Canned/preserved Food in Hong Kong, China

Abstract

Improved Results Due To Excellent Economic Performance

The overall performance of the packaged food market in 2008 was exceptionally good as the economy in Hong Kong strengthened, resulting in increased consumer purchasing power, which boosted levels of consumption. The overall economic conditions in Hong Kong are looking more positive and people are more optimistic regarding their future. Consumers became more willing and able to spend more on indulgence products, and to buy better quality packaged food.

Trend Towards Healthier Food Options

With increased sophistication and knowledge of health issues, consumers in Hong Kong are paying more attention to health and wellness products, such as organic and reduced fat offerings, as many realise the importance of a healthy diet. This shift has impacted snacking habits, with consumers looking for products that will not harm their health over products that merely offer great taste. This change is attributed to the wealth of media information highlighting the relationship between good eating habits and personal health. With higher purchasing power it is evident that consumers are willing to spend more on premium products that protect their health.

Influx of Brands From Mainland China

More brands from Mainland China have entered Hong Kong. Even though domestic companies have a long history and strong branding in Hong Kong, brands from Mainland China have the upper hand in terms of low prices, since costs of production and production facilities are cheaper. It is also an advantage for companies from Mainland China to distribute their brands in Hong Kong, as Hong Kong has a better reputation for quality. For some products consumers from Mainland China prefer to buy from Hong Kong. For example, many mothers purchased milk formula in Hong Kong which boosted demand for baby food in Hong Kong.

Supermarkets/hypermarkets Remains Main Distribution Channel

Supermarkets/hypermarkets continue to be the dominant distribution channel for packaged food. The two major supermarket/hypermarket players, ParknShop and Wellcome, are able to offer goods at competitive prices due to their economies of scale. Their outlets are in prime locations convenient for consumers. Furthermore, these outlets offer almost everything under one roof, which is beneficial for consumers seeking 1-stop shopping convenience. These outlets also implement regular promotional activities to attract customers.

Outstanding Performance Expected for Forecast Period

The growth forecast for packaged food is optimistic. Dried processed food is expected to see the highest growth due to the rising unit price of rice. The export policy of the largest rice export country, Thailand, contracted its rice export in the first quarter of 2008, which resulted in a sudden short-term increase in demand. Rice export policy of agricultural countries will significantly affect the price in Hong Kong. Importing companies suffer high costs, while consumers have to prepare for the high price. Noodles and pasta face the same threat due to the decreasing supply of wheat.