In previous blogs on dairy (traditional dairy, formulated dairy), I have pointed out that in spite of the rapid development of this industry in China, the taste of milk is still inhibiting for most Chinese. Moreover, in 2022, 22.4% of the Chinese population suffered from lactose intolerance. Especially the formulated products are meant to address this problem by creating a host of products that deliver the nutrition of milk, while disguising the creamy flavour that so many Chinese still find hard to get used to.
However, there is an alternative group of products that have a nutrition profile more or less like milk, but lack the problematic flavour, because it is plant based: protein drinks. While soy-based drinks have made considerable progress in Europe recently, as life style products, they have been popular in China for ages.
Traditional products like soybean milk have appeared in various modernised versions, and other protein drinks from almonds, peanuts, or coconuts have been added. Their popularity is evident from the large variety of products available in Chinese supermarkets. The total turnover for protein drinks in 2019 was RMB 53.690 bln, and is expected to rise with 2.7% per year until 2024.
The main technical problem to crack in these products is maintaining a proper emulsion. Protein gel is combined with an oil-in-water emulsion, which results in a non-heatstable liquid, which can only be countered with a mix of emulsifiers. Most recipes use sucrose ester, combined with monoglyceride, alginates, etc.
Let’s have a look at the most representative types, according to source.
Soybeans
Soybean milk is a traditional product in China. The earliest records of it date from the West Han period (2nd Cent. B.C.).
The process requires soybeans with a sufficient water content (10% – 14%). After the hulls have been removed, the beans are pressed and water is added. In the modern production process, a chelating agent like EDTA is added for stabilisation. The raw soy milk is cooked for about 10 minutes. After centrifuging, nutrients like fat, sugar, or vitamins and minerals (e.g. calcium to create the perfect alternative for milk) can be added. Flavours can be added too, either to strengthen the typical soy flavour, or adding new flavours, typically those of fruits.
China’s top producer of soybean milk is Weiwei, located in Xuzhou (Jiangsu). The company’s main product is instant soybean milk, which make it the most convenient of the protein beverages introduced in this blog. The other drinks are only available in liquid form.
Soybean milk is so popular in China, that KFC has decided to add it to their breakfast choices in their Chinese outlets.
Weiwei continued on this development by launching soybean milk in a bottle that resembles the classic Coca Cola bottle late 2017, even stronger suggesting that soybean milk can be consumed as a healthy alternative for soft drinks.
Another recent innovation by Weiwei is launching a range of canned soybean milk with various flavours, including coffee.
Almonds
Almond milk is not really an alternative for dairy, as milk is used as an ingredient. The recipe I consulted for this blog lists almonds and Chinese yam (shanyao) as the main ingredients and milk and honey as auxiliary ingredients.
The almonds are roasted, crushed and cooked with the milk and yam. The honey is added after the milk starts boiling.
Almond milk has been made popular in China by Lulu, a company based in Chengde (Hebei). The typical thin cans of Lulu have been on the market for more than two decades, as an alternative for milk, as well as a drink for those who cannot drink alcohol during a banquet. Lulu has accumulated a turnover of RMB 1.772 billion during the first 9 months of 2019; up 5.88%.
It is thicker than soybean milk and quite sweet. One Dutch friend called it ‘liquid marzipan’ after his first sip. With ups and downs, Lulu is still a serious player in this market.
Lulu’s turnover started to slip in 2017 and the company is trying to recoup market share by launching special protein beverages for children, like Xiao Lulu (‘Littel Lulu’).
Coconuts
Coconut milk will not be a new product for most readers. It is a traditional product of Southeast Asia, and that is the region from which it gradually conquered China. Those with 1.5-2% fat content have been very popular in China for many years, and the market continues to grow. The top producer of coconut milk in China is Yedao (literally: ‘coconut island’), located in the tropical island province Hainan.
Coconut milk is pressed from the flesh of unripe coconuts. Only some water and sugar are added.
Like Lulu’s almond milk, Yedao’s canned coconut milk quickly appeared in Chinese restaurants as the drink for drivers and other people who were unable to drink alcohol, but wanted something with a more stimulating taste than water or chemical laden soft drinks.
Walnuts
China is the world’s largest walnut producer, with an annual output around 4.5 mln mt. Walnut milk is made from walnuts and water. Walnuts are ascribed a number of medicinal properties, which are prominent in the marketing stories of the various manufacturers. Unlike the protein drinks introduced above, there is not ‘leading player’ in this market yet. Still, a National Quality Standard (GB/T 31325-2014) has been promulgated for walnut milk in on Dec. 5, 2014.
A top producer of walnut milk is Six Walnuts. It generated a net profit of RMB 7.459 billion in 2019.
An interesting development is that one Chinese coffee maker (Hogood) has launched a new type of coffee creamer made from walnut milk, marketed as Walnut 007.
Herbal tea maker Wanglaoji a walnut milk of its own in 2023; undoubtedly in an effort to cash in on the growing market of vegetable protein drinks.
The China Agricultural University and Terun Dairy (Xinjiang) have jointly developed a walnut-based yoghurt, with results published in 2024.
The number of walnut beverages rose quickly in the 2020s. The following pictures show all brands/types available early 2025. The information under the brand name indicates the energy per volume.
Multi-nuts
Qiaqia, a leading producer of seed and nuts based leisure food, has launched a protein beverage from walnuts, almonds, pine seeds and hazel nuts in 2022. It does not contain any sweetener, preservative or lactose.
Peanuts
Peanut milk, like the almond variety, is using the real thing as an ingredient. It is made from peanuts and milk, and even more than almond milk, peanut milk is more peanut-flavoured milk, like the ginger milk introduced in an earlier blog. It enriches the already nutritional milk with linoleic and arachidonic acid. And it covers the creamy taste of milk with a soft peanut flavour.
Yinlu in Xiamen (Fujian) is a major producer of peanut milk. The company is now under the control of Nestlé, which makes Nestlé the first foreign player in this market. Recently, Nestlé has announced that it is looking at updating its Yinlu peanut milk brand to satisfy consumers who prefer fewer additives and alternative ingredients.
Yinlu has launched two products with multiple raw materials in 2017: red beans + peanuts and Job’s tears + peanuts.
The growing popularity of protein beverage has attracted the attention of the recently revived beverage brand Beibingyang. The company has launched a peanut drink of its own trying to create synergy between its well known brand name (including the polar bear logo) and the current interest in protein beverages.
Hickory
The latest addition to this growing range of beverage is the hickory protein drink from Tiannie Hickory Food Co., Ltd. (Guangyuan, Sichuan). The product has been launched in 2014. The raw materials are grown locally.
This list shows that Heiheiru is not really a ‘sesame drink’, but a compound protein drink flavoured with black sesame. It partly owes its popularity to the colour black that is associated with a high anti-oxidant content.
Rice
Dashu Life Sciences (Jilin), in cooperation with Jiangnan University, has developed a new type of rice protein beverage under the Shangshanyuan (Sunshary) brand.
Oats
The oat drink Oatly has been introduced in China in the course of 2018 and is gaining popularity in coffee shops, e.g. Starbucks, as a vegetarian alternative for cow milk. Oatly’s introduction to China was aided by one of its Chinese investors: China Resources. Late 2019, Oatly had built up a presence in over 3400 outlets, including 2000 coffee shops and chains such as Pacific Coffee in China in first – and second-tier cities.
Yili Dairy (Huhhot, Inner Mongolia) has launched a range of oat milk drinks under the Zhixuan (‘vegetable choice’) brand in September 2020.
Hankou Factory Nr 2 (Wuhan) has launched a new drink combing oat milk and tea in 2020. In that way, the company was cashing in on two fads: protein beverages and milk tea.
At the end of September 2020, Shanghai-based oat milk start-up Oakidoki received funding of RMB 10 mln from Vision Plus Capital, two months after it was launched. Wang Xin, founder of Oakidoki, said the new funding will be used for marketing, research and development and recruitment. The firm has also collaborated with boutique coffee chain stores, creating more competition with international top plant-milk producers.
Compounds
Compound protein beverages have also appeared, like the walnut peanut milk produced by Taigeili in Chengdu (Sichuan). This company is known for innovative products like rose vinegar.
This market is getting so lucrative, that even an ingredient manufacturer like Jiangsu Howbetter (specialised in food texture and premix technology for dairy, beverage, bakery, and ice-cream) has launched a new plant-based beverage prototype made from peanut, walnut, almond, hazelnut, pine nut, cashew nut, pecan, Australian macadamia nuts, and Hawaiian macadamia nuts, which it showcased on the Food Ingredients China 2019 trade fair.
Not so natural
Although these drinks are all marketed as healthy beverages (not health beverages, that is another category in China), the ingredients listed on the label of Hengyi Yinxue walnut beverage includes an impressive number of additives:
This way of listing additives is presecribed by Chinese law. Interestingly, flavours are not regarded as additives in this regulation and therefore not listed within the brackets.
Decentralised market
In 2022, the market for protein beverages was still highly decentralized. A survey showed the following market share distribution.
Brand
share(%)
Yangyuan
5.44
Lulu
2.04
Dali
1.82
Weiwei
1.38
Huanlejia
0.64
Others
88.68
Foreign interest
The Reignwood Group, the Chinese distributer of Red Bull, has acquired a 25% stake in Vita Coco, a US producer of coconut juice, in July 2014. In China, through Vita Coco’s own feet on the street along with the approximately 2000 employees of Red Bull China, the brand will be available about 130,000 stores soon.
Minutemaid has launched its own range of protein beverage in China mid 2017.
The dairy empire strikes back
China’s top dairy companies have adopted an ‘if you can’t beat them’ strategy. Mengniu and Yili, the top 2, have launched their own protein beverages recently. Yili announced its plans during a public meeting at the end of 2014. Mengniu has entered into a joint venture with US-based WhiteWave Foods Company, a leading consumer packaged food and beverage company in North America and Europe early 2013. The jv is marketing WhiteWave’s Silk brand protein drinks in China. This product is common in the US and is an affiliate of Alpro, a brand in Europe, though its positioning in China is quite unique. With its convergence of flavours, Silk’s positioning as a 100% natural solution, targeting those that are lactose intolerant, could spell success for Silk in China, especially as consumers become ever more sceptical regarding the origin, nutrition, safety and environmental impact of the food and beverages they buy.
Few people know that China has already been the world’s largest potato production and consumption country since 1978.
The humble potato, a staple of many a European nation, used to have only a supporting role in Chinese cuisine, even though it has been grown in China for about 400 years. Known as tudou (literally: ‘earth bean’) in colloquial Chinese, or malingshu (‘horse bell tuber’) in more formal texts, the potato traces its history in China to the Ming dynasty, and was popularised by French missionaries in the eighteenth and nineteenth century.
As the name indicates, potatoes used to be seen as a vegetable in Chinese cooking. In home style cooking, in particular in Northwest China, where the potato is an indigenous crop, chunks of potato are added to stews, particularly with beef.
Chefs have created some deep fried delicacies, including tasty little patties and a finely shredded version of the French fry, which is sheer indulgence. Most common in the home and (home style food) restaurants, is the “tudousi“. This dish might come with strips of pork, slices chili, and pickled vegetables.
Some cooks are even combining the foreign potato with very traditional Chinese flavours like the famous yuxiang (fish flavour) spice mix, creating dishes like yuxiang potatoes, shown in the picture below.
The ultimate dish in this series should be: Sweet and Sour Potatoes, a potato variation on the most typical of Chinese dishes in overseas Chinese restaurants: Sweet and Sour Pork.
However, potatoes have started to challenge the great staples: millet, wheat and rice in China in recent years. The arrival of Western style restaurants and in particular fast food chains, have introduced potato dishes to virtually all urban Chinese. The countryside can be expected to follow soon.
Potato growing
Marketing year 2019/20 fresh potato production is forecast at 98 mln mt, a 5% increase from the estimated 93 mln mt produced in 2018/19. The top regions, Inner Mongolia, Gansu, Yunnan, Sichuan and Guizhou, are good for 45% of the national volume.
The following table shows the regional output of potatoes in 2015.
Region
Volume (mt)
Gansu
2,146,000
Inner Mongolia
1,883,000
Sichuan
1,612,000
Guizhou
1,503,000
Yunnan
1,444,000
Chongqing
1,017,000
Heilongjiang
565,000
Shaanxi
561,000
Ningxia
423,000
Hubei
415,000
Liaoning
383,000
Shanxi
362,000
Qinghai
362,000
Hebei
348,000
Hunan
285,000
Jilin
237,000
Fujian
231,000
Zhejiang
163,000
Guangdong
162,000
Anhui
49,000
Tibet
5,000
The Chinese authorities have officially divided China in three potato growing zones in 2019.
Zone 1
North China
Zone 2
Central China
Winter Zone
South China
Zone 2 is the designated zone for growing staple potatoes. However, Zone 1 is the oldest potato region of the nation. The China Daily site offers an interesting insight in the history.
Potatoes are getting so important in China that the Zhengzhou Commodity Exchange (ZCE), one of China’s two agricultural commodities exchanges, intends to introduce potato trade. ZCE is reporting problems with obtaining the necessary permits from the China Securities Regulatory Commission and other relevant central authorities, that are said to need time to “consider more about the development of the market”.
The ZCE has been mulling over the launch of the product for quite a long time. The exchange disclosed its plan to introduce potato futures trading in early 2012, saying the contract was set to be launched by the end of that year. Later that year, the agricultural authorities of Gansu province said all preparations for potato futures had been completed.
Potato growing as poverty relief
Guizhou and Gansu province are expanding the amount of land they have planted in potatoes in accordance with a Ministry of Agriculture plan which calls for around 6.7 mln hectares of them by 2020. One out of 100 towns or villages in under-developed Guizhou province is Lutang, which now has much of its land for potato growing. The head of the village, Zhang Wei, says they have 1.15 mln kgs of top quality potatoes that they plan to distribute to farmers for free to use on 200 hectares of land. Local authorities say that as many as 60 percent of the households in the area living with poverty see the potato planting as a good method to help them generate income and two special cooperatives have been set up to keep prices stable and to ensure income. The planting area is expected to reach just over 660 hectares by 2018.
China to import seed potatoes from the UK
A potato deal signed in 2018 is expected to bring major benefits to Scotland, with around 70% of the 100,000 mt of seed potatoes exported annually from the UK coming from Scottish farms. Seed potatoes are varieties intended for replanting to produce new plants and tubers. They are grown in special conditions to lower the risk of disease. Scotland’s potato crop is recognized within the European Union for its high health status. The potato is now China’s fourth staple crop after rice, corn and wheat and demand for fresh potatoes is increasing at an annual rate of around 5%. “The rapidly-growing Chinese market offers huge potential for UK farmers,” said UK International Trade Secretary Liam Fox. “According to research by Barclays, around 60% of people in China would actually pay more for a product, just because they knew it was British.”
Help from Peru
Since 1978, the Peru-based International Potato Center (CIP) has been working in China to help improve potato and sweet potato production, collaborating closely with Chinese institutions such as the Ministry of Agriculture and Rural Affairs and the Chinese Academy of Agricultural Sciences. Among CIP’s most notable achievements in China is the development of the potato varieties, such as “Cooperation 88” and “Jizhangshu”, which currently cover about 20% of all potato production in the country. CIP is also playing a pivotal role as a facilitator of innovation by connecting Chinese potato companies with international scientists and providing access to cutting-edge technologies.
Frozen French fries
The number of French fries outlets in China late 2024 exceed 2000; up 45.1% from 2023. Combined, the generated a turnover of RMB 200 billion.
In recent years, China’s rapidly changing lifestyles and eating habits have resulted in a booming fast-food industry. Chinese consumers, especially those who live in large urban areas, have accepted Western-style fast-food restaurants that serve French fries and other popular side dishes as a way of life in China.
China’s market year 2019/20 frozen French fries (FFF) production is forecast at 310,000 mt, a 10% increase from 2018/19 as a result of this year’s increased fresh potato production (see above). China imports the majority of its FFF from the United States. However, due to the additional tariffs China has levied on many U.S. agricultural products, the U.S. FFF market share fell from 64% to 53% from 2016/17 to 2018/19. As a result, forecasts China’s overall MY2019/20 FFF imports will decrease by 10%, to 129,000 MT. The next largest suppliers, Belgium, Turkey, and the Netherlands, together accounted for 40% of China’s FFF imports in MY2018/19.
Frozen French fries require raw materials compliant with strict requirements, such as shape, starch content, sugar content, and color. Therefore, processors usually contract with farmers to produce potatoes which meet certain quality conditions. After a poultry disease outbreak and other problems in that industry, which affected Kentucky Fried Chicken and McDonald’s, the largest buyers, production of frozen french fries has decreased considerably. Although the scare seems to be over, production is not expected to rise considerably soon.
Foreign investors
Still, a market like this is bound to attract international investors.
JR Simplot established in 1992 in Beijing’s Fengtai district, is a joint venture between US-based JR Simplot , McDonald’s and Beijing Agricultural, Industrial and Commerce General Company and primarily produces french fries and hash browns for McDonald’s and other East Asian customers. It was fined a record RMB 3.9 million for water pollution in April 2015.
McCain Foods started construction of a French fry processing facility in Harbin (Heilongjiang) in 2004. The new company, which was registered in the Harbin Economic and Technological Development Zone, was McCain’s first processing facility in Asia. The plant has had to cope with various problems like faulting water supply.
Aviko has a production facility in Minle (Gansu) since 2008, and in June 2014 signed another project in Zhangjiakou (Hebei), near Beijing. The latter is a partnership with Snow Valley Agriculture. The joint venture was dissolved in December 2018. Aviko acquired a 90% stake in Hongyuan Louis (Inner Mongolia) in Jan. 2020. The deal includes a factory with an annual capacity of 50.000 mt, potato storage, a semi-automatic cold store, boiler house, waste-water treatment and around 170 employees. Hongyuan Agriculture will stay involved as a 10% shareholder and closely cooperate with Aviko on amongst others the sourcing of potato. Hongyuan started exported frozen French fries in 2020.
Conagra has acquired TaiMei Potato Industry Limited, a potato processor in Shangdu (Inner Mongolia) in July 2014.
Farm Frites has signed an agreement with Inner Mongolia Linkage Potato Co. Ltd. in September 2014, to set up a joint venture in Chifeng (Inner Mongolia). The Joint venture will build a new french fry factory and target the premium segment of the Chinese french fry market. Inner Mongolia Linkage Farm Frites Co. will be for 75% owned by Linkage, while Farm Frites will own 25%. Production was to start in 2017, but the construction of the plant has been delayed and the project seems to have halted completely in 2019. However, Linkage has picked it up again by its own and the new plant started test production in August 2022.
The above list clearly indicates that while all international players are interested in developing the Chinese market, it has so far not been a smooth ride for any of them.
On the artisan side of the market, a Dutch initiative, Royal Patat, has started selling hand-cut french fries in Shanghai.
Top 3 brands
Instead of looking at volumes, this blog prefers to introduce ‘top brands’ from a popularity perspective. Here are the top 3 french fries chain outlets according to a Chinese consumer site.
1 Calbee Crazy Potato
2 Tudou Xinyuan (Potato Wish)
3 Mofa Tudou (Magic Potato)
Potato starch
China’s market year 2019/20 potato starch production is forecast at 450,000 mt, roughly 10% decrease from 500,000 mt in 2018/19, due to increased consumption in other sectors, leaving fewer fresh potatoes available for starch production. According to industry sources, starch production consumes small, irregularly shaped, or bad quality potatoes. The good weather conditions not only increased yield, but also generated good quality, which reduced potatoes available for potato starch production. Heilongjiang, Ningxia, Gansu, and Inner Mongolia are the primary potato starch producing provinces in China, accounting for over 70 percent of China’s total production.
Top Chinese producers of potato starch are:
Company
Location
Huaou Starch
Inner Mongolia
Lantian Potato
Gansu
Beidahuang Potato
Heilongjiang
Yundian Starch
Yunnan
Weston Potato
Qinghai
Potato starch can be used to make noodles, be it in combination with starches from other sources. Shanghai Suiquan Food Co., Ltd. produces ‘Potato Noodles’ with the following ingredients.
Industry sources estimate China’s market year 2017/18 sliced potato chip and fabricated potato chip production at 450,000 mt and 350,000 mt, a 7% and 13% year on year increase, respectively. The total turnover of this product group was RMB 29 bln in 2017.
Potato chips have become a popular snack food in China. Most international players are studying their options, and some of them, like Pepsi (Lay’s), have started local production. However, not any potato will do. Each must be precisely the right variety, grown into an ideal shape and size and available on the exact schedule necessary to supply the chip factories in Beijing and Shanghai. Potatoes grown by local farmers don’t always make the cut. Unless they are handled as delicately as eggs, they risk bruising — a common side-effect of China’s manual farming techniques and crude distribution methods. To ensure the yellowish color of its Lay’s chips, Pepsi also requires potatoes to
be low in both sugar and water content. The ideal specimen is about as large and round as a baseball. Even now, Pepsi’s two farms still produce only about 40% of the potatoes Pepsi needs in China.
Other major potato chip brands (manufacturers) in China are: Calbee (Calbee), Lay’s (Pepsi), Oishi (Liwayway) , Shanghai House (House), Carrefour (Jishijia). P&G has negotiated with a potential partner in China for the local production of Pringles.
Local production of crisps by multinationals is a great boost for the local potato growing industry. Lay’s is using potatoes grown in former desert areas in Inner Mongolia.
Top 3 brands
Here are the top 3 potato chips brands according to another Chinese consumer site.
1 Lay’s
2 Capico
3 Pringles
Capico is the only domestic brand in this list. Its producer, Dali Foods (Fujian) got listed on the Hong Kong Stock Exchange in November 2015. Dali is also one of China’s top producers of biscuits.
The following screenshot shows how the major brands seem to imitate Pringles’ packaging, while offering their chips for a significantly lower price.
The latest launch in this product group was from the Hengyou Group (Shantou, Guangdong). This company produces a range of potato crisps under the Bidetu “Peter Rabbit” brand.
The following table shows the top 5 selling potato crisp brands in China in 2019
Rank
Brand Name
Company
Market Share(%)
1
Lay’s
Pepsi Group
37
2
Shuyuan
Haoliyou Foods
27
3
Copico
Dali Foods
19
4
Oishi
Oishi
10
5
Pringles
Kellogg’s
1
Lay’s tried to market with its commitment to the Chinese market by launching a range of crisps flavoured after various local cuisines in 2024.
Mashed potato
The Chinese drive for developing novel foods is limitless. Baiguyou (Wuhan) has developed a range of instant mashed potato products under the Painini brand. It is packed in cups that can be filled with boiling water like cups of instant noodles. The product is available in several flavours, including: beef, walnut, curry, chicken, pumpkin, etc.
Potato-based instant noodles
Chinese researchers are developing a recipe and production process for instant noodles in which part of the wheat flour is replaced by potato flakes. This fits the efforts of the Chinese government to make the potato one of the country’s staple foods (see below) and will enhance the nutritional contents of instant noodles, possibly breaking the ‘junk food image’ of instant noodles. The following ingredients list appears in one of their publications.
Ingredients
ration (%)
Wheat flour
65
Potato flakes
35
Salt
2
Water
as needed
Gluten
5
Complex phosphates
0.3
Sodium alginate
0.3
Soda
0.15
No such product has yet appeared on the market, but it is interesting to learn about these efforts. Other research institutes in China are working on producing regular noodles and bread replacing part of the wheat flour by whole potato powder.
Exports
The first Chinese potato chips were exported to the US in the course of 2015. However, it was not Capico, but Chak Chak, produced in Fuxin (Liaoning). Chakchak chips stand out by their bright colours, produced using natural anthocyanin. It is interesting to observe that an innovative product like Chak Chak can beat a generic version of the product (Capico) in getting accepted on the global market.
Potato as staple?
A discussion has started in China to improve the status of the potato as staple food. Vice-Minister of Agriculture Xu Xinrong posted a remarkable statement on the ministry’s website on January 9, 2015, entitled ‘strategies for turning potatoes into a staple’. In this concept, potatoes will gradually become China’s fourth largest staple food, after rice, wheat and maize. Xu Shaoshi, minister of the National Development and Reform Commission (an organization under the State Council), picked this up and added that potatoes will be mixed into bread, steamed buns and noodles to suit Chinese consumers’ taste and habits. the Ministry of Agriculture is planning for 50% of China’s annual production of potatoes to be consumed as a staple food on the domestic market by 2020.
As an emerging staple food in China, potatoes have to compete with bread, as introduced into our post on the position of bread in China elsewhere in this blog.
The Institute of Agro-Produce Processing Science & Technology of the China Academy of Agricultural Sciences is developing new applications of potatoes as staple food. One of the products in the pipeline is flour consisting of 35% whole potato powder and 65% wheat flour. Using machines also developed by the Institute, a range of pastas can be produced. In cooperation with Haileda Food (Beijing) it has developed a type mantou that consists for 30% of potato. The product was launched on June 1, 2015. The potato buns are yellower and harder than traditional versions. But they are more nutritious, containing extra vitamins and dietary fiber and less fat. The researchers have announced that they next step in this R&D project is to increase the potato content to 40% and further to 50%. Other potato products will also be developed, like: noodles, or bread.
World Potato Congress in China
The 9th World Potato Congress (WPC) has been held in Yanqing county in northwest Beijing from July 28 to 30. More than 3000 representatives from over 30 countries around the world gathered in the capital for the top event by the global potato industry. More than 50 domestic and foreign well-known experts presented academic reports about the industry. Latest products and technologies were displayed during the event. There was an experience area showcasing potato food such as potato chips and potato mud to visitors. China Potato Expo, China Potato Congress and an international symposium on potato products and industrial development ran parallel to the WPC.
Yanqing county in the northern suburb of Beijing is an ideal area to grow high-quality potatoes. The climate is perfect and the soil should produce bumper yields of the vegetable. Already the county has cultivated more than 10 varieties of potatoes at the seed stage. It is also the home of the newly established China branch of the International Potato Centre, a global scientific research organization that seeks to reduce poverty and achieve food security on a sustained basis in developing countries. The centre will be China’s first international agricultural research institution and will serve the rest of the Asia-Pacific region.
The Chinese Academy of Agricultural Sciences and the Beijing Xisen Sanhe Potato Co, one of the country’s largest seed merchants, have also set up shop in Yanqing, where they have been working on new strains of potatoes. The research and development at their facilities, and the new International Potato Centre should help increase production not only in the area but in the rest of the country. Plans are also underway to open a high-tech scientific park for potato research in Yanqing. The project will be a joint venture with neighboring Zhangjiakou in Hebei province.
Beijing Hengde Jiahui Equity Investment Co。 is looking to fund agricultural and food firms focusing on the potato industry, and has set up a center in Yanqing county.
Dutch potatoes in Inner Mongolia
HZPCof the Netherlands has signed an agreement with Geruide Potato Co., Ltd. (Inner Mongolia) to establish a potato growing base in Taipusi (Inner Mongolia). The joint venture was announced to start on January 1, 2016, and was projected to produce 50,000 mt of potatoes p.a. Although not officially announced, I assume that HZPC’s thinking is based on the expectation that it will become the main supplier of the above mentioned foreign potato processing plants in the region. However, so far (last check April, 2018) the project does not seem to have started yet.
Potato songs
Feng Xiaoyan, 52, a potato farmer-turned-entrepreneur, has even commissioned multiple potato-themed songs to help promote the consumption of potatoes. On a recent day, Ms. Feng appeared on a local television station to sing a warbling tune expanding on the tuber’s delights. “Fry up a plate of slivered potato, eat a slice of potato flatbread! Potatoes are our fortunate eggs, potatoes are our fortunate eggs.”
Potato research institute
Yunnan Normal University intends to set up a Potato Research Institute. The univeristy stated that the establishment of the Potato Research Institute is in line with the national development strategies of positioning the potato as a staple food, and is also in accordance with Yunnan’s development plan for a green economy, food safety, and plateau agriculture. It has set up a virus-free potato seed repository, with more than 1,200 germ plasma cultivated in China and abroad. It’s one of the largest in China in terms of potato genetic diversity.
Drinking potatoes
Mengjian Biotech (Inner Mongolia) has developed a health drink made from potatoes. The beverage has a high content of Superoxide Dismutase (SOD). It is not clear when the drink will be available for consumers.
Western style baked bread is not a staple of the traditional Chinese diet, but it has been quickly catching up among China’s urban middle class during the past 20 years, in which China’s baking sector has grown by 10% annually, and bread has been the main driver product. Bread was good voor 44% of the total value of the Chinese baking industry in 2018. The value of the Chinese bread market is expected to reach RMB 266.3 billion in 2020.
According to a staff member of the bakery chain BreadTalk, 80% of their clientele were foreigners, when she started working there in 2005. This has changed completely, and now Chinese are the main customers.
A product for the young and the affluent
When you take the time to observe the activities at any bread store in a Chinese city, you can observe that at least three quarters of the regular domestic patrons are (young) professionals, white collar workers. Older people still regard bread as something that is foreign. They do not dislike it, but it is something you consume occasionally, as a snack.
Moreover, bread is still regarded as relatively expensive. Teenagers and students like to ‘hang out’ in and around bread and cake shops, because they like to cozy ambience that all chains like to create. However, they only occasionally actually buy Western style bread or pastry, because it is too expensive.
Chinese like it soft
When bread first started to come up in the mid 1980s, the preferred type was the soft, white bun, with a relatively sweet flavour. It had to be extremely soft. As one European bakery technician with whom I used to travel through China put it like this:
‘Chinese bread should be made of such a texture, that you can put it in an ordinary envelope, put a stamp on it and send it to your friend. When your friend opens the envelope, the bread should restore to its original shape’
This has started to change recently. Chinese consumers are gradually learning to appreciate more salty types of bread, bread with harder crusts, and whole grain bread.
Bread is also gaining ground in the breakfasts of more and more urban Chinese, replacing porridge, fried dough sticks (youtiao) and steamed bread (mantou).
The sandwich is starting to replace the bowl of (instant) noodles a Chinese office worker typically eats for lunch. The advantage of bread over these traditional breakfast and lunch items is time: you can buy a week’s supply of bread, while traditional breakfast and lunch need to freshly prepared.
Facts & figures
The Chinese consumed 2 mln mt of bread in 2016. That is a lot, but the per capita consumption of bread is approximately 2 kg p.a. (in the urban regions about 3.2 kg), compared to 10 kg in Japan and 9 kg in Taiwan. Insiders expect that the Chinese bread consumption will gradually rise to the level of Taiwan, which means that the growth potential is enormous.
According to the above estimates, the current Chinese bread consumption already exceeds 1 million mt p.a. This would grow to 9 million mt p.a., if the population would remain the same. If we apply the Chinese estimate for the population by 2020, the Chinese bread consumption would rise to 12.5 million mt p.a. The estimated development is reflected in the following table.
Market structure
Bread is a localised business in China. There are very few regional suppliers, let alone producers that sell on a nationwide scale. It is also still a very Chinese business. Multinationals are present, but do not dominate. The largest bakery company in the world by far, Grupo Bimbo, has a very small presence in the market with just one plant.
One of the few companies with such a status is Mankattan Food Co., Ltd. Mankattan has been established by the Belgian Artal Group in 1995. Mankattan has achieved a large market share through direct distribution of bread products to retail, food service and school locations. The main company is located in Shanghai, with subsidiaries in Beijing and Guangdong, giving it production centres in China’s most densely populated regions.
Another successful example is Taoli (Toly) Bread (Shenyang, Liaoning). However, Taoli also produces traditional Chinese bakery items like mooncakes and zongzi. Still, the fact that the word ‘bread’ is part of the company indicates that it is its leading product. Taoli was listed on the Shanghai Stock Exchange in December 2015. Taoli generated a turnover of RMB 2.939 billion in the first half of 2021; up 7.32%.
Worth keeping on your radar is also Ranli Food (Zhangzhou, Fujian). This producer of biscuits and pastry launched a pumpin bread in 2019. Its pumpkin content is at least 16%, creating a unique flavour and (natural) colour and considerably increasing the fibre content.
Another healthy bread newly launched in 2019 is ‘sugar-free low calorie low fat’ whole grain bread by Shanghai-based Laidalin. A blogger claims that ‘it is so light, that if feels like eating air bubbles’. I personally prefer a firmer type of bread for my early morning cheese sadwhich, but as introduced above: Chinese like it soft.
Several domestic and foreign bakery chains are gaining ground on large Chinese bakery companies like Christine and Holiland. The South Korean chain Paris Baguette now has 37 stores in China, the Taiwanese chain 85°C Bakery Cafe has about 145, the Singaporian venture BreadTalk 170, and the South Korean chain Tous les Jours 140. Starbucks Coffee is also developing in this direction in China. A good sign of the growth potential of this sector is that BreadTalk’s net profit increased 91% in 2017 to RMB 21.85 mln.
Some experienced players from Hong Kong have also expanded to the Mainland, like: Queen’s Cake Shops, Maxim’s and Aji Ichiban, which may sound Japanese, but has Chinese founders.
A common feature of all chains in this category is that they tend to be located in office buildings and high end shopping centres, close to their largest market segment.
Case study: Euro Bakery, an ambitious Dutch investor
Euro bakery, a 130 staff bakery in the Beijing region founded by Dutch investor Henny Fakkel, recently received a loan from the Netherlands Finance Development Company (FMO). The bakery is now expanding its business with a long-term EUR 2 mln loan from FMO.
Euro bakery specialises in traditional as well as new-style bread and cake variations, from European-style big loaf bread, rolls, whole wheat sourdough breads to pastry varieties, muffins and cookies, Danish pastry and also cheese savoury cookies. The bakery did well over the past years to tap into the growing popularity of bread products in China’s capital. The bakery factory of 135 staff caters for cafes like Costa coffee, Pacific coffee, and for companies like IKEA, International schools, Compass Group, Sodexo, airport catering, Pizza Express, embassies, hotels, restaurants and wholesalers.
Euro bakery has come a long way since Henny Fakkel and Grace Wang started the business in 2006. The bakery has managed to extend its large-client base to 60, and with a staff of 135, the bakery produces seven days week and distributes its products all over China via 450 delivery points.
Euro bakery wants to expand to 4000 m2 and build its own bakery education institute to train itd staff and disadvantaged young people to give them the chance to follow a baking course.
Frozen technologies
Insiders believe that the penetration of frozen technologies in baked goods will increase in the future. In China, where labour is abundant and cheap, it may be counterintuitive to see penetration of a high-end technology for production of baked goods growing. However, increasing complexity and diversity of products in industrial bakeries is driving the requirement for frozen solutions. It is already deployed in 20% of western style baked goods in the country.
In the artisanal sector, which is about 56% of the Chinese bakery industry by value, the penetration of frozen technologies is very low. The highest penetration of frozen technologies is in branded/packaged baked goods. This trend is changing and we are seeing many local and medium-sized bakery companies also interested in frozen technologies. Ingredient manufacturers should be wary not to miss these opportunities for specialist ingredients for frozen bakery products.
Key target for food ingredients
Bread is pointed out by Northern Sunlight, China’s largest distributor of food ingredients, as one of the most interesting growth markets.
This is corroborated by a the Director of the China Food Additives Association (CFAA), who claims that he regards Bakery China as the most prominent competitor of CFAA’s Food Ingredients China (FIC). Bakery China is organized annually in May, covering 9 halls of the Shanghai New International Exhibition Centre. Apart from baking products, it also covers ice-cream and pasta and all ingredients for the entire product range.
Virtually all Chinese bakers are using bread improvers, compound ready-to-use ingredients, comprising enzymes, emulsifiers and a various other additives. I have already introduced the structure of the market for flour and baking ingredients in a previous blog. You can see more details there.
Here is the ingredients list of Mankattan Coarse Grain Toast Bread:
The way the ‘additive’ is broken down in individual ingredients is prescribed by law. Although not stated verbatim, it indicates that the producer does not purchase those ingredients separately, but buys a ready-to-use bread improver.
Other ingredients include various shapes and textures of fruits (e.g. dates), vegetables, nuts and meat, cheese powder, yeasts, nutrients for fortification, flavours, special oils or fats, fresh butter, cream, shortening, starch and modified starch, chocolate in various presentations, dairy based ingredients, and much more.
Clean bread
Concepts like Clean Label have also reached China and started to get serious around 2022. However, the Chinese interpretation of ‘clean’ seems to be broader or lest strict than the Western. Here is an example of a clean bread from Eurasia Consult’s database that is advertised as ‘zero additives’ site in China.
Offering high earnings with little investment, bakeries selling bread (round buns, not an entire loaf) for just RMB 2 have shot up across China in 2023. Beginning September of that year, several social media posts showcased individuals who claimed to have quit their jobs to open a bakery, earning substantial incomes with low investment. For example, a young mother and a woman in her 20s claim monthly earnings of RMB 130,000 yuan – 180,000, respectively, after opening bakeries. Such outlets are often strategically placed in communities close to schools or markets in cities where rental costs are more manageable. Read more about that here.
2017 was the year of baijiu brands. For the first time, the fiery Chinese drink now accounts for a greater share of brand value than any other spirit type. In 2016, baijiu accounted for 23% of the total brand value of the Brand Finance Drinks 50 behind Whiskey on 37%. However this year, the tables have turned. Whiskey’s share has dropped to 28% while baijiu has surged to 37.5%.
China has produced 119.81 mln hls of spirits in 2017; up 6.9%.
Top 10 distillers of the 3rd quarter of 2017
Brand
Turnover (RMB bln)
Growth (%)
Maotai
42.45
59.40
Wuliangye
21.97
24.17
Yanghe
16.88
15.08
Shunxin
8.85
0.79
Luzhou Laojiao
7.28
23.03
Fenjiu
4.86
42.80
Kouzijiu
2.72
16.29
Jinshiyuan
2.39
16.14
Yingjia Gongjiu
2.18
2.11
Laobaigan
1.73
4.44
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Being lured into drinking numerous shots of local spirits during a Chinese banquet is a recurrent theme in the tall stories foreigners take home from their China trips. While Chinese are often imagined in Western literature as a tea drinking nation, alcoholic beverages have been the typical drinks to wash down your dinner in China, and especially business meals are not complete without at least one bottle of distilled liquor.
There is an endless variety of local spirits and the local brew is often used in the self promotion of regional governments. The World of Chinese has compiled a useful overview. However, they share a common denominator: baijiu, which literally means: ‘white wine’. However, that translation is never used, as it will put most Westerners on the wrong foot, mistaking it for fermented white grape wine. In 1989, China National Food Industry Association (CNFIA) selected the top 17 famous Chinese Baijiu.
Chinese make them strong. Most spirits have an alcohol content exceeding 50%, and even the more recently developed ‘low degree baijiu’ is usually stronger that whiskey or brandy. A sip of baijiu is a completely different experience than savouring a glass of Chardonnay.
This video provides a look in a baijiu production plant. It is in Chinese, but those familiar with the distilling industry will understand most of it.
China has produced 135.836 mln hls of spirits in 2016; up 3.23%. The following table lists the regional breakdown of the spirits production in China in 2014, and the in- or decrease compared to 2013.
Region
Volume(10,000L)
Growth(%)
China
1,257,131.81
2.75
Sichuan
349,970.50
5.57
Shandong
118,142.91
-9.99
Henan
107,746.24
1.76
Jiangsu
89,851.47
-4.05
Hubei
84,935.45
17.13
Inner Mongolia
61,670.55
-1.68
Jilin
59,415.13
7.17
Heilongjiang
57,032.90
15.38
Liaoning
50,445.49
-15.33
Anhui
43,598.58
4.66
Guizhou
38,045.20
11.00
Beijing
29,496.59
5.34
Hebei
29,367.45
5.60
Hunan
21,710.21
5.74
Chongqing
19,798.72
14.20
Guangdong
17,131.64
14.53
Jiangxi
16,381.00
13.81
Shaanxi
11,919.09
11.58
Guangxi
9,939.96
5.84
Shanxi
9,359.71
-10.11
Yunnan
8,632.72
5.26
Xinjiang
6,331.25
-2.10
Gansu
4,442.03
-1.65
Fujian
4,439.83
7.60
Tianjin
2,301.27
-9.40
Qinghai
1,944.23
-7.98
Zhejiang
1,859.33
-10.02
Ningxia
874.47
-25.31
Hainan
199.90
72.48
Shanghai
75.00
-88.11
Tibet
73.00
-10.10
The order of the regions has hardly changed in 2014. Sichuan has been the absolute top region for many years. The (much) higher than average increase of some southern provinces is conspicuous in the current statistics. Traditionally, the people in the north are the heavy drinkers.
The following picture shows how well Chinese spirits companies are appreciated among international investors. The stocks marked in red are baijiu producers.
Age and education matters
A survey into the development of the popularity of baijiu among different market segments conducted in China during the first half of 2017 reveals that spirits are getting slightly more popular in the youngest drinking age segment and then significantly more among people of 40 and up. However, this trend is considerably stronger for the low end spirits than for the high end varieties. The older consumers drink more spirits, but prefer the cheaper brands, while the beginning drinkers like to start with the high end products. This can be partly explained as a cultural phenomenon. Starting baijiu drinkers like brag about it and then the effect will be best if you can brag about your first sip of Wuliangye, rather something from a local still.
Similar curves can be observed for the various levels of education. The letters refer to the highest diploma of the respondents; legend: P = primary school, H = high school; M = intermediate vocational; V = higher vocational; U = university. It is not easy to explain why people with a higher education would drink more baijiu, while you would expect them to be more interested in wine. However, when they drink it, they prefer the high end brands.
Distillers started to gear their advertising more towards the younger consumers in the course of 2020. This is reflected in new ad designs that appeared that year, like this one by Shede.
Long tradition
The Chinese production of alcoholic beverages has a long history. The most ancient, chemically-attested, alcoholic beverage in the world was recovered from a Neolithic tomb site in Jiahu (Henan), dating back to 7000 BC. This discovery dates to almost 2000 years earlier than the hitherto discovered most ancient wine production in the Middle East. A mixed fermented beverage of rice, hawthorn fruit/grape and honey was reconstructed on the basis of the analyses of the pottery recovered from the Jiahu site by Delaware-based brewing company Dogfish Head Craft Brewery with the help of the University of Pennnsylvania. The brew is marketed under the Chateau Jiahu brand. The ancient Chinese made a unique contribution to alcoholic beverage-making by using specific grains, especially rice and millet, whose carbohydrates were broken down into simple and fermentable sugars by mold saccharification or amylolysis.
The Moutai story
Ever since US President Nixon tasted Moutai at a state banquet in China, what was already recognised as the nation’s national spirit then became known worldwide instantly. Interestingly, this brand has been developed with the aid of the State, witness the following timeline.
1951-1952: The Chinese government purchased Chengyi, the biggest local distillery, and merged it with another two distilleries, Ronghe and Hengxing, establishing the State-owned Moutai Distillery.
1952: Kweichow Moutai was rated as a nationally famous liquor, and top ranked among eight national liquors.
1957: China invested 1.3 million yuan ($197,511) in expanding liquor and yeast production, liquor storage, and laboratories. Moutai formalized 14 operating rules and procedures for producing Moutai, fully restoring traditional techniques.
1962: The Office of Light Industry of Guizhou province designated the annual output of Moutai as 500 metric tons, with 610 employees.
1972: During the National Workplanning Conference, Zhou Enlai instructed that in order to maintain water quality for Moutai production, no more mines or factories, especially chemical factories, should be built along the upper reaches of the Chishui River. Also the year of Pres. Nixon’s seminal visit to China.
1979: Moutai won the National Liquor title for the third time and the National Golden Award for Quality for the first time.
1980: The packaging of Moutai liquor was transformed into a semi-mechanical, continuous production system, effectively improving its quality and increasing efficiency.
1983: The security committee of the Office of Light Industry proclaimed that the techniques of Moutai production had been officially listed in the first batch of confidential projects in light industrial science and technology. The production process was opened for visits but could not be photographed.
1989: Manual stomping to make distiller’s yeast was fully restored. Moutai Distillery revised the national standard for first-class sauce aroma liquor distilleries. Kweichow Moutai won the Golden Award at the Fifth National Liquor Tasting Conference for the fifth consecutive time. Despite the overall decline of sales of white spirit in China, sales of Moutai surpassed the goal set by the nation and exceeded 100 million yuan ($15 million).
1991: The Kweichow Moutai brand from Guizhou gained top ranking in the first China Famous Trade Marks appraisal.
1996: Guizhou provincial government gave approval for Moutai Distillery to restructure into an exclusively State-owned enterprise, and to be renamed as China Kweichow Moutai Co Ltd. The series of 500 milliliter bottles of Kweichow Moutai (including Feitian and Wuxing) formally started to use customized caps provided by Italy’s GOALA, with anti-counterfeiting marks, anti-refilling and safe-to-use functions.
2001: Kweichow Moutai launched Vintage Moutai, marking its production date at a conspicuous place next to the Moutai brand. Kweichow Moutai was successfully listed at the Shanghai Stock Exchange, raising RMB 2 billion.
2006: The Moutai liquor-making technique was selected on a list of the first batch of National Intangible Cultural Heritage.
2010: Annual sales revenue of Moutai Group exceeded RMB 15 billion. The company expanded its production capacity by more than 35%. The total market value of Kweichow Moutai Group Co Ltd reached RMB 173.5 billion, the highest of all listed white spirit companies.
2013: Heritage sites of the Moutai liquor-making industry were placed seventh on the list of key national-level cultural relics under protection. The Kweichow Moutai brand was valued at 82.4 billion yuan, topping the Chinese food and beverage industry list.
2015: Moutai initiates an annual Moutai Day in San Francisco.
2016: Moutai is officially launched in Germany.
2017: Moutai pops up as the world’s leading spirits brand on Brand Finance’s list.
2017, Sept. 9: Moutai University, China’s first university named after a liquor company opens its doors for the first cohort of 600 students. The university has five undergraduate majors: liquor-making, grape wine-making, food quality and safety, resource recycling sciences and engineering, and marketing.
To meet rising demand from home and abroad, Moutai Group will launch a new project that will produce 66 mln hls of liquor in 2018. The company expects to reach a turnover in 2022 of RMB 127.2 billion.
In the first 10 months of 2017, Moutai exported 16.23 mln hls of alcoholic beverages and earned $281 mln. The group’s sales revenue is estimated to have exceeded RMB 60 bln in 2017, with profits of RMB 30 bln. By 2020, the amount of Moutai liquor sold overseas will account for at least 10% of the company’s total production, according to the group’s strategy.
Moutai has made strong inroads in France, with efforts to acquaint drinkers with the unique taste of baijiu. Lin Xuyang, vice-president of Cammy France Development, the sole distributor of Moutai in France, said the company sold around 60,000 bottles of the spirit in 2017, an increase of 30% year-on-year.
Flavours
Baijiu comes is distinct flavour types:
Rice aroma (mixiangxing): The basic baijiu. Expect a floral, mild flavor, almost like rice (hence the name), and an exceptional smoothness from triple distillation.
Light aroma (qingxiangxing): A popular style in Northern China, this baijiu is made from a rice and sorghum blend that displays some of the restrained aromas of sake. The feature that distinguishes light aroma baijiu from it’s more pungent cousins is the ceramic jars in which it’s fermented, which keep the spirit’s aroma fairly neutral. Also, the mash often include peas, as is the case with the famous Fenjiu, imparting a sweet, floral taste. Light aroma baijius are typically the least expensive to produce.
Strong aroma (nongxiangxing): The most ubiquitous and widely consumed style of baijiu. It is spicy, fruity, and packs a serious aftertaste that pairs well with cuisine in the Sichuan region where it is produced. Strong aroma baijiu is fermented in earth pits with recycled mash, which help to develop the spirit’s flavor over the years.
Sauce aroma (jiangxiangxing): From Guizhou province (the home of Moutai), this baijiu style is full-bodied with a sharp taste (akin to soy sauce, hence the name) and is the most labor-intensive to produce. The spirit passes through up to eight rounds of subterranean fermentation and distillation and at least three years of aging, which is why it’s more expensive.
Like Western distillers, all major producers have their own confidential process, mixing cereals with herbs, spices, berries, beans and even Chinese medicinal herbs. However, sorghum is the bulk ingredient for most types of baijiu.
An interesting novel use of this traditional distinction of flavours is implemented by Hexiaoshuang, a young brand of baijiu from Inner Mongolia. It presents its spirits in two bottles, a lighter flavour in a white bottle for consumption during day time and a more fragrant version in a black bottle for your night cap.
Modern production
All manufacturers and certainly the cheaper brands, have modernised their production processes, regulating the flavour of their end products using additives. These can include small amounts of sweeteners like sodium saccharine, sodium cyclamate or acesulfame-K. Commonly used aroma chemicals are: ethyl acetate, ethyl butyrate, ethyl lactate and ethyl formate. Ethyl acetate is the substance most influential to the prominence of the typical baijiu flavour.
A number of Chinese flavour companies have developed ready to use mixes of aroma chemicals for baijiu. Some of these are even supplying mixes to imitate the typical flavour of famous brands, like a flavour company in Guangzhou that is advertising for ‘Maotai flavour’. Moutai has so far not undertaken legal actions against such suppliers. Perhaps their confidence in their own product is strong enough.
New raw materials are also being explored. A distiller in Sichuan is currently experimenting with sugar cane. A distiller in Beijing has launched a baijiu made from quinoa in 2018.
Fluctuating market
In spite of the fact that the list of top food brands still includes several types of spirits, the production has shown considerable fluctuation during past decades. With the increase of spending power of the average Chinese consumer, the consumption of alternatives, first beer, later followed by wine, grew rapidly to the expense of spirits. This trend was reinforced by the central government that wanted Chinese to consume less baijiu, for health reasons and to save cereals.
The market has been rising again in recent years, and the output of 2013 was 123 mln hls, up 11% compared to 2012. However, this trend is not likely to be continued in 2014, as baijiu, in particular the top brands, is suffering most from the new government’s cut down on public spending. Famous spirits used to be an indispensable ingredient of an official banquet. Government organizations, but also enterprises, are now wary of feasting on Moutai or Wuliangye and are choosing less expensive brands.
Consumers aged between 35 and 45, especially those in the middle-class bracket, are crucial to the baijiu market, according to a recent market survey. They start to discover high-end baijiu between the ages of 25 to 35. Then from 35 to 45, they gradually form a “brand loyalty”.
New strategies
As a result, the China’s top distillers need to reconsider their strategy in two respects: the domestic repositioning of their brands and exploiting the international market. The growing Chinese communities all over the world form an interesting market, but the real challenge will be to lure Western drinkers to switch from their familiar whiskey or vodka to baijiu.
The buzz word of the China Foods & Drinks Fair (Tangjiuhui) of October 2014 was: ‘spirits for the masses (dazhongjiu)’. Several of the top producers were pushing cheaper brands. Moutai is now also offering a Small Moutai, Wuliangye has teamed up with Xijiang (also Sichuan) as a mid level priced baijiu. The latter option is a win-win strategy for both brands. Xijiang can link its brand to its famous brother Wuliangye, while Xijiang is promoting Wuliangye whenever it is advertising for itself.
An Beijing-based initiative to promote baijiu is World Baijiu Day. It is actually a weeklong series of events that runs from August 1 – 9, 2016.
Yet another ruse is selling top spirits for a very low price to get new customer types hooked on the product. Right after the 2014 National Holiday, Luzhou Laojiao‘s top product sold for RMB 9 for a short while (original price: RMB 288). You can imaging the rush.
Xifeng, another old respectable baijiu brand has announced that it intends to take in about 10 of its largest domestic agents as shareholders. Its agent for the Beijing region, Beijing Sugar, Tobacco & Alcohol Group, will even hold a 5% share. This has been revealed in the papers necessary for Xifeng’s intended IPO in March 2015. An interesting example of value chain integration.
Sichuan-based Luzhou Laojiao has launched a special type of baijiu geared to what it refers to as ‘young business people’. This strategy is aiming at two promising market segments, young people and business people, simultaneously. It is a top quality baijiu packed in a smaller than average bottle, to decrease the costs of business lunch or dinner. This strategy therefore also tries to fit into the new policy of the national government to curb spending on wining and dining for business.
The promotion abroad seems to get results. The list of the world’s top 10 distillers published by Brand Finance early 2017 includes 6 Chinese brands, with Moutai featuring as the world’s leading brand of 2017.
Baijiu dedicated bars in China
A new bar in Beijing billing itself as the world’s first dedicated to baijiu,named Capital Spirits, has opened its doors in Beijing recently.
“A lot of people have had bad experiences at banquets” where they might be coerced into drinking shot after shot of the colourless liquor, says American William Isler, one of the bar’s owners. “They throw up and say, ‘Never again.’”
Capital Spirits has the vibe of a speakeasy, with muted lighting, plenty of antique wood and a stainless-steel still in the corner churning out distilled beer and wine. There’s no sign on the door, although a ledge outside is set up with small wooden chairs, low tables and candles.
The Schoolhouse at Mutianyu, a restaurant and lodge project in Beijing’s suburbs near the base of the Great Wall, that produces baijiu-based liqueurs.
Mott 32 recently won media accolades as the top baijiu spot in Hong Kong.
R&D Cocktail Lab, a Taipei venue that is dedicated to alcohol experimentation. It will feature kaoliangjiu, the baijiu most associated with Taiwan.
Baijiu dedicated bars outside China
Exports of baijiu have been increasing recently. The customs of Yibin, (Sichuan), the home town of Wuliangye, report that 14,880 hls of baijiu were exported in 2015, an increase of 92.4% compared to the previous year. Let’s have a look at the situation in a few selected countries.
An important boost to the consumption of baijiu abroad is making it an ingredient of cocktails. In December 2016, Moutai Group launched its Moutai brand in Hamburg, Germany. About 300 guests were served the liquor in three cocktails designed by a local bar catering service. “Moutai has a smell and taste of cocoa, so in one cocktail we combined it with a chocolate vodka and chocolate bitters,” said Alexander Brittnacher, founder of Next Level Cocktails.”In another we looked for food pairing partners and we found that blackberries are a good combination.”
USA
Another way to facilitate baijiu making its way to the Western world is creating cocktails. Peking Tavern, a hip Northern Chinese restaurant in Los Angeles mixes baijiu into a slew of cocktails (with names like: Peking Coffee, Jin Jing, and Wong Chiu Punch), as does Korean eatery Drunken Dragon in Miami and New York’s Asian fusion den Buddakan. In early March 2015, Lumos, a new evening haunt specializing in baijiu,has landed in Manhattan. Lumos has a menu of more than 60 baijiu cocktails. Owner Salicetti was introduced to baijiu by his architect partner Li Qifan and realized baijiu would be a great way to stand out in a city awash with specialty bars.
Australia
Golden Monkey, a cocktail bar and restaurant in Melbourne, Australia, with many China-inspired dishes and drinks.
UK
The Hide, one of the London bars co-owned by Paul Mathew. Mathew, owner of the Arbitrager and the Hide cocktail bars in the British capital, said Moutai’s strong aroma is tricky to compliment, so he likes to use things such as pomelo, strong teas, pear or smoky flavors to mix Moutai cocktails. The distinctive character of the spirit adds a complexity to drinks when mixed well, he added.
Baijiu connoisseurs
Connoisseurs whose opinions can make or break a wine have been part of the wine industry for a long time. As imitating what others do well is a typical feature of Chinese culture, the Chinese baijiu industry has started to groom a similar type of experts a few years ago, and the first list of baijiu connoisseurs was published in August 2014, comprising 41 people.
It will be hard for these people to exactly copy the ritualistic activities of wine tasters. Spirits do not differ each year depending on weather conditions and other parameters, so it will be useless to decided that Moutai of 2008 was better than that of 2011.
Moreover, most of the people on the current list are employed by distillers; some even are managers. This will make it hard for them to judge competitive products fairly.
Foreign investment
Some multinationals are already trying to cash in on the expected discovery of baijiu by the international market. Diageo has acquired a stake in the Shuijingfang (Sichuan province; the top region for baijiu, see the above table) brand of baijiu a few years ago, and has recently bought out the Chinese partners. The company now intends to take baijiu to the international market. Diageo is looking to market it as a luxury drink for £99 a bottle to high-end Chinese restaurants such as Hakkasan and Mr Chow, and is looking to benefit from the growing affluent Chinese population in London, which is said to be close to 2 million, including (semi-)permanent residents and visitors. Diageo seems to be doing well, as Shuijingfang is one of the recent newcomers in the list of top Chinese food brands of 2014. The brand started to generate better figures in 2017. Shuijingfang filed a turnover of RMB 2.048 bln for 2017, and a net profit of RMB 335 mln; resp. up 74.13% and 49.24%.
However, Diageo is still affected by the spin-off of the anti-corruption campaign. The former Chinese CEO, who had stayed on after the foreign take-over, has left, and was replaced by James Rice. A Chinese has already taken over again. Rice has It will be interesting to see how a foreign will a Chinese company active in a market with such a strong bond to Chinese culture.
Overseas production
We still have to see the first Chinese distiller venturing overseas production of baijiu. However, two US investors have started producing versions of their own.
Byejoe Spirits in Houston is marketing two varieties under the Byejoe brand. The company gets baijiu from a Chinese distiller. However, this is not the same baijiu that is in your Byejoe bottle. The Chinese baijiu is shipped to a distillery in South Carolina where the alcohol is further cleaned and distilled.
Vinn Distillery (Portland), established by a Vietnamese of Chinese descent, is producing baijiu using an old family recipe.
Australian sorghum
Baijiu production has been growing so rapidly, that China now needs to import part of the sorghum from abroad. Australian sorghum exports to China peaked in 2015 at over A$ 500 mln afler baijiu manufacturers ramped up imports from down under. Sorghum exports benefited from tariff reductions under the recent China-Australia free-trade agreement. A team from various Australian research institutions is now working to identify the quality and varieties of sorghum that are best suited to the China baijiu market.
Exhibiting abroad
Three baijiu makers, Fenjiu (Shaanxi), Baofengjiu (Henan) and Laobaigan (Hebei) have participated in a trade manifestation organised by the US-China Business & Culture Association in San Francisco in January 2015 in a joint attempt to promote baijiu in the US. The China Wine Newspaper was also represented. These three brands have all won prizes during the 1915 Panama Pacific International Exposition, but apart from the honour, it has so far not won them any share in the US market.
Luring the young
Traditional baijiu drinkers in China are men born in the 1950s and 60s; an aging market indeed. To lure back a number of younger consumers, the baijiu industry is developing new types of spirits that better suit the palates of the young urban professionals. One example is Xingpai, a brand name that is said to be a translation + translitteration of High Passion. It is a so called ‘rice aroma type (see above)’ of baijiu. It is said to be made from the highest quality of rice and no flavours or other addidives are added. However, Xingpai is still 52%, so quite strong for young people used to accompany their meals with beer or wine.
Jiangxiaobai – maverick or game changer?
I have pointed at a number of attempts to revive the rather dusty image of baijiu at several places in this post. A player that is actually trying to implement a number of these is Jiangxiaobai. The name Jiangxiaobai is derived from the company’s original name: Jiangji Distillery. Xiao means ‘small’ and ‘bai’ refers to baijiu. Jiangji Distillery is located in Baisha town, Jiangjin District, Chongqing. Chongqing is now a city with provincial status, like Beijing, but used to be part of Sichuan province, the home of some of the top baijiu brands. Chongqing Jiangxiaobai Spirits Co., Ltd., the parent of Jiangji Distillery, is an integrated sorghum liquor enterprise that incorporates ecological sorghum growing, R&D, brewing and distillation, packaging and production, and marketing.
Jiangxiaobai’s products are divided into the following major series:
The different products have different flavours, packaging design, etc., all geared to different consumer segments. It is in this aspect that Jiangxiaobai is an interesting innovator in the Chinese baijiu industry. I will select one product as an example: YOLO. The brand name is an abbreviation of: You Only Live Once. YOLO encourages people to make the most of their life. It is geared to young consumers. It comes in 330 ml bottles and has only 25% alcohol. It has a sweetish flavour that appeals more to young consumers.
This trend towards smaller bottles for the younger generations was followed by the developers of Jiangemian (literally:’Let’s meet once’) who accumulated their starting capital on the online platform Ebrun, early 2020. I will monitor and report on this development here. At least their bottles are innovative.
Baijiu College – educating a new generation of baijiu makers
A Baijiu College has started operating in Yibin, the home region of Wuliangye, in 2018. This school – built in only nine months – is one outpost in Chinese Chinese government’s national push to rethink the country’s growth recipe as trade frictions with the United States intensify. Beijing aims to produce more goods at home and sell larger numbers abroad. This includes upgrading the image of traditional Chinese spirits. The state-funded Baijiu College in the misty Sichuan mountains teaches students how to craft baijiu — or work on robots that could someday automate the brewing process. The goal is to turn China’s native liquor into the next whiskey or tequila or gin: a drink with global recognition.
Even though dairy has been incorporated in several traditional regional cuisines, China is not known as a typical dairy nation. However, the industry has been developing rapidly during the previous decades, in spite of a number of food safety problems that have received global attention. The main reason is that Chinese, with support of the national government, strongly believe in the nutritional value of milk. Already in 2006, the prime minister stated that ideally every Chinese should drink one glass of milk per day.
China produced 32.31 million MT of raw milk in 2019. A little over 60% of this was used to produce drinking milk.
Still, a high volume of milk is consumed by the food industry. This is because, in spite of the healthy image of dairy, the average Chinese consumer still finds the taste of milk hard to appreciate.
Designer beverages
The combination of these facts, high nutrition + disagreeable taste, has created a very unique market segment in the Chinese dairy industry, including a broad variety of beverages with milk as their main ingredient, combined with a number of flavours and nutrients. We will refer to this product group as formulated milk beverages (FMB).
FMB can be further categorized in a number of ways. First of all there is the distinction between fermented and non-fermented beverages. Fermented FMB have a more sour taste and often contain probiotics.
Another subtype is what the Chinese industry refers to as ‘protein drinks’. These beverages used peanuts, almonds, soybeans, etc., as their main ingredients. They have a thicker texture than the average soft drink. A number of protein drinks combine milk with peanuts, red beans, or other of these protein ingredients, which makes them part of the scope of FMB.
These macro ingredients are usually supplemented with a number of other ingredients that can be divided in three main types:
Flavours: achieving the targeted flavour of the end product. Red bean milk will obviously contain red beans, but also needs a small amount of red bean flavour
Sweeteners: Chinese like their drinks sweet, so sugar is an ingredient in the bulk of FMB. However, with the growing awareness of the harm of excessive sugar intake, part or all sugar can be replaced by a combination of artificial sweeteners
Texturizers: texture is an essential aspect of FMB, and especially the protein beverages. Chinese consumers expect a creamy, thick, texture. Even Chinese who do regularly consumer plain fluid milk expect such a creamy mouth feel. Some Chinese ‘plain’ liquid milk products therefore contain small quantities of thickeners, to ensure that consumers do not suspect it to be diluted milk.
Nutrients: FMB are all marketed as nutritious products, healthier alternatives for the regular soft drinks. Milk, beans, fruits (e.g. dates; you will find a recipe in the linked blog), and vegetables already add to that nutritious impression, but special nutrients can be added as well. These include the regular vitamins and minerals, but also herbal extracts from traditional Chinese medicine, like Lingzhi fungus (Ganoderma).
Here is a representative example: Strawberry Flavoured Milk Drink
Produced by: Zhujiang (Pearl River) Beverage Company, Zhongshan, Guangdong
Ingredients:
Main ingredients
water, sugar, whole cream milk powder, strawberry juice
Many readers will doubt the nutritional value of a product like this, compared to simply drinking a glass of milk, which should be a lot cheaper as well. However, for the time being, this can be expected to be the mainstream in ‘dairy products’ in China.
Also see the dairy section in our item on cost price break down of several Chinese food and beverage groups.
New development: combination with probiotics, organic salt
Probiotics have become a pet ingredient in Chinese formulated dairy beverages. The total turnover in 2015 of probiotic milk drinks was RMB 11.98 billion, up 14.9% compared to 2014.
Huishan Dairy (Liaoning) has launched a new range of fermented dairy drinks with fruit and vegetable juice under the brand name Huawo. The company thus combines two major ‘healthy’ trends in the Chinese food industry: probiotics and natural juice, in one product.
Haocaitou (Fujian) has launched a dairy drink with probiotics and natural lake salt imported from Australia, that it markets as a sports beverage.
Also look at the Xiaoxixi vinegar milk with pineapple vinegar introduced in my post on new vinegar-based foods and beverages.
A special subtype in this category are the imitations of Yakult. This Japanese product is so successful worldwide, that a number of Chinese companies have not been able to resist the urge to launch similar products. A recent one in this category is Yili (Inner Mongolia), that launched its Meiyitian lactic acid drink early 2018.
Government support
A discussion has been going on in the Chinese media whether these beverages should be allowed to be marketed as dairy products. The government has supported the industry in this debate by officially allowing these drinks to use ‘XX milk’ a product names in October 2014. In this way, the producers are allowed to position their products with a healthy image.
The trend for 2018: healthier formulations
Three Chinese dairy companies are ending the year by launching healthy dairy specialties. It is hard to say if these launches are incidental, or that they are part of a concerted action. However, these beverages can be regarded as examples of the new generation of formulated milk drinks. These beverages are not only formulated to mask the less attractive flavours of milk, but also add several functional ingredients.
Mengniu: A2 beta-casein pure milk
A2 milk is cow’s milk that mostly lacks a form of beta-casein proteins called A1 and instead has mostly the A2 form. Milk like this was brought to market by New Zealand’s a2 Milk Company and is sold mostly in Australia, New Zealand, China, United States and the United Kingdom. Mengniu has selected 2000 cows from its Future Star (Weilaixing) Farm as designated producers of A2 beta-casein milk. It is marketed as a healthy milk for children.
Ingredients: raw milk, oat fruit jam (³8%), crystal sugar, thin cream, concentrated milk protein, hydroxypropyl distarch phosphate, pectin, DATEM (diacetyl tartaric acid ester of mono(di)glycerides), agar agar, lactococcus lactis, lactococcus lactis subsp. cremoris, lactococcus lactis subsp. diacetyl, streptococcus thermophiles, lactobacillus plantarum, lactobacillus rhamnosus.
Kedi: Soy milk milk
The English translation is rather unfortunate. The Chinese name, Doujiang niunai, literally means ‘soy sauce cow milk’, but soy sauce refers to a different product in English, and our default milk is cow milk, so we usually leave the ‘cow’ unmentioned, while we speak of ‘soy milk’, due to the colour of the liquid. Anyway, it is a combination of milk and (non-GMO) soy milk powder. In Kedi’s own words, it is the best of both.
UniPresident, non-dairy specialist has launched a Papaya Milk in March 2018
Foreign competitors enter the market
Saigon Dairy Factory (Vinamilk) has obtained the code from the Chinese General Administration of Customs on July 17, 2020, which allows the plant to export flavoured fermented milk to the Chinese market.
Pickled vegetables have become such a big business in China, that a special China Pickled Vegetable Industry Association has been founded in 2020
If we were to pinpoint a vegetable as THE most representative of Chinese pickled vegetables, it would be zhacai. The Latin name of zhacai is Brassica juncea tumida. It is a peculiarly looking pickled vegetable, resembling the shape of a fist. It is the stem of a variety of mustard. It is therefore also marketed as ‘preserved Chinese mustard stem’.
This special pickle originates from Sichuan (the Chongqing region, which is now a separate administrative region) and was first created in 1898. Another region with substantial production is Yuyao, near Hangzhou, the capital of Zhejiang province.
The name zhacai, literally meaning pressed vegetable, was inspired by the process employed to press out the salt water using a bean curd press. Zhacai is flavoured with salt, chilli, pepper and a mix of typical local spices like star aniseed, kaempferia galanga, glycyrrhiza, etc. The exact composition of the spice mix is the secret of the manufacturer.
Though covered in chilli, it is not hot but extremely salty and is usually cut to size and soaked to remove the salt before cooking. When only a small amount is used as a seasoning, no soaking is necessary. It should be cooked only briefly to retain the crunchy texture.
The total turnover of the zhacai industry was RMB 6.7 billion in 2019. Roughly two thirds of this turnover are realised in the Chongqing region and one third in the Yuyao region.
Have a look at a Chinese video showing the processing of zhacai. Although it is in Chinese, experts should be able to understand the gist.
Zhacai is an essential ingredient in the famous Hot and Sour Soup. Entire tubers available in glass or stone jars, or cans. Shreds are sold in plastic bags Some manufacturers combine zhacai shreds with shredded mushrooms or other vegetables.
In recent years, the market for zhacai has expanded considerably, after it had become a kind of leisure food. It is shredded and packed in small aluminium sachets. The shreds can be used to spice up dishes, in particular the more bland convenience foods like instant noodles, or instant congee. Many Chinese even nibble on zhacai shreds in front of the TV.
On average, 100 gr. of zhacai has the following composition.
Substance
Content
Water
67.3 gr
Protein
4.4 gr
Fat
1.2 gr
Carbohydrates
5.6 gr
Crude fibre
3.1 gr
Ash
18.4 gr
Calcium
224 mg
Phosphorus
125 mg
Iron
8.1 mg
Zhacai: – the pillar of Fuling economy
The Fuling region of Chongqing has always been famous for its zhacai. The local authorities are supporting the development of growing and processing of this vegetable. Zhacai is regarded as the symbol of Fuling and vice versa. The region produced 1.28 million MT of zhacai in 2012. Almost 90% of this was processed into ‘convenience zhacai’. They also intend to promote export. Zhacai is currently the highest valued of the ‘Chinese Local Brands’, with an estimated value of RMB 12.532 billion. Zhacai is often refered to as another name for Fuling. Fuling has given its name to the Fuling Group, China’s largest processor of zhacai. Fuling Group generated a turnover of RMB 1,989,593,123.12 in 2019, up 3.93%.
Fuling is also the home of China’s only research institute specialised in zhacai: the Yudongnan Academy of Agricultural Sciences, with a separate Zhacai Research Department.
The importance of the Fuling region is reflected in the fact that China’s top 3 brands of pickled vegetables (so not exclusively zhacai) are all located in there.
Wujiang brand (Fuling Zhacai Group)
Yuquan brand (Yuquan Zhacai Group)
This is the brand we use at home, so I will use the ingredients list of Yuquan zhacai as reference:
Fuling Zhacai Group announced in August 2017 that a new 40,000 cubic metre production tank will be constructed, involving an investment of RMB 162 mln.
Automation
The Baiheliang Zhacai Factory of the Fuling Zhaicai Group has installed a completely automated production line in 2015. Here are a few photos from that plant.
Tubers drying in the open airThe shredded tubersPacking the shredsPacked and pasteurised
Exports
Zhacai from the Chongqing region is also exported. Chongqing Fengdu Sanhe Industrial Co., Ltd., started exporting zhacai in 2001. In 2022, the export volume was about 10,000 mt. In August of 2023, representatives of the company visited Mexico and Brazil as part of a local delegation seeking trade opportunities as well as cultural exchanges. Mexican local food tastes sour, sweet and spicy. Zhacai should therefore do well as an ingredient for tacos. The company’s R&D team tasted a variety of Mexican foods, asked the local people for advice, and adjusted the zhacai formula according to the local taste of Mexico. Eight types of zhacai have been developed for the Mexican market.
From zhacai to soy sauce – an innovative process
An interesting development is the use of the affluent of zhacai processing to produce soy sauce. The Fuling Group, China’s largest manufacturer of zhacai (capacity in 2014: 64,800 mt/p.a.), listed at the Shenzhen Stock Exchange, has developed that technology. Moreover, the new soy sauce process no longer includes steps that require manual labour. Work that before required 500 workers, now only needs 30 – 40 people to complete. This is a fine example of how a traditional product can inspire industrial innovation.
A survey was held among Chinese food and beverage manufacturers about the way they purchased their ingredients in 2006. Although these figures are not very recent, they reflect habits that are not affected by sudden changes like fashions. We therefore regard them as a reliable reflection of the current situation.
Frequency
Companies’ buyers were asked to indicate how many times a year they order food ingredients.
These figures corroborate the general perception in the market that Chinese users of food ingredients tend to place their orders once per year.
Time of purchasing
The following table indicates the month of the year in which respondents prefer to place orders for food ingredients.
The numbers 1 to 12 at the bottom line of this graph indicate the months of the year (1 = January, 2 = February, etc.).
This table shows four peaks, with (late) March as the top period. Smaller peaks are located at late April/early May, late August/early September and late October/early November. Soft drinks and ice cream are the largest consumers of food ingredients in China. Those manufacturers start preparing for the summer season late March, which explains why the top peak in ordering takes place at that time of the year.
Existing events
Looking at existing events, we see that Food Ingredients China (FIC) has selected the top slot. SIAL China and Bakery China have a slightly less favourable position in May, and are competing for more or less the same clients. FiAC is held at the annual low.
This does not say anything about the quality of the shows, but for foreign suppliers of food ingredients, FIC still offers the highest probability of meeting eager buyers.
Any party with an idea to start yet another trade fair in this business in China should aim at the Oct/Nov slot, which is still open.
China is the kingdom of dates (jujubes or ziziphus jujuba). The national output was 5.62 million mt in 2017 up from 3.9 mln in 2005. The top region was Xijiang with 2.7 mln mt. They come in various varieties; so many that the New Mexico State University has started exploring them as alternatives for local jujubes.
The Chinese have known them for their medicinal properties, but have also been using them as snack food (leisure food) for ages. Now them are also processing dates into various food ingredients.
Jujube cake (Zaogao)
Along most the streets in Tianjin, you will find these little bakery shops. You don’t need to read Chinese to be able to spot one. Not only do you have the amazing smell coming from these small window bakeries. They are also kind enough to display these amazing breakfast cakes in the window. These cakes are made from dried jujubes and normally come 3 for RMB 10. After just one bite, you will find that they are not only sweet but also moist. These are a great alternative for someone in the mood for a light but filling breakfast. They can also be used for a snack between meals.
Medicinal properties
Dates are packed with nutrients: vitamins, minerals and various alkaloids. Chinese dates are also a great natural source of antioxidants. Jujube fruits assist very well in a healthy digestive system through its high fiber content, saponins and triterpenoids which prevent constipation, cramping and other gastrointestinal disorders. Chinese dates are said to support the strength of bones, muscles and teeth. They support the health of the nervous system and assist in alleviating stress, sleeping disorders and anxiety. The high antixodiant levels in Chinese dates take care for immunity, blood detoxification and a healthy skin.
A special type of dates with medicinal properties are grown in Leling (Shandong). The dates there belong to the ‘golden thread (jinsi)’ variety and are very rich in selenium and vitamin C. They also contain considerable amounts of calcium, phosphorous, potassium and iron.
The same properties are also attributed to honey derived from date flowers. Jujube flower honey is often used to sweeten concoctions of traditional Chinese medicinal herbs.
Small fruits big business
Dates have become such an important product now, that they have recently played a leading role in a civil law suit. A Shanghai-based company, Dashanhe, produced and marketed dates with Hetian Tianzao (Khotan Heavenly Dates) printed on the packaging. Heavenly Dates, however, is a brand owned by a company in Xinjiang, Tianhai Oasis. This company produces a range of luxury date products (see picture), and sued Dashanhe for infringing on its brand. It won the suit. Dates have become big business in China.
The Kunlunshan Date Co. (also Xinjiang)’s Khotan Jade Dates (Hetian Yuzao) have been incorporated in ‘China 100 Best Agricultural Products’ in 2013. This company was founded on the basis of a military operated collective farm in 2005, and was reorganized into a limited company in 2012. Dates are indeed a conduit to success in China.
Here is a video demonstrating the processing of dates in China.
Innovative products
Innovation is the trend in the present day Chinese food industry. This innovation is taking place in a number of different directions, one of which is using traditional ingredients to produce foods and beverages that suit the lifestyle of modern hasty city dwellers, but still remind them of the traditional flavors, and retain the medicinal activities ascribed to them according to traditional Chinese medicine (TCM).
An example of such a product using dates as ingredient is: date juice breakfast milk, a good example of one of the many formulated dairy drinks produced in China at the moment.
Here is a reference recipe
Stabilizer RH6 is a branded compound consisting of: sucrose ester, monoglyceride, sodium alginate, CMC and potassium dihydrogen phosphate. Ajiao (or ejiao) is a Chinese medicinal substance obtained from donkey skin that is often used in combination with dates. The complete text of the production process indicates that low calorie sweeteners can be used to. It is an experimental recipe.
Fuyuan Food (Binzhou, Shandong), is also producing a date enriched with ejiao: Changsi brand Ejiao Royal Dates. Another, sweeter and stickier, version is sold under the Selective (Zhenxuan) brand (Zibo, Shandong).
An interesting fusion between Chinese dates and Western food and beverage is: Manccio Jujube Coffee, produced by Manccio Co. (Xi’an, Shaanxi). Coffee is rapidly gaining popularity in China, but it still has a Western character. This product is therefore marketed as ‘China’s own coffee’. Its ingredients list is simple.
Date powder, instant coffee, microcrystal cellulose.
Manccio cooperates with a coffee supplier in Malaysia. I haven’t been able to sample the product myself, but I will report on the taste as soon as I have had an opportunity.
Yimin Modern Farming (Jiaxian, Shaanxi) has developed a range of date wines and spirits.
A date research centre was established in Jiaxian (Shaanxi) by the Shaanxi Normal University in 2021.
Award winning dates
Chinese dates have started winning international awards as well. Bestore‘s crispy winter dates have won a Superior Taste Award from the International Taste Institute in 2020. Winter dates are a round variety of dates that become available in the fall. They are usually consumed unprocessed, but growing star Bestore has been able to process them into an award-winning product.
Arab dates in China
In 2019, the United Arab Emirates gifted 100,000 date saplings to China to help develop the date industry and jointly explore third-party markets. That same year, Yuanjiang in Yunnan partnered with the Chinese Academy of Tropical Agricultural Sciences to establish a trial base for date cultivation. In 2025, Yuanjiang boasted a 2-hectare date cultivation demonstration site with 722 trees.
Date-derived ingredients
Some Chinese companies have developed food ingredients from dates like date powder. Our database includes a recipe for a type of bread using this ingredient. Dates are also used in babao porridge, birds nest soup, and zongzi, introduced in another posts of this blog.
Eurasia Consult’s database of Chinese industrial recipes includes numerous products with dates as a main ingredient, both traditional and innovative, including products like: date cake, date pudding, date juice, etc.
Date sausage
As the world’s date country par excellence, Chinese food technologists like to develop new foods with date as one of the ingredients. A recent proposition I picked up is a date flavoured sausage. The meat is a mixture of chicken and pork (ratio: 3:7), with dates added as a paste, made by mixing water and dates (ratio: 1:1). The total ingredients list is as follows.
Chicken meat, pork, ice water, modified starch, protein powder, glucose, salt, sugar, compound phosphate, koji red colour, pork flavour, red date pulp, red date paste, white pepper powder, ethyl maltol.
Nestlé adapts to Chinese taste
Nestlé has deftly noted the Chinese liking for dates and date flavoured products. The company has launched a red date flavoured oatmeal under the Nesvita brand. The product contains 400 gr of date powder per 1000 gr of finished product.
Branded dates
The following table lists the top 10 branded date products of 2017. The brand logos are shown in the figure.
Rank
Brand
Region
1
Haoxiangni
Henan
2
Hetian Yuzao
Xinjiang
3
Ruoqiang Hongzao
Xinjiang
4
Loulan Miyu
Hubei
5
Sanzhisongshu
Anhui
6
Loulan Hongzao
Xinjiang
7
Qiangdu
Xinjiang
8
Baicaowei
Zhejiang
9
Liangzi Puzi
Hubei
10
Tianjiaohong
Shanxi
The number one: Haoxiangni Jujube Co Ltd.
Haoxiangni (litterally: ‘I think of you a lot’), based in Xinzheng, Henan province, is the only listed company in China’s date industry. It is combines R&D, manufacturing, and distribution of jujube series products. The company primarily offers various jujube products, including royal jujubes, crystal jujubes and fragrant jujubes, and others; jujube chips and donkey-hide gelatin jujube chips; preserved products comprising preserved jujubes, wild jujubes, and ejiao (donkey-hide gelatin, an ingredient of traditional Chinese medicine TCM) jujubes; and dried jujube products, such as dried crystal jujubes and dried fragrant jujubes. It also provides jujube powders, which include original flavor jujube powders and high-calcium jujube powders; and honey products, such as jujube honey and acacia honey, as well as prepared and crisp jujube products, jujube beverages, and other series of products. The company was founded in 1992 and is based in Zhengzhou (Henan).
Washing dates in Haoxiangni’s plant
Jujube is not a rare food, but Haoxiangni made it into a luxury good, by selling gift boxes of jujube for several hundred yuan. The brand’s high-end image was its main attribute but now it is hard to maintain. After cooperating with Trout & Partners Ltd, a global consulting firm, in 2012, Haoxiangni started an overhaul of its brand image in 2013 by promoting low-price products for less than RMB 100.
According to Shi Jubin, the chairman of Haoxiangni, the company will focus on quality rather than number of franchisees by closing 600 of its 1819 stores, according to a statement released on the company’s website.
The government of Henan has included Haoxiangni in the provincial Immaterial Cultural Heritage in December 2014.
Haoxiangni suffered from the government’s ongoing anti-corruption campaign. It saw a decrease in revenue, though small, in 2013. It was the first time it had seen a decline in revenue since being listed in 2011. The company filed a turnover of RMB 973 million for 2014, up 7.10%. 65% of that turnover was derived from the company’s dedicated outlets. Unfortunately, the first quarter of 2015 turned out particularly disappointing, with a drop in net profits of almost 47%. Insiders attribute this to the ongoing change of strategy from focusing on special shops to multiple channels. Haoxiangni is also in the midst of a construction project. These investments are eating up a considerable part of the profit, but the company is still regarded as healthy and promising. Haoxiangni is also broadening the raw material of its products, like: lotus seeds and yin’er (silver fungus). The first quarter of 2017 saw a huge increase again with a turnover of RMB 1.2 bln, up 300%.
Haoxiangni has also sponsored a ‘China Date Culture Museum’ in its home town.
The government of Xinzheng has also adopted date growing a symbol of the local economy. The city’s website is laden with date flavour.
To counter the problems of relying to heavily on one product line, Haoxiangni launched a broad range of fruit snacks like dried fruits based on different kinds of fruits in 2018.
As part of the same diversification strategy, Haoxiangni has also launched a fruit nectar made from dates and hawthorn. The latter is a typical Chinese fruit, used in the famous North-China winter snack tanghulu.
Late 2019, Haoxiangni launched a breakfast replacer with dates, specially marketed among female students, under the brand name Qingfeifei.
Interesting new comer
A relatively new player in this market that is arousing nation wide interest with innovative products and promotion campaigns is Baiweicao (Bee & Cheery) (Hangzhou, Zhejiang). It is a general producer of nut and fruit-based snacks. One of its flagship products is a combination of those two: dates stuffed with walnut, marketed under the Baobaoguo (literally: Wrapped Fruits) brand name. It is packed in a series of boxes with drawings of various animals.
Bee & Cheery has an interesting relation with Haoxiangni. Haoxiangni was the owner of Haomusi, Bee &Cherry’s mother company, until Haoxiangni sold its stake in Haomusi to PepsiCo early 2020 for USD 705 mln. So, PepsiCo is now competing with Haoxiangni in the date products market.
Introducing: peach dates
Snack maker Three Squirrels, a major competitor of Bee & Cheery, introduced a new type of date called: ‘peach date’ in May 2020: called peach date. It is a date, but with a peachy texture and flavour.
The 2024 Chinese biscuit output was 14.37 mln mt; up from 11.74 mln mt in 2021.
Chinese love biscuits, cookies, wafers, crackers, etc. Following the terminology used in Chinese statistical publications, I use the word ‘biscuit’ in this blog as a translation of the Chinese term binggan, which is a kind of umbrella term for biscuit-like products. The biscuit production in China has grown from 5.518 mln mt in 2011 to 8.736 mln mt in 2017, making it the third largest market in the world behind the US and Brazil. The value of this market is expected to grow a further to RMB 101.7 billion in 2020.
This does not mean that it is a low entry level market. 219 manufacturers have reportedly stopped production between June 2014 and June 20 16. Still, China had 1699 companies registered as licensed to produce biscuits in June 2016, 721 of which were indicated as serious players in this market. The 2024 Chinese biscuit output was 14.37 mln mt; up from 11.74 mln mt in 2021.
Popular brands
The information has been collated from a number of specialist Chinese sites. We have deliberately not takenkey figures as the bases for our ranking. Instead, we are presenting the brands in order of popularity as indicated in the Chinese food industry media.
Oreo
The top brand is immediately a foreign one, owned by Mondelez. When it was still the owner of the Oreo brand, Kraft had struggled for almost a decade in China, until the company found out that Chinese consumers preferred less sweet biscuits and introduced new flavors. The size of the packaging was also decreased and Oreos were made available in a larger variety of outlets. Sales rocketed from USD 20 mln in 2005 to more than 400 mln in 2012. The company’s turnover in China has been dropping annually in the period 2014 – 20167. Mondelez is currently exploring new ways to reach customers in third- and fourth-tier cities in China to combat slowing growth in the market. It seems to work, because Mondelez reported in April 2015 that Oreo is its main driver of growth in China. Mondelez has struck a partnership with Alibaba in April 2016, under which it will begin selling brands such as Oreo and Trident through Alibaba’s Tmall online marketplace. Mondelez said it will sell the full range of its products, including Toblerone and Cadbury.
Chef Kong
This brand (Kangshifu in Chinese) is sometimes translated as Master Kong. It is a brand owned by the Taiwan-based Tingyi Group. Unlike Oreo, Master Kong refers to a broad range of biscuits, butter cookies and soda crackers. Moreover, Chef Kong’s top product is still instant noodles, which was its first product when it started production in 1992. The company added biscuits and related products in 1996. It has started activities in other food and beverage markets during the past few years, as that of instant noodles seems to be stagnating.
Haochidian
This brand name literally means: “Delicious Pastry”. It is owned by the Dali Group, established as a private enterprise in 1989 in Fujian. The company now operates production facilities in several provinces, employing close to 40,000 people. Dali got listed on the Hong Kong Stock Exchange in November 2015, and reached the Forbes Global 2000 in 2016. Dali has filed a turnover in 2018 of RMB 20.86 billion; up 5.4%.
Garden
Garden was established in Hong Kong in 1926 and still is the territory’s largest food company. It offers a wide range of cookies in the Mainland.
Jiashili
Jiashili biscuits and crackers are produced by a company in Guangdong with the same name. The company was established in 1956 by combining 17 private factory’s in the company’s home city Kaiping, under the name Kaiping Candy & Biscuit Factory. The name Jiashili was first coined in 1985. Jiashili’s current chairman Huang Xianming purchased Jiashili in 2007, making it a completely priveately operated company again. Under his ownership revenues have increased fourfold. The group operates three production bases in Guangdong, Jiangsu and Hebei provinces, with a total capacity of 130,000 MT. Jiashili’s core products include plain biscuits, crackers, sandwich biscuits and wafer biscuits.
Jiashili posted 2013 sales of RMB 748 mio up 15% on the prior year and net profit for 2013 was RMB 69 mio, up 60% on 2012. It spent RMB 5.2 mio on R&D in 2013.
Investor Actis has recently taken a “significant minority stake” in Chinese biscuit group Jiashili Food Group.
Jiashili Group has successfully listed on Hong Kong stock exchange in September 2014. The IPO raised HK 370 million, representing 25% of the company’s total issued share capital. Jiashili’s global offering document said that the Chinese biscuit market was highly competitive and said that the firm would need to constantly develop new products to respond to changing consumer demand. The company said it expected Chinese consumers to shift to healthier alternatives with reduced sugar and higher fiber as concerns mounted over obesity and diabetes.
Orion
Orion Confectionery is a South Korean brand producing biscuits, pies, candy and chewing gum. It was established in 2001, when it split off from the Oriental Group. In China, its pies, cream filled cookies, are most popular in the category of this blog.
Hsu Fu Chi
Hsu Fu Chi was established in Dongguan (Guangdong) in 1992 by four brothers from Taiwan named Hsu. The company quickly developed into one of the country’s leading producer of candy, pastry and biscuits. Late 2011, Nestlé acquired a majority share in Hsu Fu Chi. Hsu Fu Chi signed a deal with China’s second-largest e-commerce player, JD.com, to launch the latter’s first “unbounded plant” in South China. The plant aims to break traditional ways of thinking about consumer goods and achieve “shopping without borders”. Hsu Fu Chi will adopt JD’s logistics network, where products need not be distributed through major logistics warehouses, but instead enter the express delivery system directly, which is quicker and more efficient.
Pacific
This is another brand of Mondelez. With 2 out of the 10 most popular brands in China, Mondelez has become a major player in this market. The best selling products under the Pacific brand are soda crackers.
Guanshengyuan
Guanshengyuan is owned by the Guanshengyuan Group, one of Shanghai’s top food producers, established in 1915. Like Hsu Fu Chi, Guangshengyuan produces a wide range of candy and biscuits. It’s most famous product is Big White Rabbit milk candy. The company has a strong R&D unit, derived from the previous Shanghai Research Institute for Industrial Microbiology. Several such institutes have been placed under relevant state owned enterprises and the Shanghai government believed that this institute would benefit from being part of the Guanshengyuan Group.
Qingshi
This brand name literally means: “Qingdao Food”. It refers to its owner, Qingdao Food Co., Ltd. That name reflects its establishment in the early socialist era in 1950. The company produces a wide range of foods, including candy, chocolate, peanut butter and rice meal. Qingshi and Guanshengyuan are good examples of old state owned enterprises that have successfully transformed themselves during the economic reforms.
Can we discern some trends or common traits in the above list? Well the first that stands out is the number of foreign brands and brands with roots outside Mainland China. Oreo, Orion and Pacific are foreign brands, while Garden, Hsu Fu Chi and Chef Kong originate from Taiwan and Hong Kong. This can be explained by the fact that this type of foods, in Chinese statistics regarded as a subtype of leisure foods, is still perceived as part of a ‘modern’ lifestyle.
Secondly, this industry seems to be concentrated in the Pearl River and Yangtze Delta areas. Garden, Jiashili and Hsu Fu Chi’s production bases are located in or around Guangzhou and Fujian is a neighbouring province of Guangdong.
Mondelez’ HQ in China is situated in Shanghai, the home town of Guanshengyuan.
Only Qingshi and Chef Kong is located all over China. Chef Kong’s national HQ is in the port city of Tianjin. However, the company has announced on May 17, 2014, that it intends to establish a second national office in Shanghai.
Update 17/4/2019
Instead of rewriting this post entirely, I will add updates roughly once a year. This is the list of April 2019.
1
Oreo
Montelez Shanghai
2
Chef Kong
Tingshin International
3
Jiashili
Jiashili Food Group
4
Haochidian
Dali Food Group
5
Garden
Garden Food
6
Pacific
Montelez Shanghai
7
Hsufuchi
Nestlé China
8
Quduoduo
Montelez Shanghai
9
Nestlé
Nestlé China
10
Glico
Ezaki Glico Foods
An interesting detail is that the influence of international players in the top 10 is quite big. Glico’s success seems to lean heavily on its Pocky sticks that are immensely popular among Chinese consumers.
Most foreigners liken sea cucumber with bicylce tire, but for Chinese it is a mine of nutrition
The sea cucumber is a gelatinous creature that is distantly related to star fish and sea urchins. Like these creatures, sea cucumbers have small tentacles around their mouth to take in food. It derives its name from the fact that it is shaped like a cucumber.
Sea cucumbers have been part of Chinese cuisine for centuries. They are not part of the everyday menu, as they are regarded an expensive delicacy, with a high nutritional value.
In traditional Chinese medicine, sea cucumber is ascribed salty and warm properties, and is associated with the Heart and Kidney meridians. It is believed to help nourish the Yin and blood, and is a tonic herb for treating the kidneys. It is used to treat a variety of conditions, including impotence and frequent urination.
Western visitors usually do not appreciate the rubbery mouth feel of the creatures. This aversion is reflected on the alternative name for sea cucumbers: sea slug.
The Chinese name for sea cucumber – haisen – literally means “sea ginseng.” This partly reflects the shape of sea cucumber, but also refers to the high nutritional value Chinese attach to this food.
Sea cucumbers really do not have a taste of their own. The taste has to come from the condiments with which it is prepared. They are usually served in a thick broth.
With the increase of the spending power of Chinese consumers, the production of sea cucumbers has increased considerable, as shown in the following table.
Year
Output (MT)
2003
39,000
2008
90,000
2012
171,000
2021
222,700
2022
292,000
The largest production regions in 2021 were Shandong, Liaoning and Fujian provinces.
Region
Ratio (%)
Shandong
45.8
Liaoning
33
Fujian
14.9
Hebei
6.1
Others
0.2
Types
Chinese experts distinguish a number of types of sea cucumber products.
Brine soaked sea cucumbers: soaked in strong solutions of salt; can be kept 3 – 6 months;
Salted dried sea cucumbers: the most traditional type of treatment;
Low salt dried sea cucumbers: basically the same as the traditional treatment, but with less salt;
Freeze dried sea cucumbers: have to be stored under freezing conditions.
Top companies
The top companies in 2022 were
Company
Zoneco
Oriental Ocean
Haodangjia
Region
Liaoning
Shandong
Shandong
Founded
1992
2001
1992
Reg.cap. (RMB)
711.11 mln
756.35 mln
1.46 bln
Instant sea cucumbers
Preparing sea cucumbers is laborious and several research institutes are developing instant sea cucumbers ready for consumption. A number of these have already been patented. However, it seems that none of these patents have so far resulted in actual products. A company in Qingdao (Shandong) has patented a process that includes steeping sea cucumbers in an infusion of several TCM herbs. A company in Qinzhou (Guangxi) has filed a patent for processed sea cucumber packed in a so called ‘soft can (ruan guantou)’, that can be heated in the pack before consumption.
Eurasia Consult can help you find Chinese patents for all types of foods.
Added value
The industry has been studying ways to convert sea cucumbers in higher valued products.
A company in Shandong has developed a process to extract peptides from sea cucumber. The product has obtained official registration as a health ingredient. It is said to help lower blood cholesterol, ease hypertension and relieve fatigue.
Another company in Shandong has developed a process to produce sea cucumber powder using enzymatic hydrolysis. It is promoted as a health food for people with a high risk to develop cancer.
To satisfy the growing demand for sea cucumbers, some companies have started to breed them in coastal water. A company in Liaoning has developed a ‘three-stage breeding method’, starting in shallow water and gradually transferring the animals to deeper water. The photo shows a sea cucumber breeding zone near Qingdao.
Another Shandong-based company, Haina Baichuan, has launched a breakfast replacement made from sea cucumber. It is marketed as ‘168 Selenium Pack’, referring to its high selenium content.
Dedicated trade fair
A dedicated trade fair for sea cucumbers will be launched on August 25-27, 2021 in Shanghai.
First DOC for sea cucumbers
Changhai county in Liaoning province was the first region that received DOC status for its sea cucumbers
Sea cucumbers from Canada
Wild Canadian sea cucumbers, captured in the North Atlantic Ocean off the coast of Nova Scotia province, are now also finding their way onto Chinese food tables, as most Canadian people don’t consider the creature edible.
Canadian seafood processing company United Trans has signed a deal with Beijing Pharma in June 2015. Under the agreement, Canadian sea cucumbers will be allowed entry into China as a health product. At least 30% of 2014’s catch was imported into China.
The wild variety of sea cucumber is usually larger and rounder than a Chinese farmed creature. They also have little thorns on the cylindrical body’s skin and have a ring of tentacles around the mouth. Canadian sea cucumbers are claimed have greater nutritional and therapeutic value as compared to the ones farmed in China, because they are richer in nutrients, including holothurin compounds, minerals and protein, and are free of contaminants because they grow slowly in deep, cold waters. Holothurin is also known as sea cucumber saponin. North Atlantic sea cucumber contains four types of holothurin. Research indicates that holothurin may help fight obesity. The chilly waters also force Canadian sea cucumbers to swim a lot, resulting in more muscle texture in the body.
Now it is time to relax and watch this video that offers a look at the various aspects of growing, processing and eating sea cucumbers.
The Iceland connection
Wild sea cucumber from Iceland joined a coding system launched by AliHealth, a health arm controlled by Alibaba Group Holding Ltd, to help ensure food safety. The tracing system demonstrates product information such as its origin, production date, customer transportation, and safety/quality information. The Iceland sea cucumber is sold in Hema Xiansheng, an emerging online-to-offline supermarket operated by Alibaba. AliHealth first launched such a system in mid-2016 for medicines and the latest move represents a further expansion of the system’s use in the food industry.
Global heating poses big threat
High temperatures have caused deaths of sea cucumbers in a large area in Northeast China’s Liaoning province in the summer of 2018. The water temperature reached 35 C to 36 C around 2 pm at some days, which is about 10 degrees higher that sea cucumbers can sustain. According to local fisheries departments, sea cucumbers began to die across the province from July 28, and the animals first to go were in pools with a depth less than 7 meters. This is yet another unpleasant effect of global heating on the food industry.
Peverelli on Chinese food and culture 