Packaging Offers F&B Opportunities In China

Packaging innovations and out-of-home food trends in China offer opportunities to food and beverage brands despite the country's economic slowdown, research has shown.

Jason Yu, General Manager – China for Kantar Worldpanel, addressed this topic at the recent Food and Beverage Innovation Forum in Shanghai.

He observed that FMCG brands were having to rethink their growth strategies: "Last year the total packaged goods grocery category only grew by 3%, and for food and beverage the growth was only 1%," he said.

But he argued that a more challenging consumer climate doesn't mean that opportunities have dried up entirely. (For more on this topic, read WARC's exclusive report: Packaging, millennials offer FMCG opportunities in China.)

Emerging consumption trends, particularly among China's lucrative millennial demographic, offer a glimmer of hope.

Kantar Worldpanel research shows that 61% of food and beverage consumption is now out-of-home (OOH) in China. For instance, 80% of Chinese consumers prefer to drink beer when they do 'KTV,' or karaoke, and they reach for a sports drink when they are at a sports venue.

"Earlier there was not much differentiation in product and choices, but the market is maturing for brands to occupy specific spaces," said Yu.

Younger consumers are also drawn to innovative packaging. "Traditionally companies never paid too much attention to packaging, but there is a shift in mindset (over) the last three years where companies have started to realise its importance," he said.

"Our study shows that young consumers value and pay a lot of attention to packaging, and buy the product first because of the packaging and not because of the flavour, cost, or other things."

"If you look at some of the Uni-President brands, they have very unique packaging, some jokes on the pack, where consumers can scan the QR code. These things go very well with consumers," he said.