Forecast and Analysis of the Development of China's Food Manufacturing Industry from 2017 to 2021
Analysis of the Development Factors of China's Food Manufacturing Industry by CIC Consultants
1、 Favorable factors
（1） Policy benefits
The practice of relying solely on investment, especially government investment, to drive the economy has resulted in severe overcapacity, which is now difficult to sustain. The government has instead adopted policies to expand domestic demand. The key to expanding domestic demand is to pay attention to people's livelihoods. Benefiting from the national policy of expanding domestic demand and the rigid demand of the food industry itself, China's food manufacturing industry will maintain stable growth.
（2） E-commerce platform
Compared to traditional retail channels, the transaction volume of China's e-commerce market is growing rapidly year by year, and China's food e-commerce is gradually becoming an important component of the entire e-commerce industry. In China, online platforms have become the fastest growing distribution channel. More and more food brands are gradually transitioning from offline to online retail.
（3） Fast growth rate in small and medium-sized cities
The differentiation of food consumption regions has occurred, and China's first tier cities are still important positions for fast-moving consumer goods, but they are no longer the fastest-growing areas. The growth rate of fast moving consumer goods in first and second tier cities has significantly slowed down. In 2014, the compound annual growth rate of the retail market in first and second tier cities was only 2%, while in small and medium-sized cities (third, fourth, and fifth tier cities) it was as high as 7.7%. Fast moving consumer goods enterprises, including food and beverage enterprises, are repositioning their marketing and sales resources and developing towards small and medium-sized cities.
（4） Strengthening supervision and management
In recent years, the Chinese government has continuously improved its efforts in food safety management. On October 1, 2015, the strictest food safety law in history was officially implemented, setting higher requirements for food safety management. The country also explicitly proposed the establishment of a full traceability system for food safety. It is expected that around 2020 will be the accelerated promotion period for the traceability construction of meat and vegetable foods in China. On the one hand, the construction and acceptance of pilot cities should be accelerated; On the other hand, governments at all levels are expected to accelerate the construction of a fully covered circulation traceability system.
2、 Adverse factors
（1） Intense international competition
International competition is becoming increasingly fierce, and the global food landscape is undergoing profound adjustments. Large global food enterprises are constantly developing towards multiple fields, full chain, deep level, low energy consumption, high efficiency, and sustainability. Global multinational food groups have gained market advantages through capital restructuring, utilizing patent technology strategies and talent resource advantages, and developing new products and ensuring quality and safety, further enhancing the competitive advantage of the industry.
（2） Resource and environmental constraints
The resource and environmental constraints are intensifying, and transformation and upgrading are urgent. China's economic and social development has always faced dual constraints of resources and environment, especially after 30 years of rapid development. Environmental factors (environmental pollution and food safety) have had a significant impact on the competitiveness of the food industry in the international and domestic markets, and it is not easy to completely eliminate them in a short period of time. Due to the large, small, and dispersed nature of China's food manufacturing industry, the main problems that need to be addressed in the further development of the food industry are its low ability to effectively utilize resources, high energy consumption and investment, and weak ability to ensure food quality and safety.
（3） The development level of each link in the industrial chain varies
At present, the development level of each link in China's food industry chain is not the same, and the development capabilities of each link are not yet matched, which determines that China's food industry will enter a stage of accelerated integration and development. Taking the meat product industry chain as an example, at the upstream of the industry chain, Chinese food enterprises, whether in terms of seed sources or breeding, are generally in a small-scale, decentralized, and extensive production mode, which is difficult to meet the development requirements of modern food processing industry for production standardization, scale, and balance; The development level and processing capacity of the middle reaches of the industrial chain are basically in sync with the advanced level of the international industry, and objectively there is a problem of a large amount of idle food processing capacity; From the downstream of the industrial chain, the development level of food logistics, especially cold chain logistics, also lags behind the development needs of the food industry. In addition, in terms of modern circulation channel construction, except for first and second tier cities, it is far from meeting consumer needs.
Sales revenue forecast for China's food manufacturing industry from 2017 to 2021
In 2015, the sales revenue of China's food manufacturing industry was 2170 billion yuan, a year-on-year increase of 7.10%; From January to September 2016, the sales revenue reached 1690.3 billion yuan, a year-on-year increase of 8.48%. We expect that the sales revenue of China's food manufacturing industry will reach 2519.4 billion yuan in 2017, with an annual compound growth rate of approximately 7.15% over the next five years (2017-2021). In 2021, the sales revenue of China's food manufacturing industry will reach 3320.9 billion yuan.
Forecast of Total Profit of China's Food Manufacturing Industry from 2017 to 2021
In 2015, the total profit of China's food manufacturing industry was 183.2 billion yuan, an increase of 8.25% year-on-year; From January to September 2016, the total profit reached 140.9 billion yuan, a year-on-year increase of 13.26%. We predict that the total profit of China's food manufacturing industry will reach 222.7 billion yuan in 2017, with an annual compound growth rate of approximately 9.96% over the next five years (2017-2021). The total profit of China's food manufacturing industry will reach 325.6 billion yuan in 2021.