Heads up, many procurement professionals may still be catching up: Starting the day after tomorrow, on 8 month 1, the new national standard for edible oils takes effect. Four categories—peanut oil, soybean oil, sunflower seed oil, and corn oil—are all being updated to the new standard. This isn't just a version number change.
Acid values are now tighter, peroxide values are strictly controlled, and whether oil is pressed or solvent-extracted must be clearly labeled. The exact proportion of each oil in blended oil must be prominently displayed on packaging. Starting the day after tomorrow, the old tactic of diluting expensive peanut oil with cheap soybean oil and marketing it as "peanut-flavored" based solely on a peanut image on the label will no longer be allowed.
Even stricter: as of 4/1, the "Measures for Administrative Law Enforcement on Grain Circulation" are now in effect. Every step, from raw grain intake to finished product dispatch, is fully traceable via ledgers. Non-compliance? Fines up to 50 million. Starting 7/1, bulk edible oil transport is also strictly regulated—only registered dedicated food tankers are allowed. The era of using ordinary trucks for oil transport is over, with transportation costs rising by 6% to 10%.
What does this mean for supermarket procurement? Starting the day after tomorrow, any products on your shelves with vague labels, expired execution standards, or missing batch test reports will become ticking time bombs.
What is the impact of compliance enforcement?
In short: good money drives out bad.
Over 6 million oil and fat-related enterprises nationwide, with the top 5 companies commanding more than 60% of the market. Compliance testing equipment costs over 100,000 yuan, while workshop environmental upgrades and traceability systems add another several hundred thousand. Most township small-scale oil mills generate less than 100,000 yuan in annual net profit—this is an unaffordable cost that means immediate exit, not an investment in upgrading.
Industry data shows that over 30% of small and medium-sized grain and oil workshops are being eliminated. The flour sector is even more extreme: national capacity is 2.4 times actual demand, with an operating rate below 50%. Many small factories were already struggling on the brink of losses; under the new regulations, they simply shut down.
What do you do with empty shelf space? Fill it with branded products. Packaged grains and oils with clear origin labels and nutritional information see significantly higher repurchase rates than bulk commodities. Shoppers have likely noticed: the floor space for bulk rice and loose oil is shrinking, while previously niche items like low-GI rice, baking flour, and high-oleic peanut oil are now at eye level. This shift isn't driven by supermarkets; it's industry-wide momentum.
Differentiation is where the profit margin lies.
Margins on staple goods like rice, flour, and cooking oil are already at rock bottom. We make pennies per bag of rice and a couple of dollars per bottle of oil. How long can this business survive relying solely on volume?
True growth opportunities lie in differentiated categories. Low-GI millet rice, driven by young consumers' sugar-control needs, saw year-over-year sales growth of over 300%. Dedicated dumpling flour, high-oleic peanut oil, rice bran oil, and specialty seasonings offer higher average order values, stable repurchase rates, and less intense competition.
There's still a window of opportunity: with the new regulations phasing out bulk generic products, shelf space in these differentiated categories is now opening up. Previously occupied by low-cost bulk items, these spots can now be filled with higher-quality brands offering better margins. However, this window won't last long; once the market stabilizes, prime locations will already be taken.
The grain and oil sector is highly sensitive; without supply chain innovation, stagnation means certain failure.
The grocery and staple food category differs from alcohol and snacks. Consumers are extremely price-sensitive—a 5 yuan increase in peanut oil could drive them to a competitor's store. Meanwhile, your costs are rising: compliance upgrades require investment, specialized transportation costs money, and testing reports add expenses. With squeezed margins on both ends, profitability continues to thin out.
What should we do? We must find room for improvement in the supply chain.
The private label share of our own brands exceeds 60%. Sourced directly from origins and supplied straight from factories, we eliminate intermediate distribution channels and have opened 23 stores. With Wumart+, the private label ratio reaches around 50%, while bulk displays reduce labor needs—a 2000-square-meter store operates with just 19 to 23 staff. JD Discount Supermarkets follow the same model: "direct sourcing from origins, factory direct supply, and private labels" as an integrated trio, sustaining low margins through high turnover. Century Lotus has launched 300 essential items with direct price cuts, backed by nationwide origin sourcing and large-scale centralized procurement to cut out multi-layered distributor markups.
These players essentially did one thing: reinvented the low-margin grocery category by combining direct sourcing, reduced intermediaries, differentiated product selection, and hard-discount operations.
The old logic for grain and oil procurement—"buy from whoever is cheapest"—has reached its limit. You now need to negotiate directly with source enterprises that own their own planting bases, have a complete processing chain, and can provide full quality inspection reports. Each intermediary layer erodes margins and reduces price advantages. Direct manufacturer supply can cut procurement costs by 15% to 20%—a difference that could mean survival or failure in the grain and oil category.
Hard discounting in the grocery and staple food sector isn't a trend—it's a necessity. With price-sensitive customers, thin margins, and rising compliance costs, there's only one path: eliminate every possible middleman, source directly from producers, pass savings to consumers, and offset margins with differentiated product categories. The shorter your supply chain and the closer you are to the source, the better your chances of surviving in this category.
17 source enterprises, completed in three days
After discussing all these trends, the bottom line is: you need to meet directly with source companies.
One month of online chat is worth less than half an hour face-to-face. Viewing products, negotiating prices, checking production capacity, and verifying qualifications feel uncertain through a screen.
8 to 21, Super Harvest Hangzhou Exhibition at the International Expo Center. 17 source enterprises in the grain and oil sector have confirmed participation, covering rice, cooking oil, condiments, dried goods from North and South China, and snack foods:
| No. | Company Name | Category Direction |
|---|---|---|
| 1 | Luoyang Zhang Da Shuai Seasoning Food Co., Ltd. | Condiments |
| 2 | Inner Mongolia Shanhe Xingu Agricultural Technology Co., Ltd. | Grain & Oil / Agricultural Technology |
| 3 | Gaoyou Sanbao Food Co., Ltd. | Snacks / Regional Specialties |
| 4 | Luohe Xuegu He Food Co., Ltd. | Snacks / Pantry Staples |
| 5 | Zhongfan (Zhangzhou) Food Co., Ltd. | Food Processing |
| 6 | Panjin Donglai Agricultural Technology Co., Ltd. | Rice / Grain & Oil (Panjin Region) |
| 7 | Weixuanzhou Agricultural Technology Development (Chongqing) Co., Ltd. | Condiments / Agricultural Products |
| 8 | Wuchang Shengfu Rice Industry Co., Ltd. | Wuchang Rice |
| 9 | Wuchang City Jin Cui He Gu Rice Industry Co., Ltd. | Wuchang Rice |
| 10 | Heilongjiang Heliang Agricultural Co., Ltd. | Grain and Oil Comprehensive |
| 11 | Suihua Jiahe Rice Industry Co., Ltd. | Rice / Grain & Oil |
| 12 | Zhongchu Sugar (Heze) Health Products Co., Ltd. | Sugars/Health Supplements |
| 13 | Wenzhou Weizhuangzhu Food Co., Ltd. | Condiments/Side Dishes |
| 14 | Shandong Fengzhifang Agricultural Technology Co., Ltd. | Grain & Oil / Agricultural Products |
| 15 | Liaoning Weilai Food Technology Co., Ltd. | Food Technology / Condiments |
| 16 | Chengchun (Shandong) Biotechnology Co., Ltd. | Biotechnology / Food Ingredients |
| 17 | Shouguang Ouri Agricultural Development Co., Ltd. | Vegetables/Agri-products (Shouguang Region) |
Suggestions:
Rice suppliers: Wuchang Shengfu, Jin Cui He Gu, Heilongjiang Heliang, Suihua Jiahe, and Panjin Donglai. These five cover the three core rice regions of Wuchang, Northeast China, and Panjin—enabling one-time comparison of pricing and supply capacity across regions, saving you three trips to Northeast China.
In the condiment category, brands like Luoyang Zhang Dashuai, Weixuanzhou, Wenzhou Weizhuangzhu, and Liaoning Weilai each bring distinct regional characteristics, making them ideal for differentiated product line supplementation.
Snacks and local specialties: check out Gaoyou's Three Treasures, Luohe Xuegu He, and Zhongfan Zhangzhou products in the supermarket's regional specialty section.
Shouguang Ouri Agriculture leverages the Shouguang vegetable industry cluster, making it worth a dedicated discussion on fresh produce and prepared meals.
For the food and oil category, profit lies not in volume but in precision sourcing. The compliance-driven market consolidation is the ideal window to secure top-tier suppliers. Once the landscape stabilizes, the bar for quality suppliers will rise, along with their prices.
Bring the category requirements list and target gross margin. See you in Hangzhou.