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12

2023

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03

Strategic Implications for Global Meat Players

Source:

McKinsey

China’s huge population and growing middle class suggest significant market demand for real meat over the next decade. The market is expected to grow 1 percent YoY between 2022 and 2026. To capture a meaningful share of this market, global meat players should set entry strategies that reflect insights into Chinese meat consumption.

 

China’s huge population and growing middle class suggest significant market demand for real meat over the next decade. The market is expected to grow 1 percent YoY between 2022 and 2026. To capture a meaningful share of this market, global meat players should set entry strategies that reflect insights into Chinese meat consumption.

 

Companies can explore potential white spaces for establishing competitive advantage. As Chinese consumers shift meat consumption from pork to protein sources considered to be of higher quality, global players have an opportunity to introduce more premium offerings, especially beef, to the market. Likewise, as convenience-obsessed consumers eat more meals in restaurants, global players have an opportunity to meet the growing demand for frozen meat.

 

Companies can consider how they might shape the go-to-market strategy and product portfolio to meet consumers’ demand for convenience. While local producers are likely to continue providing the lion’s share of uncooked meat to consumers, global players might focus on the emerging market for prepared meat products. Success would require targeting and marketing to younger consumers, especially those who are more affluent.

 

Global players should embrace the online sales channel. This channel, which already accounts for 5 to 10 percent of meat sales, is relatively advanced in China. The offline channel is fragmented and requires local resources, but the online channel is open for global business and is better suited to the branded, premium products that global players would bring.

 

Finally, companies may find attractive opportunities in tailoring value propositions to consumer concerns about health and sustainability. Beyond communicating the health and sustainability benefits of products, global players should ensure that their products deliver on those promises—for example, by improving product safety.

 

Global players looking to anchor their strategy in concepts new to Chinese consumers, such as the health benefits of alternative meat or the role of animal welfare in sustainability, will have to recognize the limited awareness and understanding of these concepts among consumers, especially those living outside of major cities. Success would require investing significant time and resources to educate targeted consumers and build the market for relevant products. Making these efforts context specific—for example, linking new plant-based protein products to China’s long history of eating tofu—might greatly enhance the odds of success.