Hong Kong-Macau - Agricultural SectorsHong Kong-Macau Agricultural Sectors

Hong Kong is a dynamic export market for U.S. agricultural products. Total U.S. agricultural exports reached US$4.4 billion in 2017^[1], Hong Kong ranked as the 6^th largest market for U.S. food and agricultural exports. For U.S. consumer-oriented exports, Hong Kong ranked 4^th in 2017, with exports reaching US$4 billion in 2017, an increase of 10 percent year on year. The growth in the value of imports is because Hong Kong consumers are willing and able to pay more for higher-quality goods.
Hong Kong’s significance as a major food import market can be attributed to several factors: 

• Most food and beverage products enter duty free;
• A rules-based import regime and sophisticated infrastructure for trade servicing, including financing and logistics, facilitates Hong Kong’s role as a trade destination and regional hub to China and other regional markets; 
• An affluent consumer base, with per capita income of US$46,200 ^[2] in 2017, among the highest in Asia, that spends a significant portion of income on food.

Outlook for 2018

• Food imports to Hong Kong are expected to continue an upward trend in 2018 helped by economic growth of 4.7 percent in the first quarter of 2018. The Hong Kong government has forecast the economy to grow 3-4 percent in 2018.[3]
• Consumption of grocery products, meats, poultry, eggs and fresh fruit continues to be strong, with demand for natural and organic food and beverages also growing rapidly.
• U.S. agricultural products benefit from a strong reputation as safe, high-quality options.

Retail Sales and Outlets
In 2017, Hong Kong’s retail food sector sales rose 1.82 percent to US$12.28 billion. Hong Kong food retail market is made up of supermarkets, convenience stores, and traditional markets. 

Table 1 – F&B Retail Sales in Hong Kong (US$ billion)
Chart 1 – F&B Retail Sales in Hong Kong (US$ billion) 




There are more than 800 supermarkets, 1,300 convenience stores, and over 100 traditional markets in Hong Kong, making food shopping very convenient.

Traditionally, Hong Kong consumers shop daily because of a preference for fresh food. Much of the shopping is still done in traditional markets including street markets and locally-owned shops. Overall, street market sales trend toward fresh foods while supermarkets dominate in processed, chilled and frozen, high-value added and canned food products. The competition between street markets and supermarkets has intensified in recent years.

Although the number of supermarket outlets is expected to remain stable, the market share for supermarket sales is expected to continue in the future at the expense of traditional street markets. The supermarket’s share in terms of total retail sales rose from 44 percent of total sales in 1995 to 55.8 percent in 2017.

While most food shopping is still done at physical stores, online food shopping is expected to grow as rents continue to rise, more product varieties on e-commerce platforms, and consumers become more confident.

HRI Food Service Sector
Restaurants
Hong Kong boasts around 14,000 restaurants which range from local favorites to high-end fine dining outlets. The Michelin guide 2018 stars 63 Hong Kong restaurants, including 6 three-starred establishments, outnumbering the 5 restaurants in New York City and 3 in London that won the same three stars recognition.
In 2017, Hong Kong restaurant food and beverage purchases, valued at US$4.66 billion, generated estimated sales of US$14.45 billion, an increase of 2.0 and 5.0 percent*, respectively, over 2016. Sales prospects for purchases in 2018 remain strong.
Table 3 – Hong Kong Restaurants Receipts and Purchases (US$ Billion)

	2015	2016	2017	Growth (17 vs 16)
Restaurant Receipts	13.38	13.77	14.45	5.0%
Restaurant Purchases	4.51	4.56	4.66	2.0%

(Source: Hong Kong Census & Statistics Department, US$1=HK$7.8)
*Percentages are calculated before numbers are rounded
For Hong Kong statistical purposes, restaurants are grouped into five broad categories: Chinese, non-Chinese, fast food, bars and other establishments.

Chinese Restaurants
Chinese cuisine is the top grossing restaurant category, according to Hong Kong Census and Statistics Bureau, and it will continue its dominant share in the market due to deeply rooted cultural events, such as banquets for weddings and dim sum lunches, often enjoyed by groups of working class adults and families. Among all Chinese cuisines, Cantonese is the most widely available, with others including Shanghainese, Sichuan and Chiu Chow also providing many options to diners.

Non-Chinese Restaurants
Due to its history as a global trade hub, sophisticated and affluent Hong Kong consumers have an enthusiasm for a range of international cuisines made from high-quality ingredients.  Footprints of restaurants offering non-Chinese cuisine options, including Western, Japanese, Korean, Thai, Vietnamese, Indian, and more, are found everywhere in Hong Kong, leading to numerous opportunities for usages of U.S. foods and beverages as ingredients and for pairing.

Fast Food
Fast food outlets suit Hong Kong’s quick-paced lifestyle where dining out twice per day at convenient locations is not uncommon. Competition among fast food chains is intense as brands strive to retain customers and raise brand awareness. McDonald’s and KFC are the leading western style fast food chains, and Café De Coral and Fairwood are the leading local fast food chains, by brand share of foodservice value[4].  Western style outlets including Pret A Manger and Oliver’s Super Sandwich are often located at areas easily accessed by office workers who appreciate healthy and light options such as salad and sandwiches.

Bars
Hong Kong’s vibrant nightlife is renowned and is served by some 800 bars and pubs across Hong Kong[5].  Lan Kwai Fong in Central business district is home to around 90 bars and restaurants[6]. It is a place where locals, expats, and tourists gather for drinks in the evenings and during special occasions, e.g. New Year’s Eve and the beer festival.  According to Euromonitor, foodservice sales value in bars and pubs increased at a compound annual growth rate of 3.3% during 2012-2017^[7], reflecting growing opportunities for imported alcoholic beverages. 

Other Establishments
“Tea restaurants” offer a range of localized Western and Chinese cuisines and beverages. Milk tea is a particular local favorite consisting of adding milk (evaporated or condensed) to various tea combinations. Hong Kong also has a vibrant coffee culture. Independent specialist coffee shops have grown in number of outlets and sales the past several years. The leading chains, by brand share of foodservice value, are Starbucks, Pacific Coffee, and McCafe[8]. [8].

Hotels
In 2017, tourist arrivals reached 58.5 million, with visitors from Mainland China representing 76 percent of travelers. Visitor numbers grew by 10% in first 4 months of 2018[9], showing opportunities for the hospitality industry and demand for accommodation at every price level.

To meet the continued rise in the number of visitors, Hong Kong’s hotel room supply continues to increase. Up to May 2017, there were 271 hotels offering 77,555 rooms, compared with 211 hotels and 67,394 rooms in 2012[10], reflecting growth rates of 28 percent and 15 percent, respectively. The room occupancy rate was 88 percent in 2017 (up to May). Hotels in Hong Kong offer premium dining experience including buffets and occasional menus by celebrity chefs from overseas. Local residents fill dining outlets in hotels, especially during festivals when families and friends gather for celebrations. 

In 2018, the expected inaugurations of the Hong Kong-Zhuhai-Macau Bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link will further connect cities in the region and shorten the transport time. The flow of passengers is expected to contribute to the growth of the hospitality industry leading to increased opportunities for food and beverages.

Institutions
Hong Kong’s institutional food service sector consists of hospitals, residential care facilities, schools, prisons and travel industry catering facilities. Many of these facilities, especially those operated by the government, purchase food supplies through tenders where price, quality, consistency, and stable supply matter. Experienced local importers are familiar with the process and requirements.

Hospitals
Hong Kong has 43 public hospitals and institutions, managed by the Hospital Authority, and 12 registered private hospitals. Some of the meal services are outsourced to caterers and distributors.

Schools
There are 1,030 kindergartens, 581 primary schools, 506 secondary schools, and 20 degree-awarding institutions in Hong Kong. The Government provides nutritional guidelines for students’ lunch and the appropriate procedures to select school lunch suppliers. The Department of Health leads an “EatSmart at School” campaign to encourage healthy eating such as reduced sodium and inclusion of fruits.

Prisons
The Hong Kong Correctional Services managed some 29 correctional facilities including prisons and rehabilitation centers. Inmates receive meals that are prepared according to health guidelines. 

Airlines
Hong Kong is located less than five flying hours from half of the world’s population so its airport is very busy.  Connected to over 220 destinations, the Hong Kong airport handled 72.9 million passengers in 2017, and their three aircraft caterers have a combined capacity of 198,000 meals per day for plane passengers[11]. 

Cruise Ships
Hong Kong is increasingly popular as a cruise hub due to the development of the Kai Tak Cruise Terminal – the former site of the city’s urban airport - that can accommodate the largest ships in the cruise industry. In June 2017, Kai Tak Cruise Terminal celebrated the arrival of the one millionth cruise passenger since the terminal started operation in 2013. The number of revenue passengers and total calls in 2017 totaled 732,586 and 190 respectively, which almost doubled the figures in 2016. The operating company projected that 2018 would be another bright year in which itineraries out of Hong Kong will further expand and diversify, as Japan, Korea, Vietnam, and the Philippines now all offer visa free or visa on arrival service to mainland Chinese cruise passengers[12]. Luxury cruises bodes well for the demand for fine dining needs both during the cruises and in the city during on-shore excursions. 

Entertainment Parks
The two major theme parks in Hong Kong are Disneyland and Ocean Park.  The Disneyland resort operates 18 dining outlets and Ocean Park houses eight of them. These outlets include restaurants and cafes that offer various cuisines. Apart from these outlets, there are many kiosks in the parks making sweet and savory treats and beverages available to visitors. 

Outlook for the HRI Sector in 2017
As hotel and restaurant expansions continue into 2018, demand for high-quality U.S. food and beverage products by the HRI food service sector in Hong Kong is expected to remain robust. Healthy, nutritious options are increasingly found on restaurant menus as changing lifestyles and consumer awareness of transparent and sustainable food sourcing are in demand. 

Best Prospects for U.S. Consumer Oriented Food Product Exports in 2018
U.S. food and beverage products will continue to enjoy good prospects in Hong Kong:

• Hong Kong has a highly-developed marketing system, with tourists (58.5 million in 2017) and affluent consumers demanding high-value imports. Per capita GDP (over US$46,000) in Hong Kong is among the highest in Asia, enabling Hong Kong people to spend on high-quality food and beverages. With the link between the U.S. Dollar and Hong Kong Dollar, price stability makes purchases from the United States attractive.
• Hong Kong will continue to be a key gateway for trade to China and other ASEAN markets.
• Some product categories that are expected to be top prospects for U.S. consumer-oriented food product exports in 2018 include fresh fruits, wine and beer, snack foods, food preparations, red meat, and condiments and sauces.

For more information about this industry sector, please contact the U.S. Agricultural Trade Office in Hong Kong:
U.S. Agricultural Trade Office
Address: 18/F, St. John’s Building
33 Garden Road, Central
Hong Kong
Tel: (852) 2841-2350
Fax: (852) 2845-0943
Email: atohongkong@fas.usda.gov
Website: http://www.usfoods-hongkong.net  

 
 

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.