AFN China insights report: Nuts and Snacks opportunities
With healthier eating and snacking between meals on the rise in China, there are excellent prospects for growth in the nuts category. Low cost domestic and other Asian suppliers enjoy significant market share in China – though a number of local manufacturers who import their nuts and have them processed in China have successfully entered the premium market with attractive packaging and aggressive in-market promotions.
The snacks market value in China has seen a stable increase, with a CAGR of 16.7% (2010-2014). The market value is estimated to reach 77.79 billion USD in 2019, growing at a CAGR of 8.5% from 2015. (Mintel report Regional insights China Snacks April 2015).
Chinese consumers show a strong preference for healthy snacks, already proven by the success of snack nuts in the market. Snack nuts took the lead in the snacks market, with 55% market share, mainly due to consumers’ awareness of the inherent healthy benefits of nuts.
US almonds enjoy strong country branding in China, and with our natural advantages, Australia has the opportunity to develop similarly strong country branding for Macadamia Nuts – and lift our country brand for almonds.
South Africa, the world’s largest macadamia producer, currently has an agent – a Chinese national – working in the Chinese market on behalf of one or more large-scale South African macadamia producers. Rather than targeting the premium end of the market with value-added products in international supermarkets, the agent is focused on high levels of market penetration by distributing the macadamias in bulk directly to wholesalers Costco, Metro and some China-based processors.
- Tong Garden • California Field • Orchard Farmer • Seeberger • Blue Diamond • Planter
- Drive me nuts • Fisher • Feridies • Superior Nut Company • Hider Foods
Selected product information
|Product||Retailer||Manufacturer||Origin||Serving Size||Price (Rmb)|
|Honey roasted macadamia||Carrefour||Tong Garden||Singapore||150g||52.00|
|Honey roasted peanuts||BHG||Superior Nut Company||USA||255g||42.90|
|Wasabi and soy almonds||Jenny Lou’s||Blue Diamond||US||150g||32.80|
|Honey roasted almonds||City Super||Fisher||US||141g||39.00|
Packaging and flavours
Local brands targeting the premium market often use clear plastic cylindrical tubs for their packaging, with the bare minimum labelling and brand messaging. Foreign brands, mostly from the US, flavour largesized snack tins and, to a lesser extent, regular packets, though resealable packets are becoming increasingly common in international supermarkets.
Asian nut processors offer a wide range of flavoured nuts, with low-cost nuts from Vietnam, Thailand and Korea featuring crab, shrimp, chilli, beef sauce, cocoa, vanilla, butter and coconut flavours. Common Western nut flavours include honey roasted, BBQ and soy. Niche flavours include chilli and lime, chipotle lime and smoked bacon cheddar. Feedback from Chinese consumers indicated a preference for butter-flavoured nuts.
During the study period, Chinese brand Bestnut, which imports nuts (including macadamias from Australia) and processes them in China, was very active in its in-store promotions. The company ran in-store tastings, featured their products in displays near supermarket check-outs, and offered gift boxes containing a range of their nut products. One Korean brand was also offering in-store sample tastings.
Promotions for US almond brands featured in a number of international supermarkets, including informational display promotions. This follows a successful marketing campaign for US almonds in China that ran several years ago, which helped establish the US almond brand in the market.
Gondola displays for nuts were also common in supermarkets. German brand Seeberger featured gondola displays in international supermarkets, hypermarkets – and even imported food convenience stores.
Trends and opportunities
There is an excellent opportunity to develop the Australian macadamia nut brand in the Chinese market, perhaps through online platforms or informational product displays in premium international supermarkets.
The brand could then be leveraged to promote value-added products such as flavoured macadamias (wasabi and abalone flavours were observed in China), macadamia milk, oil, chocolates, nougat, bars, biscuits and other snacks. One Japanese chocolate-coated macadamia brand, which can be purchased at all levels of supermarket retail in China, from hypermarkets down to convenience stores, illustrates the potential for value-added macadamia products in China.
Flavours are greatly diversified with mash-ups like beef and peanut, a mix (such as peanut and cashew), and traditional snacks with exotic flavours.
New categories are continuously developed to cater to consumers’ curiosity to try brand-new snacks. Healthy coarse food grain, table vegetables and cold dishes are available in snack forms. Packaging also plays an important factor targeting convenience by offering on the go smaller pack size, transparent design to see product quality and packs for sharing. For example; Peanut & Beef flavour (Na Qu Pickled Peanut Beef)/Horsebean & meat floss (Horsebean with meat floss Koushuiwa foods).
Innovative nut-based products align well with health and wellness trends, where premium almond, macadamia or walnut beverages, oils, powders and snacks have excellent potential for growth in China. (Rice-based snacks with nuts and fruit were observed under the ‘new products’ category at two international supermarkets – both featuring blueberry and cranberry flavours).
Snack sizes are becoming increasingly popular, and there will be niche opportunities for manufacturers of nut-based products in snacking sizes (e.g. premium nut, fruit and seed mixes). This may include innovative and/or attractive packaging, perhaps in vibrant colours that appeal to young white-collar workers indulging in ‘guilt-free snacking’ at work.