China's agriculture shows five major trends, and organic products will become more favored

“Those skilled in warfare seek victory through favorable circumstances.” If agricultural enterprises want to break through in their regions, they must first judge and discern the situation, leverage favorable conditions, formulate development strategies, and complete rapid transformation. Looking at the overall development, China's agriculture is at the crossroads of economic transformation: the traditional agricultural development model of recent decades has reached a bottleneck, and the advantage of low labor costs is no longer obvious. Where is the future path of China's agriculture headed? In my view, China's agricultural enterprises will show five development trends in the future.

Trend One:

Organic agriculture will usher in major development

As consumers place greater importance on food safety, organic food is gradually making its way onto the dining tables of high-end consumers and becoming a healthy lifestyle. Some business celebrities have also begun to enter agriculture one after another. Chu Shijian, former chairman of Hongta Group, grew the “inspirational orange”; Liu Chuanzhi, chairman of Legend Holdings, began selling “conscience fruit”; Liu Qiangdong, CEO of JD.com, began selling self-grown organic rice; and Wang Jianlin, chairman of Wanda Group, also enclosed 5,700 mu of land in Yanqing, Beijing, to build an organic agriculture park…… Among these agricultural products, “organic” has become a major selling point.

Although the price of organic food is usually 20%~50% higher than that of ordinary food, because the excessive use of chemical fertilizers and pesticides is prohibited, thereby reducing the harm of food to the environment and the human body, it is favored by consumers around the world. At present, the share of organic products in the international market is growing rapidly. According to statistics, China's organic food consumption is growing rapidly at a rate of 30%~50% per year. China's organic food also has enormous international and domestic market demand.

Trend Two:

Greater emphasis on brand image

⟦NL> With changes in the supply and demand relationship of agricultural products and consumers' lifestyles, consumers' requirements for agricultural products are no longer limited to quality and price, but are becoming higher and higher in terms of quality. In such a broader environment, entrepreneurs with vision and a sense of social responsibility have begun to attach importance to the issue of brand image. On the one hand, they strictly control product quality and prevent problems at the source; on the other hand, they place greater emphasis on product appearance design and increase promotional efforts, thereby shaping brand image and building consumer confidence.

At the same time, many small but beautiful and small but strong agricultural products have emerged in the agricultural sector, such as Zhangsheng Guli and Strawberry Manor, among other agricultural products, with high-end design, exquisite products, excellent quality, and very distinctive features, injecting new blood into China's agriculture. The current agricultural product market has shifted from competition based solely on product price or quality to competition based on comprehensive strength led by brands, such as awareness and reputation.

Trend Three:

Build resource advantages across the entire industry chain

The squeeze from upstream raw material costs and downstream channel expenses has led enterprises to extend their industry chains upstream and downstream, and many enterprises have begun to integrate resources and lay out the entire industry chain. COFCO's reliance on resource advantages to build the entire industry chain is a successful model.

Among the clients served by Zhiqi Future, there are also many such examples: those making sesame oil go from sesame cultivation to deep-processed products; the meat industry starts from feed to self-built terminals; e-commerce companies do their own logistics; all are like this. All enterprises should integrate based on their own resources, build industry chains as much as possible, and firmly grasp market initiative in their own hands.

Therefore, in this sense, Zhiqi Future is very optimistic about the large food industry supported by agriculture. This industry has considerable long-term development.

Trend Four:

Channel layout shifts from big and comprehensive to small and refined

Constantly rising channel costs have overwhelmed enterprises, and entering traditional channels such as supermarkets has become very cautious. They have turned to seeking new, more unique, and more cost-effective channels. This new channel is not only discovered, but also created through innovation and integration.

Compared with the popularity of online stores and e-commerce, we see enterprises beginning to lay out new positions, while some changes in offline channels have occurred more quietly. For example, Tuotuo Commune and Xianfeng.com chose not to enter KA (key accounts) but instead to deepen channel cultivation, focus on network layout, integrate all convenience store and community store resources in a city, bypass the secondary wholesaler link, and supply directly, greatly reducing channel costs, while achieving no small effect.

Trend Five:

The use of emerging media is more widespread and mature

In recent years, enterprises' advertising costs have been constantly increasing. The “entertainment restriction order” and “advertising restriction order” have made television advertising investment even worse. The power of traditional media is declining, while the role of emerging media is constantly rising.

New groups and fashionable groups are also major consumer groups. These groups are all the “screen generation”; screens have become super terminals, and mobile phones and computers are their most frequent means of accessing information and interacting online. Enterprises' operations on emerging media will become more widespread, especially the use of Weibo, WeChat, short videos, micro films, and other means, which is crucial.

Overall, the effectiveness of traditional marketing methods is diminishing day by day, while new thinking and new methods have begun to emerge. If enterprises can assess the situation and seize opportunities, they will certainly be able to transform quickly. After surviving the economic winter, they will surely welcome a new world.