Sector Trend Analysis – Shrimp Trends In China

November 2017

Executive summary

With its immense population and imports that have more than doubled in volume over the past ten years, China was among the world's top five importers of shrimp in 2016.

Shrimp imports from Canada have been increasing at a compound annual growth rate of 36.4% from 2012 to 2016, making Canada one of China's top three supplying countries for shrimp in 2016, succeeding Argentina and Thailand. Most (84.8%) of China's shrimp imports in 2016 were frozen. There is an opportunity for Canadian exporters to differentiate their products from those of competing supplier countries by creating a bigger awareness of coldwater shrimp. Canadian exporters should also be aware of China's seasonal market surrounding Chinese New Year in January/February, and increased imports that usually occur during the preparative months of November/December.

China's growing middle class and increasing concerns regarding the safety and quality of the domestic food supply are factors that are likely to help maintain the trend toward imported food. Canadian companies are well positioned to meet China's increasing shrimp demand due to Canada's positive reputation for producing safe and high-quality food.

As the percentage of internet users increases in China, online grocery stores may provide a practical way of entering the Chinese market. However, it is vital that Canadian companies be able to differentiate themselves from the competition and choose an appropriate online platform that will help them do that.

Introduction – Positioning shrimp in the world

China's immense population and increasing middle class has made it one of the most important markets in the world. The population of China is currently 1.3 billion, and is expected to reach 1.4 billion by 2019.

China's import value of shrimp has increased by an impressive 574.1% over the last ten years, from Canadian dollars (Can$)152.3 million in 2007 to Can$1 billion in 2016, making it the world's fifth-largest importer of shrimp by value. Of the top ten shrimp importers worldwide, China experienced the highest compound annual growth rate (35.8%) in shrimp imports by value over the last five years.

China was also the fourth-largest importer of shrimp by volume, with 106 million kilograms (kg) of shrimp imported in 2016. China's import volume has more than doubled (increased by 123.3%) over the last ten years, from 47 million kilograms in 2007 to 106 million kilograms in 2016.

Top shrimp* import markets worldwide in 2016, Can$
Rank Country Value (Can$) Market share (%) CAGR (%)
2012-2016
World 19,886,827,429 100 10.8
1 United States 6,116,625,524 30.8 13.9
2 Japan 2,316,744,843 11.6 1.7
3 Spain 1,546,732,162 7.8 12.7
4 France 1,065,748,658 5.4 9.9
5 China 1,026,376,432 5.2 35.8
6 Italy 676,112,470 3.4 12.1
7 United Kingdom 606,480,584 3.0 12.1
8 Belgium 585,896,231 2.9 6.9
9 Netherlands 559,395,140 2.8 11.8
10 Germany 551,367,580 2.8 10.5

Source: Global Trade Tracker, 2017
CAGR - Compound Annual Growth Rate
*Note: For the purposes of this report, "shrimp" was defined using the following HS codes: 030613, 030616, 030617, 030623, 030626, 030627, 030635, 030636, 030695

Top shrimp* import markets worldwide in 2016, kg
Rank Country Volume (kg) Market share (%) CAGR (%)
2012-2016
World 1,809,188,156 100 0.3
1 United States 475,291,517 26.3 3.0
2 Japan 164,029,605 9.1 −5.2
3 Spain 162,432,061 9.0 2.0
4 China 106,040,266 5.9 18.2
5 France 96,241,296 5.3 −0.2
6 Korea 67,988,242 3.8 2.7
7 Italy 67,420,363 3.7 2.7
8 Denmark 48,787,245 2.7 −1.4
9 Hong Kong 48,432,149 2.7 4.3
10 Netherlands 48,122,130 2.7 −1.6

Source: Global Trade Tracker, 2017
CAGR - Compound Annual Growth Rate
*Note: For the purposes of this report, "shrimp" was defined using the following HS codes: 030613, 030616, 030617, 030623, 030626, 030627, 030635, 030636, 030695

In 2016, Argentina was the largest value supplier of shrimp to China, while Canada ranked third, with 16.3% market share. The most common format for shrimp imported into China in 2016 was frozen (84.8%), while only 15.1% of imports were live/fresh/chilled/dried/in brine. 27.3% of shrimp imported into China were coldwater shrimp, while 72.6% were not. Although China is a producer and exporter of shrimp, production has recently decreased due to ongoing disease problems and cannot keep up with increasing consumption, which is why shrimp imports are growing in volume and value.

Top 10 importers of shrimp* worldwide in 2016, Can$
Country Imports (Can$) Top supplies and market share #1 (%) Top supplies and market share #2 (%) Top supplies and market share #3 (%) Canada's share (%)
United States 6,116,625,524 India 31.2 Indonesia 20.1 Ecuador 12.7 0.24
Japan 2,316,744,843 Vietnam 20.0 India 18.5 Indonesia 16.5 4.17
Spain 1,546,732,162 Argentina 30.6 Ecuador 19.7 China 6.9 0.03
France 1,065,748,658 Ecuador 28.8 India 12.1 Madagascar 8.9 0.05
China 1,026,376,432 Argentina 25.2 Thailand 16.6 Canada 16.3 16.35
Italy 676,112,470 Ecuador 33.3 Argentina 24.1 Spain 14.7 N/A
United Kingdom 606,480,584 India 26.4 Bangladesh 18.3 Vietnam 11.3 0.09
Belgium 585,896,231 Netherlands 30.4 India 22.3 Bangladesh 15.8 0.01
Netherlands 559,395,140 India 25.4 Bangladesh 17.7 Vietnam 11.3 N/A
Germany 551,367,580 Netherlands 21.8 Bangladesh 16.3 Vietnam 13.8 0.64

N/A= Data not available
Source: Global Trade Tracker, 2017
CAGR - Compound Annual Growth Rate
*Note: For the purposes of this report, "shrimp" was defined using the following HS codes: 030613, 030616, 030617, 030623, 030626, 030627, 030635, 030636, 030695

Shrimp* export gap in 2016, Can$
2012 2013 2014 2015 2016 CAGR (%)
2012-2016
China's world imports 301,705,956 448,083,209 611,233,389 970,062,992 1,026,376,432 35.8
China's Canadian imports 48,429,219 92,182,707 87,815,084 154,308,896 167,769,896 36.4
Gross export gap 253,276,737 355,900,502 523,418,305 815,754,096 858,606,536 35.7

Source: Global Trade Tracker, 2017
CAGR - Compound Annual Growth Rate
*Note: For the purposes of this report, "shrimp" was defined using the following HS codes: 030613, 030616, 030617, 030623, 030626, 030627, 030635, 030636, 030695

Top 3 shrimp* products imported into China from the world, Can$
HS Code Description 2012 2013 2014 2015 2016 CAGR (%)
2012-2016
030617 Frozen shrimp and prawns. Including shrimp and prawns in shell, cooked by steaming or by boiling in water. 152,938,988 205,308,933 330,333,639 571,787,113 591,451,490 40.2
030616 Frozen coldwater shrimp and prawns. Including shrimp and prawns in shell, cooked by steaming or by boiling in water. 78,672,878 149,368,354 164,496,934 250,642,420 279,776,872 37.3
030627 Live, fresh, chilled, salted or in brine shrimp and prawns. Including shrimp and prawns in shell, cooked by steaming or by boiling in water. 69,042,368 93,081,216 116,048,065 147,011,671 154,573,748 22.2

Source: Global Trade Tracker, 2017
CAGR - Compound Annual Growth Rate
*Note: For the purposes of this report, "shrimp" was defined using the following HS codes: 030613, 030616, 030617, 030623, 030626, 030627, 030635, 030636, 030695

Consumer trends

A key driver in China's shrimp consumption is its expanding middle class. Chinese consumers' growing income is allowing for more luxury food items, such as imported shrimp. Quality is very important to Chinese consumers and retailers are no longer competing in prices, but rather in value. Seafood is a major component of Chinese cuisine, and shrimp is a consumer favourite. Shrimp is especially appreciated for its colour during Chinese New Year because red is a symbol of prosperity and good fortune. According to the July 23, 2017, Globe and Mail article: China's budding online-grocery market a huge opportunity for Canadian food producers, awareness of China's air and soil pollution is pushing Chinese consumers toward imported groceries. This is creating an opportunity for Canadian shrimp exporters because of Canada's reputation for having a clean environment, which is favourable for producing safe and high-quality food. Also, according to an article by Shuichan News (October 12, 2016) on Argentinian shrimp exports to China, Chinese consumers prefer processed products, such as 2-kilo bags of shrimp (frozen on boat), while processors prefer shrimp frozen on shore, without the head/shell.

Retail sales

According to ITE Food & Drink, China's food imports typically increase by 30-50% in November-December in preparation for the Chinese New Year, which is in January or February, creating a seasonal market with price spikes. Retail sales of shrimp and other crustaceans have been steadily increasing over the past five years. Sales are expected to continue growing by value at a compound annual growth rate of 6.6% from 2017 to 2021, and by volume at a compound annual growth rate of 4.2%. A factor that is expected to facilitate sales of imported shrimp is the increasing use of online grocers. In 2016, total digital purchases in China were worth US$680 billion. Of those purchases, 66% were made with mobile devices, and 30% were made using personal computers. Digital purchases are expected to increase 76.3% over the next five years, reaching in anticipated US$1,507 billion by 2021. JD.com, a key Chinese online grocer, marked its anniversary with a heavily promoted day of sales and Canadian shrimp were the top-selling foreign imported food: 4.5 million Canadian shrimp were sold in that single sale. Coldwater shrimp is a particularly big sale in China, according to JD Fresh, which claims that the sale of Canadian coldwater shrimp on JD Fresh's platform in 2016 was worth more than US$1.5 million.

Historical crustacean retail value sales in China, US$ millions
Segment 2012 2013 2014 2015 2016 CAGR (%)
2012-2016
Crustaceans 30,607.1 33,792.3 37,341.2 40,960.7 47,203.3 11.4

Source: Euromonitor International, 2017.
CAGR - Compound Annual Growth Rate

Forecasted crustacean retail value sales in China, US$ millions
Segment 2017 2018 2019 2020 2021 CAGR (%)
2017-2021
Crustaceans 50,764.5 54,428.1 58,083.1 61,721.8 65,482.7 6.6

Source: Euromonitor International, 2017.
CAGR - Compound Annual Growth Rate

Historical crustacean retail volume sales in China, thousands of kilograms
Segment 2012 2013 2014 2015 2016 CAGR (%)
2012-2016
Crustaceans 2,044,460 2,197,950 2,365,120 2,542,504 2,712,851 7.3

Source: Euromonitor International, 2017.
CAGR - Compound Annual Growth Rate

Forecasted crustacean retail volume sales in China, thousands of kilograms
Segment 2017 2018 2019 2020 2021 CAGR (%)
2017-2021
Crustaceans 2,864,771 3,008,010 3,143,370 3,259,675 3,373,763 4.2

Source: Euromonitor International, 2017.
CAGR - Compound Annual Growth Rate

Key players

The top three companies to launch products containing shrimp in China from 2012 to 2016 were Sanquan Foods, Dingyi Foods, and Sun Shun Fuk Foods. These products were mainly sold in supermarkets, with 39.9% market share, followed by hypermarkets with 28.6% market share from 2014 to 2016.

Top five companies to launch products containing shrimp in China, 2012 to 2016
Rank Company Market Share (%)
1 Sanquan Foods 5.9
2 Dingyi Foods 3.3
3 Sun Shun Fuk Foods 2.8
4 General Mills 2.4
5 Ayibo Food Industry 2.0

Source: Mintel, 2017

Distribution of shrimp products in China by store type: % total volume
Format 2014 2015 2016 2014-2016
Supermarket 54.5 62.8 35.7 39.9
Mass merchandise/hypermarket 26.2 31.8 48.4 28.6
Internet/mail order 0.69 1.6 10.2 3.5
Department store 5.5 1.6 5.7 3.5
Club store 7.6 0.7 0.0 2.2
Total 100.0 100.0 100.0 100.0

Source: Mintel, 2017

New Product Launch Analysis

During the last five complete years (from 2012 to 2016), 542 products containing shrimp were launched in China. New ingredients used in these products included Xylitol and coconut oil.

Most products containing shrimp that were launched in the last five years were in the "snacks" category (47.4%), while 17.7% belonged to the "Meals and Meal Centers" category, and 13.7% were in the "Processed Fish, Meat and Egg Products" category.

Over 56% of shrimp products launched over the past five years have been shelf stable, while 41.7% were frozen and 2.2% were chilled.

New product launches of shrimp products in China (January 2012 to December 2016, by feature)

Total yearly launch counts
2012 2013 2014 2015 2016
Total 52 59 145 129 157

Source: Mintel Global New Product Database, 2017.

Top five claims - yearly launch counts
2012 2013 2014 2015 2016
Time/speed 12 12 28 24 30
No additives/preservatives 6 4 14 18 32
Microwaveable 9 7 24 7 17
Ease of use 7 13 7 6 24
Halal 1 0 9 9 12

Source: Mintel Global New Product Database, 2017.

Imported status - yearly launch counts
2012 2013 2014 2015 2016
Not imported 0 1 8 117 140
Imported 0 0 4 5 8

Source: Mintel Global New Product Database, 2017.

Top five flavour components - yearly launch counts
2012 2013 2014 2015 2016
Prawn/shrimp 14 9 22 48 53
Seaweed 7 8 15 10 15
Unflavoured/plain 0 1 0 14 34
Seafood 3 4 13 13 15
Pork 0 0 2 12 8

Source: Mintel Global New Product Database, 2017.

Top five packaging types - yearly launch counts
2012 2013 2014 2015 2016
Flexible 28 21 99 79 100
Flexible sachet 7 24 8 5 2
Jar 5 5 9 6 7
Tub 4 1 5 9 12
Tray 4 1 8 5 12

Source: Mintel Global New Product Database, 2017.

Conclusion

Shrimp is a favourite among Chinese consumers and domestic production has decreased due to disease issues in China, creating an opportunity for Canadian shrimp exporters. Since China's growing middle class is increasingly aware and interested in safe high-quality food, Canadian companies are well positioned to take advantage of Canada's reputation for having a clean environment that is favourable for producing these products.

Many online retailers in China have begun to sell food, which provides a practical way for Canadian producers to enter the Chinese market. When choosing an online platform, exporters should be aware that differentiating themselves from other similar products may be a challenge and that they should look for an e-grocer that will help highlight their products. Canadian exporters may also find it helpful to create more awareness of coldwater shrimp in order to differentiate their products from those of competing supplier countries.

For more information

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Resources

Sector Trend Analysis - Shrimp Trends in China - Global Analysis Report

Prepared by: Julie Acheson, Market Analyst

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