Great opportunities for NZ pet food in China despite new regulations

By Manuel Schaffrinna   21/05/2019

China is New Zealand’s biggest export market for food and beverages, accounting for 22.4 % of exports in 2017 (predominantly dairy products) with New Zealand even having been the first developed country with which China has signed a free-trade agreement.

China offers many opportunities for Kiwi exporters, not only for food for Chinese consumers themselves but also for their small companions. The Chinese market for pet food provides a significant opportunity for Kiwi manufacturers. The numbers concerning market size vary between sources, but growth in 2019 is projected to reach 9% on average, with premium pet food even expected to grow by 10% for cats and 13% for dogs (DCCC).

Growing pet ownership in China

China constituted the country with the third highest number of owned pet dogs totalling 27.4 million dogs, only superseded by the US (55.3 million dogs) and Brazil (35.7 million dogs). Cat ownership is the global number two with a total of 58.1 million cats, only behind the US with 80.6 million cats. In the two largest pet food markets, Beijing and Shanghai, 1.5 million dogs and 700,000 cats are kept as family members. Pet ownership is expected to be 12.4% for Shanghai households and 11.2% for Beijing. While those two cities constitute the biggest markets at the moment, in general the pet ownership rate is higher in the bigger cities and developed provinces on China’s east coast with Guangdong also reaching 10.1% while it declines moving to more central provinces like Henan or Hubei with only 3.6% and 2.9% respectively. The total pet ownership rate is, however, expected to grow strongly across the whole country. Cats and dogs are also by far the most popular pets in China. While owning a dog or cat was considered bourgeois in the past, China’s fast-growing middle class, with higher disposable incomes but also delayed marriage and smaller family sizes, increasingly turns to pets for companionship at home. Especially elderly people do so, with the National Bureau of Statistics of China (NBS China) reporting that approximately 61% of the group aged 65 or older live with a pet.

The Chinese pet food market      

Considering China’s population of over one billion people, there are strong possibilities for growth. 80% of pet owners also abstain from preparing homemade food for their pets and instead opt for commercially manufactured pet food. Pet food is sold over various distribution channels, ranging from mass merchants like supermarkets and hypermarkets to specialised outlets like pet shops and vet clinics. An increasing number of pet food sales also take place online on platforms like Alibaba’s Tmall. Dry pet food is the most popular kind at the moment, making up 81% of offline and 83% of online sales, followed by wet food at 11% (offline) / 9% (online) and treats at 8% in both channels.

Bright prospects for NZ premium pet food

The average monthly expenditure for pet food is still relatively low on average for the total market but the premium and high-end market for pet food is growing. Chinese pet owners, especially considering the older age and higher income compared to total population, are increasingly interested in freshness and quality from foreign specialty brands. This in particular provides Kiwi pet food manufacturers with great opportunities. New Zealand’s competitive advantage over other countries lies in its disease-free status and strong focus on meat and protein in combination with the free-trade agreement between China and New Zealand.

New regulations for export of pet food to China

According to the recent Animal Products OMAR Notification, 19/15 China: Pet Food, certain pet food samples are required to be tested for Salmonella and Enterobacteriaceae. Food Standards Australia New Zealand states that Enterobacteriaceae and Salmonella is part of the gram negative non-spore-forming bacteria group found in human and animal intestinal tracts. At Eurofins we can complete this analysis at a very competitive price within 2 days. As well as this Microbial analysis, we can assist with complete pet food testing analysis and also include a range of nutritional, minerals, metals, contaminants, mycotoxins, Amino Acids, Dioxins and PCBs, which are required for certain pet food markets.

For over 30 years, we at Eurofins have been globally testing for life and offer the whole range of tests. Our team would be happy to assist you with the necessary certified testing of your products to explore the possibilities the Chinese market offers. Let us get in touch and discuss your specific needs and the demands of the new regulation for export to China.

Contact us:

Eurofins Food Analytics NZ Ltd

www.eurofins.co.nz

infonz@eurofins.com

0800 3876 3467

Links:

https://www.flandersinvestmentandtrade.com/export/sites/trade/files/market_studies/petfood.pdf

https://www.dccchina.org/2018/06/pet-food-chinese-importers

https://www.dccchina.org/2019/01/china-pet-market-trend-imports-to-china

https://www.foodsafety.govt.nz/password-protected/omars/chn/animal-products/other/19-015.pdf

Check out our other blogs on pet food