Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Overview Of Gourmet Powder Industry In China, 2017-2021


In recent years, substitution effect of condiments rises following the intensifying trend of consumption upgrading, leading to decreased demand for gourmet powder in catering industry and households. Meanwhile, condiments, such as soy sauce and chicken essence, increase rapidly, leading to a rising demand for gourmet powder in food processing industry. Overall, the demand for gourmet powder keeps stable. According to CRI market research, from 2011 to 2016, the annual demand remained over 2 million tons in China's gourmet powder industry.

Gourmet powder industry has undergone three rounds of restructurings. Entry barriers get higher due to government policies. Its annual growth rate remains stable, leading to fierce industrial competition and a oligopoly structure. CRI market research shows that Fufeng Group, Meihua Biological Technology Group Co., Ltd., Ningxia EPPEN Biotech Co., Ltd., Lotus Health Industry Holding Group Company and Shandong Shenghua Group took up more than 80% of the total annual output volume of gourmet powder in China in 2016.

China is the largest producer of gourmet powder in the world. Most condiments contain gourmet powder. With the increasing export of Chinese condiment and fermentation products, the demand for gourmet powder will also increase. Notice on Adjusting the Export Tax Refund Rates of Certain Products was issued by China's Ministry of Finance in 2014, which regulated to increase export rebates of some high added-value products, processed products of corns, textiles and garments. The export rebate of gourmet powder increased from 0 to 13%, which was implemented on January 1, 2015 and promoted the import of gourmet powder in China.

Corns and coals occupy the largest portion of the total cost in gourmet powder manufacturing in China. Generally speaking, the price of corns is steady while that of coals fluctuates much due to factors of economic cycles and market speculation. In addition, gourmet powder manufacturing industry faces increasing costs of environment protection and labor. Generally speaking, the production costs and price of gourmet powder both present an upward trend in China.