Sector Trend Analysis - Meat Trends in China

Contents

• China’s meat production
• China’s trade summary
• Consumption and spending
• Consumer foodservice
• Top Chinese meat import by port of entry
• Conclusion
• For more information
• Resources

China’s meat production

China is a major player in the world meat industry in terms of production, consumption and trade in recent years.

China meat production by year

China’s meat production reached its second highest peak in history. China produced 76.4 million metric tonnes of meat (pork, chicken and beef) in 2016 among which 56.5 million metric tonnes were pork, 13.1 million metric tonnes were chicken and 6.8 million metric tonnes were beef. Based on data records back to 1988, meat production had a steady increase from 1988 to 2016 to meet the high demand from Chinese customers whose living standard has improved significantly over the past twenty nine years.

China’s trade summary

Among the top ten meat suppliers to China by value, Canada was ranked in tenth place, worth US$491 million compared with the biggest meat exporter, Brazil, at US$1.75 billion. Canada represented 5% of the total world meat export value to China. Due to the strong demand from the market in China, nine of the top ten meat exporters gained steady compound annual growth rate (CAGR) between 15% and 55% from 2012 to 2016. However, the U.S. had a negative compound annual growth rate of -13% during the same period.

Among the top ten meat suppliers to China by volume, Canada was ranked sixth, exporting 321,766 tonnes, representing 7% of the total world export to China. Canada gained a compound annual growth rate of 23% while the Netherlands reached the highest compound annual growth rate at 88% among top ten suppliers from 2012 to 2016. Again the U.S. was the only exporter who had a negative compound annual growth rate of -14% from 2012 to 2016.

Canada’s total meat exports to China in 2016 were US$491 million of which frozen swine cuts accounted for US$271 million, nearly tripling from 2015 to 2016 while frozen swine edible offals accounted for US$100 million, doubling from 2015 to 2016. The top meat products are mainly pork, beef and their offals.

Canada exported 321,764 tonnes of meat to China in 2016 of which frozen swine cuts accounted for 198,186 tonnes, almost tripling from 2015 to 2016, while frozen swine edible offal accounted for 68,539 tonnes, a big increase from 2015 to 2016. “Frozen hams, shoulders and cuts of swine, bone in” almost tripled from 2015 to 2016.

Consumption and spending

The total volume of meat consumed in China reached 65.6 million tonnes rising slightly in 2016. Pork was the largest volume of meat consumed in China in 2016: 40.8 million tonnes representing 62% of the total meat consumption, then poultry: 14.1 million tonnes, beef: 5.86 million tonnes, lamb, mutton and goat: 3.55 million tonnes. Pork consumption in 2016 went down compared to the consumption in 2013, 2014 and 2015 while all other meat consumption went up from 2012 to 2016. This is due to the fact that consumers’ increasing awareness led them to make conscious decisions to consume less pork or shift to other types of meat or seafood as a protein source.

From 2012 to 2016, total volume sales of meat grew at a compound annual growth rate of 1%. Beef and veal gained the highest compound annual growth rate of 5%. Lamb, mutton and goat, poultry and other meat all grew at a compound annual growth rate of 2%. Pork had very modest growth, but was the largest category.

It is forecast that by 2021, the total sale of meat in China will reach 68.9 million tonnes which is a 3.3 million tonne increase from the volume in 2016. Beef and veal will continue to have the highest compound annual growth rate of 3%, followed by lamb, mutton and goat as well as other meat all at a compound annual growth rate of 2%. Pork and poultry have a compound annual growth rate of 1%. Canada should continue to seize this growth opportunity to export more meat to China.

China’s retail sales of meat reached US$168.4 billion in 2016 and grew at a compound annual growth rate of 6% from 2012 to 2016.

Total retail sales of meat in China in 2016 were 33.2 million tonnes. Pork continued to be the most popular type of meat with the retail sales of 24.8 million tonnes followed by poultry with 4.9 million tonnes, beef and veal with 1.9 million tonnes, lamb, mutton and goat with 1.2 million tonnes. The compound annual growth rate for beef and veal from 2012 to 2016 was the highest: 5% followed by poultry: 3%, lamb, mutton and goat as well other meat: 2%. The compound annual growth rate for pork was the lowest: 1% same as the compound annual growth rate for the total meat from 2012 to 2016.

The retail sales of meat in 2021 will reach 36.9 million tonnes, which is a 3.8 million tonne increase from the retail sales in 2016. Again beef and veal will have the highest compound annual growth rate of 6%, then poultry at 4%, lamb, mutton and goat at 4%, other meat at 2% and pork at 2%.

It is worth noting that organic meat in China became increasingly popular with a compound annual growth rate of 8% in retail sales from 2012 to 2016. Chinese consumers demanded more organic products even at higher prices due to the increasing awareness and popularity of these products.

Beef and veal were the most expensive items at US$8.59 per Kg in 2016. Poultry was the cheapest meat at US$3.16 per Kg in 2016.

Per capita spending on meat by Chinese consumers was US$122.5 in 2016, up from US$111.0 in 2015 and it is projected to reach US$160.0 in 2020.

Consumer foodservice in China

With 1.38 billion Chinese people, representing one fifth of the world’s total population, China is the largest global market for fresh meat. Almost 50% of the meat consumed in China in 2016 was through foodservice and institutions. In China, restaurants are crucial not only to social and cultural life, but also to work and business success, traditionally and contemporarily.

Group buying in consumer foodservice catering is popular. Group buying occurs when a company offers products and services at significantly reduced prices, on the condition that a minimum number of buyers are willing to purchase the same item. This trend was due to the rapid development of e-commerce platforms such as Alibaba through its Alipay, the online payment system which was also launched in Canada on Sept. 25, 2017 to enable Canadian retailers to accept Chinese currency from Chinese shoppers through a mobile wallet. Seven hundreds Canadian merchants already accept Alipay which increases the opportunity of Canadian merchants to expand their market to China.

The foodservice sector continues to be the dominant buyer of beef and veal products, as Chinese middle class consumers are less used to cooking beef compared to pork, and with busy lifestyles, they tend to choose beef over other proteins when they eat out.

Top Chinese meat import by port of entry

Shanghai, Tianjin and Guangzhou were the top three ports of entry for meat from the world representing 64% of China’s total meat imports: US$10.3 billion from the world in 2016.

Tianjin, Shanghai and Guangzhou again were the top three ports of entry for meat from Canada representing 72% of China’s total meat imports: US$626 million from Canada in 2016.

Conclusion

Demand for meat in China continues to rise both in quantity and quality. With local meat supply constrained by land, feed, and water and supply chain issues, China will continue to import a significant proportion of meat from the world. The 15th China International Meat Industry Exhibition (CIMIE 2017) organized by China Meat Association (CMA) and International Meat Secretariat (IMS) was recently held in Qingdao, October 18-20, 2017. Canada will have a Pavilion at Food and Hospitality China to be held in Shanghai November 14-16, 2017 to showcase meat and other products.

China's meat market had a growth of 2% between 2011 and 2016, and is forecast to increase to a compound annual growth rate of 4% in 2021. With a tradition of cooking and eating a variety of foods, Chinese people are the world’s largest customers for meat. China’s economic conditions have facilitated growth through increased certainty for business and consumer spending confidence. Technological gains particularly in e-commerce and stronger spending power make China a promising market, not only for the meat sector, but also for other sectors of higher value.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of Trade Commissioner Services in China
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found under Statistics and Market Information, arranged by sector and region of interest.

For additional information on Food and Hospitality China (FHC) 2017, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Resources

• Euromonitor International, 2017. Meat in China.
• Global Trade Tracker, October 2017.
• China Meat Production By Year.

Sector Trend Analysis - Meat Trends in China
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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