Chinese industrial food recipes

Producers of food ingredients will be very familiar with the general applications of their ingredients in foods and beverages. However, what do you know about their application in traditional Chinese foods, or novel foods based on traditional recipes? The transformation of the production processes and formulations of traditional Chinese foods into large scale commercial production is probably the most interesting challenge to suppliers of food ingredients worldwide.

Eurasia Consult has been active in the Chinese market for food ingredients since 1985, and in the course of our activities we have built up a substantial database of industrial recipes. This information can be used in market research, but also constitutes a mine of information for international suppliers of food ingredients to broaden the scope of existing ingredients and develop new products.

In this post, I am providing a few examples of the most promising application areas: novel foods, in particular those based on local products, traditional foods adapted for modern industrial production and ingredients based on traditional Chinese medicinal herbs.

The recipes are provided as found in the various sources. They are not ready to reproduce recipes, but provide insight in the perception of food formulation in China.

Novel

The Chinese love experimenting, as you can see on the Trends section of this blog. A consequence of this trial and error mentality for product innovation is that the route between idea and prototype is usually considerably shorter in China than in Europe. Novel products are often tested by throwing them on the market to see how consumers react.

Combined with other traits of Chinese culture, like playfulness, curiosity, etc., makes that more peculiar products are launched in China than in any other market in the world. Our favourite is still this one: ‘yoghurt to cure hangovers’. However, in this post I prefer to show a more common product.

Instant maize noodles

MaizeNoodles

Ingredient ratio(%)
Maize flour 75 – 90
Modified potato starch 10 – 25
Gluten powder 1 – 3
Monoglyceride ester 0.4 – 1
Xanthan 0.3 – 0.7

Traditional

In several earliers posts, I introduced the transformation of traditional Chinese foods into products manufactured at an economical scale. Chinese food designers have grown very apt in creating new variations adding extra value to such traditional products. A related trend is to create new foods from typical locally cultivated fruits, vegetables, etc. Local food specialties used to be a source of pride in China, but in the course of the ‘modernisation’ these traditions became rather suppressed.

Local governments have regained interest in these products recently and many of them are even applying a kind of DOC status for their typical local specialties, prohibiting manufacturers from other regions using that product name, like the term ‘champagne’ in France.

Improver for steamed bun (mantou) flour

MantouProd

Mantou used to be made at home, using a piece of the previous dough to start the fermentation process. Mantou have started to be produced on an industrial scale recently, which has created a demand for specialized flour improvers for this application, with enzymes as the main active ingredients.

Ingredient parts
Calcium stearoyl lactate 30-50
Monoglyceride 10-20
Vitamin C 6-10
Fungal alpha-amylase 0.6-1.2
Xylanase 2-3
Alkaline buffer 12.5-18.75

TCM

Food and medicine have never been as closely separated in China as in the Western tradition. Virtually all food and food ingredients are attributed certain medicinal activities in Traditional Chinese Medicine (TCM). Against this background, it is not so hard to imagine why the notion ‘functional food’ was accepted so quickly and smoothly in China: it was not really a novel concept for the Chinese. Actually, a number of fashionable functional foods in Europe, like Gingko, originate from Asia. As soon as ‘functional ingredients’ established themselves as a separate and lucrative category, medicine companies started to promote extracts from TCMs as food ingredients.

Chrysanthenum honeysuckle icecream

honeysuckle

Ingredient Dosage (%)
Whole milk powder 7
Crystal sugar 13
Margerine 10
Glutinous rice meal 3
Gelatin 0.3
CMC 0.3
Sucrose ester 0.05
Monoglycerine 0.1
Chrysanthemum extract 15
Honeysuckle extrac 5

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

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

 

Is China the future for chocolate?

Chocolate is one the most appreciated gifts to friends in East Asia

The confectionery industry is a sweet line of business by itself, but it can be even sweeter in China, where market potential and a growing confectionery culture is leading to a new bonanza of sweets and chocolates.

Chocolate sales in China grew 58% from 2009-2013. They are expected to expand to USD 4.3 billion by 2019, rising nearly 60% from USD 2.7 billion in 2014, lifted by outstanding demand from the growing urban population, Bert Alfonso, president of Hershey International, forecast in a recent webcast at the Consumer Analyst Group of New York conference.

China has become such an important market for chocolate suppliers, that Barry Callebaut had chosen Shanghai as the place to introduce its inhouse-developed ruby chocolate to the world in September 2017. Barry has further opened a new Chocolate Academy in Beijing in 2019 – the company’s 22nd globally – to meet demand and better serve the Chinese market.

High-end market

Sales of China’s chocolate and confectionery boomed over the past five years after a handful of Western brands began entering the country in the 1980s. The maturing chocolate culture has prompted Chinese consumers to begin asking for a greater variety of premier products. China’s chocolate consumption is increasing 10% to 15% a year, as living standards rise and there is a growing acceptance of Western lifestyle.

So far, the top 20 chocolate makers have already presented themselves in the market. In a common supermarket in Shanghai, you can easily find over 70 brands of chocolate. Most of them are foreign brands. The big four (biggest four companies in China chocolate market: Dove, Ferrero, Cadbury and Leconte) have taken over 70% of the market. Of these, only Leconte is a local brand (Owned by COFCO, possibly Nestlé’s main international challenger). Among the three foreign brands, Dove alone has taken one-third of the market. Dove has charmed Chinese consumers by its special taste. Secondly, Dove chocolate has nice packaging with a neat wrap which leaves a deep impression of delicious and good quality in the consumers’ mind. In addition, Dove always produces new products with special packaging which propose meaningful designs. Chinese consumers care about the packaging of a product, because chocolate is also a good choice to buy as a present. How the chocolate appearance has been the most vital factor for the purchasing decision as a gift.

Foreign players go into lengths to ensure the quality of their products on the Chinese market. E.g., Hershey’s indicates on its packaging that it uses 100% imported milk.

HersheyImpMilk

Major potential

China’s current per capita chocolate consumption is very low at about 100 grams a person, compared with more than 10 kilograms in Europe. Even in Japan and South Korea, the figure is close to 2 kg. However, by 2016, 340 million Chinese will be middle class – more than the population of Western Europe – creating a huge market. Greater purchasing power – and the growth of large foreign retail chains – will boost consumption. This leaves plenty of room for business growth in China.

Insiders estimate the total value of chocolate sales in Chinese retail in 2019 at RMB 22.4 billion; up 4.4%. The further expect an annual growth of 3.5% for the coming 5 years.

Milk chocolate is still the favourite flavour with Chinese consumers. However, in some developed regions of China, such as in the east, sophisticated customers are more likely to choose dark chocolate as it has an image of being healthier. This flavor’s share of retail value has more than quadrupled in five years to 34% in 2013. Of all the chocolate fillings, nuts are the most popular.

Selling Points of Chocolate

What are the factors to getting Chinese people buying chocolate ? A report shows that the No.1 factor Chinese consumers consider is the taste (30%), following by brand (18%) and price (7%).

  1. Taste

It’s true that in China, taste is the most important factor, but compared to western consumers, Chinese consumers don’t care about the taste nearly as much. A report shows 66% western consumers put taste as the most important factor, while only 30% of Chinese consumers think it’s the top factor.

  1. Brand

When chocolate came to China’s market, it was branded as an exotic food product which is an added extra value. And now the brand has become even more important. First of all, a big part of imported chocolates purchased in China are for gifts or ceremonial use like wedding candy.

For young Chinese men, chocolates, especially luxurious delicately packed chocolates have become a must to show their love to their girlfriends. During the Chinese Valentines’ Day this year, half of the top 10 items sold online were chocolates. That’s why imported chocolates are sold as high class food product.

Apart from their fancy look, imported chocolates also enjoys a fame of high class ingredients. With the growing concern for health and food safety, consumers are becoming more careful about the ingredients of chocolates and imported chocolate are trusted for containing more coco or milk.

  1. Price

When chocolate first appeared in China, the price for a box of imported chocolates was sky-high. Today, chocolate has become a common food product that most people can afford. But some chocolate brands are still famous for their high price such as Ferrero because Ferrero targets on high class chocolate market where price is an important tool to show its value.

A Chinese consumer can easily find reasons to buy a box of imported chocolate for its taste, brand and price. And what chocolate makers need to do is to produce nice chocolate, promote its brand and label with a suitable price.

Local players

Local competitors are still finding it hard to set up a premier brand recognition among Chinese consumers and adopted cheaper compounds to secure price competitiveness.

LeConte holds 6.7% market share and another local company, Golden Monkey (Shanghai), with 1.5% market, was acquired by Hershey in 2015 (after acquiring an 80% stake in the previous year). However, Hershey sold the Chinese subsidiary again in July 2018 to a local party Yuxiang Food Technology (Henan), a company co-founded by Xizang Cangying (literally: Tibet Goshawk) Investment Management Company and Henan-based Youshi Foods, which has become one of the biggest bakeries in central China.

LeConteMCGM-mchoc

Ingredients listed on the packaging of domestic chocolates:

  • LeConte milk chocolate: sugar, cocoa butter, whole milk powder, cocoa mass, skimmed milk powder, lactose, food additives (soybean lecithin, food flavour), cocoa butter 35% min., cocoa solids 40% min., milk solids 26% min. The cocoa beans are imported from Ecuador.
  • Golden Monkey milk chocolate (cocoa butter alternatives):sugar, hydrogenated vegetable oil, cocoa powder, milk powder, whey powder, salt, food additives (lecithin, polyglycerol ricinoleic acid ester), food flavour.

On the other hand, the higher prices of global players also scare away Chinese customers, who do not have the purchasing power of their Western counterparts. There is still room for growth in second-tier cities dominated by these lower-end products. This applies particularly to China’s vast rural population. The challenge for domestic players is to develop affordable chocolate products that apply to the various local tastes and habits.

Perhaps foreign tourists can be charmed into buying chocolate replicas of the famous terra cotta soldiers from Xi’an.

chocolateWarriors

Russian chocolate making progress

Chinese imports of foods and beverages from Russia have been rising during the past few years and chocolate is one of the favourite categories. One Russian chocolate, Krokant, chocolate filled with toffee crunch, is hard on the way to become the most popular chocolate in China. Chinese refer to it as ‘Purple Candy’ due to its purple wrapper. Similar Russian products are also available.

Eurasia Consult’s database of the Chinese food industry includes 123 producers of chocolate products.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

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