CHINA September 2019
 
Food manufacturers need to realign strategies with China's new Health Plan
 
Major food producers, domestic and international, are now looking into realigning their strategies in line with Chinese government plan to reduce salt, sugar and edible oil consumption in its population.
This plan follows the 18 July announcement by China’s State Council of a 'Healthy China Action Plan (2019-2030)' targeting food processors and consumers. Although this plan does not list down any concrete new regulation for food-processing, the plan does list ambitious goals to reduce adults' daily average intake of edible oil by between 30% and 40%; sugar by at least 17%; and salt by 50% by 2030, using 2012 as a statistical base year.
Already, major international companies like Mondelez has started early by providing no/low-sugar products to consumers like its Stride-branded sugar-free chewing gum and mint confectionery products; its low sugar Pacific Soda biscuits; and the highly popular low-sugar Oreo Light Sweet. Mondelez has reduced the proportion of sodium and saturated fat in its ingredient mixes for products sold in China. Oreo cookies sold in China now have 25% less sodium than 10 years ago; Pacific Soda lines have 10% less sodium than in 2012 and the company's new Chips Ahoy! Double Chocolate Soft Cookie launched this May has 20% less saturated fat than past soft cookies. In addition, Mondelez also offers individually-wrapped smaller portion snack options that are under 200 calories.
Another major player, Nestle has also changed its products’ recipes including sugars, salt and saturated fats by 5%, 10% and 10% respectively, as part of its goal to promote healthier lifestyles to the Chinese.
These 2 major companies’ proactive strategies to align their product formulations according to new government policies are brilliant future moves. Between 2002 and 2012, there was a 67.6% increase in Chinese obesity rate and the government aims to reverse this growth. In addition, daily per capita intake of salt in China was 10.5g, much higher than the WHO’s recommended 5.5g. Per capita intake of edible oil was 42.1g in China, also higher than WHO’s recommended 30g.
In addition, the Chinese government is also concerned by the rising number of elderly in the country as well as the growing number of preventable illnesses like cardiovascular diseases, stroke and diabetes brought by higher disposable incomes which resulted in higher consumption of meat, sugar, salt and processed foods. Not only the elderly but also many young children are suffering from obesity and diabetes due to excessive consumption of sugary beverages and snacks.
The Chinese government is also reviewing pre-packaged food nutrition labelling rules so as to ensure sugar, salt and edible oil are clearly highlighted, alongside more mandatory labelling of sucrose.
Companies that might suffer under the Healthy China Action Plan could be the small to medium domestic enterprises as the plan and its associated reforms and campaigns might promote the credibility of larger producers like Mengniu and Yili for example, which are deemed easier to regulate. The new Health Plan might eventually lead to industry consolidation through mergers and acquisitions, or alternatively through government’s action of getting rid of the smaller players who failed to comply to the new regulations.
There is already a growing consumer awareness on leading healthier lifestyles and diets in China, however with the government attempting to turn this into policy should greatly accelerate this change.
Food and beverage companies investing or doing business in China should be mindful of this new Healthy China Action Plan in their present and future R&D activities.
 
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