Which organic market in China ?

Despite the Covid-19 crisis, or perhaps because of it, 2020 and 2021 saw a sharp increase in the global organic market. This increase was observed in both production and consumption. In China, while organic remains marginal in the food market (around 1%), the strong growth in demand could prove decisive, particularly in infant nutrition.

Greater awareness of organic food

As the fourth largest organic market in the world and the first in Asia, China is an increasingly important buyer of organic products: it has roughly tripled since 2007 and increased by about 18% between 2017 and 2018.[1] Driven primarily by supermarkets (representing three-quarters of the market), this growth is also sustained by specialized distribution networks, direct sales and e-commerce.

Increasingly aware of food safety and quality, 80% of Chinese people wanted to eat healthier after lockdowns. Although the price factor is a barrier, city inhabitants, wealthy families or people with infants, as well as individuals with health problems, are eager to increase their budget: “73% of Chinese consumers are willing to pay extra for foods deemed healthier.”[2] Processed foods account for 93.5% of organic consumption,[3] including powdered milk and infant food supplements.

Rising demand of organic infant nutrition

Organic formula and other baby food products are increasingly in demand. Several food scandals have had an impact on this change in buying habits, including melamine-contaminated milk in 2008, which sickened 300,000 children. Online retail platform JD – China’s second largest e-commerce platform behind Alibaba – reports that sales of organic infant food supplements grew 6.6% in 2019 and 11.2% in 2020.

For foreign brands, this is a real opportunity to import their products and establish themselves in China by meeting the specific expectations of this market, especially as they are seen as exemplary from a health point of view. Through several brands, major groups such as Johnson & Johnson, Bellamy’s Australia and Danone are now firmly established in the country. Consumers buy infant formula and newborn supplements both in physical stores and online, through cross-border platforms such as Tmall (Alibaba) and JD Worldwide.

Although it still accounts for only a small share of the food market, organic food is attracting increasing interest from the Chinese. This is due to the growth of the wealthier middle classes and a greater awareness of the health implications. Among the sectors benefiting from this trend, infant nutrition is driven by a strong demand from younger generations who are conscious of these issues from an early age.

[1] National Certification and Accreditation Administration (Chinese), 2018

[2] Dezan Shira & Associates, 2019

[3] Agence Bio, 2021