China Food and Drink Report Q2 2016
BMI View: China will remain the most attractive consumer market globally despite the slowdown in itseconomy. Nonetheless, the period of easy growth is over as retail sales growth heads lower and consumersdevelop increasingly sophisticated tastes. Accounting for rising health consciousness, demand forinnovative goods and the surging popularity of e-commerce will be essential to succeed in the country.
Over the next five years, the greatest opportunities for food and drink manufacturers will be concentratedamong young and high-income consumers. The youth save less than their elders, a trend which will bereinforced with the slowdown in the economy. The top 20% of households will experience the greatestincome gains over the next five years. Therefore, opportunities for food and drink manufacturers will beconcentrated among premium and innovative products, while staple categories will underperform.Illustrating this trend, Nestlé upgraded its Hsu Fu Chi product portfolio in 2015.
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