Want Want, PepsiCo and Orion only account for 19% of the Chinese snack market. Could nuts and seeds be a future disruptor?

Savory snacks market in China expected to reach $16.6bn by 2021, Euromonitor

Kraft introduced its Planters brand to China last year to crack into the country's nut snack market. Pic: China Candy

A recent Euromonitor report projected China's savory snack market will reach sales of 3,676,200 tons and 144.1bn RMB ($16.6bn) by 2021 with 4% retail volume CAGR and 6% value CAGR. 

Although Chinese consumers are concerned about a rapid rise in childhood obesity, which caused a slow growth of savory snacks during 2016, Euromonitor noted the the category is proving more resilient than other snack categories. Snack bars, fruit snacks, sweet biscuits, confectionery and ice cream are all set to see retail volume sales decline, said the market research company.

“This will be thanks to a healthier image for many areas, with nuts, seeds and trail mixes notably viewed as healthy. A wide range of low-fat products are also available across savory snacks.”

Fragmented category

Currently, Want Want Holdings is the leading player in the Chinese savory snacks market with 9.9% of the share, profiting from its diverse portfolio of puffed snacks and rice snacks.

“The company benefits from strong investment in marketing and a wide distribution reach, and will thus continue to edge up marginally in share in 2016,” the report said.

The second-ranked savory snack company is PepsiCo from the US with 5.1% market share, while the third is Orion from South Korea with 4.2%.

But, the fragmented shares seen in the category make it difficult to gauge whether domestic or multinational companies dominate, with Want Want (Taiwan), PepsiCo and Orion accounting for just 19% value share in 2016, Euromonitor added.

Some of the domestic top-selling companies include Hefei Huatai Food, Shanghai Liwayway Food, Fujian Dali Food, as well as the dominant e-commerce nut snack brand, Three Squirrels. Each of them makes up 3.4%, 2.8%, 2.4% and 2.3% of the market.

Other international food giants, including Mondelēz and General Mills only own a small share of the market in 2016, with 0.8% and 0.4% respectively.

It is noted that, while General Mill’s market share remained stable for the past few years, Mondelēz, on the other hand, has seen a steady decline.

Nut, seeds, and trail mixes

Euromonitor predicted there will be a rise in unit price of savory snacks between 2016 and 2021, “partly due to rising production and distribution costs.

“This growth will also be due to consumers trading up, with nut, seeds and trail mixes notably set to see growth of 10% as consumers seek higher-quality and fresher products,” the report said.

The nut, seeds and trail mixes segment, according to Euromonitor, is expected to reach retail value of 33,634.6m RMB ($4.9bn) by 2021, while savory biscuits anticipate a 17,109.5m RMB ($2.5bn) worth of sales. 

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