On July 7, 2020, the CNHFA held the 5th Nutrition and Health Food Industry Professional Managers' GFUN Talks online through the China Economic Net Cloud Platform. The event focused on how China's nutritional health food industry is coping with the changes brought about by the COVID-19 pandemic. The following policy research experts, legal experts and industry leaders were invited to give their views and discuss the strategic development of the industry and how professional managers should respond to the changes: Hu Yinglian, Professor of the Central Party School (College of National Administration), Yang Guochao, Senior Vice President of Corporate Affairs at Royal FrieslandCampina Greater China, Chen Yuqi, Chairman and Chief Executive Officer of ZhenAo Group, Chen Jia, Vice President of the Amway (China) Botanical Research Center, Yang Rui, Chief Strategy Officer and Executive Vice President of Sirio Pharma Co., Ltd, and Wang Jianjian, Partner of King & Wood Mallesons. A total of 193,000 people watched the live stream on the day.
The meeting was chaired by Li Liangqiu, Executive Vice President of CNHFA. Bian Zhenjia, President of CNHFA, attended the meeting and delivered a speech.
President Bian pointed out that while the pandemic changed the way we work and live, it also made people pay more attention to the nutrition and health of themselves and their family members. Against this background, the demand for nutrition and health foods has shown diversified growth; products that enhance immunity and improve gastrointestinal functions are particularly popular. We have also seen a significant rise in vitamin supplements and probiotic products. The market of health food, infant formula and food for special medical purposes have grown at different paces. At the same time, changes in consumer habits are driving breakthroughs in sales channels. The outbreak of the pandemic has impacted the traditional sales model significantly, as new sales models - e-commerce, WeChat-business and live streaming - are developing rapidly. The change in consumer habits forced the industry to respond quickly, with most companies making timely adjustments to their sales channels and models in order to satisfy consumer demand during the pandemic. President Bian also pointed out that high-quality, high-tech products are more popular in the market and public awareness of nutrition and health has been significantly enhanced thanks to the pandemic. As more consumers demand for a better life, they will seek more high-quality, high-tech nutritional products. Since nutritionalization is becoming a hot topic around the world, the sound development of the industry cannot be achieved without global cooperation and international exchange.
President Bian also spoke about the significant changes that are currently taking place in the industry. Firstly, with the State Council’s promulgation of the National Nutrition Plan (2017-2030) and the Healthy China 2030, the industry has ushered in a golden period of policy. Secondly, the structural changes on the consumer side and supply side brought about by the pandemic are forcing transformation in the industry. The CNHFA will lead the industry to implement the reform of government functions (reforms to streamline the government, delegate power, and improve government services) and ensure overall security and stability by using scientifically proven new concepts, new methods and new standards. At the same time, we advocate that enterprises in the industry continue to enhance their sense of mission and social responsibility and fully utilize the vitality of the market. The CNHFA proposed the "Six Regulations" initiative for enterprises to fulfil their corporate responsibility and promote the regulated development of the industry， namely to follow: (i) the objective rules, (ii) laws and regulations, (iii) the self-regulated rules of the industry, (iv) the norms of production and operation, (v) the blueprint of innovative development, and (vi) the goal of expanding and strengthening the scale of the industry.
Professor Hu Yinglian expressed his views on how to make a breakthrough in the process of global regulation integration. He said that the industry still needs more attention from the top-level policymakers and that the main reason for this is not because "the scale of the industry is too small" or "the industry is mixed with the good and bad" as some people may think. For an industry to gain more attention at a high policy level, it is not dependent on individual market players but on the willingness of the entire industry to express the desire and work together to achieve it. Looking at the policy differences between different countries and the history of industrial development, we can advance China’s nutrition and health food industry’s healthy growth and global regulation integration by making full use of CNHFA as a platform. Entrepreneurs, experts, scholars, as well as professional managers should join forces to secure more favorable policies for the industry.
Yang Guochao, Senior Vice President of Corporate Affairs at Royal FrieslandCampina Greater China, shared his views on how food companies can cope with the changes brought about by the pandemic. He noted that although the pandemic has hurt the country's economy, the food industry will have a better future and companies should make efforts to adapt to changes and grasp opportunities. In the future, companies should focus on: increasing their production autonomy and supply chain resilience; innovation and R&D; understanding changes in consumer psychology and behavior; opening up new marketing channels such as e-commerce; and seeking digital transformation. In addition, he suggested that, in terms of career development, professional managers should look for sunrise industries that combine personal development with the health and well-being of our people.
Chen Yuqi, Chairman and Chief Executive Officer of Zhen'ao Group Co Ltd, spoke about how to seek changes in innovation within the industry, specifically that the pandemic has brought life to the industry. Innovation is the lifeline of societal, industrial and enterprise development, and thus it is vital to seek changes and breakthroughs in innovation. Innovation in the national system, supported by regulations and public opinion can create a favorable external environment for the growth of enterprises. Improving industry standards and innovation are important factors for such growth, with a particular focus on aligning with international standards. At the same time, we should increase investment in scientific research, break the traditional model in market segmentation and explore new marketing models. Innovation can help enterprises to seize opportunities in the crisis and to achieve better and healthier development.
Chen Jia, Vice President of the Amway (China) Botanical Research Center talked about new R&D trends in the global nutrition and health food industry. She said that the global annual increase of health food sales is between 7% and 8%. The U.S. is still the world's largest nutritional health food market. China is the world's second largest market, but the per capita consumption is only in single digits, there is still room for improvement. South Korea, Vietnam and Brazil are all fast-growing markets. The pandemic is changing consumers’ purchasing habits, volumes and many other aspects, with consumers becoming more concerned about their health and economic situation. Retail consumers are embracing digital commerce and other diversified channels. At the moment, the most notable new R&D trends in the global industry include: health products related to the immune system, social media e-commerce rejuvenation, healthy snacks, herbal sources, and individualized nutrition.
Yang Rui, Chief Strategy Officer and Executive Vice President of Sirio Pharma Co., Ltd mentioned that international trade in nutrition and health products is facing both challenges and opportunities. On the one hand, the tariffs imposed by the U.S. on Chinese exports have posed a huge challenge to China's nutrition and health food export business, with the growth rate of China's nutritional health food exports to North America, the EU and Oceania slowing from January to April 2020. On the other hand, companies are seeing new opportunities for business growth. Sirio is committed to transforming cost advantages into product advantages by localizing its marketing team, upgrading its marketing model, expanding its product categories and making technological breakthroughs. As a result, there has been a significant acceleration in the year-on-year growth rate of its export business to both the Americas and Europe this year. Speaking of the industry-wide trends, overseas sales of dietary supplements have increased year-on-year over the past three years, with the dietary fiber/fruit and vegetable fiber category ranking the highest.
A video presentation was also made by Wang Jianjian, Partner of King & Wood Mallesons, sharing some tips remotely on how to deal with changes to commercial contracts due to the pandemic. Many commercial contracts (including logistics contracts, travel contracts, housing leases, etc.) are facing difficulties in enforcement due to the impact of the pandemic. Both parties to a contract can make use of the principles of force majeure and change of circumstances to deal with the situation. At the same time, parties to contracts should pay close attention to the relevant documents recently issued by the legal authorities in China, so as to safeguard their rights and interests and avoid legal disputes.
At the end of the event, guests exchanged views on how the regulatory authorities can achieve scientific supervision; how enterprises can promote the healthy development of the industry; and how professional managers can improve themselves.
We firmly believe that professional managers in the industry can reap a better tomorrow with their enthusiasm and solidarity, without forgetting their original intentions.
Scan the QR code below to watch the recorded event.
