China is the world’s largest grocery market with the value of the organic food market estimated at US$7.8 billion to more than US$13 billion, while grocery market growth is expected to rise by 9% in 2014 to over 14% in 2020, according to IGD research.
A market study carried out by the Organic and Beyond Corporation also indicated that the Chinese market offers good business opportunities for European organic companies who want to export their products to China.
Dairy products, wine, baby food, olive oil and grain products are especially popular, and organic consumers mainly buy them at luxury supermarkets, at organic specialist stores, or online
Chinese organic certification groups signing more mutual recognition agreements with leading overseas organic certifiers in Australia, Europe, North America and other countries are helping the organic market growth.
China is a major organic export country as well. In 2013, 246,000 tonnes of organic goods were exported to 23 countries and regions around the world. Besides the USA, the main importing countries are Germany, Great Britain, the Netherlands, Switzerland and France. Soya beans are China’s chief export, though its tea, fruits, nuts, vegetables show increased export demand too.
A Hong Kong Trade Development Council report in June 2014 said that an urbanised lifestyle and rising incomes are fuelling the growth of China’s packaged food market and with consumer concerns over food safety and quality, certification guidelines are very strict.
And the rate of high-income groups is steadily growing in big cities like Shanghai and Beijing.
Supermarkets/hypermarkets are the main retail channels for packaged food, but are facing increased challenges from online retailers such as Alibaba’s Tmall business to consumer online shop front.
China’s is the world’s largest e-commerce market, with growth expected to rise from US$153 billion last year to US$323 billion in 2016, with over 70% of the people in Mainland China shopping online more than once a week.
The Alibaba Group alone controls more than 80% of e-commerce transactions in the Chinese market.
In December 2013, inspection and administration agency AQSIQ issued the Administration Measures for Organic Product Certification, which clarified that the Certification and Administration of the PRC (CNCA) was responsible for the unified administration, supervision and overall coordination of organic food certification across China.
The new organic certification rules commenced in April 2014. A major change is that the organic ingredients must be equal to or above 95% and that the term ‘organic’ must be listed on the product package and the label, and have an organic certification mark affixed to it after obtaining organic certification.
Chinese organic certification bodies have to be registered with the Certification and Accreditation Administration of the PRC (CNCA). One of the largest certifiers is COFC, while there were 25 organic certification groups in 2014.
The organic certification bodies are allowed to inspect and certify against their own private organic standards as long as certified products adhere to China’s national regulation. Certification bodies are obliged to publish their private standards and certification procedures.
Australian organic certification bodies have signed agreements with Chinese organic certification groups such as the Organic Food Development Center (OFDC) and Beijing WuYue HuaXia Management and Technique Center (CHC).
World’s largest market to boost BIOFACH CHINA 2015
By OWN News Network
Due to the success of last year’s show, the 9th BIOFACH CHINA, gateway to the huge Chinese market, will take place May 28 to 30 at the new venue, the Shanghai World Expo Exhibition & Convention Centre (SWEECC), located in the heart of the 2010 Shanghai World Expo site.
The main international organic fair in Asia BIOFACH CHINA expects 360 exhibitors and 20,000 visitors, a considerable increase from the 345 exhibitors and 16,755 attendees recorded last year.
A Taiwanese pavilion and a Danish pavilion significantly larger than the Scandinavian country’s last pavilion will be present this time.
Making its debut on the second day of the event is the ‘Online Organic Food Retailer Sourcing Summit, which includes a panel discussion and a matchmaking activity.
Project director Helen Lin is pleased about the move to the SWEECC. She said in a statement earlier this year: “We are expecting the space required for BIOFACH CHINA to increase by up to 20 per cent, which would see it cover 12,000 square metres.
“BIOFACH CHINA is already one of the most important organic trade fairs in Asia and provides the perfect business platform for Asian and also European companies. Anyone looking to secure a foothold in the Chinese organic market will be able to acquire important contacts here, and the demand for organic products from Europe remains strong.”
China is the second largest consumer market in the world and the largest grocery market. It also accounts for about 20% of all U.S. agricultural exports. For 2015, sales in the Chinese organic market are estimated at US$7.8 billion dollars as Chinese consumers place greater importance to healthy and safe foodstuffs and would like to know the origin of their food and consumable products.
The consumption of organic food has accounted for 1.01% of the whole consumption of food since 2012, up by 0.65% compared with 0.36% in 2007.
Since 2007 and under the patronage of IFOAM, BIOFACH CHINA has developed into the most influential organic trade fair in the country.
Products expected to be displayed include fresh and frozen food; grocery, cooking and baking products, snack foods and confectionery, beverages, cosmetics and personal care at the new Nature Zone, technology and equipment.
The BIOFACH CHINA Congress for 2015 will be the Conference on International Organic Food Market and Development, organised by the China Organic Food Certification Center (COFCC) and NürnbergMesse China.
BIOFACH CHINA is one of the sister fairs of BIOFACH, the world’s largest organic trade fair hosted each year in Nuremberg, Germany.
For further information, look up: www.biofach-china.com
Asia: A look at organic and natural C&T markets
By Annemarie Kruse
Natural and organic cosmetics in East Asia are booming. According to a recent report by Organic Monitor, the Asian countries are amongst the fastest growing organic markets worldwide.
And China is the biggest regional market. The country has a strong and affluent middle class and natural cosmetics are becoming very popular amongst this demographic. Over the past decade mainland China has seen a string of ingredients scandals, primarily in the agricultural and food sectors but also in drugs and cosmetics manufacturing.
As a result, consumers are increasingly concerned over product safety and product authenticity. This has contributed to the rising demand for organic cosmetics. Natural beauty products are perceived as being safer than regular cosmetics, and international brands – especially European names, which are known for their strict quality control – have a solid reputation in China.
Because few Chinese companies manufacture organic beauty products the market is dominated by foreign brands. And although many international organic brands have left the Chinese market in recent years – current legislation requires animal testing on any foreign cosmetics brand that is retailed in mainland China – the demand for natural cosmetics in China continues to grow, especially amongst young urbanites.
Concept stores are the most important retail channel for organic beauty, with Western and Asian brands opening stand-alone stores or brand boutiques in shopping centers and department stores. International organic brands available in mainland China tend to be premium brands like Aveda and Jurlique. There are few affordable organic choices.
Japan is the second biggest natural cosmetics market in Asia. The organic sector here is more sophisticated, enjoys well-established retail structures with a wide range of international and domestic organic brands. Organic beauty is a luxury category in Japan just as much as it is in China, and it is also very much a urban trend. However, the popularity of natural beauty products has little to do with concerns about product safety. Japanese cosmetics have an excellent reputation in Japan and the rest of Asia.
Instead, the strong growth of the natural beauty sector in Japan can be traced back to an increasing interest in organic products and a healthy lifestyle. Traditionally, Japanese consumers pay attention to ingredients and the regional heritage of a brand is considered to be very important. Over the last decade the focus on natural foods and ingredients has become much stronger and it is now extending to other categories, such as cosmetics. The Fukushima reactor disaster in 2011 has only intensified this trend.
There is no official retail data but the Japanese trade publication Diet & Beauty Magazine estimates that the Japanese market for natural and organic cosmetics has now reached some 116-124bn Yen. The most important retail channels for organic cosmetics are specialty stores, stand-alone boutiques and brand concessions in department stores. Companies like Aveda, Neal’s Yard Remedies, Jurlique, Melvita and John Masters Organics are present with their own brand stores and counters whilst German firms like Weleda and Dr. Hauschka are also popular among Japanese customers. Increasingly, domestic brands like ShiGeTa, Amritara, Do Organics, Chant a Charm and Naturaglacé are also appearing on the scene.
Another reason why the Japanese organic market is strongly developed is the presence of organic retail chain Cosmekitchen. Founded in 2004, today the company operates 28 stores in Japan, mostly in the larger cities. Cosmekitchen in the market leader in organic beauty retail and its outlets carry a very wide range of natural and organic cosmetics; primarily European and Western labels but also Japanese beauty brands. The success of Cosmekitchen and its strong market presence has contributed to shape the organic sector in Japan.
Korea and Taiwan
In Korea and Taiwan, organic brands and ingredients are also making their presence felt. As a rule Korean C&T products tend to be functional. Consumers are often more interested in the anti-ageing, whitening or skin-refining aspects of a beauty brand than its organic credentials. However, even here organic labels are starting to appear on the market.
Korean beauty brand Whamisa was introduced in 2010 with a product range that carries the German BDIH and the French Ecocert seals. Vieco, an organic beauty brand launched last year, specializes in cosmetics formulated with unrefined organic ingredients. And in late 2014, LG group introduced The Remedy, a natural skin care range based on powdered roots and bulbs.
Korean cosmetics in general are getting greener. Amore-Pacific’s Innisfree was one of the first Korean beauty brands to highlight the regional heritage of its products. Innisfree cosmetics are formulated with ingredients sourced from the Korean island of Jeju, a popular holiday destination. There are a number of Korean brands that use Jeju ingredients, but Innisfree is arguably the best-known Jeju beauty brand.
Over the last few years Innisfree has also launched a number of eco-oriented product ranges and some of its products now carry the Ecocert seal. Other Korean brands are focusing on the principles of Traditional Chinese Medicine (TCM) and on traditional Korean ingredients. These products are called hanbang and although hanbang brands are rarely organic by European regulatory standards, they are popular among Korean and Asian consumers.
Taiwan’s organic sector is still in its infancy but the awareness for natural ingredients is definitely there. The country has been hosting the Asian Organic & LOHAS Expo since 2007 and although the trade fair is amongst the smaller organics shows in Asia, it is very popular for local visitors. In Taiwan, the natural concept is most visible in the food sector – the majority of exhibitors at the 2014 LOHAS show were food and beverage companies – but there are also some domestic natural beauty brands. One of these is Evergoods, the first Taiwanese C&T firm to be awarded a European organic seal. Evergoods’s Naveen product range is certified by the UK’s Soil Association. The company also has two other non-certified natural products ranges and manufactures natural cosmetics for other Taiwanese retailers.
A question of standards
Certifications are starting to play a more important role in the Asian markets. According to Organic Monitor, one of the major challenges facing natural and organic brands in the region is the so-called green-washing. “Asia is rife with brands making false natural and organic marketing claims, with some placing fake logos and symbols on product packs. As a consequence, there is a high level of consumer confusion about natural and organic cosmetic ingredients.”
However, a growing number of organic brands are going in for official certifications, Organic Monitor says. “Ecocert standards are the most popular, having the highest adoption rate amongst Asian brands. Many organic food shops are requesting certification to ‘legitimize’ marketing claims of brands.”
This development is encouraging since it shows that consumer awareness of what constitutes an organic product is growing slowly but steadily. And although the organic markets in Asia still have a long way to go before they approach the maturity of the Western European countries, it looks like the region is well on its way.