Exporters forced to adjust to changing food demands

If China and the rest of the developing world gets older and its population stabilizes, how should Canadian farmers and the agrifood industry deal with that very different marketplace?

Does the old recipe of growing more and better bulk crops and meat at a low cost of production still work?

“There’s more need to understand the dietary and cultural differences to tailor to the market,” said Wendong Zhang, an economist and analyst with Iowa State University.

“There is growing demand for specialty and higher quality (food in China.)”

But both Zhang and Darrell Bricker, author of Empty Planet, say China’s demand will skew toward a type of food that isn’t a major focus of exporters now.

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“Start thinking of your consumers not as young consumers but as older consumers,” said Bricker, who believes China’s people will rapidly age to Japan-like levels while slumping in terms of overall population.

“I call them the perennials as opposed to the millennials.”

Bricker says China’s population could fall by more than half by 2100, while its aging has already commenced as the hangover of the “one-child policy” and rapid urbanization bite into its fertility rate.

Zhang doubts China’s population will fall by anything like that amount, but agrees that it will fall back from today’s levels and its average age will significantly rise.

“They could be more into higher quality products,” said Zhang about the impact of aging.

Older consumers in the industrialized West have a great interest in health-related foods, so serving that anticipated demand could provide a good market for North American food processors.

The urbanizing population is also likely to change its food preferences away from the staples and mainstays of rural China and to experiment and broaden its tastes as it comes into contact with the wider range of foods available in the cities. For instance, Chinese consumed almost no avocadoes a few years ago, but consumption has exponentially increased as many urban consumers have begun to earn enough money and care about their longevity enough to eat the healthy food, importing it mainly from South America.

That has helped boost prices in the United States, following production problems in California and Mexico that couldn’t be backfilled by the South American supplies that went to China, analysts say.

Zhang said Canada might already have specialty products that would appeal to Chinese urbanites.

“Ice wine will be desirable to more and more people,” he said.

And while China’s birth rate has been plunging, whatever babies its mothers have are likely to be pampered, creating demand for specialty baby foods.

“There are even Chinese businessmen who are coming to Iowa and asking about whether it’s possible to set up a 100,000 head goat farm,” said Zhang.

The interest in goat milk? It is believed to be good for pregnant and post-partum mothers.

China has a limited ability to expand agricultural production, something much more easily done in North America.

“These gaps are sometimes the growth areas.”

Bricker said farmers can still look forward to a growing population in one region that also has relatively low incomes and will be in the market for affordable bulk commodities.

“Focus on Africa,” Bricker said.

While most of the world is seeing birth rates flatten, decline and fall beneath replacement rates, Africa and a few hot spots in Asia still offer growing markets based on population.

But for much of the rest of the world, health-focused, high quality and speciality products are likely to be the growing niche markets within population-stable or shrinking nations.

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