Consumer Snacking Trends - China - February 2021

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market 
Retail sales of major snack categories to remain robust growth
Figure 1: Best and worst case forecast for retail value of major snack categories, China, 2015-25
Meal supplement categories benefit during COVID-19 outbreak
Figure 2: Retail sales value of major snack categories by segment, China, 2015-20
Companies and brands
Leading companies compete to take over children’s snack market
Better-for-you claims become more specific 
The consumer
Consumers increase snacking frequency during the “new normal”
Figure 3: Consumption frequency, November 2020
Opportunities to target post-meal dessert occasions
Figure 4: Consumption occasion, November 2020
Short video platforms have become an influential channel
Figure 5: Information channels, November 2020
Consumers want healthy snacking without a compromise on lifestyle
Figure 6: Attitudes towards snacks, November 2020
Consumers prefer healthy upgrades over reducing negatives
Figure 7: Interest in premium features, November 2020
Trust in favourable taste of chips leads to interest in all ingredients
Figure 8: Alternative ingredients in chips, November 2020
What we think
ISSUES AND INSIGHTS
Snacks as part of a meal solution have potential to grow
The facts
The implications
Figure 9: Zenb vegetable snacks
Figure 10: Boohee product examples, China 2020
Grow traditionally indulgent snacks in lower tier cities
The facts
The implications
Figure 11: Novel chip ingredient product examples, China, 2021
Figure 12: Bao Bao Chan Le Shrimp Chips
Utilize short-video platforms to educate consumers on healthy snacking
The facts
The implications
Figure 13: Screenshot of popular snack review video
THE MARKET – WHAT YOU NEED TO KNOW
Major snack categories forecasted to remain robust growth
Light meal replacements and indulgent categories see strong growth
Growing scope of snack categories lead to more specialization
MARKET SIZE AND FORECAST
Stable growth in snack spending
Figure 14: Retail sales of major snack categories, China, 2015-20
Increasing growth rate as snack plays more active role in daily diet
Figure 15: Best and worst case forecast for retail value of major snack categories, China, 2015-25
MARKET FACTORS
Permissible indulgence at home
Clarifying regulations on children’s snacks
Figure 16: New product launches features “Children (5-12)” claim, China, 2016-20
Higher priority of healthy eating in the long run leads to specialized needs
MARKET SEGMENTATION
Meal supplement categories benefited from COVID-19 outbreak
Demand for small treats during stressful time drove ice cream sales
Figure 17: Retail sales value and growth rate of major snack categories, by segment, China, 2015-20
KEY PLAYERS – WHAT YOU NEED TO KNOW
Targeting children with specialized products
Emerging brands are targeting previously untapped sub-categories
Start-ups are deep-diving on health claims of snacks
COMPETITIVE STRATEGIES
Growing specialization for children’s snacks
Figure 18: Product examples of children’s snacks, China 2020-21
Figure 19: Bao Bao Chan Le product examples, China, 2021
Co-authoring regulatory guidelines to establish authoritative image
Bring healthiness without taste compromise
Figure 20: CHOCDAY dark milk product infographic, China, 2021
Figure 21: NOC ice cream product examples, China, 2020
Reversing the flavour profile stereotypes
Figure 22: Examples of sweet Lay’s flavours, China, 2020
Figure 23: spicy Oreo advertisement, China, 2020
Figure 24: Ffit8 beef flavoured fitness protein bar, China, 2020
WHO’S INNOVATING?
Snack producers replace natural claims with more specific nutrient exclusions and inclusions
Figure 25: Changing claim categories in new snack product launches, China, 2016-20
Figure 26: Changing claims in new snack product launches, China, 2016-20
Giving familiar formats a healthy makeover
Figure 27: Shi Yan Shi Yi Pian Yu Ye (fish crisps) and Yu Rou Shu Pian (fish chips), China, 2020
Sugar and chocolate confectionary go beyond simple indulgence
Figure 28: Rising claims in new sugar and chocolate confectionary product launches, China, 2016-20
Start-ups target occasion-based functional claims
Figure 29: BUFFX product examples, China 2021
Figure 30: Olly product examples, China, 2020
Edible beauty comes in snackable formats
Figure 31: Hyalur product examples
Figure 32: Examples of products with beauty benefit claims, Japan and Korea 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
Snacking frequency increased but category ranking remains largely consistent
Opportunities to target post-meal dessert occasions
Short video platforms have become important information channel for new products
Consumers prefer healthy upgrades over reducing negatives
High interest in chips made from different ingredients
CONSUMPTION FREQUENCY
Snacking frequency rose during the “next normal”
Ranking of popularity largely remains the same
Figure 33: Consumption frequency, November 2020
High household income consumers succumb to nutritious branding
Figure 34: Consumption frequency, by household income, November 2020
CONSUMPTION OCCASION
Opportunities in targeting post-meal dessert occasion
Figure 35: Consumption occasion, November 2020
Improve the go-the-go experience
Figure 36: Glico Ice No Mi Rich Muscat Ice Cream Ball, Japan, 2020
Females more likely to associate snacks with meals
Figure 37: Consumption occasion – Select occasions, by gender, November 2020
Figure 38: GoMuc Grilled-Rolled Squid
Snacks for exercise occasions should reflect lifestyle choices
Figure 39: Food and drink purchase and consumption behaviour, by consumption occasions, November 2020
INFORMATION CHANNELS
Short video platforms already rank third as information source
Figure 40: Information channels, November 2020
Figure 41: Screenshots from Douyin of snack reviews, China 2021
Females more likely to be swayed by those they trust
Figure 42: Selected information channels, by gender, November 2020
Highly educated consumers prefer channels which provide more details
Figure 43: Selected information channels, by education level, November 2020
ATTITUDES TOWARDS SNACKS 
Different views towards healthy snacking
Figure 44: Attitudes towards snacks, November 2020
Consumers are curious yet conservative
Convince older consumer to include snacks in daily routine
Figure 45: Attitudes towards snacks – Select statements, by age group, November 2020
INTEREST IN PREMIUM FEATURES
Healthier upgrades have replaced focus on reducing additives
Figure 46: Interest in premium features, November 2020
Opportunity to upgrade packaging for mass market products
Figure 47: Interest in premium features – Select features, by household income, November 2020
Individual and assorted packaging help with portion control
Figure 48: Interest in premium features, by agreement with “I would rather eat fewer snacks that I like than to switch to a healthier snack that is not tasty”, November 2020
ALTERNATIVE INGREDIENTS IN CHIPS
Chips is a beloved format for all ingredients
Figure 49: Alternative ingredients in chips, November 2020
Figure 50: New “chip”, “chips” and “crisps” product launches, by sub-category, China, 2016-20
Potential in lower tier city expansion
Figure 51: Alternative ingredients in chips – Select ingredients, by city tier, November 2020
APPENDIX – MARKET SIZE AND FORECAST
Figure 52: Forecast for retail sales value of major snack categories, China, 2015-25
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations