snacks market in China

The snacks market in China is becoming meatier, more convenient and healthier

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Driven by both increase in spending power and willingness to consume, the scale of snacks market in China has continued to expand.  According to Qianzhan, the Chinese snack market is expected to maintain a compound growth rate of over 6%, and was around 2.7 billion yuan in 2020, and by 2025 is expected to exceed 4 trillion yuan. New products such as meal replacements, which became popular after the COVID-19 outbreak, have attracted more and more attention in Chinese snacks market.

Snacking culture in China

Nutrition is an important factor

According to the consumer survey data of The Harris Poll, in a survey of Chinese consumers, more than 80% of respondents put health first when choosing snacks. Among them, millennials account for 88%; 78% of consumers pay attention to freshness. This proportion of the millennials generation reached 85%.

Snacking is a social activity in China

However, apart from these reasons, relationship is another significant factor why people eat snacks. In such a relationship-based country, eating snacks become a convenient way to strength relationship by sharing food together.

A survey of “Snacks for office workers” released by 58.com showed that the Chinese snacking culture in offices in Nanjing, Suzhou, Hangzhou and other places is developed, and snacks not only can promote working efficiency, but also have become an “important weapon” to draw the relationship between colleagues. Also, many Chinese families will leave snacks out on tables especially during family gatherings, which draws people together to chat while snacking.

Snacks are for both stomach and mind

When people face tremendous social pressure, they will involuntarily produce anxiety in the face of pressure. And eating snacks can give them a sensory stimulation, and through this stimulation to divert attention, which can reduce stress and anxiety.

In November 2020, Mondelez International released a “Snacks Status Report“. The report showed that more than 50% of the interviewees believed that snacks were a “savior” during the pandemic times, especially those who work at home. Over 60% of the respondents believe that snacks can nourish the body and mind in difficult times.

With the development of Chinese society and pressure of pandemic, people’s pressure in the workplace and life is gradually increasing, so snacks have become an important way for people to entertain and release their pressure.

As stress builds through the day, people look for a short-break. According to a paper about Trends in Chinese Snacking Behaviors, Chinese people are more likely to eat snacks in the evenings.

Chinese peoples’ snack preferences

Snacks choices under pandemic: Nut and meal replacement products

The top five categories of snacks sold online in 2020 Q1 were nuts, cakes and pastries, cookies, mat and dried fruit.

2020 Q1 China snacks market turnover by category

Source: MobTech, 2020 Q1 China snacks market turnover by category

Wu Bin, the head of the operations of the Three Squirrels, said that COVID-19 has affected various industries across the country to varying degrees, and demand has shifted to rigid-need categories. Among them, as the “fourth meal”, although the overall sales of snacks have been suppressed to a certain extent, categories with meal replacement attributes such as convenient fast food and pastries and bread have taken the opportunity to achieve high growth.

Snack food marketing in China

Co-branded snacks are welcome in Chinese snacks market

In recent years, the types of IP co-branded snacks have been continuously enriched and the market scale has continued to expand. It has shown explosive growth in 2019, with sales increasing by more than 7 times compared to 2018, and the number of purchases even reaching 11 times compared to 2018.

According to CBN data, post-90s and post-95s are the main consumers of online IP co-branded snacks, contributing nearly 60% of consumption. For example, the New Year gift box co-branded by Xu Fuji and the Summer Palace incorporates a strong national style into classic snacks, which not only reflects cultural taste, but also adapts to the New Year gift-giving scene.

The co-branded product by Xu Fuji and the Summer Palace

Source: Zhihu, The co-branded product by Xu Fuji and the Summer Palace

At the same time, co-branded products of snacks and gaming IP have great potential, because the loyal fans of the game will definitely pay for them. The “Dreams Back to Daoxiang” Mid-Autumn Mooncake Gift Box co-branded by Daoxiang Village and Jianwang 3 IP is extremely popular with various posts and recommendation videos in bilibili and Weibo.

 Daoxiang Village X Jianwang 3 IP “Dreams Back to Daoxiang” Mid-Autumn Mooncake Gift Box

Source: Zhihu, 2020 Daoxiang Village X Jianwang 3 IP “Dreams Back to Daoxiang” Mid-Autumn Mooncake Gift Box

Recommendation videos about “Dreams Back to Daoxiang” Mid-Autumn Mooncake Gift Box

Source: Bilibili, Recommendation videos about “Dreams Back to Daoxiang” Mid-Autumn Mooncake Gift Box

Segments of the snacks market

The segments of the snacks market in China mainly include healthy snacks, meat snacks, baked goods, chocolate and puffed snacks.

Market size of segments in Chinese snacks market

Source: LeadLeo, Market size of segments in Chinese snacks market

The market concentration and compound growth rate of each segment are not consistent. The concentration of the baked goods and braised products industry is low, whereas the concentration of roasted nuts, chocolate and puffed food is high. In these snack groups, the leading companies have given priority to occupying the market and channels.

Healthy snacks

Dried fruits, nuts and yogurt are the three main types of products in the healthy snacks market in China.  As mentioned before, the raising health awareness especially among millennials drives the healthy snacks market.

Chinese healthy snacks consumption is highly related to traditional holidays. Baidu index search data shows fluctuations on searches for healthy snacks around the time of the Spring Festival.

Three Squirrels, BESTORE, Be&Cherry are three influential healthy snack leading companies, and their distribution channels leverage both online and offline.

Three Squirrels has quickly risen to fame from using ‘cute’ marketing

Source: Three Squirrels, Nut gift box, Three Squirrels has quickly risen to fame from using ‘cute’ marketing

For detailed information about the healthy snacks market in China, you can read our full report here.

Meat snacks

Because of the sanitary steps in place, many Chinese young consumers find it more convenient to enjoy hardier snacks and less regular meals.

Compared to other types of snacks, meat snacks provide more energy and nutrients, making them a more satisfying meal-replacement than carbohydrate snacks. But now that the sanitary precautions have relaxed, new snacking patterns have been established. As a result, the prevalence of meat snacks in China is likely to continue. Meat rose from 14% to 21% of country’s snack consumption in 2020 alone.

White Sesame Pork jerky, pork and beef jerky are popular meat snacks in China

Source: Be & Cheery, White Sesame Pork jerky, pork and beef jerky are popular meat snacks in China

Click here for for detailed information about the meat snacks market in China.

Baked goods

Baked food uses flour, yeast, table salt, sugar and water as basic raw materials, adding appropriate amount of fat, dairy products, eggs, additives, etc., and is baked by complex process methods to make convenience foods, mainly including bread, biscuits, cakes and more.

Benefiting from the upgrade of residents’ consumption, China’s baked goods industry has ushered in a new stage of development. From 2015 to 2019, the market size of China’s bakery food industry (in terms of sales) increased from 163.57 billion yuan to 241.34 billion yuan, which is in line with the annual growth rate is 10.2%. In the next five years, China’s bakery industry will be affected by the already high market penetration rate, and the industry’s compound annual growth is expected to slow.

a Chinese baked good that uses the French image in marketing, a common practice in China’s baked goods segment.

Sourece: Panpan, Panpan French cakes, a Chinese baked good that uses the French image in marketing, a common practice in China’s baked goods segment.

Read more on the baked goods market in China

Chocolate

China’s chocolate consumption has experienced some ups and downs. After Chinese chocolate market gone through some industry adjustments, the market size has continuously declined in 2015 and 2016. The industry began to recover in 2017 and reached sales of 22.4 billion in 2019.

With the progress of society and the awakening of people’s health awareness, Chinese consumers are gaining more appreciation for the raw materials and craftsmanship of chocolate products. But for now, a majority of consumers rely on the brand for purchasing decisions.

As chocolate culture has only hardly taken root in China, consumption is still very low, at less than 100 grams per person. Unsurprisingly, most of the top-selling chocolate brands in the Chinese market are foreign brands, and domestic chocolates are mainly concentrated in the middle and low-end sectors. However, first-tier cities are developing a stronger market for chocolate, where brands like Godiva sell premium chocolate

Read more on the Chocolate market in China.

Puffed snacks

The puffed food market has a high degree of concentration, but in recent years, due to people’s further attention to the health of food, the market size has declined. The production of new puffed food pays more attention to preserving the nutrients of food raw materials and promotes the development of non-fried puffed foods.

the category of puffed food in China contains a wide-variety of products, common flavors are shrimp, cheese, onion and corn.

Source: Xueqiu, Oishi puffed food, the category of puffed food in China contains a wide-variety of products, common flavors are shrimp, cheese, onion and corn.

What brands should know about the growing snack market in China

  • The pandemic, during which time more Chinese people work from home, has accelerated the development of the Chinese snack market. The pandemic has also changed snacking habits, causing an increase in sales of meat snacks and meal replacements.
  • In the future development trend, health and innovation have become the two main directions for the development of the snack market in China.
  • Western snacks such as chocolate and baked goods are more concentrated in high-tier cities, but low tier cities are wide open for development with the right marketing strategy.

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Learn more about the healthy snacks market in China from our 2019 report

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