Today marks ten years since news first emerged of a food contamination scare in China, in what later became one of the industry’s most serious food safety issues.
The tainted milk scandal led to the death of at least six infants and affected thousands more, when milk powder was found to be contaminated with the chemical compound melamine.
It had a destructive impact on the country’s dairy sector as a whole, undermining consumer confidence and kicking off a series of events that would profoundly change the nature of China’s food and beverage sector.
It has also resulted in Chinese manufacturers getting their house in order over food safety.
The scandal led to greater trust in imported dairy products and, according to research from Mintel, means that China’s new middle-class “over-indexes” on organic infant formula as parents desperately seek products that are safe to consume.
Nearly nine in ten Chinese consumers say they use organic infant formula, according to Mintel – a significantly higher proportion than the average.
Cheryl Ni, food and drink analyst for Mintel, said: “Our research indicates that high-end and niche baby food and drink products have great potential in the Chinese market. Organic infant milk formula has experienced a high adoption rate, indicating that consumers with more spending power are willing to pay a premium for products they perceive to be better for their infants.”
The lessons learned from the melamine crisis have been brought sharply into focus since the Chinese government relaxed its laws on Chinese parents having more than one baby; the so-called ‘one-child policy’ was scrapped, replaced by a maximum of two children per couple, and there has been speculation that the replacement policy might be phased out too.
According to Richard Hall, chairman of food and drink consultancy Zenith Global, China has since got its house in order over food safety.
“The Chinese dairy industry is very confident that Chinese families are now receiving the best possible nutrition and service from infant formula products,” Hall said.
“This was already vitally important under China’s policy restricting each family to one child. Since the policy was relaxed last year to allow two children, there hasn’t been a surge in the birth rate, but there has been an increase and the market for infant formula is expected to continue with strong growth for the foreseeable future.”
Yesterday Alex Gao, a spokesperson for New Zealand-based dairy company WNS Group, explained how the Chinese market had evolved in the decade since the melamine scandal.
China is a unique market that requires a deep understanding, Gao said, but nonetheless there are challenges that exist for importers into China that don’t apply to local companies. Although New Zealand still has its shortcomings, the country’s dairy sector has inadvertently benefited from the melamine crisis.
© FoodBev Media Ltd 2019
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