Cheese is Just the Beginning: Change in China

food and beverage brand consultants for china

Written by Andrew Kuiler, TSI CEO

It’s a hard time to be a soft cheese in China. News spread this week from a WeChat platform of a cheese retailer to The Guardian and The Financial Times that China has banned the import a number of soft cheeses, apparently for exceeding allowable bacteria levels. (A theoretically Chinese-made gorgonzola would be fine, as there is an exception for products that are traditionally made with yeasts and bacteria.)

The product is new and the news is opaque. No official announcement has come out and speculation is that this is part of a bargaining round between high-level political bodies, or perhaps an embarrassing SNAFU for the Chinese Customs, Inspection and Quarantine, who have been forced to enforce a previously overlooked statute.

But the story is not new. The regulatory environment in China is notoriously fickle, and the product you may have spent years developing for the Chinese market may suddenly fall on the darker side of the grey zone. (It’s China — it’s always a grey zone.) The market is constantly shifting. In just the past two months, China has agreed to open its markets to American rice and beef, the latter of which has not been seen here for more than a decade, and in the past two years, the country has signed comprehensive free trade agreements with countries including Chile and Peru, which continue to expand. Everyone is trying to get in, from Israeli wine producers to shipborne New Zealand beef.

cheese in china

PHOTO: Alamy

Back to the cheese. Many would argue that this affects expats in China the most, but that’s a short-sighted view. Consumers are changing and fast.

Chinese supermarkets are increasingly carrying — and selling — mild and easy to accept cheeses such as Brie, whose creamy texture and milky flavor is not such a hard sell for Chinese, but who nonetheless has been banned in the country. (Apparently any stocks left on shelves are the remnants of imports prior to late August.) China, a supposedly lactose-intolerant country, is one of the largest dairy markets in the world, consuming 30 million tons of dairy products in 2016, with annual growth forecast at 5.7%.

In the last 12 to 18 months, we’ve seen a proliferation of Western-style quick-serve steak restaurants that offer 150 or 200 gram cuts of steak, usually served medium or medium rare, with nothing more than a few leaves of salad. Lines are long and the copycats are spreading into the suburban and lower tier cities. Suffice it to say, that when the Chinese diet can now include a meal of 200 grams of medium-rare steak and barely any vegetables, things have changed.

And change again they will, no matter what happens with the cheese ban, as it were, and whether it is temporary or longer-lasting.

As always, it’s important to have ground-level knowledge from experts in China who understand the food and beverage landscape, and the potential dynamics of whiplash regulation. The Silk Initiative is China’s foremost expert in food and beverage. We can help you with that.