This article is based on the speech delivered by Frank Li, chief content officer of foodaily, at the DSM 2020 high end partner technology directors forum.
Meat products are an indispensable part of human diet. Although the wave of vegetarianism and vegetarianism is rising year by year, meat still plays an irreplaceable role on the Chinese table.
At present, the global epidemic situation fluctuates repeatedly and is in dire straits. Only China is unique, and the social and economic recovery is accelerated, “internal circulation” has become the main theme of the current economy, and the meat industry ushers in new development opportunities. From the industrial level, optimizing the proportion of meat sources, increasing the proportion of processed products and enriching the types of products are the only way to improve the competitiveness of the industry. From the perspective of enterprises, it is the secret to win the favor and trust of consumers and stand out in the competition by studying the preference of subdivided groups, reshaping the brand image and facing the challenge of plant meat.
The new consumption wave, marked by the rise of the new generation, the popularization of new retail and the outbreak of new domestic products, is pounding every economic field. What is the significance of the new business environment for China’s meat industry? What are the potential opportunities for attention in the overall pattern of meat market? What is the direction of global meat product innovation? What guiding significance does it have for the upstream feed breeding enterprises?
Food consumption trend in post epidemic Era
Compared with the past five years, the changes of food business environment are mainly reflected in the changes of consumers, consumption scenarios and dietary demands. The cognition of these changes is the basis of analyzing the opportunities and challenges of meat industry.
1. Differentiation and combination of consumer groups
In the “double 11” of 2019, Alibaba proposed eight emerging consumer groups in China. The division of these consumer groups includes not only the traditional dimensions of age and gender, but also new considerations such as social identity, income level, living area and living habits. With the increase of dimensions, we can distinguish people more precisely and precisely. Through the big data of tmall online trading, we can clearly see the business potential of 8 groups of people. Senior middle class, exquisite mothers and new white-collar workers constitute the backbone. They are about 300-400 million people, accounting for 60% of the total sales. The youth of the town and generation Z constitute a new force group. In the next few years, they are likely to grow into the backbone. Urban silver hair, urban blue collar and the middle-aged and elderly in small towns constitute the blue ocean group. With the aggravation of aging, the proportion of middle-aged and elderly population is increasing year by year, and the consumption ability of blue ocean people can not be ignored.
2. Construction of consumption scenarios under the new normal of epidemic prevention
An epidemic has forced us to stay at home, reduce gatherings and contacts, and the family has become a new hub for interpersonal connection and a gathering place for consumption scenes. It’s not only family relationships and parent-child relationships that have been rekindled. Many people are also looking at work life balance, learning new skills, or paying attention to their own health. In the past six months, dairy products, convenience food, health care, decompression, immune enhancement, one person food, night food and many other categories and concepts have experienced explosive growth.
Now, the domestic epidemic situation has been completely controlled, the vitality of the catering industry has been restored, and the supermarket shelves are no longer out of stock. Of course, prevention and control measures are still needed. Contact free and keeping social distance will still be important social life standards in the future. Restaurant robots, unmanned retail and home business will continue to grow. For sensitive groups, such as children, the elderly, pregnant and lying in women, special occupations and other groups, products suitable for small parties and office consumption will be favored.
3. From physical safety to circle identity: the evolution of consumption proposition
At present, diversified consumption demands can be found in Maslow’s pyramid demand theory. Meeting the basic physiological needs is at the bottom. With the improvement of the economic level, people’s consumption demands are also rising. From the most basic physiological needs to the focus on nutrition and health, the pursuit of convenience, functionality, emotional demands, to the top level of individual realization, that is to find social attributes and circle identification. With the acceleration of the change of the generation of consumers, the performance of consumption proposition tends to be more circle and personalized.
Among all the consumption propositions, how to choose between health and delicious food is the epitome of the contradiction after the diversification of consumption demand.
In addition, in the era of rapid development of the Internet, the traditional progressive demand division is becoming more flat, and consumers expect to meet the needs of different fields at the same time. For example, health preserving young people who stay up late and work overtime want a sausage which can satisfy the stomach, taste good and is full of healthy elements; the new middle-class people after light fitness need not only a sports drink that can quickly supplement energy and electrolytes, but also hope to pass on their life attitude and taste pursuit to their peers and mobile phone friends through product packaging and brand Please.
Photo source: four major industry consumption trends: Rereading consumers, Ali’s mother, April 2020
Overview of meat food market in China
If we use one sentence to describe the overall pattern of meat products consumption in China, it is that the well-off society has passed and the wealth has not yet been fulfilled.
In 2017, China’s per capita meat consumption ranked in the middle of more than 40 major countries in the world, showing a high degree of consistency with the per capita GDP level. From the stage of consumption level, China is in the process of moving forward from the second stage (well-off) to the third stage (affluence). The consumption scene shifts from family cooking to catering industry; from holidays to daily life; the new generation and middle-class groups in high-speed cities gradually have personalized meat consumption concept, and plant-based, functional, snack and all natural are gradually becoming a trend.
1. Steady optimization, huge room for improvement: market scale and consumption structure of meat products
In the past three years, China’s meat product market scale has remained high and stable, and the consumption structure needs to be optimized. From 2017 to 2019, the proportion of processed meat products in China increased from 18.73% to 23.20%. Compared with the global average of 45% and the level of over 70% in developed countries, the processing degree of 23% still has considerable room for improvement.
In terms of product types, the proportion of the most popular chilled meat increased year by year, from 30% in 2017 to 37% this year. Similarly, compared with 87% in the United States and 90% in Japan and the United Kingdom, 37% has a significant gap.
Let’s look at the comparison of consumption structure of meat products. Meat consumption in China is still dominated by pork, accounting for more than half. In Japan and the United States, pork accounts for only more than 20%. In Japan, the most important consumption is aquatic products. In the United States, poultry meat (including Turkey) is the main consumption. The consumption of beef has decreased significantly compared with 10 years ago. Although different countries have different dietary traditions, the adjustment of the sources of meat products is directly reflected by the diversified dietary needs.
In addition to fresh meat and traditional processed meat products, the consumption pull of leisure meat products for meat products can not be ignored. Although its proportion is only 4% (generally reaching 60% in foreign countries), the average annual growth rate is still above 30%. Among them, as the leader of leisure meat products, the market scale of leisure halogen products is expected to reach 120 billion yuan in 2020.
2. The industrial chain is long, and new retail brings opportunities for industrial restructuring
Similar to dairy products, meat products also span the first, second and third industries, involving feed processing, livestock and poultry breeding, slaughtering primary processing, deep processing, cold chain logistics, to the terminal catering and household consumption. The chain is long, and each industrial link has its own independent ecological system and brand camp.
Under the impact of new retail, meat industry is setting off a subversive revolution. From product oriented to consumption oriented, from controlling raw materials to controlling data and flow, new sharp brands, new product forms and new marketing models are constantly emerging The traditional pattern of meat industry is facing restructuring.
3. Oligarchy and Decentralization: joy and worry of head brand
The market concentration of leading brands generally reflects whether the market competition is sufficient, whether it is in a stable period or a period of differentiation and reorganization. China’s top 5 market shares in feed breeding, slaughtering and processing are 6%, 5% and 26%, respectively, which are decentralized markets.
High temperature pork products and low-temperature pork products occupy a considerable share of the whole domestic meat industry. In the high-temperature meat market, Shuanghui is far ahead of other brands with 63% share. Its three super items: Wang Zhongwang, runkou xiangtian Wang and instant noodle partner have almost divided up half of ham sausage. In the current new consumption wave, high-temperature meat products are obviously difficult to attract the new generation of people, few new forces are willing to enter, and the market is relatively cold. But high temperature meat products are still in great demand in low-end cities.
Low temperature meat products have better freshness and taste, which are more in line with the current consumption trend. There are many brands in the market, showing a high degree of dispersion. Shuanghui, Yurun, Jinluo, Xiwang, Hormel and delis have a total market share of only 26%, leaving a broad stage for small brands and new forces.
With the increasing proportion of low-temperature meat products in the meat processing industry, the market space is increasing day by day, and the competition is intensifying. The traditional big brands need to improve their product positioning, brand image and marketing strategy to cater to the new generation of consumers.
4. New meat force: who says meat is not delicious?
The continuous influx of new forces in an industry indicates that there are still demands that cannot be met or the existing demands are not well met, which leads to market cracks. New forces can make old brands start to seek innovation and change, and activate the competitiveness of the industry. Chinese people’s preference for meat supports a huge industrial space, and it is difficult to fill this market only by existing brands.
The new forces of meat mainly come from four fields. The first is to expand the product line to meat products from fitness, body control and meal substitute. Such as mint health, Mr. kangaroo, etc. And from the second snack brand, such as squirrel. The third is some brands that focus on health, nature and new scenes, such as pig leader, Xiansheng, a brand of Xiansheng. The fourth one comes from e-commerce platforms, including comprehensive ones, such as Netease yanxuan, and community fresh food optimization platforms, such as geben yanxuan. After having a stable customer base, these e-businesses will develop their own brand products. Highlight the origin of high-quality food materials, good quality and healthy nutrition.
5. Social media, fashion, joint name grass planting: what do traditional meat brands rely on to catch the hearts of young people?
Different from the new forces, traditional meat brands in the eyes of the new generation are often equated with the past tense, with conservative and stereotyped. Foodaily has previously analyzed how many traditional industries are transformed and upgraded under the new consumption wave, and how to grasp the hearts of young people. Social media, keeping up with fashion trends and cross-border co branding with other well-known brands have become the most commonly used strategies. Here we take three brands of Jinluo, Shuanghui and Hormel as examples.
Last May tiktok launched a tiktok on the shaking, which was called 6#’s challenge and challenge, and urged consumers to bravely show their healthy shape. Through the mode of “national idol + hot topic”, the activity creates participatory experience, achieves good participation and interaction, and achieves ideal communication effect.
Tiktok, in collaboration with jitter and incity city life festival, was also digging in 2019 to cater for the trend of youth. It also deeped and spread the city and brand characteristics to inspire young people’s sympathy.
Unlike Jinluo and Shuanghui, which rely on social media, Hormel uses co branding to attract women. They jointly launched the women’s sports life report with keep and Mary Daijia, which integrated meat consumption into women’s sports life and implanted product related topic data, creating a new positioning for the brand.
6. Plant meat: cold thinking behind the upsurge
Plant meat is undoubtedly one of the hottest topics and business opportunities. Under the promotion of media and capital, domestic meat enterprises have also laid out the vegetable meat market one after another, making use of consumption hot spots to enhance brand popularity. In April this year, Shuanghui and bean eater IP jointly sold vegetable meat in tmall’s flagship store. One month later, Jinluo launched the “vegetarian meat pie” series of plant meat.
How far can plant meat go in China? Is it possible to form sustained and stable consumption, or is it a flash in the pan? According to the consumer survey results of Ipsos, most of the vegetable meat consumers expect are Western-style meat, such as steak, sausage and beef jerky. Why is no one expecting vegetable meat in Chinese food? At the end of the day, the taste of vegetable meat is not satisfactory. The plant meat in Western food is more a kind of taste, but if we want to make it into Chinese food, we will face the huge risk of challenging our daily eating habits. In order to achieve long-term development of plant meat in China, it is necessary to have a foothold in Chinese food, and its taste and taste are still the biggest challenges.
Photo source: opportunities and challenges of plant protein in China market, Ipsos, 2020
Global meat food innovation direction
From a global perspective, after repeatedly experiencing the impact and test of epidemics and public health events, people’s demands for meat food have shifted to safety and health. The convenience reflected by packaging design and eating methods has become an inevitable consideration under the fast-paced life.
In the past four years, among the top ten statements of meat snacks listed in the Asia Pacific region, three items related to health were “no addition”, “high protein” and “fat reduction”, while those related to convenience included “easy to eat”, “edible on the road”, “convenient packaging” and “microwave heating”.
With thousands of years of history of meat eating, meat has carried the demands of satiety, supplementing high-quality protein, satisfying hobbies, releasing pressure, showing diet and life attitude and so on. After meeting the two main needs of health and convenience, the enjoyment, humanity and emotion elements contained in meat food have been enriched. From tens of thousands of new meat products every year, we can see the depth and extension of product innovation.
Compared with the healthy words of high protein, all natural, no resistance and pure grass feeding, the functionalization of meat products is more exciting. From weight control and meal substitution to lowering blood lipid & cholesterol, calcium supplement and anti hangover of special groups, the consumption frequency and population penetration rate of meat in daily diet can be higher.
The pickles and pickles in the tomato sauce and mustard sauce on the left side of the breakfast are served with the fresh and refreshing flavor of pickled beef and mustard. This fish sausage on the right is rich in calcium, which helps young women maintain healthy bone health and reduce the risk of osteoporosis in old age.
2. Segment the population
Mobile Internet makes people’s life scenes become extremely rich, and more and more meat products positioning is shifting from the public and daily diet to more subdivided groups and food scenes. Women, silver haired, children, outdoor sports, games, staying up late It’s turning into a new blue ocean of meat.
The dried salted kangaroo meat on the left is rich in conjugated linoleic acid, with protein content of nearly 60% and fat of less than 3%. It can meet the nutritional needs of shaping and saving people. On the right, this little yellow man shaped fish cake was originally only sold by USJ. Now it is more used as a retail product of Shangchao. Cartoon modeling is easy to stimulate children’s appetite, can be used as part of the children’s lunch box.
3. New taste, new eating method
Meat is often combined with local cultural imprints and eating customs. For example, the use of herbs, spices and special ingredients (farmhouse cheese, black beer, rata sauce, etc.) will make people instantly associate with the flavor of their hometown. When the products are made into wine snacks or bibimbap dishes, meat will become omnipresent all-weather food
On the left is a vacuum packed toothpick pork. The pork is dipped in a special sauce based on soy sauce and baked over an open fire. The fresh pork is delicious, juicy and rich in lean meat. At the same time, it is seasoned with spicy pepper to increase the flavor. Toothpicks are included in the package, which can be eaten without touching hands. It is the best choice for drinking. On the right is a pre frozen wild salmon. The meat of the product is delicate and mild in taste. Each salmon fillet is sprinkled with a mixture of millet, lemon and orange, ginger, garlic and onion, and served with garlic and brown sugar sauce. Grill fillet for 26 minutes, add sauce, and serve with rice.
From dining table to farm: how do upstream industries respond to consumption trends?
In the eyes of ordinary people, feed breeding enterprises are far away from consumers, and consumption demands can affect the processing end at most. The enterprises in the upper reaches of the river only need to raise livestock and poultry well to ensure the meat quality and safety. In the eyes of many farm managers, they are more concerned about how to prevent and control feed prices and animal epidemics, and selectively ignore changes in the consumer side. However, industrial innovation is never just a matter for downstream enterprises. In the face of increasingly changing consumer demands and the market pattern of new forces constantly pouring in, the transformation and upgrading of meat industry needs the active participation of upstream enterprises.
As a matter of fact, we have noticed that the breeding industry is changing. With the promotion of AI and 5g technology, smart farm has become a new round of investment hotspot. From Netease’s self run pig farm, to Ali et agricultural brain, and then to Jingdong Shennong brain, pig raising is crazy in the intelligent scene. Visual weight estimation, pig face recognition, animal wearable devices, diagnostic algorithms These new technologies not only provide a strong guarantee for the standardized management of farms, but also lay a solid foundation for the production of safe and high-quality meat.
Image source: vectorstock
In addition to using high-tech means, upstream enterprises can also think about how to match the needs of consumers in the breeding stage. For example, functional meat products can be designed into different nutritional forms, including rich omega-3 fatty acids, conjugated linoleic acid, selenium, phytosterol, collagen, and low cholesterol. In general, processing enterprises achieve this by adding functional ingredients. At the breeding end, can formula feed be used to efficiently produce meat rich in specific ingredients in the growing process? For example, to get meat products with immune function, can animals produce immune antibodies in the process of breeding? This may involve regulations and safety issues, but it will be beneficial to broaden the business perspective of upstream enterprises and improve the differentiation of aquaculture output.
If one day, when farm owners start to study the meat purchase data of e-commerce platforms and pay attention to the annual consumption trend, it will be a clarion call for China’s meat industry to take off again.
The instant explosion of plant meat makes people rethink the advantages and disadvantages of meat. The new outbreak has made people realize that meat is so important to us. The diversified demand under the rigid demand and the subversive new forces in the traditional industrial pattern constitute the main line of the development of meat in China at present.
The innovation road of China’s meat industry needs the close cooperation between upstream, middle and lower reaches, the cleaning and promotion of new consumption wave, and the acceleration and assistance of science and technology.
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