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Sugar Confectionery - China - December 2016

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Concerns about sugar intake bring down market value
Figure 1: Retail market value and volume of gum and sugar confectionery, by segment, China, 2011-16
Figure 2: Best- and worst-case forecast of gum and sugar confectionery retail market volume, China, 2011-21
Figure 3: Best- and worst-case forecast of gum and sugar confectionery retail market value, China, 2011-21
Functional candy is the only winning sub-segment
Key players
The Chinese market remains stagnant in terms of innovation
Taking action in response to rising concerns about sugar intake
Figure 4: Retail value share of leading companies in sugar confectionery market, China, 2014-15
Consumers’ health concerns urge brands to adjust their offering
The consumer
Chewing gum and mint are the most popular types
Figure 5: Penetration of different types of sugar confectionery, August, 2016
Modern trade channels are being challenged by e-commerce
Figure 6: Purchasing Channels, August, 2016
The elder cares about the inside, while the younger values the outside
Figure 7: Triggers for trying a new product, August, 2016
Sweeteners being associated with plant or fruit have higher awareness
Figure 8: Perception of sweeteners, August, 2016
Most gum/mint brands skew to emotional rather than functional image
Figure 9: Chewing gum/mint brand awareness, August, 2016
Figure 10: Chewing gum/mint brand perception, August 2016
What we think
ISSUES AND INSIGHTS
Enhance product offering to survive in a health conscious world
The facts
The implications
Figure 11: Products with added enzyme and collagen, Japan, 2016
Target females by claiming true benefits
The facts
The implications
Figure 12: New products targeting women, China, 2015-16
Figure 13: Products with substantial RTBs that targeting female, China, Taiwan and Japan, 2015-16
Figure 14: Cross-category innovation of candy that serves personal care needs, Canada, 2016
Amplify the fun part to attract young consumers/parents in their 20s
The facts
The implications
Figure 15: Products that encourage collaboration between parents and kids, Japan and Germany, 2016
Link gum with benefits for teeth protection
The facts
The implications
Figure 16: Products with logos of dental associations, and providing usage tips, France, Japan and UK, 2016
THE MARKET – WHAT YOU NEED TO KNOW
Concerns on sugar intake bring down market value
Healthier versions of candies have competitive edge
Sugar confectionery lovers reduce consumption but raise expectation
MARKET SIZE AND FORECAST
The category will see more premiumisation in the near future
Figure 17: Retail market value and volume of gum and sugar confectionery, by segment, China, 2011-16
The market volume will continue to decline at a slower pace
Figure 18: Best and worst case forecast of gum and sugar confectionery retail market volumee, china, 2011-21
Figure 19: Best and worst case forecast of gum and sugar confectionery retail market value, china, 2011-21
MARKET SEGMENTATION
Sugar-free gum has been gaining momentum
Figure 20: Best and worst case forecast of gum segment retail value, China, 2011-21
Sugar confectionery needs to play health card
Figure 21: Best and worst case forecast of sugar confectionery segment retail value, China, 2011-21
MARKET FACTORS
Reduced consumption frequency due to health concerns
Customisation encourages young generation’s consumption
Rise of wedding candy market
Figure 22: Sugar & Spice’s premium nougat, China, 2016
Online channels are booming
KEY PLAYERS – WHAT YOU NEED TO KNOW
The Chinese market lacks innovation
Nestle has taken action to survive the rising concern of sugar intake
Healthier product offerings can come in different formats
MARKET SHARE
Mondelēz has gained share in 2015 through gum business
Figure 23: Retail value share of leading companies in sugar confectionery market, China, 2014 and 2015
Mars’ control of Wrigley will enhance its performance of gum business
Nestlé might focus on products with health claims
Hershey is seeking opportunities in savoury snack
Bright’s White Rabbit plays around packaging
Figure 24: White Rabbit’s products in unique packaging, China, 2015-16
Brands from adjacent categories have stepped into the game
COMPETITIVE STRATEGIES
Highlight nutritional facts through front-of-pack labelling
Figure 25: Products with added nutrition, China, Japan and South Korea, 2015-16
Figure 26: Nutrition claims of sugar confectionery category, China, Japan, South Korea and USA, 2015-16
Create new occasions for young urbanites
Figure 27: Products with innovative claims, Japan, South Korea, UK and New Zealand, 2015-16
Tailor convenient package design for gum lovers
Figure 28: Comparison between pack size trend of Chinese and global gum products, 2015-16
Figure 29: Mini-pack gum/mint products, Germany and Japan, 2016
Figure 30: Gum products with accessories, Poland and USA, 2016
Cooperate with prominent IP to create buzz
Figure 31: Sugar confectionery products leveraging Disney’s and Minion’s influence, China, 2015-16
WHO’S INNOVATING?
China lacks new product innovation
Figure 32: China’s share of global new launches in sugar confectionery and gum category, 2014-16
Figure 33: Top 15 flavours of sugar confectionery product, China, 2015-16
Figure 34: Products containing alcohol or soda, Japan, 2015-16
Yogurt flavoured products rising
Figure 35: Yogurt-flavoured sugar confectionery, South Korea, 2015-16
Take advantage of consumers’ growing concern of air contamination
Figure 36: Orion’s counter-haze gum, China, 2016
Emphasise on authenticity with visible cues
Figure 37: Products offer authenticity, China and Germany, 2016
Figure 38: Products with authentic cues on packaging, Spain and USA, 2015-16
Stress ingredients’ provenance
Figure 39: Sugar confectionery products with sourced ingredients, China, 2016
THE CONSUMER – WHAT YOU NEED TO KNOW
Chewing gum and mint are the most popular types
Modern trade channels are being challenged by e-commerce
The elder cares about the inside, while the younger values the outside
Sweeteners being associated with plant or fruit have higher awareness
Most gum/mint brands skew to emotional rather than functional image
PENETRATION OF SUGAR CONFECTIONERY
Breath-fresheners are popular, while candies for fun are lagging behind
Figure 40: Penetration of sugar confectionery, August, 2016
Figure 41: Consumption of products with fun or indulgent images, by gender, August, 2016
Tier one cities and southern regions are more into premium sectors
Figure 42: Penetration of nougat and functional candy, by city, August, 2016
Young females and consumers in Xiamen enjoy diversity
Figure 43: Types of sugar confectionery consumed, August, 2016
PURCHASING CHANNELS OF SUGAR CONFECTIONERY
Self-consumption is more practical, while gifting is more about brands
Figure 44: Purchasing Channels, August, 2016
Online channel is occupying great momentum
Brand specialty stores and duty free shops are considered ideal for gifting
Figure 45: Selected purchasing channels for gifting, by age, August, 2016
TRIGGERS FOR TRYING A NEW PRODUCT
After all, flavour is the key trigger
Figure 46: Product offering unique texture, South Korea and Japan, 2015
Figure 47: Triggers for trying a new product, August, 2016
Figure 48: Selective triggers for trying a new product, by age, August, 2016
Packaging and naturalness weighs a lot to certain groups
Figure 49: Unique packaging, China, 2016
Figure 50: Triggers for trying a new product, by gender and age, August, 2016
PERCEPTION TOWARDS SWEETENERS
Xylitol has gained more attention throughout the years
Figure 51: Selective sweeteners included in gum and mint products, China, 2015-16
Figure 52: Perception of sweeteners, August, 2016
Sweeteners pairing with different types of product to increase credibility
Figure 53: Functional candy users’ perception of the naturalness of selective sweeteners, August, 2016
Regional difference can be linked to TCM philosophy
Figure 54: Popcorn using stevia as sweetener, UK, 2016
Figure 55: Perception of popular TCM sweeteners, by tier, August, 2016
CHEWING GUM/MINT BRAND AWARENESS
Extra achieves the highest brand awareness
Figure 56: Chewing gum/mint brand awareness, August, 2016
Brands and their target demographics
Figure 57: Rio’s mint products, China, 2016
Brand awareness varies in different regions
Figure 58: Selective chewing gum/mint brand awareness, by city, August, 2016
CHEWING GUM BRAND PERCEPTION
Gum brands’ perception are consistent with their propositions
Figure 59: Chewing gum/mint brand perception, August 2016
Figure 60: Mentos’ and Five’s gum/mint products, China, 2015-16
MEET THE MINTROPOLITANS
More sophisticated in terms of consumption variety and purchase channel
Figure 61: Purchasing channels by gifting, August, 2016
Looking forward to more premiumised products
Figure 62: Triggers for trying a new product, August, 2016
More knowledgeable on sweeteners
Figure 63: Perception of less known sweeteners, August, 2016
APPENDIX – MARKET SIZE AND FORECAST
Figure 64: Value sales of China’s gum & sugar confectionery retail market, 2011-21
Figure 65: Volume sales of China’s gum & sugar confectionery retail market, 2011-21
APPENDIX – MARKET SEGMENTATION
Figure 66: Value sales of China’s gum & sugar confectionery retail market, by segment, 2011-21
Figure 67: Volume sales of China’s sugar confectionery & gum market, by segment, 2011-21
APPENDIX – METHODOLOGY, DEFINITION, AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations

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