About Peter Peverelli

I am passionate about many things, but the top three are: China, food and human organizing processes. I started learning Chinese when I was 14, spontaneously. In the end this resulted into a PhD in Arts (Leiden University; 1986), 10 years of working and living experience in China as a representative of a Dutch firm and a marriage with a Chinese partner (1984). During my work in a company (Gist-brocades, now part of DSM) and as an independent consultant, I became fascinated with organization theory. This has led to a second PhD in Business Administration (Erasmus University Rotterdam; 2001). I am currently combining both interests in a long-term research project studying Chinese entrepreneurship, with a number of Chinese partners. From the day I joined the company, I picked up an interest in food, not just the final product, but also how it is produced, with an emphasis on ingredients and formulation. Once more combining that interest with my China passion, I became an avid student of the cultural and societal function of food. In this blog, I hope to blend all those ingredients into a savoury soup about China, the Chinese food industry and how the organization of that industry differs from the West.

Chinese subway stations start selling prepared meals

Recently, some Beijing subway stations have installed vending machines selling prepared meals: sheep intestine soup (yangzatang) and sweet corn, priced RMB 12 and 9 respectively.

A number of Chinese food manufacturers and restaurants have already developed vending machines for prepared meals and this is the next step in the process of relieving busy Chinese office workers from work in the kitchen.

Recently, a reporter from Beijing Business Daily found that yellow prepared meal vending machines had appeared in many Beijing subway stations such as Shilihe Station. On the machines, you can see texts like: “DT Canteen”, “breakfast and dinner are here”, “take away from work in the morning, heat up and eat in the office”, “take away after work at night, prepare breakfast for the next day”, etc. It is not difficult to see its intention is to target office workers and hope to solve their needs of breakfast and dinner meals.

The reporter learned that among the products sold, sheep intestine soup is a DT Canteen’s own brand product. By the end of April, DT Canteen had put a total of 10 retail cabinets in Guomao, Shuangjing, Shilihe and other subway stations in Beijing.

According to Sun Wei, the head of Jilin Wanlongjia Technology Co., Ltd., the operator of DT Canteen, vending machines that provide drinks in the subway are more common, but not many provide meals. In order to cooperate with the subway’s strategy and meet the living needs of office workers and other subway customers through the promotion and sales of pre-made dishes, Jilin Wanlongjia Technology Co., Ltd. launched a new brand DT Canteen suitable for subways.

Regarding the future development plan, Sun Wei revealed that DT Canteen will introduce prepared dishes of major local cuisines, celebrity chefs, and well-known food brands. In addition to the subway scene, DT Canteen signed a cooperation agreement with Huazhu Group, and plans to enter into its youth apartment brand “Chengjia Apartment” in May 2023 to roll out the prefabricated meal there.

Wang Peng, a researcher at the Beijing Academy of Social Sciences, believes that with the rapid development of the prepared meal market, competition is becoming more and more fierce, and there are problems such as homogenization. We can expect more developments in the near future.

Comment

The sheep intestine soup is an interesting choice for the first batch of prepared meals offered through vending machines in Beijing subway stations. Beijingers are in general not so keen on mutton, with the exception of the traditional Mongolian Hot Pot (shuanyangrou) a fondue with thinly sliced mutton. Perhaps DT Canteen expects that many domestic imigrants, many of whom are Muslims, will buy this product.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success

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The Chinese health food market in 2023

Health food has been one of the fastest growing food industry sectors in China for many years. However, the COVID-19 pandemic has fastened the growth even more. The number of newly registered health food companies increased from 2,985 in 2017 to 13,893 in 2022. 2,082 new companies were registered in the first two months of 2023.

The following table shows the annual number of newly registered companies per year from 2017 up to the first two months of 2023.

The total value of the Chinese health food market in 2023 is estimated at 219.7 billion. The following table shows the development of this key figure from 2016 to 2013.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

China’s lactic acid industry in 2022

An organic acid with a long history and importance, lactic acid and its salts are widely used in the food industry. The national and local governments in China are actively promoting their production. In January 2023, the Ministry of Industry and Information Technology, the National Development and Reform Commission and six other departments jointly issued the “Three-Year Action Plan for Accelerating the Innovation and Development of Non-food Bio-based Materials”, proposing to accelerate the construction of standards such as physical and chemical properties, different process performance, and degradation performance under different conditions around key bio-based materials such as polylactic acid.

Key facts & figures

During the period from 2017 to 2022, the average export price generally maintained a growth trend, and the average export price in 2022 was USD 1.71/kg, an increase of 13.79% year-on-year. According to statistics, the global lactic acid production capacity increased from 750,000 mt in 2021 to 995,000 mt in 2022, an increase of 32.67%; China is the world’s second largest consumer and the largest exporter of lactic acid, accounting for about 50% of the world’s production capacity.

Leading company: Jindan Technology

Jindan Technology has been focusing on R&D and production of lactic acid and its series of products for many years, including clean production of strains, the production of ethyl lactate, and the application research of new lactic acid antibacterial agents in the feed industry. In emerging fields, Jindan Technology has conducted research into green organic catalyst conversion, and biodegradable polymer technology to facilitate extending the company’s industrial chain to the downstream biodegradable plastics industry. In 2022, Jindan Technology further increased R&D investment, with a total of R&D expenses in the first three quarters of RMB 0.44 billion, up 18.34%。

Foreign trade

The export volume of lactic acid and its salts and esters in China is much greater than the import volume. During this period, China’s imports of lactic acid and its salts and ester products generally maintained a relatively stable growth trend, with a total of 16,200 mt in 2022, up 9.44%. The export volume of lactic acid and its salts and esters in 2022 totaled 88,100 mt, up 7.73%.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Totole – a chicken as the flagship of China’s seasoning industry

After the development of industrially produced MSG, China soon became the world’s largest producer and consumer. However, MSG also has certain health hazards (like the so calle ‘Chinese restaurant syndrome’), so the search for healthier flavour enhancers continued. Chicken powder, actually a combination of powdered chicken meat, salt and MSG, was launched in China towards the end of the previous century as a new generation flavour enhancer. Taitaile (literally: “the lady (of the house) is happy”) became the leading producer. It adopted Totole as its official English name.

Established in 1988, Shanghai Totole Food Ltd. is one of the parties involved in drafting the national industrial standards for chicken bouillon and chicken powder in China. In 1999, Totole linked up with Nestlé to take full advantage of international resources to accelerate product and technology research and development. Adhering to the corporate vision of “Totole Makes Life Better”, Totole has been committed to the research and promotion of umami science, driving the technological innovation of umami industry, and constantly bringing healthier and tastier condiments to the consumers. A Totole Sales Conference was held in Shanghai in February 2023, on which the firm confirmed its goal of achieving sales of RMB 10 billion in 2023.

第一支柱产品:三鲜鸡精

2022 has been a challenging year for Totole and a year of accumulation and breakthroughs – Totole keeps pace with changes in consumer demand and continues to innovate in diversified categories and international market development. The company also engaged in the field of sustainable development, helping green public welfare projects.

Two-wheel drive

Since its establishment more than 30 years ago, from the initial production of umami products represented by chicken essence, Totole has developed into a diversified condiment enterprise covering two categories: solid compound flavour seasonings and liquid freshening seasonings. The strategy is referred to as “two-wheel drive”. Chicken powder (essence) will remain its flagship product, but most R&D effort will go to developing liquid and finished products. These includes ranges of instant soup, compound spices for home cooking (e.g. yuxiang

太太乐产品全家福

Domestic marketing

At present, some emerging channels such as O2O, group buying, and e-commerce are playing an increasingly important role in the Chinese condiment industry. In terms of O2O, Totole takes “fast response, multi-innovation and high efficiency” as the criterion, focuses on cross-brand joint activities, fully explores the application scenarios and convergence points between various brands and products, and customizes a total of 12 joint activities on Meituan, Yonghui, Hema and other online platforms. With the help of on-site media tools like DTC (direct consumer)/community group buying, Totole can accurately reach the consumers and accelerate the integration of product and application.

International marketing

Totole is also committed to spreading the concept of “umami” to all parts of the world. At present, its products have been exported to more than 70 countries and regions such as the United States, Canada, Indonesia, the European Union and the United Kingdom, Japan, South Korea, Singapore, Malaysia, Cambodia, the Middle East and Africa. The company is set to improve its Halal certification, and has obtained the European Shandong Halal, the American IFANCA Halal, the Asian Halal and the MUI (Indonesia) certifications to effectively compete in the Muslim nations. Totole mushroom essence, the next generation of flavour enhancers after chicken powder, has won the title of Top Brand in the Indonesian market.

I am sure that I will be able to extend this post soon with new developments at Totole.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Milk tea brands cover their sins with artificial sweeteners

It is not news that milk tea is outrageously popular in China. Young people are at times willing to line up for ours to sample a new flavour of a newly opened shop. However, there is clash of interests in the popularity of the colourful beverages. Chinese consumers are talking all day about more healthy eating and drinking milk tea definitely does not fit into that realm.

The various brands are engaged in a murderous competition and the less than healthy image of the product does not make that battle easier. Recently, the brands have started to work on that image and their competition for the healthiest version has become as fierce as the one for market share.

A relatively easy aspect to work on is sweetness. In line with the ongoing no sugar no salt no fat vogue in the food and drinks markets, many top brands have started advertising with their favourite sugar substitute. In this post, I am showing a few of these ads.

Nayuki

Nayuki (Naixue) has chosen the monk fruit (luohanguo or arhat fruit, in Chinese). This gives its sweetening a very Chinese image. The ad claims 0 calorie sweetener and also adds that it is ‘vegetable sweetness’, which sounds very natural.

Hi Tea

Hi tea (Xicha) is is sweetening with stevia. This, according to the ad, decreases the energy content with 90%. The ad also tells us twice that stevia is a natural sweetener. This is supported by the Chinese name for stevia: tianjutang, literally ‘sweet chrysanthemum sugar’.

Baifen Tea

Baifen Tea (Baifencha) has selected a less common sweetener: L-arabinose. The add uses a pun ‘pa tang bu pa tang’ ‘afraid of sugar not afraid of sugar’. This is based on the fact that the final character of the Chinese translation of arabinose (alabotang ‘arabian sugar’) is tang. A minor problem with arabinose is that Baifen Tea cannot claim zero calories, as this sweetener is low caloric.

Anyway, Chinese milk tea companies keep looking for more alternative sweeteners as well as alternative ingredients for the fatty ingredients. I will keep you abreast on this page.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

The Chinese creatine industry (2022)

Creatine is an amino acid located in the body’s muscles as well as in the brain. Most people get creatine through seafood and red meat. The body’s liver, pancreas and kidneys also can make about 1 gram of creatine per day. The body stores creatine as phosphocreatine primarily in the muscles, where it is used for energy. As a result, body builders take creatine orally to improve athletic performance and increase muscle mass.

Overview

Creatine is made up of arginine, glycine and methionine The substances synthesized by three amino acids can be synthesized by the human body itself or ingested from food, and the common creatine on the market currently includes creatine monohydrate, complex creatine and creatine compounds. Creatine not only provides energy quickly, but also increases strength, builds muscle, and speeds up fatigue recovery. The more creatine is stored in the body, the more energy is supplied, the faster fatigue recovery and the stronger the exercise energy. Creatine can be used as a nutritional enhancer, food additive, pharmaceutical raw material and health care product additive, and can also be directly made into capsules and tablets for oral administration; In addition, creatine can also be used as a cosmetic surfactant, feed additive and creatine derivative.

The industry

Compared with overseas markets, the Chinese creatine industry has certain advantages in raw materials, energy and environmental protection. Driven by the downstream market, the capacity growth of the domestic creatine industry is high, but the overall capacity utilization rate leaves to be desired, with a capacity utilization rate in 2021 ofchina approximately 67.3%. In 2021, the domestic creatine production capacity was 43,000 tons. Actual production was 28,949 tons, with a compound growth rate since 2016 of 6.52%。

Demand

At present, Chinese creatine is mainly exported as primary product. Foreign markets are more mature, domestic market consumption is still in the development stage, but with the growth of demand for creatine downstream applications, the creatine market is expected to grow in the near future. The domestic demand for creatine in 2021 was 7808 mt, with a compound growth rate of demand since 2016 of 7.78%.

Creatine is widely used in medicine, food, health products, feed, chemical industry and other fields, in 2021, the demand for creatine in the fields of medicine, food and health products in China was 3425 tons, and the demand for creatine in feed, chemical industry and other fields 4383 tons.

Prospects

With the issuance of the Opinions of the State Council on the Implementation of the Healthy China Initiative and the Healthy China Action (2019-2030), a disease management and health service model of combining medical and physical education is currently being promoted at full speed. This has become a new trend of cross-integration of the big health industry and the big sports industry and is expected to give a big boost to China’s sports nutrition industry. With the improvement of the living standards of Chinese consumers, the demand for sports nutrition products is rising, and a large number of people want to take sports supplements to improve sports performance or improve physical condition. 30% of Chinese (urban) citizens were regular exercisers in 2020, though only a minority of them were members of a local gym.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Top 5 Chinese food and beverage companies for selected industries

The Chinese site Food Forum has published the top 5 companies for a number of industries. I am listing them in this blog. It is useful to stay in touch with who is on top in China. I have added links to posts in which a company is introduced, but I advise interested readers to search for posts discussing all these companies using the search function of this site.

Dairy

RankCompany2021 turnover (RMB 100 mln)
1Yili1084.62
2Mengniu881.41
3Bright265.10
4Feihe225.45
5Junlebao203.00

Beverages

RankCompany2021 turnover (RMB 100 mln)
1Wahaha519.15
2Nongfu Spring296.96
3China Food197.84
4China Resources113.79-122.36
5Baiyunshan108.51

Alcoholic beverages

RankCompany2021 turnover (RMB 100 mln)
1Moutai1060.59
2Wuliangye617.31
3China Resources333.87
4Tsingtao246.39
5Yanghe246.39

Seasoning

RankCompany2021 turnover (RMB 100 mln)
1Haitian235.97
2Yangpu Nanhua113.02 (2020)
3COFCO Sugar87.11
4Fufeng86.01
5Yihai59.43

Leisure food

RankCompany2021 turnover (RMB 100 mln)
1Three Squirrels97.70
2Liangpin Puzi91.44
3Qiaqia59.85
4Weilong Meiwei48.00
5Lyfen40.50

Cereal products

RankCompany2021 turnover (RMB 100 mln)
1Chef Kong732.50
2Uni-President242.63
3Wantwant239.85
4Dali201.74
5Jinmailang200.00

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Herbal tea – China’s recent beverage trend.

I have discussed herbal teas in earlier posts, in particular Wanglaoji. Recently, a number of similar drinks, based on a variety of traditional Chinese medicinal herbs, have appeared. Possibly under the influence of the ‘national trend (guochao)’, young Chinese consumers are started to drink these beverage in a similar way as we (some of us) eat their daily handful of supplements.

I will introduce the most popular ones in this post, including their lists of ingredients. This lists show a broad variety in naturalness. The header of each product consists of the producrer and the product name.

Yangxiecheng – Chinese mesona beverage

Ingredients: water, sugar, Chinese mesona, distarch phosphate.

Genki Forest – Qiancha

Ingredients: concentrated maize juice (water, baked maize), concentrated maize tassel juice (water, maize tassel), maize tassel powder, glutinous rice powder, VC, sodium bicarbonate, food flavour.

Podu – white tea beverage

Ingredients: water, white tea, concentrated oolong tea, alginose, vine tea, orange peel, acesulfame-k, food flavour.

Taifu – Wax gourd job’s tears water

Ingredients: water, sugar, job’s tears powder, concentrated wax gourd juice.

Wanshoukang – Dendrobium drink

Ingredients: water, erythritol, dendrobium devonianum.

Zuixi – Almond tea beverage

Ingredients: water, almonds, erythritol, rock sugar, resistant starch, red dates, monkfruit, stevia.

N12 – Tangerine peel white tea beverage

Ingredients: water, erythritol, polydextrose, tangerine peel, white tea.

Renhe – Honeysuckle Dew

Ingredients: water, sugar, glucose syrup, honeysuckle, chrysanthemum, mint, VC, acesulfame-K, food flavour.

Lianshuang – Lotus leaf tea

Ingredients: water, rock sugar, lotus leaves, chrysanthemum, honeysuckle.

Guizhou Miao Girl – Yigancao drink

Ingredients: water, Houttuynia cordata (chameleon plant), taraxacum mongolicum, gardenia, red raspberry, kuding tea, arrow root, goji, date, liquorice.

Eastern God – Cordyceps Beverage

Ingredients: water, alginose, isaria sinclairii, goji, cordyceps, chrysanthemum, hibiscus.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

China’s new funky ice creams for the 2022 summer

Banana shaped ice cream, bear paw ice cream, nationalist ice cream, black garlic ice cream . . . it’s only a small selection of the odd shaped and flavoured ice creams with which Chinese can cool themselves during the coming hot season.

As the temperatures are rising rapidly in all regions of China, the ice cream makers are running overtime in filling the retail outlets with their latest products. Earlier, I reported on various new savoury ice creams. In this post, I will give you a peep into the most important trends in this product group for this year.

Guochao – national trend

I have introduced this trend in a recent post. It is one that I expect to last for a considerable and has plenty of potential to grow. It is not simply a trend among consumers, but one that is linked to the international political climate. As China is being attacked by Western politicians and media for multiple perceived ills, and the reaction of the Chinese nation is a growing interest in traditional Chinese values and other things Chinese. In the food and beverage industries, this is leading to the launching of foods in traditional shapes, traditional flavours, packaging inspired by old Chinese stories, etc.

Chicecream (Zhongxuegao) was and remains the leader in this segment. Look at a picture of a one of the latest products of this company.

These are regular pieces of art, with Chinese wisdom printed on the handles. I can imagine that you are hesitant to take the first bite after taking off the wrapper. However, after finishing the ice cream part, you will see that the first half of the proverb on the handle was hidden under the edible part. So, the cultural experience does not stop with finishing the food. In fact, if I were the marketing manager of Chicecream, I would launch a campaign in which consumers could get a free ice cream by handing in a complete set of all different proverbs.

A new ice cream with a traditional flavour has been launched by one of China’s oldest surviving seasoning makers: Liubiju (Beijing). Check out is ‘black garlic ice cream’.

I will add my tasting experience as soon as I am back in Beijing again.

Funny shapes

The number of shapes in which ice cream is sold world wide is rather small (blocks, popsicles, cones, etc.). This is now changing radically in China. Dongbei Daban (Big Boss from the Northeast) has launched a ‘big fish tail’ ice cream.

Don’t worry about its taste; it is blueberry-flavoured and contains no fishy ingredients.

Here are two other odd shapes: twisted banana and bear paw

Fancy

A number of ice creams with a fancy high-end appearance have been launched as well. There is the new pineapple ice cream by Dongbei Daban.

The combination of yellow pineapple ice cream, dark shiny chocolate and the sharply cut shape makes it a genuine piece of art, again.

Mengniu’s brand Suixinguo has added a ‘7-layer’ ice cream. Under its chocolate coat you will encounter blueberries, chocolate beads, orange sherbet and more.

This ice cream is not so much a piece of art as an adventure; a new experience with each bite.

Is that all? By all means: no! This is just a peek, not a full market report. If you want that report: you know where to find us.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success

Top Chinese regions for various foods

It has been a while since I placed a post about the regional variation of food in China. That post focused on typical local produce and traditional dishes and snacks.

Today, I am posting some information about the regional distribution of the production of a few major product groups. There is a certain relation between that distribution and the information in the previous post, but also distinct discrepancies, linked to facts like the presence of a major producer, the location of large urban centres in a province, etc. There are also interesting differences between more traditional products and foods related to the modern life style. In other words, today’s post is a genuine ‘Chinese food and culture’ one.

I will illustrate the distribution in the form of tables indicating the top 3 production regions (provinces) of each product in terms of percentage of the total national volume of 2021. The total of those percentages is a good indication of the degree of concentration of that product.

Dairy

The dairy industry is traditionally concentrated in the norther half of China, which makes sense as dairy cows prefer a cooler climate. A consequence of this was that most Chinese in the south would drink milk reconstituted from milk powder. Recently, the production of fresh pasteurised or UHT milk has increased considerably in the major urban regions. Look at the differences in the distribution of milk powder and liquid milk production.

Milk powder 
Heilongjiang37.1
Shaanxi15.2
Inner Mongolia11.2
Total63.5
Liquid milk 
Hebei13.6
Inner Mongolia12.3
Shandong8.0
Total33.9

Heilongjiang, Shaanxi and Inner Mongolia are all traditional dairy regions. Hebei as well, though much smaller. However, Hebei supplies dairy products to the large Beijing – Tianjin urban conglomerate, and is the home of some of the country’s top dairy processors.

Wheat

Although most Westerners still perceive Chinese as eating rice as a staple, the Northern Chinese traditionally eat wheat products. The most popular wheat product traditionally is flour. Chinese use it to make dumplings, mantou (steamed bread), noodles, and many other products at home. This does not always agree with the pace of life of the modern city dweller and even Chinese living in smaller towns do not want to spend so much time in the kitchen. This is reflected in the distribution of the flour and instant noodles.

Wheat flour 
Henan25.9
Shandong19.7
Hebei14.6
Total60.2
Instant noodles 
Henan20.5
Guangdong10.4
Tianjin6.7
Total37.6

Henan and Shandong together form China’s main wheat belt, hence Henan’s top position for both products. However, the production of instant noodles does not necessarily take place in those provinces. Guangdong and Tianjin are located in major urban regions (the Pearl River Delta and the Beijing – Tianjin region) and local production there makes distribution a lot easier.

Candy

Candy 
Fujian29.7
Guangdong21.8
Hubei10.7
Total62.1

China has a wide range of traditional sweets, but candy is a Western product. This is probably the reason that production is concentrated in the richer southern coastal provinces of Fujian and Guangdong. These are also sugar cane regions. Hubei is an exception.

Alcoholic beverages

Alcoholic beverages 
Sichuan13.7
Shandong10.9
Guangdong9.3
Total34.0

Sichuan has been the top producer of traditional Chinese spirits (baijiu) for many years. Although beer and wine are growing in China, the big money makers are still the spirits. Shandong’s position is probably related to the availability of cereals, but it is also the home of Tsingtao Beer and is China’s oldest wine region. Guangdong’s third position is based on beer, which is undoubtedly due to the fact that the Pearl River Delta is one of China’s most affluent regions.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success