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Chocolate Confectionery - China - June 2016

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Figure 1: Total China chocolate market retail value, 2011-21
Key players
Figure 2: Value share of top 10 companies, 2014-15
The consumer
Chocolate gains high penetration but low depth of usage
Figure 3: Usage frequency of chocolate, January 2016
Dark chocolate is not outstanding for health benefits
Figure 4: Perceptions of chocolate, January 2016
Weight gain is the biggest concern
Figure 5: Barriers to having more chocolate, January 2016
Chocolate origin and health benefits are premium selling points
Figure 6: Opportunity for premiumisation, January 2016
Chocolates have opportunity to tap into other categories
Figure 7: Attitudes towards product extension, January 2016
Price is not the key consideration factor for online purchases – brand is
Figure 8: Online purchase behaviour, January 2016
What we think
ISSUES AND INSIGHTS
Lessons from Hershey – The risk of expansion
The facts
The implications
Is healthy chocolate an opportunity?
The facts
The implications
Seek growth by product extension
The facts
The implications
Figure 9: Food with chocolate flavour, China and global, 2011-15*
THE MARKET – WHAT YOU NEED TO KNOW
Chocolate market volume sales fall in 2015
Increasing price of chocolate drives consumers away
Gifting market decreases, while opportunity exists in daily consumption
MARKET SIZE AND FORECAST
Chocolate market volume sales fall in 2015
Figure 10: Retail market size of chocolate in China, 2011-16
Market is forecast to grow at a CAGR of 3.3%
Figure 11: Total China chocolate market retail value, 2011-21
Figure 12: Total China chocolate market retail volume, 2011-21
MARKET DRIVERS AND CHALLENGES
Increasing disposable income assists growth
Figure 13: Per capita disposable income, China, 2010-14
Increasing cocoa price
Figure 14: Average price of cocoa, 2005-16
Figure 15: Average price of chocolate and sugar confectionery (RMB/kg), China, 2009-14
High calorie levels drive consumers away from chocolate
Festivals influence chocolate consumption
MARKET SEGMENTATION
Gifting market decreases
Figure 16: Retail value of other forms of chocolates, 2011-21*
Growth opportunity exists in encouraging daily consumption
Figure 17: Retail value of tablet chocolate, 2011-21
Figure 18: Retail value of countlines, 2011-21
KEY PLAYERS – WHAT YOU NEED TO KNOW
Chocolate market is quite consolidated
Hershey loses 1.1% market share and Ferrero opens first plant in China
Manufacturers want to enhance health image of chocolate
Chocolate brands tap into adjacent categories in other countries
MARKET SHARE
Chocolate market in China is quite consolidated
Figure 19: Value share of top 10 companies, 2014-15
Le Conte exits the market
Hershey loses 1.1% market share
COMPETITIVE STRATEGIES
Mars promotes impressive advertisements
Ferrero opens first plant in China
Fruit-filled chocolate enhances healthy image
Figure 20: Hershey fruit-filled chocolate, China, 2015
Figure 21: Dove fruit-filled chocolate, China, 2015
WHO’S INNOVATING?
The market is lacking in product innovation
Figure 22: Newly launched chocolate, by launch type, 2013-15
Healthy chocolates
Chocolate with ‘minus’ claim
Figure 23: Chocolate with low/no/reduced sugar, global, 2015
Figure 24: Chocolate with low/no/reduced fat, global, 2015
Chocolate with additional health benefits
Figure 25: Chocolate with low/no/reduced fat, global, 2015
Chocolate leveraging other healthy food ingredients
Figure 26: Chocolate with healthy food, global, 2015
Chocolate married with other categories
Figure 27: Chocolate flavoured food (new launches), China and global, 2011-15
Figure 28: Examples of Mars brand extension, UK, 2015
Snickers launches ‘Hungerithm’ campaign in Australia
THE CONSUMER – WHAT YOU NEED TO KNOW
Dark chocolate, milk chocolate and chocolate with fruit bits/nuts are most popular types
High calorie content is the biggest concern hindering growth
Chocolates have opportunity to tap into other categories
Consumers are conservative when purchasing chocolate online
Brand is a key consideration factor for online purchasing
THE CONSUMER – USAGE FREQUENCY OF CHOCOLATE
Chocolate gains high penetration but low depth of usage
Figure 29: Usage frequency of chocolate, January 2016
Dark chocolate, milk chocolate and chocolate with fruit bits/nuts are most popular types
Figure 30: Usage frequency of chocolate (continued), January 2016
White chocolate is gaining popularity
Figure 31: Rank of popular chocolate types, 2015-16
25-39-year-olds and high earners are core consumers
Figure 32: % of those eat chocolate once a week or more, by age and income, January 2016
THE CONSUMER – PERCEPTIONS OF CHOCOLATE
Plain chocolate for energy boost, chocolate with added ingredients for snacking
Figure 33: Perceptions towards chocolate, January 2016
Milk chocolate is widely available
The health benefits of dark chocolate are not well appreciated
Chocolate with bits and fillings are premium for gifting
THE CONSUMER – BARRIERS TO HAVING MORE CHOCOLATE
Weight gain is the biggest concern
Figure 34: Barriers to have more chocolate, January 2016
Figure 35: Top 5 ‘minus’ claim among newly launched chocolate, global, 2011-15
Figure 36: Kit Kat on-pack low-calorie claim, Australia, 2016
Consumers are satisfied with the flavour of chocolate
High price hinders growth
THE CONSUMER – OPPORTUNITY FOR PREMIUMISATION
Origin is key for premiumisation
Figure 37: Opportunities for premiumisation, January 2016
Health is another selling point
Interest in ‘handmade’ is increasing
Flavour innovation stays niche
THE CONSUMER – ATTITUDES TOWARDS CHOCOLATE
Imported chocolates do not offer superior health benefits
Figure 38: Attitudes towards imported chocolate, January 2016
Figure 39: Usage frequency of chocolate, by souvenir purchase behaviour, January 2016
Chocolates from boutiques are premium
Figure 40: Attitudes towards chocolate from boutiques, by boutique purchase behaviour, January 2016
Chocolates have opportunity to tap into other categories
Figure 41: Attitudes towards product extension, January 2016
THE CONSUMER – ONLINE PURCHASE BEHAVIOUR
Price is not the key consideration factor for online purchases
Figure 42: Purchasing chocolate from online, by demographics, January 2016
Figure 43: Online purchase behaviour, January 2016
Old and low-income consumers are conservative, young and high earners are willing to explore
Figure 44: Online purchase behaviour (continued), January 2016
Figure 45: Online purchase behaviour (continued), by gender, age and income, January 2016
Brand is an important consideration factor
Figure 46: Online purchase behaviour (continued), January 2016
New brands still have opportunity to attract consumers on shopping websites
Figure 47: Online purchase behaviour (continued), January 2016
THE CONSUMER – MEET THE MINTROPOLITANS
Mintropolitans eat chocolate as treats
Figure 48: Perceptions towards chocolate, by consumer classification, January 2016
Exquisitely-made chocolates generate premium perceptions amongst Mintropolitans
Figure 49: Opportunity for premiumisation, by consumer classification, January 2016
Mintropolitans buy premium chocolate online
Figure 50: Online purchase behaviour, by consumer classification, January 2016
APPENDIX – MARKET SIZE AND FORECAST
Figure 51: China chocolate market, value and volume, 2011-21
APPENDIX – MARKET SEGMENTATION
Figure 52: Retail value of chocolate tablets, 2011-21
Figure 53: Retail value of other chocolate, 2011-21
Figure 54: Retail value of chocolate countlines, 2011-21
Figure 55: Retail value of individually wrapped chocolates, 2011-21
Figure 56: Retail value of non-individually wrapped chocolates, 2011-21
Figure 57: Retail volume of chocolate tablets, 2011-21
Figure 58: Retail volume of other chocolate, 2011-21
Figure 59: Retail volume of chocolate countlines, 2011-21
Figure 60: Retail volume of individually wrapped chocolates, 2011-21
Figure 61: Retail volume of non-individually wrapped chocolates, 2011-21
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Fan chart forecast
Mintropolitans
Why Mintropolitans?
Who are they?
Figure 62: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
Figure 63: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
Abbreviations

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