China’s 2 trillion RMB breakfast market is expected to grow with a forecast compound growth rate of 7.7% by 2025.

Introduction

The meal that most people find hardest to change is breakfast. Most people are willing to experiment with different foods during lunch or dinner, but when you are still waking up, you prefer to do so with those familiar breakfast items. However, diets in China, including breakfast, are moving to incorporate more western-style foods, driven by economic growth, urbanization, and market liberation.

A survey conducted in 2020 showed that 35% of the respondents were too busy to eat breakfast every day. 42% said that they spent less than 10 minutes on breakfast. A survey conducted a year later, showed the following reasons for skipping breakfast entirely.

Reason	% respondents
Too busy	49
Other reasons	25
No appetite in the morning	17
No need or directly eat lunch	9

Yet, few studies use microeconomic data to identify the factors driving the trends, particularly to link the rapidly changing demographics to specific western-style foods. Research jointly conducted by the Chinese Academy of Sciences, Washington State University, North Dakota State University, University of Florida, and Economic Research Service at USDA used household-level data that were collected in Beijing, Nanjing, and Chengdu in recent years to provide new insights on this issue.

The data were collected through a week-long food diary approach, asking the selected households to record all the detailed food consumption by meals (breakfast, lunch, and dinner), including each ingredient prepared or eaten in the meal, no matter the meal occurred at home or away from home. The tracked food items includes each item’s name, price, purchase venue, and amount consumed for that meal, which allow us easily to identify and distinguish the western-style items from traditional Chinese diets. A full list of western style breakfasts and the observed frequency for each item are presented in Table 1.

Table 1 Observed Western style breakfast items

Western-style Foods Have Gained Significant Popularity

Most of Western-style breakfast menu items can be found on Chinese dining tables for breakfast, and they have become increasingly popular in urban areas. In Table 1, all observed western breakfasts are grouped into three categories, including bread and cake, milk, and other western foods. Each category further includes several kinds of specific western foods. Clearly, 83% of surveyed households consumed at least one kind of the listed food in Table 1 during the survey week. Of which, fluid cow milk is the most popular, with 564 households reported consumption, accounting for over 70% of the entire sample. Following fluid cow milk are the bread and cake categories, with 47.3% and 16.1% of surveyed households reported consumption, respectively. Although less frequently consumed, it is notable that sausage, cheese, and coffee, three very western items, have been incorporated in Chinese breakfast menus.

Urban households more frequently incorporate the western-style foods in breakfast as income rises

Table 2 Frequency of the Western Foods to Be Consumed In Breakfast in the Survey Week

On average, there were about four breakfasts out of seven (in the survey week) where at least one kind of western food was consumed for each household. Income, as expected, has a significantly positive effect. The number of breakfasts included at least one kind of western-style food is 3.83 for the lowest income group, while it increases to 4.63 for the highest income group. Similar trends can be found for bread, milk, and other western foods consumption in terms of meal number. For bread, the weekly consumption frequency for the highest income group is 2.42 breakfasts, which is one breakfast more than that for the lowest income group.

The positive income effect can also be seen in terms of per capita consumption (Figure 1).

Fig. 1: Per Capita Consumption of the Western-Style Foods in Survey Week

Breakfast cereals

Although cereals are still restricted as breakfast item to a small number of Chinese households, the market is growing. Major players, including Cereal Partners Worldwide, General Mills, Kellogg, and PepsiCo, have all targeted the market in some way. Breakfast cereals are predicted to see 6% value CAGR. Manufacturers will take their inspiration from traditional Chinese medication by offering products containing Chinese ingredients such as red dates, goji berries, and black sesame. Sugar-free products are also a huge rising trend. In 2015 the revenue of general cereal sales amounted to RMB 2.805 billion, whereas in 2022 the market is expected to more than double, reaching RMB 6.2 billion.

A domestic player to watch is Guilin Sea Mild (Ximai) Biology Technology Development. With its brand Sea Mild it accounted for a value share of 18% in 2016 as well as the year before. Guilin Sea Mild specializes in hot cereals, which require the addition of hot water or milk. The company built the overall leadership mainly through its well-established brands and strong distribution network. Guilin Sea Mild is also positioned as mid-priced and thus benefits from a broad potential customer base. The company mainly targets elderly consumers with products such as Seamild Nutrition Cereal for the Elderly, High Iron Red Dates Cereal, and High Calcium Walnut Cereal. Sea Mild got listed on the Shenzhen Stock Exchange in June 2019.

The next step in convenience was taken in 2021, when Ocak launched a sachet-size version of its breakfast cereals.

Women in command

Women (mothers) play an important role in deciding the ingredients on a Chinese breakfast table.The western food consumption varies by demographics, including the characteristics of the female head of household (FHH). In Figure 2, we can see that families with wives who hold college or advanced degrees more frequently incorporate western foods in breakfast than other families. It is also the case for per capita western food consumption, with 1.26kg for families with a highly-educated FHH versus 0.98kg for others.

Fig. 2: Wife’s Education Effect on the Western-Food Choice Is Positive

Younger Generations leading the Westernization of Chinese Breakfast

Family composition also matters, but the effect differs across food types. For instance, families with children tend to consume more bread at breakfast than other families, but the difference is not that remarkable for milk and other western foods. Also, families with adolescents or young adults more frequently consume bread at breakfast than their counterparts, but families with seniors consume bread less frequently, but more frequently consume other western food products. Families with dual-career parents do not present consistent differences from single-career families.

Table 3 Effects of Family Composition on the Western Food Consumption

Regional Effects Are Significant

Western food consumption differs remarkably across cities. Beijing is leading in consuming western foods in terms of the number of breakfasts consuming western foods. On average, there are 4.42 breakfasts including at least one type of western-style food, which leads Chengdu by 0.42 breakfast meals and Nanjing by 1.23. Similar comparisons can be found if we focus on bread, milk, and other western foods. In terms of consumption quantity, however, Chengdu takes over the leading position with per person consumption of1.53kg, nearly double the level of Beijing (0.85kg) and Nanjing (0.79kg). It is noted that the differences across cities may not exactly reflect the regional difference as these surveys in three cities were not conducted at the same time.

Figure 3: Western Food Consumption by City

Entrepreneurial activities

A number of companies have already started cashing in the above mentioned trends by launching foods and beverages specifically formulated for breakfast. Several dairy companies have launched breakfast milk, like Yili’s Oat Milk introduced in an earlier post. In my post on public nutrition in China, I selected a fortified bread from Oishi that is also marketed as a breakfast food. The common element in all these products is: get all the nutrients you need from one single sip or bite.

New policy = new opportunities

In 2016, many roadside breakfast stands disappeared in several Chinese cities, as the nation set out to improve city appearance and food security management. However, that also meant fewer breakfast locations for local residents, opening the door wider for higher-quality ones. Choices used to be mainly limited to international giants, such KFC and McDonalds, but not anymore. Local companies such as Doujiang Ai Youtiao, a Shanghai-based start-up focusing on data-management and freshly-made breakfast, have created a “second breakfast table” for consumers (see photo). The Shanghai-based start-up has many stores in residential communities, offering Shanghai-style local foods and traditional Chinese breakfast, including youtiao (fried bread sticks). Sales are monitored for adjusting taste and service. Moreover, it also boasts a system that can analyse customers’ eating habits and offer suggestions based on previous purchases. By 2021, sales of breakfast foods at convenience stores is expected to exceed RMB 840 billion in China, while the total sales of breakfast foods in the country will reach RMB 1.94 trillion, data from a 2016 survey showed. Now, many Chinese start-ups have set their eyes on the breakfast market, trying to woo more customers seeking high-quality king-like meals with advanced technology and more convenient services, including Baoxiaotuan, a start-up founded by the founder of Steamed Stuffed Bun Restaurant, Qing Feng.

The nationalist trend

The trend towards revival of traditional Chinese values, practices, foods, etc. that started in the course of 2020 reached the breakfast revolution early 2022 with CP (Zhengda)’s launch of a range of ‘breakfast dumplings‘. The are packed in small one-person helpings, also gearing to the growing market for single households. This indicates that young Chinese consumers are longing back for traditional foods for breakfast, but still without the fuzz to prepare them.

Conclusions

The western-style foods, in particular bread and milk, have gained popularity in China and become an important part of urban Chinese breakfasts. In the future, with further income growth, the demand for the western foods will continue to grow remarkably. This finding has important implications for agricultural production and food processing industry. Since making bread requires higher protein wheat flour relative to making noodles, fried dough (youtiao), and steamed buns (mantou). The increasing demand for bread herein is challenging China’s wheat breeding and high-protein wheat production. A potential to rely on imports might be a solution considering China’s limited land for high-protein wheat production such as hard red winter and hard red spring, and its relatively logged wheat breeding technologies.

Regarding milk, it is well known that the recent milk safety incidents such as melamine-contaminated baby formula have terribly damaged consumers’ confidence in consuming domestic produced milk and shocked milk production in China. The fact that Chinese consumers are demanding more milk with the growing income and health desire, however, is unchanged according to our findings from this study. Therefore, how to supply sufficient and safe milk becomes a critical question for policymakers and milk industry to pay enough attention. The western-style food consumption is also significantly related the female head of household’s education achievement and family composition. Particularly, the researchers found that younger generations in urban household are leading the trend for westernization of Chinese breakfasts. Since people often formed their food preferences at young and will stick on when aging, the findings thereby suggests that western-style foods will be included in all age groups in the foreseeable future. Meanwhile, the FHH’s education is found to have a significantly positive effect on western food consumption, both in frequency and in consumption level. This result suggests that any effort to promote western-style foods in China’s market can increase returns by targeting the FHH.

The other direction: the sophistication of traditional Chinese breakfast

Against the background of growing nationalism in China, it will be no surprise that the opposite of the westernisation of Chinese breakfast, the sophistication of traditional breakfast foods, can also be observed. A good example is a recently opened fast-food outlet of the famous Goubuli Baozi (steamed fill buns) restaurant in Beijing. Apart from its steamed buns, the menu also features typical breakfast items like jianbing and doufunao.

Jianbing resemble French crêpes and are sold on almost every corner of the street in Beijing during breakfast time. The ones sold in Goubuli include Peking duck jianbing cooked with cucumber, sliced Peking duck, pickles and the sweet paste of flour. Three other varieties of jianbing are available: traditional Tianjin-style; bacon; and seafood. The pictures compare a jianbing as sold by street vendors and Goubuli’s Peking Duck jianbing.

Doufunao literally means bean curd brains and is made of soft silken bean curd with sauces and garnishes usually served sweet in southern China, and salty in northern China. At Goubuli it is topped with crumbs of mahua (fried dough twist, Tianjin’s most famous snack), rousong (meat floss), and furu (fermented bean curd). This combination makes each spoonful of doufunao tasty and complex thanks to the savory furu and soybean paste, crispy mahua, and silken bean curd.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.