China’s F&B sector to grow slower in 2025

It is anticipated to slow to 5%-6%.

China's food and beverage (F&B) sector is projected to grow at a slower rate in 2025 but is still expected to surpass the country's GDP growth, according to a report by S&P Global Ratings’ China Food and Beverage: Outdoor and Leisure to Prop Up Demand report.

The growth was attributed to rising demand in outdoor dining and leisure activities.

"We expect overall growth in China's food and beverage [F&B] sector to slow to 5%-6% in 2025 from 8.2% in 2024, said S&P Global Ratings Credit Analyst Manqi Xie. "This is higher than our 2025 GDP growth forecast of 4.1%, driven by higher outdoor and leisure demand."

Higher U.S. tariffs on Chinese exports will have little direct impact on rated F&B companies, which focus on the domestic market, the report said.

However, weaker employment, income, and consumer sentiment could indirectly affect revenue. Nine out of ten rated F&B companies in China have stable credit outlooks, but some face financial pressure. Health and Happiness has a negative rating due to weak demand for infant formula, though its supplements business remains strong.

Dairy producers will likely see a slight revenue drop due to oversupply, which should ease in the second half of the year, allowing for a gradual recovery.

Demand for healthy drinks and supplements will also remain strong, whilst pre-cooked food consumption will continue to support steady packaged food growth.

Moreover, catering sales are expected to rise by 5%-6% in 2025, with food delivery driving most of the increase.