The China frozen food production market developed rapidly in the past decade. In the five years through 2013, industry revenue is expected to increase at an annualized 21.2% to $11.8 billion. The strong growth is mainly due to higher disposable incomes, higher product prices, changing consumption trends caused by the faster pace of modern life, a wider variety of frozen foods, product quality improvements, high growth in mid-range and high-end product segments and the development of new markets.
The global financial crisis negatively affected China's economy and had a moderate impact on this industry. Weaker international demand saw exports from this industry decrease 20.2% in 2008 and 1.8% in 2009. Domestic demand increased just 23.6% in 2009, lower than the growth of 41.8% in 2008. Overall, industry revenue increased 22.4% in 2009, with several frozen food manufacturers adopting price discounts to attract customers and increase sales volumes. Some small and medium companies were phased out of the industry due to very low profit margins.
As competition in the frozen food market intensifies, manufacturers are increasing investment in product innovation and production capability. There is a large market space for high-end frozen food. With improved nutrition and taste, the proportion of mid-range and high-end products produced by this industry will increase. Manufacturers have also started to pay more attention to markets in China's counties, towns and some developed rural areas.
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