• The total market size for organic packaged food and beverages in China in 2017 is US$2,839.2mn. The country ranks as the 4th largest market in the world by value.
• Sales growth is due in large part to the overall health and wellness trend in China and consumers’ rising incomes but is constrained by consumer skepticism about organic products’ value over conventional offerings.
• Organic standard milk dominates the landscape.

• Organic packaged food sales grew by 18.6% in 2017 versus 2016, and organic beverages sales grew by 17.1%.
• Rising disposable income levels and a growing consumer focus on product quality and food safety are also encouraging consumers to trade up to organic products, particularly in the wake of a number of recent food safety scandals.
• Organic standard milk dominates overall value sales, accounting for more than 71% of total market value.

• China's dairy giant, Inner Mongolia Yili is the market leader with 29.1% value share in 2017.
• International companies such as US-based Abbot Laboratories and Bellamy’s Australia have increased their market shares in recent years, largely at the expensive of local Chinese firms.

• As Chinese consumers’ incomes continue to rise, organic food and beverage sales value is projected to continue growing in coming years, albeit at a slower pace as the category matures.
• Manufacturers are expected to expand their product ranges to attract increasingly affluent and health-conscious consumers.
• Organic milk sales will continue to grow as consumers trade up to organic products, particularly for their children.
• Tea is projected to remain the fastest-growing organic beverage category through 2021.

• Due to the rise of obesity, high blood pressure and diabetes in China, demand for healthier food and beverages—particularly those low in sugar or sugar-free—is growing.
• Fortified/functional beverages are increasingly popular among consumers with fast-paced lifestyles and demanding work schedules as a means of boosting their energy levels.

Economy:

• China’s real GDP growth rates have been decelerating in recent years after a prolonged stretch of rapid growth.
• The economy continues to be sustained mainly by a flood of cheap credit supplied by state-run banks.
• A high level of inequality, especially between urban and rural areas, will remain a key challenge to consumer goods businesses.

Population demographics:

• In 2017 China’s population was almost 1.4 billion.
• The fertility rate is presently 1.8 births per female. China abandoned the one-child policy in 2015, and fertility rates are expected to gradually increase to 1.9 births per female through 2022.
• The country is rapidly urbanizing. More than half of all Chinese live in urban areas, and up to 70% are expected to be urbanites by 2030.

Income & expenditure:

• The income of urban households is, on average, several times higher than that of rural households, but the gap has narrowed in recent years.
• For the period 2017-2030, total consumer expenditure will grow at an average annual rate of 5.5% in real terms.
• Disposable income per capita totaled RMB37,000 (US$5,474) in 2017.