Contents

• Market Condition

• Company Dynamics

• Regulatory Compliance

Market Condition

1. During the first three quarters of 2024, China imported approximately 214 million liters of wine, reflecting an 11.27% year-on-year (YoY) increase, with an import value of around USD 1.16 billion. In September alone, wine imports reached about 24.95 million liters, marking a significant 46.68% YoY increase, and the import value rose 30.86% YoY to USD 121 million. France, Australia, Chile, Italy, and the United States were the top five sources by import value during this period. Notably, Australian wine saw explosive growth following the removal of anti-dumping duties, rebounding from a low base in recent years. In the first three quarters of 2024, imports of Australian bottled wine surged by over 10,000% YoY in volume, with the import value soaring by over 24,000%, and the average price increasing by over 120% YoY.

Recommend reading: Latest Developments in China's Wine Market

2. From January to September 2024, China imported 1.93 million tons of dairy products, down 13.2% YoY, with an import value of USD 8.24 billion, a 14.1% decrease YoY. In September alone, dairy imports totaled 185,700 tons, a 12.8% decline YoY, but the import value rose by 8.4% YoY to USD 864 million. Notably, infant formula imports increased significantly, up 44.7% in volume and 44% in value, reaching 18,500 tons and USD 365 million, respectively.

3. According to the 2024 China Coffee Industry Report, the market size for coffee consumption in China has reached RMB 150 billion, with the freshly brewed coffee sector accounting for approximately RMB 120 billion. The market has evolved from being dominated by instant coffee to embracing a variety of consumption scenarios, making freshly brewed coffee mainstream. The coffee bean industry has also seen substantial growth, with China’s coffee bean consumption increasing by 167% over the past decade, reaching 350,000 tons in 2023, of which over 150,000 tons were imported, valued at nearly RMB 6 billion.

4. Data from Winwin Network, an offline retail data service provider, indicated that the market share of traditional Chinese beverages (RTD plant-based drinks made from raw materials such as red beans, coix seeds, goji berries, red dates, and mung beans) increased by 37.64% YoY in Q3 2024. This growth outpaced all other beverage categories, including sports drinks, RTD tea, bottled water, and dairy beverages. Popular products in this segment include red bean coix seed water, goji berry and red date water, mung bean water, longan water, etc.

5. Nutritious plant-based raw materials rich in vitamins, minerals, dietary fiber, and antioxidants have gained traction in China’s food and beverage market, particularly in the freshly made tea beverage segment. Popular raw materials include kale, avocado, beetroot, and açaí, often paired with fresh fruits like apple, kiwi, grapefruit, grape, and lemon to enhance flavor and promote benefits such as weight management and skin improvement.

Company Dynamics

1. It is reported that Nestlé Health Science China plans to establish local production lines for protein powder and probiotics. Currently, its protein and probiotic products, such as Beneprotein and Garden of Life, are imported into China via cross-border e-commerce. This local production move will enable Nestlé Health Science to respond more swiftly to Chinese consumer demand. Data shows that the protein powder and probiotics market in China has shown steady growth, with CAGRs of 9.5% and 14%, respectively.

2. The packaging material for Snickers' 140g and 240g peanut chocolate products has been upgraded to single-material polypropylene (PP), which is more recyclable and environmentally friendly. By the end of this year, Snickers plans to upgrade all products to single-material packaging.

3. More details about Mondelez's major equity investment in the Chinese frozen bakery company Evirth have been disclosed. Upon completion, Mondelez Shanghai will own 72.3546% of Evirth. In 2023, Evirth captured 10-15% of the Chinese frozen cake market, with Sam's Club in China as its largest client, supplying Swiss cake rolls—one of the most frequently repurchased bakery items at Sam's Club in China.

4. The premium Singaporean coffee brand Bacha Coffee plans to open stores in Shanghai and Beijing. The Shanghai store will feature a café and retail area, while the Beijing location will offer retail and food delivery services. Currently, Bacha Coffee sells its products to Chinese consumers through cross-border e-commerce on Tmall Global.

5. China Resources Beverage (Holdings) Co., Ltd., the parent company of the purified water brand C'estbon, has officially been listed on the Hong Kong Stock Exchange. According to the prospectus, the company’s revenue grew from RMB 11.34 billion in 2021 to RMB 13.52 billion in 2023, with a CAGR of 9.2%. Profits increased from RMB 858 million to RMB 1.33 billion over the same period, with a CAGR of 24.6%. The prospectus also indicates that China's RTD beverage market is expected to exceed RMB 1.2 trillion by 2028.

6. Feihe has entered into technological collaboration with Japanese enterprise KYOWA HAKKO BIO, and established a joint innovation laboratory, focusing on the development of fermentation technology for lactoferrin production.

7. Mengniu's fully digitized "super factory" in Ningxia has been certified as a "Lighthouse Factory" by the World Economic Forum. The factory's digital infrastructure covers all production processes, resulting in a 55% reduction in delivery times, a 32% cut in operational costs, and significant gains in efficiency and product quality.

8. At the 9th China Special Food Conference, Mengniu revealed its patented blood sugar-lowering plant extract formula, which will be applied in its Yourui milk powder brand designed for precise nutrition for middle-aged and elderly consumers.

9. ALDI has re-attracted consumer attention with its budget wine offering, made from Chilean Cabernet Sauvignon and bottled in China. Priced at RMB 99 per case (six bottles), each bottle costs just RMB 16.5. Previously, ALDI launched a strong aroma Baijiu with 52% alcohol content, priced at just RMB 9.9, which quickly went viral on social media and became one of its best-selling products.

10. A longstanding legal battle between "Danisa Butter Cookies" and "Kjeldsens Butter Cookies" concluded with Kjeldsens found guilty of false advertising and defamation against Danisa. The court ordered Kjeldsens to cease its actions, issue a public statement to mitigate the impact and compensate Danisa for economic losses.

11. Chinese snack company Three Squirrels announced plans to invest up to RMB 660 million by the end of 2026 to expand its retail, manufacturing, and brand presence. This includes acquiring a bulk snack chain to strengthen its offline distribution. Following the viral success of its macadamia nut product on Douyin, Three Squirrels has rapidly optimized its omnichannel strategy centered on Douyin and streamlined its supply chain, achieving consecutive quarters of high growth in revenue and profit. As China's snack distribution is still dominated by offline channels, Three Squirrels is intensifying its focus on offline channels.

Regulatory Compliance

1. On October 8, 2024, the National Health Commission (NHC) announced a public consultation on 19 national food safety standards. These include six food additive standards, one contaminant standard, one product standard, eleven testing standards. More information on ChemLinked.

2. On October 9, 2024, China’s State Administration for Market Regulation (SAMR) issued a notification, publishing a document titled “Guidelines for Filing Ingredients and Other Matters of Formula Foods for Infants and Young Children”. This document aims to ensure that companies adhere to food safety responsibilities throughout the product lifecycle, allowing all products—from raw and auxiliary materials to finished goods—to be monitored and tracked effectively. More information on ChemLinked.

3. On October 11, 2024, China State Administration of Market Regulation (SAMR) unveiled two drafts regarding the filing of health food, namely, Dosage Forms and Technical Requirements for Health Food Filing (2024 Edition) and List of Auxiliary Materials for Health Food Filing and Terms of Use (2024 Edition). These two drafts aim to add candy products and beverages as two newly permitted dosage forms in terms of health food filing and update requirements for corresponding health food products. More information on ChemLinked.

4. On October 18, 2024, China’s State Administration for Market Regulation (SAMR) issued a notice consulting on a draft to further strengthen the management of raw and auxiliary materials for formula milk powder for infants and young children (hereinafter infant formula or infant formula milk powder). More information on ChemLinked. 

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