China Plus One for Food: Why European Companies Are Shifting to ASEAN — and How to Start

The value of US imports from China fell from $438.7 billion in 2024 to $266.3 billion in 2025. That is a $172 billion drop in a single year.

While these numbers reflect US-China trade, the shockwave is global. European food companies that source ingredients or finished products from China are rethinking their supply chains — not because China cannot produce, but because the risks of single-source dependency have become impossible to ignore.

This article examines why “China Plus One” is now a food industry imperative, why ASEAN is the leading alternative, and how to make the shift without disrupting your existing supply chain.

The China Plus One Imperative for Food

China remains the world’s largest food producer and a critical sourcing market. But three converging risks are making single-source reliance on China untenable for European food companies.

Risk 1: Tariff Escalation

In April 2025, the US imposed tariffs of up to 54% on Chinese goods — including food products. While the EU has not followed with equivalent tariffs, the precedent is clear. EU anti-dumping duties already apply to specific Chinese food categories, and the political appetite for trade measures against China is growing across Europe.

The immediate impact on food sourcing:

• Chinese food ingredients with US exposure face dual-market risk

• Supply chains routed through China for EU-bound products face increasing scrutiny

• Currency volatility (CNY) adds unpredictability to long-term contracts

Risk 2: Quality and Compliance Pressure

The EU’s food safety framework is tightening. In the past five years, the RASFF (Rapid Alert System for Food and Feed) has flagged hundreds of notifications related to Chinese food exports — covering pesticide residues, unauthorized additives, and labeling non-compliance.

The Corporate Sustainability Due Diligence Directive (CSDDD), entering force from 2027, adds environmental and human rights accountability to supply chains. For food companies, this means auditable traceability from raw material to finished product — significantly harder to achieve in China than in ASEAN countries with EU free trade agreements.

Risk 3: Geopolitical Concentration

COVID-19 exposed the fragility of China-dependent supply chains. Port closures, zero-COVID lockdowns, and shipping disruptions cost European food companies months of delayed deliveries.

The lesson: supply chain resilience requires geographic diversification. “China Plus One” does not mean abandoning China. It means adding a second sourcing region so that disruption in one does not halt your entire supply chain.

Why ASEAN? Data-Driven Comparison

ASEAN’s food manufacturing sector is worth an estimated $667 billion (2023) and growing at 7% annually. The region produces many of the same product categories as China — often at comparable cost and with better EU market access.

Four structural advantages make ASEAN the leading China Plus One destination for food:

1. FTA Access to the EU

Vietnam’s EVFTA eliminates 99% of tariffs between Vietnam and the EU. No equivalent agreement exists between the EU and China. For products like coffee (tariff reduced from 7.5% to 0%), seafood (20% to 0%), and cashew nuts (12% to 0%), this creates a direct cost advantage.

2. Lower and Stable Labor Costs

3. Certification Infrastructure

Thailand’s food manufacturing sector holds the highest density of BRC, IFS, and FSSC 22000 certifications in Asia outside Japan. This is not the case in China, where international certifications are common only among the largest export-oriented factories.

4. ASEAN Internal Market

ASEAN’s 680 million consumers create a secondary market. A factory in Thailand can export to all ASEAN members at zero or near-zero tariffs under AFTA. This dual-market access (EU + ASEAN) is something China cannot replicate.

ASEAN vs China: Food Manufacturing Head-to-Head

This comparison covers the factors that matter most to European food procurement teams evaluating a China Plus One strategy.

For the website version with interactive tables, visit taitonmai.co.jp/en/column/

Need a custom comparison for your specific product category? We provide tailored market research with local-language sources — from $2,000. Get a quote

Real-World Examples: Companies That Made the Shift

The China Plus One shift in food is already happening. These examples show the patterns.

S&B Foods: First Overseas Factory in Thailand

S&B Foods, Japan’s leading spice manufacturer, operated exclusively from Japanese factories until 2026 — when it began building its first overseas production facility in Chonburi, Thailand.

The decision was driven by:

• Raw material access — Thailand grows or imports the spices and herbs S&B needs

• ASEAN market access — AFTA enables zero-tariff exports to all 10 ASEAN countries

• Halal infrastructure — CICOT certification opens access to 1.8 billion Muslim consumers

• BOI incentives — 8-year corporate income tax exemption, import duty waivers on machinery

S&B’s target: increase overseas revenue from 10% to 40% by 2043. Thailand is the platform.

European Canned Seafood: Thailand Over China

European private label retailers increasingly source canned tuna and seafood from Thailand rather than China. Thailand’s advantages:

• Thai Union Group ($4B revenue) operates the world’s largest canned tuna facilities

• BRC and IFS certifications are standard across major Thai seafood processors

• EU-Thailand seafood trade totaled approximately EUR 400 million in 2024

• RASFF alert frequency for Thai seafood is significantly lower than for Chinese seafood

Coffee and Cashew: Vietnam Replacing China as EU Supplier

Vietnam has become Europe’s primary source for robusta coffee and cashew nuts — categories where China was previously a significant intermediary. In Q1 2025:

• Vietnamese agricultural exports to the EU reached $2.61 billion (+37.8% YoY)

• Coffee exports hit $2.88 billion, with Germany and Italy as top destinations

• Cashew exports reached $841 million, with the Netherlands as the largest market

The EVFTA’s tariff elimination is the key driver. Chinese intermediaries cannot compete on price when Vietnam ships directly to the EU at zero tariff.

For a detailed country comparison, see: Food Manufacturing in ASEAN: Thailand vs Vietnam vs Indonesia

Your China Plus One Roadmap: 5 Steps to Get Started

Moving from a single-source China supply chain to a China+ASEAN model does not require abandoning existing suppliers. It requires adding a parallel track.

Step 1: Map Your Current China Exposure

Identify which product categories, ingredients, or finished goods you currently source from China. Quantify the revenue at risk if any of these supply chains were disrupted for 3-6 months.

Step 2: Prioritize Categories for ASEAN Sourcing

Not everything needs to move. Focus first on:

• Products where ASEAN has a natural cost advantage (seafood, coffee, tropical products, coconut derivatives)

• Products where EU tariff advantages exist (Vietnam under EVFTA)

• Products where China quality concerns have created compliance risk

Step 3: Identify ASEAN Manufacturers

Use trade databases (ensun.io, DITP Thailand, VIETRADE), attend regional trade shows (THAIFEX, Food & Hotel Asia), or commission local research. Local-language sources are essential — the best manufacturers in Thailand or Vietnam are often invisible in English-language searches.

For a complete methodology, see: How to Find and Verify Food Manufacturers in Southeast Asia

Step 4: Run Dual Sourcing for 6-12 Months

Do not switch overnight. Run parallel supply chains — China + ASEAN — for at least two production cycles. Compare quality, delivery reliability, communication, and total landed cost in actual operation, not just on paper.

Step 5: Scale What Works

Once you have validated an ASEAN supplier through actual production and delivery, gradually shift volume. Most companies find that a 60/40 or 70/30 split (primary/backup) is the optimal risk-reward balance.

Sources

• Tax Foundation “Trump Tariffs & Trade War by the Numbers” 2026 (US tariff rates)

• Al Jazeera “US trade with Southeast Asia surging despite Trump tariffs” January 2026 (trade flow data)

• Fortune “Southeast Asian economies prove resilient” December 2025 (ASEAN growth)

• World Economic Forum “Navigating Asia’s new trade reality” April 2025 (tariff impact analysis)

• Lowy Institute “Navigating the storm: Southeast Asia and global trade shocks” 2025

• PwC “US reaches limited trade deal with China and ASEAN partners” 2025

• European Commission “Agri-food Trade Statistical Factsheet” 2024 (EU-ASEAN trade data)

• Source of Asia “F&B Industry in Southeast Asia 2024-2025” (market size)

• ASEAN Briefing “US Tariffs in Asia 2025: A Regional Investment Map”

• VietnamNet “Vietnam’s agricultural exports soar to record $70 billion in 2025”

• Vietnam Export Data “Vietnam Food Exports Report 2024-2025” (Q1 2025 EU exports)

• S&B Foods “Press Release: Thailand Factory Construction” January 2026

• Thai Union Group “FY2024 Results” (revenue, private label data)

About the Researcher

Takashi Kinoshita, MBA — Founder of Taitonmai Co., Ltd. 8 years in international procurement at SHARP Corporation, including factory operations in Thailand. Now leads a research team covering 80+ countries, specializing in ASEAN company intelligence and market analysis. 350+ projects delivered to clients in Japan, Europe, and North America.

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