Health-minded Chinese upgrade to affordable premium foods

The Chinese middle class is upgrading to products in the "affordable premium" segment, accounting for the popularity of chains like Starbucks, which is opening up about 500 stores a year in the country.

"The volume that Chinese are consuming is not growing rapidly, but they are trading up in terms of what they are buying, and we are seeing this not just in the first and second-tier cities but across lower-tier cities as well," said OC&C Strategy Consultant's Greater China partner Jack Chuang.

This trend is benefiting foreign consumer brands that have been positioned as premium from the beginning, like Danone's Evian mineral water brand, he said.