 and is expected to reach 114 billion yuan in 2026, with a five-year CAGR of 17%. Furthermore, with a growing trend of younger pet owners, the adoption of scientific pet-raising ideas is driving a continual upgrade in pet consumption.

Holiland Pet

3. Nongfu Spring has unveiled its first plant-based dairy beverage—Coconut Soy, blending the rich flavors of coconut and soy milk. The initial market rollout primarily targets the southwest and east of China, with a focus on regions like Jiangsu, Hunan, Sichuan, and Guizhou. The product will be strategically distributed to hotpot restaurants, small eateries, and other catering channels.

Coconut Soy-Nongfu Spring's first plant based dairy beverage

4. Nestlé's Yiyang Wanning formula milk has made its worldwide debut in the Chinese market. This innovative product is grounded in Nestlé's latest advancements in sleep research, leveraging a nutritional combination of "tryptophan + mulberry leaf extract + magnesium + zinc + high protein," derived from natural sources. It is specifically designed to enhance the speed of falling asleep and improve sleep quality.

Nestlé's Yiyang Wanning formula milk

5. CLASSY KISS has introduced a new yogurt flavor enriched with traditional Chinese ingredients, including hawthorn, Chicken Gizzard-membrane, Chinese yam, malt, red dates, and poria cocos. The fusion of yogurt with these traditional ingredients not only introduces novel flavors but also contributes to nutritional and health advantages. This strategic move signifies a focus on distinctive and innovative product positioning.

CLASSY KISS  yogurt with traditional Chinese ingredients

6. According to Luckin Coffee’s financial results for the year 2023, the net revenue increased by 87.3% YoY to CNY 24.9 billion. New store openings in the year 2023 were 8,034, including 30 in Singapore, leading to a total of 16,248 stores by the end of 2023 (10,628 self-operated stores and 5,620 partnership stores).

Financial Results

Global Performance

Noteworthy Performance in China


(full year results 2023)

Total Revenue:

EUR 27.619 billion, + 7.0% YoY

  • Essential Dairy & Plant-based Products (EDP): 14.322 billion, +6.6% YoY

  • Specialized Nutrition: EUR 8.504 billion +6.7% YoY

  • Waters: 4.793 billion, 9.1% YoY

Revenue in China, North Asia & Oceania (CNAO):

EUR 3.496 billion, 10.1% YoY

  • Specialized Nutrition in CNAO: EUR 2.445 billion, +8.3%

    (Specialized Nutrition maintained its momentum in China, in both infant nutrition and medical nutrition)

  • Waters in CNAO: EUR 692 million, +14.1% YoY

    (Mizone grew by double digits)


(full year results 2023)

Total Revenue:

CHF 93.0 billion, organic growth +7.2% YoY (pricing of +7.5% YoY and real internal growth (RIG) of -0.3% YoY)

  • Purina PetCare: strong momentum across all channels

  • Coffee: high single-digit growth

  • Infant Nutrition: high single-digit growth, based on continued momentum for premium infant formula, including HMOs products as well as specialty formulas

  • Dairy: mid-single-digit growth, led by fortified milks, coffee creamers and home-baking products

  • Confectionery: high single-digit growth, fueled by continued double-digit growth for KitKat

  • Prepared dishes and cooking aids: mid-single-digit growth, with robust demand for Maggi

  • Water: mid-single-digit growth

  • Nestlé Health Science: low single-digit growth

Revenue in Greater China: 

CHF 5.037 billion, organic growth + 4.2% YoY (RIG of +2.5% YoY and pricing of +1.7% YoY)

  • Infant Nutrition: positive growth led by NAN hypoallergenic and specialty offerings. In the Q4 2023, the illuma launched its HMOs children milk formula

  • Coffee: low single-digit growth, supported by ready-to-drink offerings.

  • Confectionery: mid-single-digit growth, led by Shark wafer and Hsu Fu Chi

  • Purina PetCare: double-digit growth, based on new product launches and strong e-commerce momentum.

  • Culinary: high single-digit growth, with increased demand for Totole in out-of-home channels and new product launches.


(full year results 2023)



Total Revenue:

EUR 13.1 billion, -7.1% YoY

  • Specialized Nutrition: EUR 1.155 billion, +8.9% YoY

  • Specialized Nutrition reported an increase in revenue and a higher operating profit, thanks to growth in the sale of Friso Prestige products in the ultra-premium segment in the Chinese infant formula market.

  • Friso brand ranks fourth in the Chinese infant formula market, compared to seventh a few years ago


(H1 2024, 6 months ended in Dec 31, 2023)

Total Revenue:

NZD 811.1 million, +3.72% YoY

  • Infant Milk Formula:sales grew by 1.5% YoY with China label up 10.4% YoY and English label down 6.9% YoY.

  • Liquid Milk: sales grew, with. Australia and New Zealand up 1.5% YoY and USA up 7.0% YoY.

  • Other Nutritional: grew by 48.5%

Revenue in China & Other Asia:

NZD 549.5 million, +16.5%

  • China Label Infant Formula: NZD 299.0 million, +10.4% YoY. Consumer demand for a2 至初® remained strong with market share improving both in-store and online

  • English Label Infant Formula: NZD $210.5 million, +19.9% YoY. Strong growth in retail sales of a2MC English label IMF through emerging CBEC channels such as Douyin

  • a2 has become a top-5 IMF brand in the Chinese infant formula market, taking into both China label and English label products.

Regulatory Compliance

1. On February 8, 2024, the China State Administration for Market Regulation (SAMR) announced to solicit public comments on the draft of Technical Requirements for Health Food Filing Using Health Food Ingredients Including Ginseng, American Ginseng, and Lingzhi. The draft specifies the filing requirements for health food products added with the three ingredients, mainly covering five aspects including auxiliary materials, product dosage forms, product processing, product technical requirements, and other requirements. More information on ChemLinked

2. On February 26, 2024, the General Administration of Customs of China (GACC) issued a notice announcing the cancellation of registration for JERRY & SONS PHARMACEUTICAL INC, a U.S. beverage manufacturer. As revealed by the notice, the company was found to have provided false materials during the registration process. GACC also stated that there have been no customs declaration records for products from this company. More information on ChemLinked

 Disclaimer: All images used in the article are from the Internet. 

Rita Bao
ChemLinked Regulatory Analyst
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