Restrictive Requirements for Imports

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Quick Stats

Quick Stats

Organics Dashboard From Passport

  • Inner Mongolia Yili Industrial Group Co Ltd leads the organic segment in China with a value share of 27.9% in 2021, followed by China Mengniu Dairy Co Ltd with a value share of 12.9% and Nestle SA with a value share of 9.5%.
  • China continues to show organic growth above the regional and global averages, posting a 13.3% expansion in 2021. A positive growth pattern is expected to continue, with China averaging a CAGR of 7.1% the forecast period 2021-2026.

 

  • Organic products in China recorded a market size of US$4.8 bn in 2021, representing roughly 8.0% of global demand. However, a per capita expenditure of US$3.40 indicates organic products in China are still a relatively niche category. 
  • With an increasing emphasis on the importance of organic products among the younger generation and a rise in demand for organic baby food due to the growing number of mothers in the workforce and the increasing adoption of the health and wellness trend, organic products are expected to record strong growth in China, registering a value CAGR of 7.1% for the forecast period 2021-2026, reaching a total of US$6.4 bn by 2025.
Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Rising demand was seen for good quality and healthy products due to Covid-19 in 2021, leading to a stronger performance for organic packaged food. Organic baby food was a highlight, growing 15.6% in the year.
  • Organic packaged food saw 13% growth in retail current value in 2021, to reach US$4.7 billion. The category expected to see a current value CAGR of 5.3% over the forecast period, to reach a value of USD$6.3 billion in 2025.
  • Organic beverages saw 11% growth in retail current value to reach USD$68.4 million in 2021.
Market Trends
  • Organic baby food has remained the largest category within organic packaged food in 2020, with organic milk formula achieving the highest sales and also seeing exceptional growth. Chinese parents have been careful with the products they give their children and are happy to spend more if necessary. However, it is not necessarily the organic nature of these products which attracts parents. Organic baby food has an advantage mainly due to its premium positioning, because parents believe if they pay a higher price, they are getting better quality. 
  • Organic beverages remain by far the smallest category within health and wellness beverages in China, due mainly to weak consumer awareness. Sales of organic soft drinks are not notable in China, with organic hot drinks remaining dominant, and within this, sales are exclusively of organic tea, mainly organic green tea.
  • One of the barriers to the production of organic beverages in China is the high costs involved. To obtain organic certification, no chemical synthetic substances should be used in pesticides, herbicides, fertilisers, or other additives used for the growing of ingredients. According to national standards, it takes at least three years to obtain a certificate. Even with all these factors in place, certification is only valid for one year, and requires an annual inspection to retain the label, with organic certification sometimes revoked. Most players do not consider it to be worth the effort and cost involved.
Competitive Landscape
  • Increased attention to safety and high-quality standards considering the spread of Covid-19 has increased sales of organic milk. The category has also been stimulated by product innovation. Leading player Inner Mongolia Yili Industrial Group launched organic milk with zero fat under its brand Satine, catering to the demands of young women. It also offered organic milk for children in a small pack. The brand comfortably leads the organic landscape in China, with 28% market share. Chinga Mengniu Dairy Co holds a distant second place with 13% share.
  • Manufacturers have been keen to launch organic milk formula to cater to parents’ needs. For instance, in March 2020 Junlebao launched organic milk formula with hydrolysed protein and probiotics to help digestion. Danone also added a new organic milk formula to its portfolio, Aptamil Essensis 3, which contains A2 protein and serves as a super premium offering. In addition, Heilongjiang Feihe Dairy launched super premium organic milk formula in October 2020 to enhance its organic offering.
  • Traditional tea brands are now attempting to explore organic tea. For example, leading international tea player Unilever China attempted to introduce its Pukka brand of organic tea into the Chinese market in October 2020, featuring products for acne treatment, soothing nerves, and detoxification.
Prospects And Growth Opportunity
  • Organic baby food is set to see the strongest growth, extending its lead in the category. As parents are particularly concerned about the quality of the food they give their children, more are likely to turn to organic baby food. Nevertheless, all organic packaged food categories are expected to see both retail volume and current value growth in the forecast period.
  • Although organic dairy is forecast to see a retail volume decline in 2021, offsetting the growth seen in 2020, the category is expected to return to strong growth over the following years. This explains Inner Mongolia Mengniu Dairy Industry (Group)’s optimism and its continued investment in organic dairy. For instance, it has increased its investment in China Shengmu, and become the largest shareholder in this organic dairy company. This is expected to help Mengniu gain share within organic milk, drawing closer to the leader Inner Mongolia Yili Industrial Group, and will also aid in the development of new products.
General Health And Wellness Trends
  • The National Health Commission’s “Healthy China 2019-2030 Initiative” sets out the “Three Reduce, Three Health” plan to advocate healthy lifestyles. One of the elements of the plan is to reduce the intake of sugar in both packaged food and beverages. Although China has not imposed sugar taxes on the food and beverage industries, unlike many other markets, the release of the plan was also seen as encouragement for manufacturers to develop reduced sugar and sugar-free products.
  • Although rising from a low base, the organic segment is expected to perform particularly well in both packaged food and beverages in the forecast period. Higher-income consumers are increasingly looking for better quality in the products they purchase. They tend to believe that higher prices indicate higher quality, and therefore they are increasingly selecting organic products, as these carry higher prices. However, they are choosing them due to the belief that they are high quality, not necessarily because they are organic.
General Economics And Demographic Landscape

Economy: 

  • Following real growth of 8.9% in 2021, China’s economy is expected to expand by an average annual real rate of 4.1% over 2022-2040.
  • Inflation in China is forecast to increase to 2.2% in 2022 from 1.0% in 2021.
  • As China’s exports increased by 31.1% during 2021, the country’s trade surplus reached record-high levels.
  • FDI inflows in China continued to grow and reached an all-time high of US$179 billion in 2021, supported by strong investment in hi-tech and services sectors.
  • Public debt levels in China increased slightly to 67.6% of GDP over 2021, standing below the regional average of 94.7%.

Population demographics: 

  • China’s population will peak in 2029, but after this point deaths will overtake births resulting in depopulation every year up to 2040. When China’s population reaches nearly 1.4 billion in 2040 it will be the second largest country globally, after being surpassed by India in 2026.
  • Extremely low fertility and diving birth rates, as well as climbing longevity, ensure that the ageing trend accelerates up to 2040. Rapid expansion of the 70+ age cohorts of over 100% in 2019-2040, alongside declines in most age groups under 60 years, will result in a transformation of consumer trends.
  • Eight of China’s ten major megacities will experience overall population growth in 2019-2040, except for Shanghai and Beijing. Dongguan is set to grow the fastest, influenced by its high-tech transformation.

Income & expenditure: 

  • Per capita gross income in China is forecast to increase by 153% in real terms over 2021-2040.
  • Young adults are projected to become predominant in the top-income band by 2040, shaping luxury spending patterns in China. 
  • Income inequality is estimated to increase over the long term and remain extremely high by global standards.
  • The Guangdong region is anticipated to remain the largest consumer market in China by 2040, accounting for 11.1% of total consumer expenditure.
  • Housing is forecast to be the largest consumer spending category in 2040, while hotels and catering will record the fastest growth over 2021-2040.
  • Over the period 2020-2030, China is projected to increase by seven positions and rank 16th out of 84 countries in Euromonitor International’s Wealth Index.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2018

2019

2020

2021

2022

2023

2024

2025

CAGR
(18-21)

CAGR
(22-25)

Health & wellness products consumption

USD million

118,502.8

125,815.9

125,014.1

133,606.9

138,014.8

142,177.3

146,217.9

150,028.2

3.0%

2.1%

Organic packaged food and beverages consumption

USD million

3,250.2

3,531.7

4,237.9

4,800.9

5,186.4

5,589.8

5,988.8

6,374.9

10.2%

5.3%

Organic packaged food consumption

USD million

3,198.6

3,474.6

4,176.2

4,732.5

5,113.0

5,511.6

5,906.0

6,288.0

10.3%

5.3%

Organic beverages consumption

USD million

51.6

57.1

61.7

68.4

73.4

78.2

82.8

86.9

7.3%

4.3%

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

2.7%

2.8%

3.4%

3.6%

3.8%

3.9%

4.1%

4.2%

-

-

 

Economic And Demographic Data

Data type

Unit

2018

2019

2020

2021

2022

2023

2024

2025

Total population

million

1,391

1,399

1,406

1,412

1,413

1,414

1,414

1,413

% Middle and upper class of total population

%

21.6

21.6

21.6

21.6

21.5

21.5

21.5

21.5

% Population aged 65+

%

11.3

11.8

12.4

12.9

13.4

13.9

14.3

14.8

% Population aged 0-14

%

17.3

17.2

16.9

16.6

16.3

16.0

15.6

15.3

% Population with higher education degrees

%

14.3 

14.5 

14.7 

14.9 

15.0 

15.2 

15.3 

15.4

Average number of children per household

children

0.6

0.6

0.5

0.5

0.5

0.5

0.5

0.5

GDP per capita

USD per capita

10,249.5

10,935.4

11,202.2

12,652.4

13,237.9

13,879.4

14,545.0

15,203.7

Consumer expenditure per capita (US$)

USD per capita

3,918.6

4,249.5

4,287.2

4,657.6

4,906.1

5,145.9

5,373.3

5,614.1

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

765.5

822.9

936.8

929.3

963.0

1,020.3

1,070.9

1,114.7

 

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2021)

1

Shanghai

24.1

Top cities by population (2021)

2

Beijing

21.9

Top cities by population (2021)

3

Tianjin

16.0

Top cities by population (2021)

4

Guangzhou

14.3

Top cities by population (2021)

5

Shenzhen

12.6

 

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2021)

1

China Resources Enterprise Ltd

Top grocery retailers by sales (2021)

2

Auchan Group SA

Top grocery retailers by sales (2021)

3

Yonghui Superstores Group

Top grocery retailers by sales (2021)

4

Walmart Inc

Top grocery retailers by sales (2021)

5

Sinopec Corp

 

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To China

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2021

China

1

Organic Vinegar and Substitutes

2,397,312

2021

China

2

Organic Apples Fresh

674,836

2021

China

3

Organic Cherries Fresh

298,465

2021

China

4

Organic Milk

260,450

2021

China

5

Organic Tomato Sauce Ex Ketchup

207,581

2021

China

Total

Total Organics*

4,293,854

2020

China

1

Organic Apples Fresh

1,341,800

2020

China

2

Organic Cherries Fresh

922,240

2020

China

3

Organic Cherry Tomato Fr/Ch

848,033

2020

China

4

Organic Tomato Sauce Ex Ketchup

735,303

2020

China

5

Organic Vinegar and Substitutes

590,015

2020

China

Total

Total Organics*

5,402,178

2019

China

1

Organic Carrots Fr/Ch

282,488

2019

China

2

Organic Tomato Sauce Ex Ketchp

233,659

2019

China

3

Organic Vinegar and Substitutes

142,841

2019

China

4

Organic Coffee Roast Not Decaf

124,091

2019

China

5

Organic Fruit Prep

108,995

2019

China

Total

Total Organics*

1,188,347

2018

China

1

Organic Cherries Fresh

1,863,467

2018

China

2

Organic Apples Fresh

669,346

2018

China

3

Organic Fruit Prep

542,174

2018

China

4

Organic Vinegar and Substitutes

312,960

2018

China

5

Organic Coffee Roast Not Decaf

276,515

2018

China

Total

Total Organics*

4,231,286

 

Note : Total organics is the sum of all exports in a particular year  

Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2018 – 2021 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2018-2021 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Standardization Administration of China (SAC) and the General Administration on Quality Supervision, Inspection and Quarantine (AQSIQ).

Agency(s) Contact Information:

Standardization Administration of China
No. 9 Madian East Road
Haidian District
CN-Beijing 100088
Telephone: +86 10 8226 2622
Fax: +86 10 8226 0660
Email: sac@sac.gov.cn
Web

State Administration for Market Regulation (SAMR)
No. 9, Madian East Road
Haidian District
Beijing100088
People's Republic of China
Telephone: +86 10 8226 1056
Email: sac_info@sac.gov.cn
Web

Certification and Accreditation Administration of the People’s Republic of China (CNCA)
No. 9, Madian East Road
Haidian District
Beijing100088
People's Republic of China
Telephone: +86 10 8226 0777
Fax: +86 10 8226 -799
Email: infocnca@cnca.gov.cn
Web

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

In 2019, China published a revised national standard for organic products and released revised organic certification regulations.  The new standard and regulations took effect on January 1, 2020.  The new standard GB/T 19630-2019 incorporates and replaces the organic standards published in 2011.  The standard and certification regulations are voluntary but for a product to be marketed in China as organic, compliance with this standard and regulations is mandatory. National Standards for Organic Products, GB/T 19630-2005 were updated in 2011 to National Standards for Organic Products, GB/T19630-2011.

An official or unofficial translation is not yet available.

See USDA's GAIN Report: China Publishes New Organic Standard and Certification Rules 

Date of Implementation: 2005

Regulation and/or Standard Scope:

The Chinese standard covers the general specifications and requirements for organic production, processing, transport, storage and packaging of crops, edible fungi, wild plants, livestock and poultry, aquatic products, textiles, and apiary.

China will begin new organic national standards for organic products and new regulations for certification and use a revised eligible products list on January 1, 2020. Products marketed in China as organic must comply with this standard and accompanying regulations.
 
The new organic standard includes changes to production and processing inputs, such as adding microbial preparations for control and prevention of animal diseases, adding detergents and disinfectants in plant production, adding requirements for packaging materials for feed products, adjusting lists of food additives, processing aids, and feed additives eligible for organic production and/or processing. The standard also changed the requirements for the labeling of organic conversion products. 

The new organic certification rules appear to have streamlined some certification practices. For example, an overseas organic production site which has been certified organic certification for at least four years can be waived from a 12-month organic conversion period before being certified to the Chinese organic standard. And if an organic product is produced or processed overseas, the product sample can be tested by a local testing agency. Site inspection requirements have also been simplified.

Imported Products

China does not allow equivalence agreements with other countries. US producers, even though they are USDA certified, will not be allowed to use the Chinese term for organic unless they receive Chinese certification. See the reports in Additional Information below for more detailed information about meeting China's requirements for imported products.

China and New Zealand have an arrangement on mutual recognition of organic product certification and equivalence of their organic products systems. 

Certification and Accreditation

Certification:

United States Department of Agriculture Foreign Agriculture Service UNOFFICIAL translation of certification rules .pdf (2012) Another revision of the organic product certification system is in process.

There are local and foreign certifiers available.
Two major Chinese certifying organizations: China Organic Food Certification Center (COFCC) and Organic Food Development Center (OFDC).

There are numerous third-party certification services located in China that certify to the China Organic Standards including the following public control authorities:
Fangyuan Organic Food Certification Center (FOFCC) http://www.fofcc.org.cn/
China Quality Mark Certification Group (CQM) http://www.cqm.com.cn/cqm/chanpinrenzheng/nongshichanpinrenzheng/

Joint-venture or foreign certification bodies are:  
Agricert https://agricert.pt/en/certificacao/organic_china
EcoCert https://www.ecocert.com/en/certification-detail/organic-farming-china-gb-t19630-2019
Australia Certification Ltd. https://www.aco.net.au/Pages/Operators/ChinaStandards.aspx
NASAA Organic https://ncocertifiedorganic.com.au/organic-export-requirements/organic-certification-for-china/
SRS https://srs-certification.com/certserv/org-2/

Accreditation Method:

Government

Accreditation:

Certification and Accreditation Administration of China (CNCA)
CNCA Organic Product Certification Catalogue - 2019: http://www.cnstandards.net/index.php/organic-product-certification-catalogue-cnca-2019/

China does not allow foreign assessment bodies, such as USDA, to accredit certifiers.

Additional Information

Reference Standards:

USDA's GAIN Report China Publishes New Organic Standard and Certification Rules (2019)
The China Organic Standard GB/T 19630: https://srs-certification.com/wp-content/uploads/2020/02/OGA-Ti7-China-Organic-Standard-GBT19630-2019-12-12.pdf

Additional Information:

Food importers must register every four years. See GAIN Reports below for more information.

U.S. International Trade Administration

USDA's GAIN Report Update - US Pet Food is Poised to Expand in the China Market (2022)
USDA's GAIN Report GACC Updates Decree 248 Product List (Feb. 2022)
USDA's GAIN Report Verifying Decree 248 Facility Registration Information (2022)
USDA's GAIN Report Update to Imported Dairy Product Inspection and Quarantine Requirements (2022)
USDA's GAIN Report Administrative Measures on Import and Export Food Safety - Decree 249 (2021)
USDA's GAIN Report Overseas Facilities Registration Regulation - Decree 248 (2021)
USDA's GAIN Report Decree 248 - FDA Constituent Update (2021)
USDA's GAIN Report Decree 248 Single Window User Manual and Training (Dec. 2021)
USDA's GAIN Report Decree 248 Information Update (Dec. 2021)
USDA's GAIN Report Decree 248 HS Codes Published in GACC Single Window (Dec.2021)
USDA's GAIN Report GACC Issues Interpretation of Decree 248 (Nov. 2021)
USDA's GAIN Report Decree 248 Unofficial Self-Registration Guide for Overseas Food Facilities (Nov. 2021)
USDA's GAIN Report Decree 248 Foreign Facilities Self-Registration Website Launched (Nov. 2021)
USDA's GAIN Report China Releases Draft General Standard for the Labelling of Prepackaged Foods for Domestic Comments (2020)
USDA's GAIN Report China Implements Food Safety Law Implementing Regulations (2019) Includes unofficial translation.
USDA's GAIN Report Smart Consumers and ‘New Retail’ drive China’s Food Retail Sector (2019)
USDA's GAIN Report China Retail Foods Change and Opportunity (2018)
USDA's GAIN Report China Passes E-Commerce Law (2018)
USDA's GAIN Report Exporter Guide to China (2022)
USDA's GAIN Report Consumer Study on China's Imported Food Products (2018)
USDA's GAIN Report Retail Foods Report (2021)
USDA's GAIN Report Snack Food Market Overview (2021)
USDA's GAIN Report Food Processing Ingredients (2022)
USDA's GAIN Report Food Service Hotel-Restaurant Institutional (2022)
USDA's GAIN Report China Retail Foods Change and Opportunity (2018)
USDA's GAIN Report Macau Food Retail Industry (2018)
USDA's GAIN Report The Notice on the Technical Review of Relevant Standards for Imported Foods Without Applicable National Food Safety Standards (2020)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2022)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2022)

Hong Kong does not have a law regulating organic food products.  U.S. organic products can be sold in Hong Kong with the USDA organic logo. See the Global Organic Trade Guide's page for Hong Kong for more information about this Special Administrative Region of the People's Republic of China.