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The F&B Industry of Hong Kong

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The F&B Industry of Hong Kong

2020-06-03T04:15:20+00:00February 26th, 2020|0 Comments

Hong Kong’s F&B industry forms an important part of its economy. Despite the fact that most food bought and sold in Hong Kong is imported, the industry has nevertheless succeeded in establishing a significant presence both within Hong Kong and throughout the entire Asia-Pacific region.

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Hong Kong 's F&B Industry

General Information About Hong Kong’s F&B Industry

Hong Kong is involved in much commercial activity in the food and drink manufacturing sector. Dah Chong Hong, Four Seas Food Development, Edo Trading Company, Kampery, and Sun Shun Fuk are the leading importers and traders of food in Hong Kong. The production of food and drinks in Hong Kong is a major economic activity there. Most F&B products in Hong Kong are bought and sold locally. Instant noodles, rice, sweets, pastries, desserts, and drinks are the main items purchased.

The total value of exports of processed food and drinks from Hong Kong grew by 1% to HK$69.3 billion in 2018. Mainland China, which accounted for 41% of the products sent from Hong Kong, is the largest market for Hong Kong exports of packaged food and beverages. Vietnam ranks second at 20%. Hong Kong’s food and beverage sector is primarily driven by re-exports. Over 90% of Hong Kong’s total food and beverage exports in 2018 were re-exports.

Hong Kong food products have become more around the world. For this reason, Hong Kong businesses have proactively started to widen their markets internationally by selling regional food and drinks to international customers. Some companies which have done so are Lee Kum Kee, Kee Wah Bakery, and Kampery. Large producers in Hong Kong have extended their international networks and built offices and factories in several key markets. For example, Lee Kum Kee has factories and regional offices in the United States, Malaysia, and the Philippines. Vitasoy has offices and factories in Australia and Singapore., while Kampery has offices in Canada and France.

For consumers around the world, food safety has become a major concern. For this reason, restrictions on food products, whether produced locally or abroad, have become prevalent all over the world, including in Hong Kong.

 

Growth of Hong Kong’s F&B Industry

The food and beverage industry in Hong Kong is both extremely competitive and cutting-edge. Those who own an F&B business in Hong Kong must constantly find ways to stay relevant in the eyes of the consumers while also being able to negotiate the changes in the industry’s business environment.

The wider retail sector has become much more accessible to the owners of F&B businesses in Hong Kong. Street markets in particular have become more accessible because retail incentives are now much greater as business owners seek to expand their F&B companies.

Hong Kong’s food and beverage industry has experienced growth in various ways. One of these is related to the introduction to Hong Kong’s F&B industry of more foreign distributors of light refreshments. Approximately 40% of these distributors are from Japan. Over half of these distributors are located in shopping malls across Hong Kong. Many of them developed small outlets for light refreshments to cater to Hong Kong’s busy working people’s working hours and lifestyles.

Shopping malls across Hong Kong have also been changing their approach to the F&B industry, and this change has led to the industry’s growth. These shopping malls have been trying to replicate the feel of the local street food scene. These ‘indoor street’ areas often include brightly refreshed outlets. They seldom have chairs, unlike traditional food courts. Food Point in East Point City and Food Lane in TKO Gateway are two of Hong Kong’s most notable areas using such an approach.

This modified approach has proven to be successful for operators and tenants alike. They provide retailers with lower entry costs and enable owners to provide higher-quality F&B services and products.

 

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Foreign Involvement in Hong Kong’s F&B Industry

Hong Kong is an important and lucrative destination for all types of food products. It is home to a generally affluent community of over seven million. Hong Kong also receives many millions of tourists from all over the world every year. The vast majority of these tourists are from mainland China; Hong Kong draws approximately 45 million visitors from mainland China annually.

Hong Kong has limited trade barriers with regard to exports because it has one of the most open markets in the world. The F&B market in Hong Kong is very competitive, which also requires all producers to have to balance product quality and cost. The countries from which Hong Kong imports the largest quantities of F&B products are China, the United States, Brazil, France, and the Netherlands. Almost all F&B products consumed in Hong Kong are imported; approximately 95% of the F&B products in Hong Kong are from abroad. Therefore, Hong Kong is heavily reliant on F&B imports.

Hong Kong is also a trading hub in China, Macau, and other parts of the Asia-Pacific region for re-exports of F&B products. Demand for different types of convenient foodstuffs has risen. Customers have also become increasingly aware of nutritional values, traceability issues, and food safety. Many F&B producers in Hong Kong have noted these changing demands and acted accordingly so that their products will be more marketable around the world.

Many manufacturers of Hong Kong food and beverages deal with supermarket and overseas importers directly. The food and beverage trading companies located in Hong Kong are vital to the introduction of Hong Kong’s food products to foreign markets. They also help smaller manufacturers sell their products abroad.

A large number of companies in Hong Kong have established a significant presence in foreign markets. Kee Wah Bakery, Vitasoy, Amey, Lee Kum Kee, Lam Soon, and Kampery are among Hong Kong’s foremost F&B companies. Many of these companies have expanded abroad in order to increase their sales all over the world. These Hong Kong companies have aggressively spread to overseas markets so that they could be recognized internationally. There have also been businesses which have built factories abroad in order to serve the local markets of foreign countries. For example, Vitasoy Group has expanded far beyond Hong Kong and today sells its goods in more than 40 countries. The company now has manufacturing facilities not only in Hong Kong, but also in Shenzhen, Foshan, Wuhan, Shanghai, Australia, and Taiwan.

On January 1, 2019, the latest Goods Trade Agreement between the Government of Hong Kong and the Department of Commerce came into effect. The new agreement specifies the most recent rules regarding origin arrangement. Goods which are not subject to the Goods Specific Origin Regulations will enjoy zero tariff status in accordance with their conformity to the Hong Kong products and the general rules of origin.

 

Status of Specific Subdivisions of Hong Kong’s F&B Industry

Three of the major subdivisions of Hong Kong’s F&B industry are the meat industry, the fruit and vegetable industry, and the alcoholic beverage industry. Each of these industries is faced with different sets of circumstances which affect their level of profitability as well as from which countries most of the products of these industries are imported.

Hong Kong’s meat industry has shown significant growth in recent years. This growth has been driven by an increase in demand for premium meat. The influx of affluent tourists as well as the steady rise in local income have combined to drive up demand for premium meat products in Hong Kong. The country from which Hong Kong imports the most premium meat products is Australia. The high levels of food safety, traceability, consumer confidence, and value for money have caused many customers in Hong Kong to choose Australian meat. Commercial purchasers have made plans to expand Hong Kong’s selection of meat products to include safe, hormone-free, and natural meat products. However, due to the increasing availability in Hong Kong of plant products, more customers will opt for meat-free food in the long term.

Hong Kong’s fruit and vegetable industry is thriving because it is one of the world’s highest per capita consumers of fresh fruit and vegetables. Just as is the case with all other food products in Hong Kong, most fruit and vegetables bought and sold in Hong Kong are imported. Only around 5% of such products are produced locally. The bulk of imported fruit and vegetables sold in Hong Kong originate from China, the United States, and Australia. Pesticide-free, natural, and hydroponic fruit and vegetables are often those preferred by customers in Hong Kong. Hong Kong’s straightforward import system and effective logistics network have served to increase the general competitiveness nature of the fruit and vegetable industry there, especially with regard to fresh products.

Hong Kong’s market for alcoholic beverages has also been expanding. Customers there are reasonably knowledgeable about alcoholic beverages. They also tend to be interested in learning about new trends in alcoholic beverages due to the increases in general consumption of alcohol and international travel. Many consumers in Hong Kong have also begin to develop a preference for microbrews and niche items instead of the alcoholic beverages typically sold in the mainstream market.

 

F&B Industry of Hong Kong FAQs

How has Hong Kong’s Food Industry grown in relation to its Economy?2020-02-17T08:15:24+00:00

Food imports to Hong Kong have aided in its current upward trajectory. According to the latest figures, the retail food industry in Hong Kong most recently grew by 1.8%, while the food service sector of Hong Kong posted an impressive financial growth rate of 4.9%. These figures show that the growth of Hong Kong’s food industry is outpacing the growth of its economy as a whole. Current statistics show that Hong Kong’s most recent GDP growth rate was 0.5%. Thus, the influx of food imports into Hong Kong has proven to have had a very positive impact upon the well-being of its food industry.

Which Countries send the Largest Quantities of Food into Hong Kong?2020-02-17T08:17:12+00:00

The country from which Hong Kong imports the most food is China. This fact should not come as a surprise because of its proximity. According to the latest statistics, 23.5% of all food and over 50% of all fresh food which had been imported into Hong Kong came from China.

Therefore, Hong Kong’s food market is heavily impacted by changes in the quantity, safety levels, and cost of food produced in China. Such changes have a clear effect on consumer demand for such food products in Hong Kong. Of course, China is not the only country from which Hong Kong imports much food. Other countries which contribute much of Hong Kong’s imported food supply include the United States, Brazil, the Netherlands, and Thailand. The latest statistics show that these four countries combine to supply almost 40% of all of the imported food in Hong Kong.

Which Food Products are most likely to be Imported into Hong Kong?2020-02-17T08:19:11+00:00

Hong Kong is one of the areas of the world which is deemed to be “food-vulnerable”. This means that Hong Kong is a location in which the vast majority of its food supply is imported. Hong Kong’s government has confirmed that approximately 90% of its food supply is imported from other countries. The food products which are imported into Hong Kong in the greatest quantities are beef, pork, fruit, vegetables, and salmon.

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