Probiotic Beverages in China: An Overview of Market and Regulatory Conditions

Suggestions on regulatory compliance:

China has released the list of bacterial cultures permitted in foods, and only the bacterial cultures in the list are allowed to be used during product innovation (please check the list from here).

GB 7101-2015 serves as a fundamental and overarching food standard for beverages circulating in China, which specifies the technical requirements for beverages sold within China. Other important standards for beverages include:

Market Overview

According to a recent China beverage industry report (as revealed in Food and Beverage Innovation Forum 2017), probiotic beverages have gained significant traction in China’s beverage market. Natural probiotic products include fermented foods and drinks, which ranked in China’s top 10 food trends in 2016. Despite a wide variety of beverage categories in China, fermented products still represent a small percentage of the overall market.

Data source: Euromonitor

Currently the vast majority of probiotic beverages in China’s market are dairy-based. The first product we will discuss are drinks containing milk protein or plant protein, that is, fermented milk and fermented vegetable protein drinks. Then we’ll focus on fermented fruit and vegetable juice and tea beverages.

The value of fermented products in China’s healthy food sector

Probiotics and prebiotics offer untapped potential in China’s markets for their ability to enhance health and refine the taste of products. The contribution of pro- and prebiotic foods to human health and the interactions of commensal bacteria in our GI system are just beginning to be elucidated. Given the complexity of this relatively new field of medicine and the eminent ability to commercialize R&D outcomes, the potential for huge growth in this niche of the food sector is obvious. The use of bacterial cultures in cheese manufacturing and other related sectors of the dairy industry have been appreciated for hundreds of years, however the ability to alter human physiology and potentially ameliorate pathological processes through the use of foods containing specific bacterial cultures (probiotics) or foods which enhance growth of specific indigenous commensal gut flora (prebiotics) is cutting edge medical science.

It is been widely accepted by Chinese consumers that fermented foods are great for health. Proximity to countries like Japan (natto) and Korea (Kimchi) which have a historical appreciation for the health promoting characteristics of fermented foods has also influenced acceptance of this category of food in China. Moreover, fermented flavor is natural and fresh and will transform the original taste. Research indicates that consumer awareness of probiotics has reached 70% in first-tier cities. For Chinese consumers, taste is everything and in terms of its impact on purchasing decision it still outranks health benefits.

As for marketing strategy, fermentation has a strong association with biotechnology which can help improve product image and market value in China. Technical support is essential for product research and innovation. Using health functional claims is another way to create added value for consumers, however, it should be noted that only health foods ( a specific and highly regulated category of food in China) are allowed to bear functional claims (related to disease risk factor reduction), and only 27 function claims are allowed to be used on health foods. Any product aiming to bear health function should apply for health food registration in advance.

Fermented protein drinks

The ubiquity of probiotic products will soon be matched by the variety of products on offer. We predict that diversification of functional properties will be a major source of future growth. For example, Japanese and Korean manufacturers have successfully promoted the ability of probiotics to improve the appearance of skin etc.

Asians have always favored plant protein-derived products. In Japan and South Korea there are plenty of fermented products like fermented rice, which is both healthy and tasty. Japanese manufacturers have succeeded in removing the unpleasant taste of soybeans and now target products at females (soybean has a high content of phytoestrogen which can have benefits in women). Health-conscious consumers prefer drinks packed with nutrients like protein, vitamins and minerals. Raw materials must be fresh, green and natural.

Fermented fruit and vegetable juice and tea beverage

Although consumers are well aware that fermented fruit and vegetable juice is healthy and nutritious, market growth in the juice sector is still weak, nevertheless, it still has great potential. Walking through the streets of Chinese cities, you can see freshly squeezed juice stores everywhere. The profits of those products are very high and they’re extremely popular. Consumers love the natural and healthy combination of fresh fruits and vegetables and naturally fermented juices offer great potential. Take a look at several international products. Japan has a great variety of fermented fruit and vegetable beverages, which all use probiotics to improve the flavor and function (cosmetic and slimming effect). In Europe, we can see fermented carrot juice and beet juice products containing almost 20 billion units per product.

One type of fermented fruit and vegetable juice can be made by adding probiotics directly into frozen juice, which should be preserved in the cold chain because the shelf life is very short, only 10-60 days. A second type is made by mixing fruit and vegetable juice with fermented milk, or by adding probiotics into fermented fruit juice or mixed fruit juice, which can either be probiotic drinks with live strains or non-viable bacteria drinks with long shelf life. The third is to use fresh fruit and vegetable juice as a substrate and then add lactic acid bacteria and yeast to produce fermented juice, which can be preserved under room temperature or cold chain. Probiotic fermentation produces organic acids which can help maintain a balanced digestive system and also moderate the sweet and sour flavor.

Fermented tea drinks are another important sector. New manufacturing and production methods use enzymatic hydrolysis, fermentation, additional bacteria, combined enzymatic hydrolysis and fermentation, or enzyme solution before fermentation. Apart from common products like black tea, green tea and oolong tea, consumers need more new choices. Currently there are sugar-free and herbaceous tea beverage on the market. For example, fermented green tea, black tea, and oolong tea can have cosmetic functions. Kombucha also has a long history in China and strawberry green tea can facilitate digestion. A new green tea introduced in Japan last year has innovative packaging. The bottle is designed to preserve the tea in room temperature and there is probiotics powder in the bottle cap so that 1-2 billion live probiotics can be introduced into the liquid when you unscrew the bottle.

Disclaimer: the above is the author's personal opinion and is not the opinion or policy of Chemlinked.