Chocolate Confectionery - China - July 2013

INTRODUCTION
Definition
Report structure
Methodology
Abbreviations
EXECUTIVE SUMMARY
The market
Chinese chocolate market enjoys steady growth in recent years
Figure 1: Chocolate confectionery volume and value sales, China, 2008-13 (est)
Market segmentation
Figure 2: Chocolate market segmentation, by volume sales share, 2013 (est)
Market growth drivers and growth barriers
The forecast
Figure 3: China retail volume sales of chocolate confectionery, 2008-18
Figure 4: China retail value sales of chocolate confectionery, 2008-18
 COMPANIES AND BRANDS
Company share
Figure 5: Chocolate brand value share, 2009-12
The arrival of Western chocolate brands
 THE CONSUMER
Boxed gifting chocolate and individual bars are popular
Consumers eat chocolate most often when craving for sweet taste
Important consideration factors
Modern trade is the key distribution channel
Consumer attitudes towards chocolate
Key issue: The importance of brand positioning
Key issue: Innovation can stimulate growth in the chocolate market
Figure 6: Share of new chocolate confectionery launches within total chocolate NPD, by selected global markets, 2008-12
Key issue: Targeting new chocolate consumption occasions
THE MARKET
Key points
 MARKET SIZE
Chinese chocolate market enjoys steady growth in recent years
Figure 7: Annual chocolate consumption per capita, China, 2008-13 (est)
Fully imported vs locally manufactured chocolate
Figure 8: Total China volume and value sales of chocolate confectionery, 2008-13 (est)
 MARKET SEGMENTATION
Figure 9: Chocolate market segmentation, by format, in terms of volume sales, 2008-13
Figure 10: Chocolate market segmentation, by format, in terms of value sales, 2008-13
Figure 11: China chocolate market segmentation, by price points, 2013
 MARKET GROWTH DRIVERS
Sustained economic growth
Rising personal and household income
Figure 12: Per capita net income and actual growth rate of urban and rural residents in China, 2008-12
Emergence of the middle class
Western culture and lifestyle influence
Development of modern trade distribution channels
Figure 13: Average monthly temperature in China, 2007-11
The online shopping boom
Figure 14: Online shopping penetration by categories (%), 2012
 GROWTH BARRIERS
Shortage of cocoa supply and its fluctuating price
Figure 15: Cocoa pricing (US$ per ton), 2007-12
Consumers’ health concerns
Culture challenge
 MARKET FORECAST
Value sales forecast to reach RMB 41 billion by 2018
Figure 16: China retail volume sales of chocolate confectionery, 2008-18
Figure 17: China retail value sales of chocolate confectionery, 2008-18
COMPANIES AND BRANDS
Key points
Company share
Figure 18: Chocolate brand volume share, 2009-12
Figure 19: Chocolate brand value share, 2009-12
The arrival of Western chocolate brands
Multinational brands have faced significant challenges
Premium brands gaining momentum
Chinese chocolate brands held back by a lack of scale
 COMPANY PROFILES
Multinationals
Mars, Inc.
Ferrero S.p.A.
The Hershey Company
Nestlé S.A.
 PREMIUM BRANDS
Lindt & Sprüngli AG
Godiva
 LOCAL BRANDS
COFCO Group
Shanghai Golden Monkey Foods Co., Ltd.
THE CONSUMER
Key points
Boxed gifting chocolate and individual bars are most typically eaten formats
Figure 20: Type of chocolate eaten, past 6 months, March 2013
Consumers eat chocolate most often when craving for sweet taste
Figure 21: Occasions for eating chocolate, March 2013
Important consideration factors
Figure 22: Important factors in choosing chocolate, March 2013
Brand performance measurement
Figure 23: Brand loyalty and consistency indices for chocolate confectionery, March 2013
Modern trade is the key distribution channel
Figure 24: Channels of chocolate purchasing, March 2013
Consumer attitudes towards chocolate
Figure 25: Attitudes towards chocolate, March 2013
KEY ISSUE: THE IMPORTANCE OF BRAND POSITIONING
Key points
Chocolate consumption is underpinned by the gifting culture
Figure 26: Festive food bought as a gift, past 12 months, June 2013
Brands need to address emotional as well as functional requirements
Figure 27: Chocolate brand positioning analysis, July 2013
A lack of variety in brand associations and positioning
Figure 28: Brand positioning vs. consumer needs, July 2013
New brand positionings can encourage people to consume chocolate more regularly
Figure 29: Occasion of eating chocolate, March 2013
Scope to boost the association between chocolate and energy
Figure 30: Agreement with healthy lifestyle descriptions, November 2012
What does it mean?
KEY ISSUE: INNOVATION CAN STIMULATE GROWTH IN THE CHOCOLATE MARKET
Key points
Figure 31: Important factors in choosing chocolate, March 2013
China lags behind other markets for chocolate NPD
Figure 32: Share of new chocolate confectionery launches within total chocolate NPD, by selected global markets, 2008-12
The importance of flavour innovation
Figure 33: Consumer attitudes towards chocolate, March 2013
Figure 34: Share of new chocolate confectionery launches within China, by flavour, 2008-12
Drawing lessons from overseas markets
Specific NPD for chocolate confectionery
Inspiration from Chinese traditions
Coffee and chocolate
Figure 35: Café house outlets in China, 2007-12 (est.)
Healthier recipes
Fruit and chocolate
Adding salt to reduce sweetness
Chocolate brands face major cross-category competition
Figure 36: Frequency of buying chocolates and snacks for oneself, January 2012
Smaller and easy-to-carry packaging
Figure 37: New product launches by pack sizes, top 5 innovation countries and China, 2008-12
What does it mean?
KEY ISSUE: TARGETING NEW CHOCOLATE CONSUMPTION OCCASIONS
Key points
The downside of pitching on love and gifting
Target leisure and business travellers’ energy boost needs
Chocolate for people undertaking outdoor and indoor activities
Selling chocolate at entertainment venues where people are likely to treat themselves
Figure 38: Middle class consumers discretionary spending, April 2012
Figure 39: Type of chocolate eaten, past 6 months by gender, March 2013
Chocolate flagship stores can help entrench the chocolate culture
What does it mean?
APPENDIX – TYPES OF CHOCOLATE EATEN
Figure 40: Type of chocolate eaten, past six months, March 2013
Figure 41: Important factors in choosing chocolate, by most popular occasions for eating chocolate, March 2013
Figure 42: Important factors in choosing chocolate, by next most popular occasions for eating chocolate, March 2013
Figure 43: Most popular type of chocolate eaten, past six months, by demographics, March 2013
Figure 44: Next most popular types of chocolate eaten, past six months, by demographics, March 2013
APPENDIX – OCCASIONS FOR EATING CHOCOLATE
Figure 45: Occasion of eating chocolate, March 2013
Figure 46: Most popular occasions for eating chocolate, by demographics, March 2013
Figure 47: Next most popular occasions for eating chocolate, by demographics, March 2013
APPENDIX – CHOCOLATE BRANDS PURCHASED
Figure 48: Chocolate brands purchased, past 6 months, March 2013
Figure 49: Important factors in choosing chocolate, by most popular chocolate brands purchased, past six months, March 2013
Figure 50: Important factors in choosing chocolate, by next most popular chocolate brands purchased, past six months, March 2013
Figure 51: Important factors in choosing chocolate, by other chocolate brands purchased, past six months, March 2013
Figure 52: Most popular chocolate brands purchased, past 6 months, by demographics, March 2013
Figure 53: Next most popular chocolate brands purchased, past 6 months, by demographics, March 2013
Figure 54: Other chocolate brands purchased, past 6 months, by demographics, March 2013
APPENDIX – CHOCOLATE BRANDS PURCHASED MOST OFTEN
Figure 55: Chocolate brands purchased most often, past 6 months, March 2013
Figure 56: Important factors in choosing chocolate, by chocolate brands purchased most often, past six months, March 2013
APPENDIX – CHANNELS OF CHOCOLATE PURCHASE
Figure 57: Channels of chocolate purchase, March 2013
Figure 58: Most popular channels of chocolate purchase, by demographics, March 2013
Figure 59: Next most popular channels of chocolate purchase, by demographics, March 2013
Figure 60: Other channels of chocolate purchase, by demographics, March 2013
APPENDIX – IMPORTANT FACTORS IN CHOOSING CHOCOLATE
Figure 61: Important factors in choosing chocolate, March 2013
Figure 62: Most popular top ranked factors in choosing chocolate, by demographics, March 2013
Figure 63: Next most popular top ranked factors in choosing chocolate, by demographics, March 2013
APPENDIX – ATTITUDES TOWARDS CHOCOLATE
Figure 64: Attitudes towards chocolate, March 2013
Figure 65: Most popular attitudes towards chocolate, by demographics, March 2013
Figure 66: Next most popular attitudes towards chocolate, by demographics, March 2013