ATO/Beijing outreach to the city of Zhengzhou, Henan province, identified a massive, fast-growing, highly modern frozen food industry that is hungry for new ingredients.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE
BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S.
GAIN Report Number:
China - Peoples Republic of
Post: Beijing ATO
Frozen Foods an Opportunity For U.S. Exporters
ATO ACTIVITIES reports
Export Accomplishments - Other
Food Processing Ingredients Sector
Market Development Reports
Ralph Bean/Wang Jun
ATO/Beijing outreach to the city of Zhengzhou, Henan province, identified a massive, fast-growing, highly
modern frozen food industry that is hungry for new ingredients. The top two manufacturers produce half a
million metric tons of frozen food at a sales value of nearly $1 billion, and are interested in using more
A Boom In Frozen Foods
In ten years China?s frozen food industry has grown from a small-scale industry dominated by mom-and-pop
stores into a massive, highly modern industry accounting for nearly $2 billion in annual sales. The industry is
centered around the city of Zhengzhou, home to China?s two largest frozen food manufacturers, San Quan and
Synear. Each company commands close to ¼ of the market, with over 250 thousand metric tons in current
manufacturing capacity and gross sales of 3 billion yuan (a little under half a billion US dollars). Both are
adding new manufacturing capacity, and the largest, San Quan, expects to triple its output within the next five
These manufacturers are a far cry from their homespun antecedents. They are large corporations whose
products are a household name across China, and who have brand names and reputations to protect. San
Quan currently exports to twenty different countries, but is much more focused on domestic markets. With
famous names and large investments in their product lines, these companies have a powerful interest in
guaranteeing the quality of their products ? including the ingredients they use to manufacture them.
Laboratory facilities are extensive and include the latest gas chromatography and other equipment. This need
to ensure quality and safety, along with the need to innovate in order to stay ahead of me-too manufacturers,
is driving a keen interest in new ingredients, including imports.
?Lil Dumplings are Serious Business
China?s frozen food industry revolves around
several traditional foodstuffs: vegetable and meat
dumplings that are boiled (jiaozi) or fried (guotie),
and sweet rice flour balls traditionally stuffed with
black sesame sauce (tangyuan). Other products
include won ton (hun dun) and noodles. The
principal ingredients are simple: wheat flour, pork,
fresh vegetables. However, as competition grows,
manufacturers are seeking ways to distinguish
themselves by offering new tastes and varieties.
Sanquan is already producing a line of fruit-flavored
tangyuan, including one that uses blueberry fillings
imported from the United States. ATO is currently Meat and vegetable dumplings, called Jiaozi, are
working with Sanquan to identify a reliable supplier
the backbone of the frozen food industry.
of frozen wild blueberries. At both Sanquan and
Synear, interest was strong enough for the companies to request a list of products with good potential. While
producing a list of all food ingredients available for export from the United States is perhaps a tall order, ATO
is working to narrow down the range of categories so that it can work with these and other companies to
identify products with good potential.
Why EMP Matters
ATO?s outreach to these companies is part of an EMP-funded project to identify and make contact with the
major players in China food manufacturing industry. Because the industry has grown so quickly from humble
origins, many of the key players are not well known outside of their regions, let alone internationally.
Likewise, these companies, although large, have limited experience in sourcing ingredients outside of
traditional local channels. Of the fifteen companies ATO has contacted on this project so far, only one has an
international sourcing operation. ATO is seeking to build contact between these rising manufacturers and
potential U.S. suppliers by reaching out to these companies, identifying their ingredients needs, and passing
this information along to potential U.S. suppliers. Longer term, ATO hopes to identify areas where a lack of
technical information on the use of U.S. ingredients limits their use, and to provide this information as a
means of building new markets for U.S. food ingredients.
Frozen food is actually only one of the product categories covered under this project: in this outreach effort
ATO also conducted meetings with manufacturers of noodles (ingredients of interest: wheat flour, starches,
peas and dried beans), instant noodle dinners (flavorings, essential oils, freeze dried vegetables, meat
powders, various starches), steamed breads (starches, wheat flour), and hot pot ingredients (starches and
seafood and meat products for manufacturing fish balls and meatballs). The strategic objective is to build
markets for U.S. products by helping Chinese manufacturers identify ingredients with good potential, then
adapt these into Chinese food products and cooking styles, thereby tapping into the larger demand stream of
daily Chinese food use.
ATO?s ability to quickly identify these key companies owes a great deal to previous work done through the
EMP-funded Cold Chain program. Cold Chain activities sought to improve markets for U.S. meat, fruit and
dairy products by providing the technical knowledge that importers, logistics providers and end users need to
ensure that products were properly handled to ensure quality and prevent spoilage. This project built
connections to the frozen food logistics industry that ATO has been able to use to identify potential partners
for the current Food Manufacturing project. Cold chain continues to be an extremely important aspect of
trade development with China, and at least one USDA fresh fruit cooperator has identified cold chain problems
problems as the primary barrier to penetration of second and third-tier markets in inland China.
For any questions about this report or about markets in North China in general, please contact us directly.
U.S. Agricultural Trade Office
Ralph Bean, Director
The Foreign Agricultural Service also maintains ATO offices in the following Chinese cities:
ATO/Shenyang (Northeast China): ATOShenyang@fas.usda.gov
ATO/Shanghai (East China): ATOShanghai@fas.usda.gov
ATO/Guangzhou (South China): ATOGuangzhou@fas.usda.gov
ATO/Chengdu (West China): ATOChengdu@fas.usda.gov