China rank second in the bakery and cereals market

Posted by Josette Dunn on 14th July 2010

Inherent strength of the Chinese economy and resultant consumption boom is driving the growth of the bakery and cereals market in China.China held the fourth position in terms of retail sales and the second position in new product launches in the global bakery and cereals market in 2009 with more than 1,500 new product launches in 2009.

Bread

The pace of new product launches in the Chinese bakery and cereals market has been increasing steadily over the last few years with manufacturers taking a keen interest in the Chinese market in view of the huge potential that exists there. These firms are launching products aimed at the populace in general as well as those targeted at specific segments such as the various sub-cultural and economic classes. Moreover, they are adapting to local Chinese tastes and offering products in flavours that range from peanut and black sesame seeds to Peking duck and Shanghai crab.

“The key to a successful product launch in China seems to be marrying modernity with tradition rather than pitting one against the other,” says Amit Srivastava, Datamonitor analyst and author of the report – Product Insights: Bakery and Cereals in China.

The stupendous increase in product options has created an overwhelming sense of power amongst consumers. Variety has moved from being a motivation factor to being a necessity. As such, consumers expect to be offered a range of options, be it in flavour, shape, texture, density or aroma.

One of the key trends in the Chinese market is the growing influence of children in purchase decisions, particularly when it comes to bakery and confectionery products. Manufacturers are tapping this segment by introducing new products and are targeting packaging and product promotion activities specifically at this consumer segment. Additionally, increasing obesity in children is likely to play a role in new product launches. “There is a growing concern over obesity in Chinese children, so there may be an opportunity to launch healthier products with intuitive packaging that appeals to kids and their parents,” opines Amit, based in India.

Consumers in China demand products that offer taste and at the same time can be consumed without worrying about health issues. Manufacturers have tried to tap this opportunity by offering healthier bakery product options, such as whole-wheat biscuits and oatmeal. Local ingredients that are believed to improve one’s health such as longan, tremella and sesame are also frequently used in bakery and other products, as consumers are acquainted with their benefits and can quickly embrace products containing them. Additionally, there is a growing demand for convenient bakery products in the Chinese market. The reasons for this range from the increasing proportion of elderly people in the population to critical shortage of time on account of increased work pressure.

The Chinese bakery and cereals market continues to evolve and grow at a brisk pace. At this pace, it is likely to feature among the top three countries by market value in the next few years. “As such, we are likely to see a lot of action in this market with new companies entering it and global heavyweights fighting it out for a share of the market. It will be interesting to observe how the local players respond to this scenario. The Chinese consumers for sure will be a happier lot with even more choices and benefits coming their way,” concludes Amit.