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Snacks in China

Abstract

Introduction

"China's savoury snacks market has grown strongly thanks to increased consumer spending power, busier lifestyles and increasingly varied leisure pursuits. Consumer interest in new products has fuelled a massive expansion in the number of companies and products involved in the market. But that growth has now created such a bewildering mass of products and brands that all of the products now struggle to stand out from the crowd. Consumers faced with a wall of products come to view all of the products as the same, leading to many sectors becoming viewed as just commodities.

That has left the door open for snack food retail chains and modern grocery chains to develop retail brands and private-label brands that compete successfully where manufacturers' brands have stalled. They provide uniformity of brand image that stands out from the crowd in a way the manufacturers' brands mostly had not, and the manufacturers now face competition from retailers as well as each other, raising the competitive temperature.

Consolidation in the savoury snacks industry is therefore inevitable. We are already seeing leading snacks makers gear up for that consolidation by beginning to innovate in their branding, packaging, marketing and advertising. They are also already showing signs of having identified key consumer groups to target, and adapting their products and strategies to focus on increasing consumer interest among those key groups so as to establish much more sustainable market share in the future." Matthew Crabbe - Asia-Pacific Research Director

In this report we answer the key questions:

  • Who the key consumer groups for savoury snacks are and how their differing lifestyles shape their demand for savoury snacks?
  • How the industry needs to face imminent and inevitable consolidation with creative branding and marketing to engage better with the key consumer groups.
  • What the threat from snack food retail chains and modern grocery chain private label is doing to the competitive landscape in the savoury snacks market.
  • Whether the snacks industry is meeting the health demands of Chinese people in light of increased worries among consumers about food safety, obesity and nutrition
  • Are manufacturers beginning to understand how premiumisation could raise their profile and appeal amongst consumers, and help them to survive the oncoming period of consolidation?

Definition

This market covers the roasted nuts and seeds, dried/preserved fruit and vegetables snacks, dried/preserved meat and seafood snacks, rice-based puffy snacks, potato-based puffy snacks and other puffy snacks sectors in the People's Republic of China.

Table of Contents

INTRODUCTION

  • Definition

EXECUTIVE SUMMARY

  • THE MARKET
  • THE FORECAST
    • Figure 1: Forecast - Volume sales of snack foods in China, 2006-16
    • Figure 2: Forecast - Value sales of snack foods in China, 2006-16
  • COMPANIES
    • Figure 3: Forecast - Value sales of snack foods in China, 2011
  • ISSUES
  • High fragmentation hinders market differentiation
    • Figure 4: Repertoire of brands of potato chips every bought in the last 3 months, December 2011
  • Changing lifestyles create more snacking opportunities
    • Figure 5: Location of eating savoury snacks, December 2011
  • Potential snacking Super-brands begin to emerge
    • Figure 6: Brands of potato chips ever bought in the last 3 months, December 2011
  • Building snack brands on a health proposition
    • Figure 7: Top 10 health claims by new product launches, 2009-11
  • Premium products begin to rise above the throng
    • Figure 8: Attitudes to bulk and discount buying of savoury snacks, December 2011

THE MARKET: A SNAPSHOT

  • The slowing of rapid snacks market growth means significant, imminent consolidation
    • Figure 9: China - Savoury snacks: Market volume and value annual growth, by sector, 2007-11
    • Figure 10: China - Savoury snacks: Market volume and value, by sector, 2007-11
  • The leading companies
    • Figure 11: Total savoury snacks market shares, 2009-11
    • Figure 12: China: Leading potato snack company total market shares, 2009-11
  • China's snacking target consumer groups
    • Figure 13: The key target savoury snacks consumer groups, December 2011
    • Figure 14: The key target savoury snacks consumer groups' snacking attitudes, December 2011

FRAGMENTATION HINDERS MARKET DEVELOPMENT

  • Key issues
  • Snack products proliferate without a clear strategy
    • Figure 15: % Breakdown of new products surveyed, by type, 2007-11
    • Figure 16: Brands of potato chips bought in the last 3 months, December 2011
    • Figure 17: Repertoire of brands of potato chips bought in the last 3 months, December 2011
    • Figure 18: Percentage points growth/decline in significance within new product launches, 2007-11
    • Figure 19: % breakdown of savoury snacks volume & value sectors and percentage point growth/decline, 2007-11
    • Figure 20: Period sector value & volume growth rates, 2007-11
  • Fragmentation hinders brand loyalty
    • Figure 21: Key snack markets value growth compared with savoury snacks, 2007-11
    • Figure 22: Snack product launches, by type of launch, 2008-11
    • Figure 23: Snacks annual % growth rates, by sector, 2007-11
  • Case study: Laiyifen and commodity snack retailing
  • What does it mean?

CHANGING LIFESTYLES CREATE MORE SNACKING OPPORTUNITIES

  • Key issues
  • The snacks market gears up for a change in consumer habits
    • Figure 24: Total savoury snacks market value & volume and annual growth, 2007-11
  • Breaking with traditional snacking habits
    • Figure 25: Frequency of snack consumption, by consumer groups, December 2011
  • On-the-go snacking still in its infancy
    • Figure 26: Location of eating savoury snacks, December 2011
    • Figure 27: Frequency of eating savoury snacks, by income group, December 2011
  • Functional benefits appeal to women
    • Figure 28: % of new product launches with product claims targeting women, 2007-11
  • Making snacking manly
  • Snacks for children
    • Figure 29: % of new product launches with product claims targeting children, 2007-11
  • Snacks to suit every lifestyle
    • Figure 30: New savoury snacks product launches based on usability claims, 2007-11
  • What does it mean?

SNACKING SUPER-BRANDS BEGIN TO EMERGE

  • Key issues
  • Brand share development has huge potential for growth
    • Figure 31: Total savoury snacks market shares, 2009-11
    • Figure 32: Total nuts and seeds snacks sector shares, 2009-11
    • Figure 33: China leading potato snack company total market shares, 2009-11
  • Case study: Qia Qia revamping its tired brand
  • Making packaging stand out from the crowd
  • Case study: advertising the new message - follow the PepsiCo lead
    • Figure 34: Brands of potato chips bought in the last 3 months, December 2011
    • Figure 35: Repertoire of brands of potato chips bought in the last 3 months, December 2011
  • Tingyi/Calbee New JV Set to Make a Significant Snacks Market Entry
  • Private label: the emerging challenge to brand shares
    • Figure 36: Retail formats where savoury snacks have been bought in the last 3 months, December 2011
    • Figure 37: China top 100 retailers' forecast sales and private-label sales compared, 2010-14
    • Figure 38: Private-label % of new snack product launches, 2009-11
    • Figure 39: Top 20 companies based on new product launches, 2009-11
  • In-store promotions remains key area
  • Deepening brand penetration through new channels
  • What does it mean?

BUILDING SNACK BRANDS ON A HEALTH PROPOSITION

  • Key issues
  • Snack consumers really do care about health as an issue
    • Figure 40: Consumer attitudes to healthy snacking, December 2011
    • Figure 41: Attitudes towards savoury snacks consumption, December 2011
  • What are considered healthy snacks
  • Healthy and ethical products - recent development
    • Figure 42: Top ten health claims, by new product launches, 2009-11
    • Figure 43: Attitudes towards snacks consumption, December 2011
    • Figure 44: % of total new product launches making health claims, 2011
    • Figure 45: % of total new product launches making ethical claims, 2009-11
  • The profound effect of food scares
  • GMO-free
  • No additives
  • Marketing health to snackers
    • Figure 46: Savoury snacks consumption frequency survey results, December 2011
    • What does it mean?

PREMIUM PRODUCTS BEGIN TO EMERGE

  • Key issues
  • Improved quality driving increased consumer spending
  • Product price and the premium shift
    • Figure 47: Average unit price per kg for savoury snacks, by sector, 2007-11
    • Figure 48: Attitudes towards bulk and discount buying of savoury snacks, December 2011
    • Figure 49: Average savoury snacks product prices, by sector, 2008-11
  • A miscellany of premium features
  • Premiumisation through packaging
  • Special-occasion gift packs
  • What does it mean?

FUTURE OF THE SAVOURY SNACKS MARKET IN CHINA

  • The market will slow but remain strong
    • Figure 50: China - Forecast volume market for snacks, 2006-16
    • Figure 51: China - Forecast value market for snacks, 2006-16
  • The industry will continue to consolidate
  • Consumers will respond to more targeted marketing

APPENDIX - CONSUMER - CONSUMPTION HABITS

  • Figure 52: Frequency of eating savoury snacks, December 2011
  • Figure 53: Frequency of eating savoury snacks, December 2011
  • Figure 54: Location of eating savoury snacks, December 2011
  • Figure 55: Location of eating savoury snacks, by demographics, December 2011
  • Figure 56: Time of day savoury snacks are typically eaten, by demographics, December 2011
  • Figure 57: Time of day savoury snacks are typically eaten, December 2011
  • Figure 58: Frequency of eating savoury snacks, by time of day savoury snacks are typically eaten, December 2011
  • Figure 59: Most popular frequency of eating any savoury snacks, by demographics, December 2011
  • Figure 60: Next most popular frequency of eating any savoury snacks, by demographics, December 2011
  • Figure 61: Most popular frequency of eating nuts, by demographics, December 2011
  • Figure 62: Next most popular frequency of eating nuts, by demographics, December 2011
  • Figure 63: Most popular frequency of eating seeds, by demographics, December 2011
  • Figure 64: Next most popular frequency of eating seeds, by demographics, December 2011
  • Figure 65: Most popular frequency of eating preserved fruits, by demographics, December 2011
  • Figure 66: Next most popular frequency of eating preserved fruits, by demographics, December 2011
  • Figure 67: Most popular frequency of eating meat snacks, by demographics, December 2011
  • Figure 68: Next most popular frequency of eating meat snacks, by demographics, December 2011
  • Figure 69: Most popular frequency of eating dried fish/seafood snack, by demographics, December 2011
  • Figure 70: Next most popular frequency of eating dried fish/seafood snack, by demographics, December 2011
  • Figure 71: Most popular frequency of eating potato chips, by demographics, December 2011
  • Figure 72: Next most popular frequency of eating potato chips, by demographics, December 2011
  • Figure 73: Most popular frequency of eating rice-based snacks, by demographics, December 2011
  • Figure 74: Next most popular frequency of eating rice-based snacks, by demographics, December 2011
  • Figure 75: Most popular frequency of eating other puffed foods, by demographics, December 2011
  • Figure 76: Next most popular frequency of eating other puffed foods, by demographics, December 2011

APPENDIX - CONSUMER - PURCHASING HABITS

  • Figure 77: Source of buying savoury snacks, December 2011
  • Figure 78: Most popular source of buying savoury snacks, by demographics, December 2011
  • Figure 79: Next most popular source of buying savoury snacks, by demographics, December 2011
  • Figure 80: Average weekly spending on savoury snack, December 2011
  • Figure 81: Brands of potato chips ever bought in the last 3 months, December 2011
  • Figure 82: Brands of potato chips ever bought in the last 3 months, by most popular frequency of potato chips, December 2011
  • Figure 83: Brands of potato chips ever bought in the last 3 months, by next most popular frequency of potato chips, December 2011
  • Figure 84: Brands of potato chips bought most often, December 2011
  • Figure 85: Brands of potato chips bought most often, by most popular brands of potato chips bought second most often, December 2011
  • Figure 86: Brands of potato chips bought most often, by next most popular brands of potato chips bought second most often, December 2011
  • Figure 87: Most popular brands of potato chips ever bought in the last 3 months, by demographics, December 2011
  • Figure 88: Next most popular brands of potato chips ever bought in the last 3 months, by demographics, December 2011
  • Figure 89: Most popular brands of potato chips bought most often, by demographics, December 2011
  • Figure 90: Next most popular brands of potato chips bought most often, by demographics, December 2011

APPENDIX - CONSUMER - ATTITUDES

  • Figure 91: Attitudes towards savoury snacks consumption, December 2011
  • Figure 92: Most popular attitudes towards savoury snacks consumption, by demographics, December 2011
  • Figure 93: Next most popular attitudes towards savoury snacks consumption, by demographics, December2011
  • Figure 94: Agreement with the statements 'I try to avoid snacks with artificial ingredients' and 'I try to limit the amount of savoury snacks I eat', by demographics, December 2011
  • Figure 95: Agreement with the statements 'I eat them as a meal replacement' and 'I tend to buy in bulk to save money', by demographics, December 2011
  • Figure 96: Agreement with the statements 'I trust Chinese branded snacks more than foreign brands' and 'I tend to buy what's on special offer', by demographics, December 2011
  • Figure 97: Agreement with the statements 'I prefer fried over non-fried snacks' and 'I tend to avoid MSG when buying snacks', by demographics, December 2011

APPENDIX - REPERTOIRE ANALYSIS

  • Figure 98: Repertoire of brands of potato chips every bought in the last 3 months, December 2011
  • Figure 99: Repertoire of brand preference, by demographics, December 2011

APPENDIX - CLUSTER ANALYSIS

  • Figure 100: Target groups, December 2011
  • Figure 101: Target groups, by demographics, December 2011
  • Figure 102: Fequency of eating savoury snacks, by target groups, December 2011
  • Figure 103: Location of eating savoury snacks, by target groups, December 2011
  • Figure 104: Time of day savoury snacks are typically eaten, by target groups, December 2011
  • Figure 105: Source of buying savoury snacks, by target groups, December 2011
  • Figure 106: Brands of potato chips ever bought in the last 3 months, by target groups, December 2011
  • Figure 107: Attitudes towards savoury snacks consumption, by target groups, December 2011

APPENDIX - MARKET DATA

  • Figure 108: Value sales of snack foods in China, 2011 Attitudes towards savoury snacks consumption, by target groups, December 2011
  • Figure 109: Market size, value 2007-11
  • Figure 110: Snack market size, Volume 2007-11
  • Figure 111:
  • Figure 112: Snack Market share by %, 2009-11

APPENDIX - NEW PRODUCT LAUNCHES

  • Figure 113: Proportion of new product launches by snack category, 2006-11
  • Figure 114: Top 10 health claims by new product launches, 2009-11
  • Figure 115: New product launch type, 2006-11
  • Figure 116: % of 'healthy ingredient' new product launches, 2006-11
  • Figure 117: New product launch claims, 2006-11
  • Figure 118: New product launches, by company, 2009-11
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