Contents

• Market Condition

• Company Dynamics

• Regulatory Compliance

Market Condition

1. Hosen Capital, a private equity firm specializing in the food and consumer sectors, identifies five major trends influencing China’s food industry in 2025:

• Chinese food and beverage enterprises are accelerating their global expansion.

• M&A activity is driving scale growth, resource integration, and business synergies.

• Sugar-free tea and functional beverages continue to dominate the shift toward healthier flavor profiles.

• Content-driven and interest-based e-commerce platforms are emerging as key growth drivers.

• AI is playing a crucial role in R&D innovation and cost efficiency across the industry.

2. Concerned about a potential TikTok ban in the U.S., a large number of users migrated to RedNote (the international version of Xiaohongshu). Under the hashtag #TikTokRefugee, posts and views surged, driving high engagement among local users. This influx also created opportunities for brand exposure, prompting food and beverage brands—including Yili, Luckin, Mixue, ChaPanda, Haidilao, Tastien, Naixue, and Chi Forest—to actively participate in the trend and enhance their presence.

3. Winwin Network released its Q4 2024 offline retail performance report. In the food sector, frozen dim sum, adult milk powder, instant noodles, frozen glutinous rice balls, and yogurt saw year-on-year (YoY) market share increases compared to Q4 2023. In the beverage sector, Chinese traditional herbal drinks, sports drinks, dairy beverages, RTD fruit juice, and RTD tea experienced YoY market share growth. Notably, Chinese traditional herbal beverages emerged as a standout performer in the second half of 2024, with a YoY market share growth of 37.01% in the Q4 2024.

Company Dynamics

1. PepsiCo has entered a strategic partnership with Jiangsu Rilong Foods to jointly invest in a new factory, aiming to accelerate the growth of its Quaker oats brand in China. With an investment of approximately CNY 500 million, the facility will have an annual production capacity of 160,000 tons and manufacture over 10 oatmeal varieties. PepsiCo stated that this move aligns with its strategy to tap into China’s aging population market.

2. Nestlé Purina PetCare (Tianjin) has signed a strategic cooperation agreement with Runhe Pet Supply Chain, designating Runhe as the exclusive distributor for Friskies cat food products in China. This marks the first time Nestlé Purina has adopted a nationwide distributor model in the Chinese market. Through this partnership, Friskies aims to leverage Runhe’s robust supply chain network to expand its market reach and enhance distribution efficiency across China.

3. Meiji Holdings President Kazuo Kawamura stated in an interview, that the company aims to increase its overseas sales ratio from 10% to 30% by 2030. Addressing Meiji’s operating losses in China, Kawamura emphasized a short-term focus on profitability over sales growth, with no plans to downsize factories.

4. Suntory unveiled nearly 10 new products, including two entirely new sub-brands at its China distributor conference. The company also restructured its regional sales strategy to optimize resource allocation and enhance collaboration with distribution partners for a more agile market response. China’s sugar-free tea market has transitioned from high-growth to a stabilization phase, with data showing a significant slowdown in YoY market share growth from Q1 2023 to Q4 2024.

5. Budweiser China’s supplier, Guangdong Yuehai Yongshuntai (Baoying) Malt Co., Ltd., has been certified as the industry’s first carbon-neutral malt factory. This milestone follows the carbon neutrality achievement of Budweiser China’s breweries in Wuhan, Jinzhou, and Jiamusi, marking another step forward in Budweiser’s value chain decarbonization efforts.

6. Dairy giant Yili and leading restaurant chain Haidilao have signed a strategic cooperation agreement to develop market-driven foodservice products, further driving dairy innovation in the restaurant sector. In recent years, Yili has expanded its B2B focus, leveraging its raw material and supply chain advantages to unlock new growth opportunities.

7. Nongfu Spring has introduced a new 17.5° NFC juice made from blue honeyberry, a lesser-known berry rich in anthocyanins, minerals, and organic acids. Blue honeysuckle boasts significantly higher anthocyanin content than blueberries and offers multiple health benefits. With rising consumer health awareness, China’s fruit juice industry is increasingly focusing on niche fruit flavors and health attributes as a key growth strategy. 

8. Eastroc Beverage announced that it expects to achieve a revenue of CNY 15.72-16.1 billion in 2024, reflecting a YoY growth of 40–43%. Net profit attributable to shareholders is projected at CNY 3.15–3.45 billion, up 54–69% YoY. The company’s flagship products include its functional drink, Eastroc Vitamin Energy Drink, and its electrolyte drink, Eastroc Water Boost.

9. Moutai Ice Cream, an initiative aimed at attracting younger consumers, has seen multiple store closures. While the product initially gained traction among younger demographics, the downturn in the overall ice cream market has led the company to scale back its ice cream business and refine its operational strategy for more efficient resource allocation.

10. Sanyuan Biotechnology Co., Ltd., China’s leading erythritol manufacturer, has been hit with a 156.7% anti-dumping duty following the EU’s final ruling on Chinese erythritol imports. The EU has imposed duties ranging from 34.4% to 233.3% on affected products, effective January 17, 2025, lasting for five years.

Recommended reading: China Erythritol Manufacturer Faces 156.7% Anti-Dumping Duty from EU

11. Meijian Green Plum Wine’s New Year marketing campaign sparked controversy due to content disrespectful to women. As the brand primarily targets young female consumers, the inappropriate messaging led to widespread criticism, which forced Meijian to issue an official apology and removed all controversial New Year posts and related materials.

Regulatory Compliance

1. On January 3, 2025, the General Administration of Customs of China (GACC) released a revised draft of the Regulation on the Registration and Administration of Overseas Manufacturers of Imported Food. Compared to the current registration requirements, the draft introduces several significant changes, including the refinement of "system recognition" requirements, the introduction of new registration approach, new food catalog for recommended registration, etc. More information on ChemLinked.

2. On January 14, 2025, China’s State Administration for Market Regulation (SAMR) issued new guidance regarding the registration of nutritionally complete food for special medical purposes (FSMP). This guidance clarifies the requirements for formula design and labeling, and simplifies the application materials for product registration as well as the onsite inspection requirements for nutritionally complete FSMP. More information on ChemLinked.

3. On January 20, 2025, the General Administration of Customs of China (GACC) released a draft announcement titled "Announcement on Matters Related to the Registration of Import and Export Traders of Imported Food (Draft for Comments)". The announcement aims to further standardize the registration management of import and export traders of imported food, streamline registration procedures, and ensure the safety of imported food. More information on ChemLinked.

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