China’s F&B sector forecast to see slower growth

This is due to a shift in demand towards outdoor and leisure activities.

China's food and beverage (F&B) sector is expected to grow 5%-6% in 2025, down from 8.2% in 2024 but still outpacing the country’s GDP growth forecast of 4.1%.

This slowdown is attributed to a shift in demand towards outdoor and leisure activities, according to S&P Global Ratings.

Despite higher U.S. tariffs on exports, the impact on rated F&B companies will be minimal, though weaker employment and income may indirectly affect revenue.

Nine out of the 10 companies rated by S&P in China’s F&B sector have stable outlooks, although some have thin rating buffers. Health and Happiness, a key player in the market, faces challenges due to weak demand for infant milk formula, despite strong performance in supplements.

Dairy producers are set for a mild revenue contraction, but margins are expected to recover in the second half of the year.

Rising interest in preventive health is expected to boost the healthy drinks and supplements segments, while growing consumption of pre-cooked food will keep packaged food growth stable.

Moreover, catering sales are projected to grow 5%-6%, driven mainly by delivery services.