In 2013 China’s grocery market crossed the US$1tn mark to become the largest food and grocery market in the world. The US is a close second and predicted to remain in that position at least until 2016. Next are Japan, India, Brazil, Russia, France, Germany, Britain, and the list goes on.
Numbers are telling and confusing at the same time. The USA population is about 1/4 of China’s, but we pretty much spend the same amount of money on food. What does it say about the per capita calorie intake in both countries, or about the price of food? It is well established that we are a fat nation, but just how much more do we eat compared to the average Chinese?
One trillion dollars on food spent by 1.4 billion people is a little over $700 per person per year. Compare that to the USA figure of also one trillion dollars spent by a population of 320 millions, that’s $3,125 per person per year.
In a global market where the price of basic food is determined in commodity exchanges, it is hard to pin the the 4x per capita spending on the price of food. Indeed, the data below (source: numbeo.com) suggests that the price of basic foods in the USA is only 30% more expansive than China’s.
China
Milk (regular), (1 liter) 13.35 ¥ or $2.15
Loaf of Fresh White Bread (500g) 10.55 ¥ or $1.72
Rice (white), (1kg) 6.52 ¥ $1.06
Eggs (12) 11.77 ¥ $1.92
…
Cost of daily 2000 calories, balanced diet – $6.91
USA
Milk (regular), (1 liter) $1.01
Loaf of Fresh White Bread (500g) $2.43
Rice (white), (1kg) $3.00
Eggs (12) $2.30
…
Cost of daily 2000 calories, balanced diet – $9.54
If we calculate the yearly expenditure based on the cost of minimum calorie diet (365 days x $6.91 x 1.4bn people), Chinese people spend US$3.5tn on food each year, while Americans spend just a little over US$1.1tn. So where does this measurement gap come from?
The figures of around US$1tn market size for China and the USA represent a consensus of major research firms such as AC Nielsen and Euromonitor International. But measuring food market is notoriously difficult. How do you account for dumpling and noodle stalls in the streets of Hong Kong or the Halal food carts in New York City?
Food sold in retail stores indeed represents a large part of the global food market, but not all. There are street vendors, fast food chains, restaurants, there’s food served in schools, hospitals and government organizations, etc. If these can account for one meal per day, that explains 30% of the gap between retail sales figures and the figures based on calorie needs.
As long as we don’t measure the same grain of rice more than once as it traverses the food supply chain, the numbers should play out. Measuring the end points of the supply chain is a good way to go. Supermarkets sales, is one such end-point, probably the largest in many countries. But, unless we are willing to assume that Chinese folks somehow survive on a 600 calorie diet, it is fair to assume that as much as 2/3 of the Chinese food market still takes place outside traditional retail.
Supermarket and Retail Food Sales Info-graphics courtesy of – The Irish Farmers Journal
grocery store size is also important because you can give more product option to customer. this blog is useful of making good size off grocery store..