The market for organic food in China has seen a magnificent growth rate over the period 2010-2015 considering the very low proportion of organic food consumers in the country. The growing demand in the healthy, non-industrialized production has led to the development of several subscription farms to cater to the demand, especially from the urban populations. Organic food consumption has been predominantly limited to the economically richer section of the society over the period 2010-2015. China has currently become the world’s fourth-biggest consumer of organic food. International China organic food fairs that had major organic nations such as Denmark, Germany and Australia showcasing their organic products like dairy, meat and wine reflect the growing popularity of this market outside. Also, rampant food scams in 2012 and 2013 led to surge in demand for imported organic products from foreign destinations like North America, EU, Denmark and Australia. Besides, foreigners residing in the mainland have brought with them different food habits to the nation which has led to widening of the organic food portfolio in the nation.
Organic tea market in China has been heavily encouraged because of its substantial demand in the domestic as well as export market. There is a high potential for tropical fruit market in China on account of low domestic production. Producers having exotic tropical fruits like banana, durian, pineapple, pamelo, star fruit, rambutan and guava in their product portfolio can penetrate the market. Additionally, fruits like strawberries, grapes, apples and pears have been traditionally favored in the market.
The competitive scenario in the market is quite fragmented with presence of around 730 companies engaged in organic food and beverage production. There are only a handful of small companies who have their businesses totally dedicated to organic production and processing. Yili and Mengniu are the two largest organic dairy companies. Hebei Qimei, Taian Taishan Asia and Tony’s Farm are the three of the largest organic food manufacturers in China.
The rapid growth of organic food and beverages coupled with the growing e-commerce market in China has incentivized many organic retailers to venture into the online segment of organic food and beverages. Most of the online retailers have tie ups with various producers of organic food whereas others operate their own online portals. Online stores help in saving costs as online retailers save considerable amount of money in terms of infrastructure investment. On the other hand, they can penetrate a huge internet customer base.
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Ankur Gupta, Head Marketing & Communications