China’s healthy snack trend creates opportunities

China’s healthy snack trend is creating massive opportunities for FMCG companies and retailers according to a new report from research house Mintel.

While snacking is often thought of as an indulgent and convenient alternative to traditional meal times, many Chinese consumers are now focusing on their health. Mintel’s report reveals that four in 10 urban Chinese consumers eat more nuts and seeds today compared to six months ago. Pointing to the rise in popularity of these healthy snacks, 58 per cent of consumers say that nuts and seeds taste good and 44 per cent say they are convenient to eat, while only 9 per cent say nuts and seeds are unhealthy.

It seems that nuts are high in demand in China as product launch activity is also on the rise. Mintel Global New Products Database (GNPD) reveals that 17.5 per cent of snack products launched in China between 2014 and 2016 were nuts, compared to 15.3 per cent of those launched globally.

The healthy snacking trend is contributing to the growing popularity of nuts and seeds in retail channels as well. In China’s retail snack market, nuts and seeds is the largest category, with a retail value of RMB263.7 billion (US$38.3 billion). Mintel forecasts the segment will grow at a CAGR of 10.7 per cent in value between 2015 and 2020, reaching RMB345.6 billion.

Ching Yang, senior food and drink analyst at Mintel, said Chinese consumers have become more aware of the health benefits of nuts and seeds.

“Now, it seems that  eating nuts and seeds is no longer something to do to kill time while chatting with friends, but part of the overall pursuit of a healthy and trendy lifestyle. Therefore, companies should consider packing up the traditional nuts and seeds bulk products in favour of branded products that are positioned as a healthy snack. We’re seeing a number of the nuts brands thriving when leveraging this consumer trend.”

Mintel research reveals that six in 10 consumers associate a healthy snack with ‘all-natural’, while 42 per cent associate it with ‘fortified with additional nutrients’. One third of Chinese consumers associate healthy snacks with ‘high in protein’, and the demographic skews towards male consumers aged 25-29 (42 per cent). What’s more, 41 per cent of Chinese consumers aged 40-49 associate healthy snacks with ‘low in salt’.

According to Mintel GNPD, one quarter of snack products launched in China between 2014 and 2016 were meat- or seafood-based snacks. In line with this, Mintel research reveals that 48 per cent of consumers think meat/seafood-based snacks taste good and 46 per cent think they are filling.

On the other hand, the growth rates of traditional sweet snacks, such as sugar confectionery, ice cream and biscuits, are relatively slow. Mintel research indicates that 26 per cent of urban Chinese consumers are eating less chocolate confectionery today compared to six months ago, while 23 per cent are eating more. However, 63 per cent of Chinese consumers are eating more fresh fruits and vegetables as snacks, and 42 per cent are eating more dairy-based snacks.

Yang added: “Chinese consumers have rising awareness of their sugar and fat intake. Therefore, more consumers are switching to fresh fruits and vegetables or dairy-based foods for snacking. This suggests a growing opportunity for food and drinks brands that enjoy a healthy perception (e.g. dietary supplements, cereals and yogurt) to tap into the snacking occasion by developing snack format products. Our research shows that Chinese females are concerned with calories, while Chinese males care about protein. With this in mind – and the fact that  the average sodium level in China’s meat snacks is lower than the global average and the level is decreasing over time – the ‘reduced sodium’ claim is still rarely seen on meat snacks and, therefore, could be leveraged to meet consumer needs.”

Imports gain favour

Finally, imported snacks are gaining popularity among urban Chinese consumers. According to Mintel research, as many as four in 10 urban Chinese consumers are interested in buying imported products they’ve never tried before across a variety of purchase channels that specialise in selling imported snacks. Of these same urban consumers, while 34 per cent have bought snacks from imported food stores, 28 per cent have bought at local stores when travelling and 19 per cent have bought from foreign shopping websites. In addition, though 75 per cent of consumers have bought snacks from any e-commerce site, physical retail channels are still the most popular purchase destination (96 per cent).

“As consumers continue to look for new and different flavour experiences, international snacks have become a sector that many consumers are gravitating towards,” said Yang. “E-commerce is an especially important channel for international snacks. It not only allows consumers to easily access foreign products, but also provides a less costly channel for international players to enter the Chinese market.

“However, one of the challenges for consumers is deciding what products are good and worth the higher cost, especially for consumers living in tier-one cities as they are more likely to shop online. A product targeting mainstream consumers could use regular retail channels in order to reach more consumers, especially in the lower tier cities,” Yang concluded.

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