China insights report: Confectionery opportunities in China
As incomes in China continue to rise, snacking between meals has become increasingly popular. Traditionally, nuts and seeds were often consumed as snacks in China – particularly when travelling – yet confectionery has grown as a snack of choice for many Chinese today.
The retail chocolate market in China is estimated to have grown at a CAGR of 8% between 2011 and 2016, reaching RMB 27.5 billion in 2016, up from RMB 18.7 billion in 2011. (Mintel report Chocolate Confectionery – China June 2016).
China’s gift-giving culture and tendency towards regular gatherings of relatives and friends further drives demand in this category, particularly during Chinese New Year.
Western influence has led to a greater acceptance of sweet confectionery in China, though less sweet domestic brands are still extremely popular. Unlike chocolate, a number of Chinese consumers indicated they did not have a preference for Western confectionery brands over local ones.
Aside from the large multinationals and coffee chains such as Nescafe and Starbucks, manufacturers from Taiwan and Korea dominate the packaged iced coffee market. However, there are still opportunities for manufacturers who can differentiate their product through innovative flavours and/or packaging, such as Austrian brand Landessa.
- Haribo • White Rabbit • Fosters • Bonumee
- Yum Earth Organics • Pierrot Gourmand • Sugarpova • Pandora Bell
Selected product information
|Product||Retailer||Manufacturer||Origin||Serving Size||Price (Rmb)|
|Milk candy||Lianhua||White Rabbit||China||227g||14.30|
|Peanut nougat||Carefour||Ma Da Jie||China||300g||16.00|
|Pear drops mini boilies||Ole||Fosters||Turkey||100g||29.80|
|Strawberry lollipops||Jenny Wangs||Yum Earth Organics||US||85g||25.20|
|Fruit Marbles||City Super||Mrs Bridges||UK||155g||68.00|
Packaging and flavours
Local confectionery typically comes in smaller-sized packaging than Western confectionery, though larger sizes are more common in hypermarkets. A number of Western European manufacturers, from the UK in particular, have developed strong branding in the premium confectionery category in China through packaging that evokes a sense of ‘old-fashioned, authentic, hand-made and reliable’ confectionery. These products are also well-suited to gift-giving.
Localised confectionery flavours include red bean, sesame, nut, coconut and milk. Sour, fruit (lemon, berry, sour cherry) and cola candies are popular flavours among local and Western brands alike.
A range of confectionery is often presented in displays close to check-outs at China’s international supermarkets. Some manufacturers leverage festivals such as Halloween and Christmas to launched themed confectionery products and packaging, or accompanying gifts. Gondola displays for confectionery are also common.
Trends and opportunities
There are opportunities to localize flavours in the confectionery category in China (for example, leveraging Australia’s strong milk brand in China to launch a milk-based confectionery product). Manufacturers will be able to differentiate their products through premium and/or functional ingredients. ‘Contains real fruit juice’, ‘reduced sugar’, ‘organic ingredients’ and ‘vitamin C’ were some of the branding messages observed on confectionery products in China. Sugar and gum confectionery, bakery, desserts and ice cream, snacks and dairy are the top five food categories adopting chocolate flavours according market data, which could be prioritised when companies consider tapping into more categories. Innovative packaging, perhaps targeting China’s gift-giving culture, weddings and Chinese New Year – or promotions and themed products targeting Christmas and Halloween may also present opportunities. As an example refer to the following Hershey fruit filled Chocolate and Dove Blueberry & Cherry dark chocolate.