Sports nutrition and healthy ageing will fuel China's industry growth
That’s the view of Clarence Fong of China Health Care Association who said the health food market – classed as either functional foods or dietary supplements – will continue to grow between 10-15% per year.
In the past five years, the sector has grown from RMB260bn in 2010 to RMB400bn in 2015, with domestic products growing much faster thank imported ones, said Fong.
As of last year, there were over 15,000 domestic products on the market, with fewer than 2,000 international ones.
The knock-on effect of this is that there are currently around 16,500 products approved by the China Food and Drug Administration (CFDA), of which only 750 are imported. Functional food accounts for about 65% of the market and nutritional 35%.
Despite the strength in volume of the domestic market, Fong said it did have some limitations.
“They have a limited scale and don’t do much research,” he said. “They rely on ingredient makers or equip manufacturers. [There is little] research and development capability and there is not a diverse product range.”
Most of the manufacturers are SMEs with just 2% having total investment of over RMB100m.
Fong said that China’s aging market meant that products targeted at the elderly, including foods and supplements containing calcium and DHA were selling well, and would continue to grow.
The consumer power of China’s elderly population is predicted to soar from RMB4 trillion in 2014 to about RMB106 trillion in 2050, with health food products forecast to become priority items.
He also said that sports nutrition products would drive future industry growth
“I think we can expect a compound annual growth rate of around 8.5% to 2020,” he said. “The market was worth US$500m in Asia 2013, and I think we can expect China to be the fastest growing country for it [moving forward].”
While the market is primed for success, Fong pointed out that regulatory landscape could pose some hurdles.
Cross-border retail remains a hot topic in the country and new rules come into force in May which means products must be approved China's Food and Drug Administration if they are not already on a ‘positive list’ of allowable imports via one of China's 11 pilot free-trade zones.
Health foods are the third largest category for cross-border shopping but they will now be subject to the dual system of registration and/or filing.
That said, Fong, speaking at Vitafoods in Hong Kong earlier this month, concluded that “Growing demand and will continue and we will see more international firms moving in.”
A new NutraIngredients and European Specialist Sports Nutrition Alliance (ESSNA) congress held in Frankfurt on November 28 the day before Health Ingredients Europe will place your business front and centre of the playing field be it in supplements, herbals, powders, mixes, drinks, bars or gels.
More information here.