Snack market in China

Substantial growth of snack market in China

From 2005 to 2013, the snack food industry of China showed a growth of 16.9% every year for sales, with its revenue in 2013 hitting RMB770.57 billion. As the residents’ demand increases, the earnings from Chinese snack food industry these years is expected to grow at a high rate.

China snack food industry involves seven sub-sectors. By operating revenue, biscuit and other baked food sector ranks the highest, with the revenue soaring to RMB80.7 billion in 2010; while the roasted seeds and nuts sector reached revenue RMB37.3 billion, less than other sectors, but it was expected to see substantial prospect. In the future, the robust demand for roasted seeds and nuts products in small- and medium-sized cities and villages will be new growth engine.

Snack market in China

With the change of food consumption concept, the snack market in China shows a health trend in recent years. In Western countries, low-oil potato and raw fruits and vegetables to snack foods are favored by people and sales gaining momentum, indicating that in the escalating competition in the market, began to tend to the health of snack foods. But childhood obesity is becoming a problem in urban households and has become the focus of attention; then the relationship between snack foods and obesity is also causing more and more attention. It is a major threat for snack food market in China.

Recent trend on snack food market in China

snack China

According to a marketing survey conducted by a Chinese planning organization, nearly 80 percent of the snack food consumers are female. Among the female groups, the preferences of age groups between 17-27 and 27-37 are quite different. Therefore, the design and production of snack food will put more emphasis on the female market, enhancing the attractiveness of the products to the females by designing package specifically to woman.

As aiming at the middle and premium market, the production of the snack food will pay attention to the nutrition especially the low calories diet because most of the females concern about keeping fit.

Snack market in China has great potential in terms of market prospects, but because of the food industry has entered a stage of fierce competition, brands have to develop innovative and market-adapted strategy.

Branding strategy is a key driver in snack food market in China

Therefore, enterprises should seize the opportunity to snack foods out of the circle of product homogeneity, with the implementation of differentiation strategy, to enhance consumer awareness of products for the consumer and the inherent superiority of closely linked companies, through innovative products, building brands in China and expanding the market out of a sustainable development path.

Exactly, brand has become the key to earn more competitiveness in the context of the growing snack market in China and the rising consumption level.

Development of foreign companies in China’s market

Mondelez China

At the same time, many foreign companies started to become interested in the Chinese market. For example, in February 2010, Kraft took over Britain-based candy tycoon Cadbury following its acquisition on Danone biscuit business in July 2007. Afterwards, Kraft launched varieties of new products in China through Cadbury’s production lines, in a bid to seize more market occupancy of candy products.

On December 6th, 2011, Nestle gained approval to take over 60% stake of Hsu Fu Chi International Ltd, marking the second acquisition move for the company to buy local food company shortly after being approved to take over 60% stake of Xiamen-based Yinlu in September. Hsu Fu Chi International Ltd is mainly engaged in the production of candies, sachima, etc, with the operating revenue and net income hitting RMB4.31 billion and RMB600 million in 2010, a respective YoY rise of 14% and 31%. And the market occupancy of Hsu Fu Chi International Ltd in China realizes 6.6%, ranking the first place. The acquisition will help Nestle greatly enhance its strength to compete with Kraft in the candy market of China.

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Liu Ning, market survey China

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