Food Processing

Stimulated by policies such as supply side structural reform and moderate expansion of total demand, the production and market demand grew steadily in 2016. The supply-demand relationship was better coordinated. The food industry in China maintained an overall stable and sound development.

In 2016, the business revenue of enterprises above designated size (enterprises with annual turnover of at least 20 million yuan, same below) in food industry (excluding tobacco, same below) grew by 6.6%, higher than the growth of all industrial enterprises (4.2%). The added value was up 6.3%, higher than the overall growth of 5.0%. The growth in both the business revenue and the added value continued to increase. The growth of the total profit was 6.5%, lower than the growth of 8.3% in all industrial enterprises. The growth of profit in the food industry fell. The added value in food industry exceeded RMB 2,000 billion for the first time in history, reaching RMB 2,020.5 billion.

Operation overview of China’s Food Industry in 2016 (RMB billion )

                                                        Note: Tobacco is not included. Data come from public sources.

In 2016, there were 41,494 food enterprises above designated size in China, an increase of 5.00% over the previous year. The growth was higher than that of agricultural product processing enterprises (2.08%) and also higher than that of industrial enterprises (1.28%). The number of enterprises above designated size in food industry accounted for 10.94% of the total number of industrial enterprises. There were 25,853 agricultural and sideline food processing enterprises, 8,844 food manufacturing enterprises and 6,797 beverage enterprises (including wine, beverage and tea manufacturing). The main business revenue in food industry reached RMB 9,454.6 billion in 2016, accounting for 9.60% of the total business revenues in all industrial enterprises. The total profit was RMB 724.8 billion. The total profit in food industry accounted for 10.53% of the total industrial profit in China, the proportion being slightly lower than the proportion of the number of food enterprises. 

In the 4 major sectors of the food industry, the profits in agricultural and sideline food processing sector, the wine, beverage and refined tea manufacturing sector dropped in the year. The profit in tobacco product sector maintained a meager increase of 0.2%. The profit in food manufacturing sector increased remarkably at 9.8%. 

Major food import origins and export destinations were New Zealand, the United States, Japan, Hong Kong, Korea, Brazil, Malaysia, Australia, Germany and Thailand.

The Engel’s coefficient continued to decrease. The per capita food, tobacco and wine expenditure reached RMB 5,151 in 2016, an increase of 21.2% from 2012 and the average annual growth was 4.9%. The proportion of the food, tobacco and wine expenditure in the total consumption expenditure (Engel’s coefficient) was down from 33.0% in 2012 to 30.1% in 2016, 2.9 percentage points lower. It indicated the further improvement of people’s living standard. And people tend to consume more nutritious and high-quality products. 

To sum up, there are still serious copying and homogeneity in China’s food industry. The demand of high-end and natural products grew quite rapidly; the demand of sweet foods, baked foods and soft drinks also maintained a rapid growth in recent years; the growth of salty foods demand has started to decline. Owing to changes in people’s consumption concept, consumers tend to pursue healthy and nutritious foods and beverages. The market share of foods and beverages with high health and nutrition value keeps going up.