The Rising Influence of Rising Affluence

[oldberkeley]

Driving the shift in large part are dietary changes as China's population becomes wealthier.

While pure dollar-driven economics is primary, cultural politics plays a big part. This is already well-documented, and will continue to be a rich vein for those studying the relationships between food and culture.

Eating Western mass-produced foods is one way to show that you and your family are more progressive/richer/influential/etc. As Western media spreads, filled with images of "the good life"—cars, computers, clothes, and of course, food—the Chinese increasingly want these things, not just for their utility, but as symbols of modernity.

It’s still tough for many to buy a car or a computer, but a Little Debbie Snack Cake can be had! The inevitable rise in heart disease and other ailments from this type of diet seems to be no more of a concern to the everyman than the inevitable rise in pollution from unchecked industrial expansion is to the government.

PG is one of my larger holdings. About 15 years ago I heard one of their execs simply raving, in almost an incredulous manner, about how much the Chinese loved Pampers; a week later, a just-back-from-China friend remarked on their national infatuation with American boxed breakfast cereal (one night, in a misguided attempt to please, he was served Cheerios as a side dish at dinner.) Finally a light went on in my thick skull: these folks are potential consumers—on steroids—of what most of us consider ordinary, unremarkable U.S. grocery store fare. And there are a lot of them.

ps: I'm oversimplifying, especially for a biotech expert like you, but IMO the Chinese market is also the main driver behind the PG/Teva deal. Why drink some nasty herbal tea when you can have some pretty pink Pepto-Bismol?