With China’s spate of food safety scandals in recent years, demand for foreign food brands is on the rise.
And that spells good news for Australian food exporters.
As affluent Chinese consumers grow more concerned about food safety, foreign companies are cashing in.
A recent report by consulting firm Data Driven Marketing Asia (DDMA) confirms that demand for foreign food brands is rising in China, with an increasing number of global food companies now well-positioned to reap the rewards.
A survey of 500 middle-to-high income earners in Shanghai found that many consumers now actively seek foreign food brands both while shopping and dining out.
According to the report, 48 percent of consumers “actively seek out foreign food brands when shopping,” while 60 percent “prefer restaurants that serve foreign food.”
With a total of 1,090 food scandals reported in Chinese media over the last three years, safety has become the key issue – with foreign food becoming a distinct preference.
Food safety was the respondents’ highest concern by a wide margin, topping worries about air quality, water quality, healthcare, and China’s economy.
The number of scandals being reported has gone down drastically in the past two years, but the worries are still prevalent in people’s minds.
While there were 710 scandals in 2011, the number fell to 170 in 2012, but shot up to 210 last year.
Although imported food is more expensive, rising incomes and consumer perceptions mean that more Chinese customers are willing to pay a premium for the luxury.
China’s wealthy are particularly fond of foreign brands, with 80 percent agreeing that “foreign food brands are better,” compared to 70 percent of middle-income respondents.
Also, affluent consumers are more likely to go to restaurants that serve foreign foods, actively research foreign food brands, and seek out foreign food brands while shopping.
New Zealand the top choice
New Zealand produce was the top choice for survey respondents, who believe that the country’s high food safety standards and clean environment make its food brands the most worthy of purchase.
Australia came in a close second, with perceptions of a clean environment playing a larger factor than regulation.
While Germany and the United States don’t fare very well in terms of perception of environmental cleanliness, they are next on the list thanks to consumers’ perceptions of strong regulation and high technology. Germany beats the US, however, because its food brands are considered more “trustworthy.”
Quality food outlets
Also making the list were neighbor countries Japan and South Korea, as well as the UK, France, and Nordic countries Sweden and Norway. When broken down by individual categories of positive affiliations, Norway wins in many, such as high safety standards and clean environment.
According to the report, these factors have strong implications for foreign food brands — especially high-end ones.
The preference for foreign brands has caused a spiral in the number of quality foreign retail food outlets in China and the emergence of high end/boutique supermarkets.