Rapid economic growth and increasing awareness of health is driving demand for confectionery categories in China that claim to offer wellness benefits. Products such as chocolate confectionery and functional gum are becoming mainstream indulgences in urban areas.
This trend is being underpinned by higher disposable incomes among middle-class consumers, who are turning to snacks offering not only indulgence but also health properties.
Middle-class consumers in urban areas drive demand for chocolate confectionery
Retail value sales of chocolate confectionery in China rose while volume sales increased. Chocolate confectionery is the most dynamic category within confectionery and, compared with other confectionery categories, it achieved the fastest growth in both volume and value terms in 2010.
Dark chocolate recorded strong growth in 2010 due to its health-related benefits: it has a lower fat content compared to other types of chocolate and is therefore particularly favoured by female consumers. In addition, dark chocolate producers claim that it can increase antioxidants in the blood, thereby preventing high blood pressure and heart disease.
Therefore, companies such as Mars (China) and Ferrero China launched Dove Xinshui dark chocolate and Ferrero Rocher Lang Mu respectively in late 2009 and 2010. In contrast with the rapid growth of dark chocolate, plain white chocolate declined in 2009 and 2010, mainly thanks to its relatively high fat content.
Sugar confectionery sales recover from melamine scandal
Sugar confectionery achieved growth of 3% and 4% in retail value and volume terms respectively in 2010, according to Euromonitor International’s estimates. With the melamine contamination scandal fading away, as well as the country’s economic recovery, both retail value and volume growth were slightly faster than in the previous year.
Pastilles, gums, jellies and chews remained the most dynamic category within sugar confectionery in 2010, recording an 8% increase in retail value sales. These products are very popular among young consumers due to their great variety in terms of packaging design and flavours.
For instance, Frutips, launched by Nestlé (China) in 2008, offers eight different flavours (orange, lemon, blackcurrant, apple, mango, litchi, strawberry and grapefruit). Due to the various tastes and different packaging, Frutips has achieved considerable growth since its initial launch.
Health benefits underpin growth of functional gum
Functional gum continued to be the fastest growing category in 2010. As Chinese consumers have become more health conscious, functional gum has gained increasing popularity among consumers.
Many leading manufacturers have emphasised the health benefits of the ingredient Xylitol, either through packaging or advertising. For example, Extra Xylitol is promoted as offering “care for your teeth”, a slogan that has been widely used in its advertising and packaging campaigns.
Sugar-free gum is another category which achieved considerable growth in 2010, with retail volume and value sales increasing by 7% and 6% respectively. Sugar-free gum is dominated by two foreign brands, Extra and Mentos, with the latter recording impressive growth in 2009 due to its unique packaging and cube shape, which is particularly attractive to young people.