China has become the world’s largest market for food and grocery retail and, despite a fragmented distribution infrastructure and growing local competition, opportunities for foreign SMEs to sell their products in China are likely to grow, driven by increasing disposable income and urbanization, an improving logistics system, growing concerns on food safety as well as a growing taste for foreign foodstuffs.

Highlighted opportunities, especially for European SMEs, in this sector are: wine, cheese, dairy products and premium ice cream, pasta, sauces and tomato products, olive oil, beer, chocolate and high-end confectionery, pre-packaged biscuits and snacks, breakfast cereal, coffee.
In China imported food and beverages are generally consumed in bars, cafes, restaurants and hotels. Chinese consumers are increasingly choosing ‘western food’ when they dine out. Many of the western-style restaurants, which were originally targeting expatriates, now have a predominantly Chinese clientele and more generic ‘western-style food’ chain restaurants are widespread.
Imported food and beverages remain a status symbol in China, being perceived as a high value good over similar Chinese goods. They are often used for display purposes as opposed to food products to consume for enjoyment. In this instance, branding and packaging are particularly important.