Sugar confectionery china - december 2014

© 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel

Sugar Confectionary China, December 2014

2

Definition

• Sugar confectionery:• Fruit soft – this includes pastilles, gums, jellies and chews.• Other flavours – this includes liquorice, marshmallows, fudge, toffee,

caramels, nougat, Turkish Delight, Halva and others, such as éclairs and marzipan.

• Mints – this includes regular mints and breath fresheners.• Hard – this includes boiled sweets and lollipops.• Functional – this includes medicated and energy giving products.• Other – this includes mixed assortments and other sugar confectionery.• Gum confectionery consists of regular chewing gum, sugar-free chewing

gum and bubble gum

3

ReportOVERVIEW

• Market Overview

• Consumer Trends

• Who is innovating

4

Market Overview

• Pick the highlights of how the market is performing

1. The wine market is expected to grow continuously, at a double-digit rate

2. Retail consumption has exceeded non-retail, which means retail distribution

becomes increasingly important for businesses to expand

3. A highly fragmented market, meaning companies need to win with brands

4. Imports have a strong growth momentum and multi-channel presence will help

brands to reach more wine enthusiasts

mintel.com5

Sugar confectionary market faces slowing growth

• Total market value growth is slowing, having achieved CAGR of only 13.7% between 2009 and 2013, slower than for competing snack markets.

• Total market volume growth was even slower, at only 9.7% CAGR, indicating mounting competitive pressure and a shift towards consumers purchasing more higher priced products.

• Competitive pressure is mounting both within the market, and from other competing snack sectors such as chocolate confectionary and salty snacks.

Total sugar confectionary and chewing gum historical and forecast market value, 2009-19

Source: NBS/Company Information/Mintel Estimations

mintel.com6

Source: NBS/Company Information/Mintel Estimations

Sugar confectionary sees revival in value share

• Sugar confectionary has recently overtaken chewing gum in value growth thanks to consumers trading-up to

more expensive products.

• The market is shifting away from sheer quantity of sales, and more towards higher quality and value.

• Focus is now on what added-value features candy consumers are willing to pay more for.

Total sugar confectionary and chewing gum market value share by broad category, 2010-14

mintel.com7

What does it mean?

A slowing market growth, and highly fragmented competition means candy makers must focus on differentiating through selling more innovative, value-added products.

Competition from chocolates and salty snacks means sugar confectionary can no longer just be an indulgence, but must also supply other benefits to consumers.

Online retail and social media marketing have barely begun to be explored, but offers wider consumer reach and the potential to improve operating margins.

8

The Consumer

• Give a summary of key consumer insights

1. Sugar confectionary products face more consumer eating less, compared to

other snack sectors seeing more consumers eating more.

2. More consumers make deliberate purchases than impulse buys.

3. Celebrations and festivals are still key purchasing occasions, with potential for

new innovation.

4. Consumers are willing to pay more for natural ingredients and functional benefits

in their sugar confectionaries.

mintel.com9

Source: QQSurvey/Mintel

Sugar confectionary facing challenge from other snack sectors

• A key reason for slowing market growth is that significant numbers of consumers are eating more other types of

snacks and less sugar confectionary.

• The challenge for the industry is to make their products more of a first choice snack, compared with other

products.

Consumption of confectionery versus other snacks, September 2014

Note*: Eg jerky, pork scratching, dried fish slices.Base: 3,000 internet users aged 20-49

Compared to 6 months ago, which of the following types of confectionery/snacks would you say that you are eating more, less or about the same?

mintel.com10


Deliberate purchasing dominates, but impulse still important

• Deliberate purchases for

self/family consumption

focus on functionality.

• Deliberate purchases for

gifting focus on social

celebrations and festivals.

• Impulse purchases are

stronger where young

children are present,

indicating significant

“pester power”.

Reason for confectionery purchase, September 2014

Base: 3,000 internet users aged 20-49

Thinking about purchasing sugar and gum confectionery in the last 6 months, for which of the following reasons, if any, have you bought them?

mintel.com11


Individually-wrapped assortments highly favoured

• Assorted flavours and

individually wrapped are

the two most considered

products for both gifting

and self-consumption.

• For individual

consumption, people

more likely to buy single

flavour packs

• There is a strong

distinction between the

gifting and self-

consumption motives.

Types of sugar confectionery products bought for yourself/family or gifting, September 2014

Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months

Which of the following types of sugar confectionery products (chewing gum and bubble gum excluded) have you bought most often in the last 6 months for yourself/family?

mintel.com12


Festivals and celebrations key selling occasions

• 45% of consumers bought

sugar confectionary gifts

during festivals, especially

people in their 30s & 40s.

• Other important gifting

occasions were to express

gratitude (38%) and as

house warming gifts (36%).

• Men are more likely than

women to purchase as

dating gift or during

Valentine’s day, typically

men in their 20s.

Occasion of sugar confectionery gifting, September 2014

Base: 2,420 internet users aged 20-49 who have purchased sugar/gum confectionery for gifting in the last 6 months

Thinking about buying sugar confectionery (chewing gum and bubble gum excluded) as a gift, for which of the following occasions, if any, have you bought sweets in the last 6

months?

mintel.com13


What consumers will pay more for

• 48% of people agreed

natural ingredients are

worth paying more for,

especially people in their

40s.

• Men in their 20s are those

most likely to spend more

on candies offering

additional health benefits,

such as added vitamins or

a throat soothing

function.

Elements in sugar confectionery that worth premium price, September 2014


Thinking about buying sugar confectionery for you or your family, which of the following factors, if any, are you willing to pay more for? Please select up to 3 options for each type.

mintel.com14


Attitudes towards sugar and gum confectionary

• Lack of additives, and

addition of natural

ingredients key product

features sought.

• More products aimed at

specific consumer

segments.

• More new and interesting

flavours.

• Opportunity for hand-

made, premium candies.

• Cannot ignore the

potential of selling online.

Statements about sugar confectionery, September 2014


Thinking about sugar confectionery, which of the following statements, if any, do you agree with?

mintel.com15

What does it mean?

On the product side, consumers want more natural ingredients and functional benefits for themselves, and more gift packs for festivals and celebrations.

Products should diversify to reflect diverse consumer needs, and there are potential opportunities in individualised and artisanal candies.

Developing more diverse and individualised products requires candy makers to sell through the currently under-utilised online channels.

16

Who’s Innovating?

• An increasing number of products are being launched, targeted at

children, boasting nutritional ingredients.

• Very few products are aimed at a female market, and most of those are

aimed at girls, indicating potential for products aimed at adult women.

• Nutritional and functional ingredients could also be used to target older

consumers, and their health needs.

17

Some products already targeting specific consumer segments

Qifeng fruit candy with dietary fibre features a popular Doraemon cartoon character, is

aimed at children aged 5-12, and also claims to contain no additives or

preservatives.

Haimazhuangyuan candy is specifically targeted at postnatal women, and has been QS certified. This product is one of only few

targeted specifically at adult women.

Meiji Xylish lemon and mint flavoured sugar-free chewing gum with xylitol is now

available in a pack that comes with environmentally friendly wrapping paper for

disposing of gum.

All eyes on children Target the women Emerging ethics

18

What does it mean?

The emergence of environmentally-friendly packaging is a sign of growing consumer awareness of environmental issues, and manufacturers could differentiate by leading in this still new area.

Functional health ingredients show potential for development of new products aimed at specific target groups, such as women, older people or smokers trying to give up cigarettes.

A few product packs are now showing QR code links to online social media sites, indicating more companies are beginning to explore developing consumer engagement this way.

Sugar confectionery china - december 2014

Marketing

Transcript of Sugar confectionery china - december 2014