How to “read the tea leaves” of China’s sustainable food and packaging sector?

— Key Insights from the NZCC x NZTE Webinar

China may still be perceived as being behind the curve when it comes to consumer sentiment on sustainable food and packaging. But, what became clear during the recent webinar hosted by the New Zealand China Council Te Kaunihera o Aotearoa me Haina (NZCC), in partnership with New Zealand Trade & Enterprise (NZTE), is that a lot is going on behind the scenes.

The Chinese government is setting ambitious climate targets, to which all local sectors will be expected to contribute. With strong government influence driving market trends and shifting consumer behaviours, New Zealand exporters must adapt to these shifts to remain competitive. This online discussion explored these changes and provided valuable insights for exporters navigating this dynamic market. Below are the key takeaways:

Understand China’s Government-Driven Direction

China’s top-down policy approach plays a pivotal role in shaping sustainability efforts. China’s government can set long-term goals that drive everything from production standards, packaging and retail to market trends and consumer choices. Key areas of government focus include decarbonisation, common prosperity, and reducing food waste. Chinese companies have the advantage as they typically “read the tea leaves” better – predicting these moves and proactively aligning with these policies, anticipating stricter sustainability standards and a growing focus on food security. New Zealand exporters should be aware of the role that the Chinese government plays and be prepared for similar standards to be imposed on them in the future.

Data and Sustainability Credentials Are Crucial

As China accelerates its sustainability efforts, reporting and data collection are becoming the norm. China is known for its high levels of data collection and very high-quality data, and New Zealand exporters will need to match this or risk being left behind. New Zealand’s image as the “clean green country” is no longer enough –  exporters must provide robust sustainability credentials and data to succeed in China. Consumer expectations are also shifting, with increasing demand for sustainably designed products, making it crucial for exporters to understand and meet these evolving requirements.

Be Prepared to Diversify and Innovate within China

While New Zealand has long been seen as a sustainability leader, the rest of the world is catching up. The pace of change in China is exceptionally fast, for New Zealand exporters to stay ahead, they must continually innovate and improve. Understanding both the current market landscape and future trends will be essential for their long-term success.

For example, China is adopting a “broader approach to the concept of food” in terms of food security and sustainability by diversifying protein and nutrient sources. For Chinese consumers, plant and animal proteins have co-existed and will continue to do so. A growing trend is the use of blended proteins, such as soy milk and dairy milk combined, to offer a wider range of nutritional and sustainability benefits. New Zealand exporters can learn from China by viewing these two forms of protein as complementary, not competing.

Sustainability Is a Consumer Priority – but in many different ways

Sustainability concerns are deeply influencing Chinese consumer behaviour. The visibility of environmental challenges and the direct impacts on people’s lives have sparked greater awareness and a heightened desire for clean environments and safe, high-quality products. However, China’s diverse consumer base means that exporters must adapt their strategies to target specific demographics, as generational and regional differences impact consumer preferences. Therefore, exporters need tight targeting and an understanding of how to leverage sustainability credentials.

While sustainability is a key issue in China, consumers are primarily motivated by how sustainability directly impacts their lives. To resonate with consumers, exporters must align their sustainability efforts with local needs, such as food safety, health and wellbeing, nutrition, or quality. Understanding consumer insights and linking sustainability credentials to these drivers will help build awareness and enhance product appeal.

Sustainable Packaging: Beyond the Environment

The webinar also discussed sustainable packaging, which is not just about reducing a company’s environmental impact. Packaging must also protect food quality, convey brand values to consumers, manage costs, and meet regulatory requirements. Two of the five sustainable packaging principles, reuse packaging and the use of recyclable materials in packaging, are problematic when dealing with food contact materials (FCMs) in China due to safety concerns. The lack of specific laws and regulations for recycled FCMs makes this a complex space. New Zealand exporters should be aware of the broader packaging ecosystem, including transport packaging and food labels when considering sustainability.

China’s growing emphasis on sustainability offers both challenges and opportunities for New Zealand exporters. To succeed, companies must stay ahead of regulatory changes, align with shifting consumer expectations, and embrace data-driven sustainability practices. As the market evolves at “China Speed”, New Zealand exporters must be agile and forward-thinking.

We would like to thank our six speakers – Alistair Crozier, Cleo Gilmour, Ellie Copeland, Samira Tang, Eva Gaugler, and Kate Parker – for their valuable insights and contributions to this discussion. We would also like to thank our partner, NZTE for their support, and all those who attended.