Sugar confectionery china - december 2014

Sugar Confectionery -

China,

December 2014

Published by Mintel Group Ltd 11 Pilgrim Street London EC4V 6RN tel: 020 7606 4533 fax: 020 7606 5932 Sales hotline: +44 (0)20 7606 6000 email: [email protected] © Mintel Group Limited. All rights reserved. Statistics in this report are the latest available at the time of research

NOTE: This publication is issued as a series of reports. Each report is a complete work in itself, which is available separately or as part of a subscription

www.mintel.com

CONDITIONS OF USE

Congratulations on your purchase of a limited license to this Mintel report! Mintel

Group Ltd. (“Mintel”) is the publisher and licensor of this report; the licensee of this

report is the original purchaser (“you”). Absent another written agreement

between Mintel and you, the following conditions of use govern your access to and

use of this report.

1. GRANT AND SCOPE OF LICENSE. Subject to the restrictions under clause 2,

Mintel grants to you a personal, revocable, non-exclusive, non-sublicensable,

and non-transferable right and license to access and use this report for your

internal business purposes.

2. LICENSE RESTRICTIONS.

A. Absent advance written consent by Mintel, you may not grant access to,

sell, pass on, communicate, or distribute this report or its content to any

third party, including any of your affiliates. Principles of Fair Use do not

apply to your use of this report.

B. The purchase or use by a Non-Participating Retailer (or an agent or

professional advisor working on its account) of any Infoscan data

sourced by Information Resources, Inc., and contained in this report is

prohibited. Accordingly, you will not knowingly disclose any Infoscan

data contained in this report to a Non-Participating Retailer. As of 10

October 2013, the Non-Participating Retailers are Aldi, Costco, Dollar

Tree, Lidl, Trader Joe’s, and Whole Foods (current list available at

www.mintel.com/legal/non-participating-retailers).

C. You will neither encourage financial reliance by third parties upon, nor

invite investment from others based upon, this report without first

obtaining the written consent of Mintel’s corporate secretary to do so,

which Mintel may withhold in its absolute discretion. Absent such

consent, you will defend, indemnify, and hold harmless Mintel against

any claims made against Mintel based upon such encouragement or

invitation.

3. INTELLECTUAL PROPERTY. As between Mintel and you, this report, including

but not limited to the content, design, look, layout, appearance, and graphics,

is the copyright property and confidential information of Mintel. You disclaim,

and Mintel reserves, all right, title, and interest in this report, and all copies

thereof, not expressly granted by these conditions of use, whether by

implication, estoppel, or otherwise.

4. DISCLAIMER OF WARRANTY. THIS REPORT IS PROVIDED “AS IS.” MINTEL

MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO

CORRECTNESS, COMPLETENESS, OR CURRENTNESS AND SPECIFICALLY

DISCLAIMS ANY WARRANTY, WHETHER EXPRESS, IMPLIED, OR STATUTORY,

INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A

PARTICULAR PURPOSE. THIS REPORT NEITHER GIVES INVESTMENT OR

PROFESSIONAL ADVICE NOR ADVOCATES ANY COURSE OF ACTION.

5. INDEMNIFICATION. You will defend, indemnify, and hold harmless Mintel from

and against all costs, liabilities, losses, and expenses (including reasonable

attorneys’ fees) (collectively, “Losses”) arising from any third party claim,

demand, complaint, or action arising from unlicensed access or use of this

report. Mintel will defend, indemnify, and hold harmless you from and against

any Losses arising from any third party claim, demand, complaint, or action

arising from your licensed access or use of this report and alleging that this

report infringes any intellectual property right.

6. LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY

APPLICABLE LAW AND EXCEPT FOR ANY INDEMNITY UNDER CLAUSE 5,

NEITHER PARTY, NOR ANY OF ITS AFFILIATES, OFFICERS, EMPLOYEES, OR

AGENTS, WILL BE LIABLE IN CONNECTION WITH THIS REPORT FOR ANY

INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES,

INCLUDING WITHOUT LIMITATION LOSS OF GOOD WILL AND LOST PROFITS

OR REVENUE, WHETHER OR NOT SUCH DAMAGES ARE BASED IN CONTRACT,

WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE (EVEN

IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), AND NEITHER

PARTY’S AGGREGATE LIABILITY WILL EXCEED THE FEE PAYABLE TO MINTEL

BY YOU FOR THIS REPORT.

7. ENTIRE AGREEMENT. These conditions of use, together with any Mintel

documentation of your order, constitute the entire understanding between

Mintel and you regarding this report and may be amended only by a written

instrument duly executed by Mintel and you. No purchase order issued by

you will modify these conditions of use, even if signed by Mintel.

8. CHOICE OF LAW AND JURISDICTION. Use of this report and any dispute

arising out of or in connection with such use is subject to the laws of the

People’s Republic of China. Any dispute arising out of or in connection with

use of this report that cannot be resolved through friendly consultations

between you and Mintel shall be submitted to the Shanghai International

Economic and Trade Arbitration Commission for arbitration in Shanghai.

v 101013 Single

Table of Contents Sugar Confectionery China, December 2014

© Mintel Group Ltd. All rights reserved. iii

INTRODUCTION ...................................................................................................................................... 8

Definition .......................................................................................................................................... 8 Methodology..................................................................................................................................... 8 Abbreviations ................................................................................................................................... 9

EXECUTIVE SUMMARY ........................................................................................................................ 10

The market ..................................................................................................................................... 10 Figure 1: Total sugar confectionery and chewing gum historical and forecast market value, 2009-19 .............. 10

Companies and brands .................................................................................................................. 11 Fragmentation impedes strong brand penetration ............................................................................................ 11 Figure 2: Total sugar confectionery and chewing gum market value market shares of leading companies, 2012 and 2013 ................................................................................................................................................. 11 Sugar confectionery: All eyes on children ......................................................................................................... 12 Target the women ............................................................................................................................................. 12 Gum confectionery innovation .......................................................................................................................... 12 Confectionery brands go online ........................................................................................................................ 12

Key issues ...................................................................................................................................... 13 Pursuing the online sales option ....................................................................................................................... 13 Accentuate the artisanal ................................................................................................................................... 13 Segment to survive ........................................................................................................................................... 13

The consumer ................................................................................................................................ 14 Consumption of confectionery and snacks ....................................................................................................... 14 Figure 3: Consumption of confectionery vs snack, September 2014 ................................................................ 14 Reason for confectionery purchase .................................................................................................................. 15 Figure 4: Reason for confectionery purchase, September 2014 ....................................................................... 15 Type of sugar confectionery products bought for self/family and gifting ............................................................ 16 Figure 5: Types of sugar confectionery products bought for yourself/family or gifting, September 2014 ........... 16 Occasion of sugar confectionery gifting ............................................................................................................ 17 Figure 6: Occasion of sugar confectionery gifting, September 2014 ................................................................. 17 Premium element for sugar confectionery ........................................................................................................ 18 Figure 7: Elements in sugar confectionery that are worth premium price, September 2014 .............................. 18 Premium element for gum confectionery .......................................................................................................... 19 Figure 8: Elements in gum confectionery that are worth premium price, September 2014 ............................... 19 Attitudes towards sugar and gum confectionery ............................................................................................... 20 Figure 9: Statements about sugar confectionery, September 2014 .................................................................. 20

What we think................................................................................................................................. 21

ISSUES AND INSIGHTS ........................................................................................................................ 22

Pursuing the online sales option .................................................................................................... 22 The facts ........................................................................................................................................................... 22 The implications................................................................................................................................................ 22

Accentuate the artisanal ................................................................................................................ 23 The facts ........................................................................................................................................................... 23 The implications................................................................................................................................................ 23

Segment to survive ........................................................................................................................ 24 The facts ........................................................................................................................................................... 24 The implications................................................................................................................................................ 24 Figure 10: The population of over-60s in China, 2000-15 ................................................................................. 25

TREND APPLICATION .......................................................................................................................... 26

Trend: Sense of the Intense ........................................................................................................... 26 Trend: Cool Vending ...................................................................................................................... 27 Trend: Help Me Help Myself .......................................................................................................... 28

MARKET SIZE AND FORECAST .......................................................................................................... 30

Key points ...................................................................................................................................... 30 Value growth slow: driven by trading up ........................................................................................ 30

Figure 11: Total sugar confectionery and chewing gum historical and forecast market value, 2009-19 ............ 30 Volume growth even slower: time for new innovation ................................................................... 31

Figure 12: Total sugar confectionery and chewing gum historical and forecast market volume, 2009-19 ......... 31 Sugar confectionery lagging behind competing sectors ................................................................ 32

Figure 13: Comparative total market value growth for competing snack food options, 2009-13 ........................ 32


© Mintel Group Ltd. All rights reserved. iv

How competing sectors are innovating .......................................................................................... 32

MARKET SEGMENTATION .................................................................................................................. 34

Key points ...................................................................................................................................... 34 Overall picture ................................................................................................................................ 34

Figure 14: Total sugar confectionery and chewing gum market value and volume, by broad category, 2010-14 ............................................................................................................................................................ 34

Sugar confectionery ....................................................................................................................... 34 Figure 15: Total sugar confectionery historical and forecast market value, 2009-19 ......................................... 35 Figure 16: Total sugar confectionery historical and forecast market volume, 2009-19 ...................................... 35 Figure 17: Total sugar confectionery market value, by sector, 2010-14 ............................................................ 36 Figure 18: Total sugar confectionery market volume, by sector, 2010-14 ......................................................... 37

Chewing gum ................................................................................................................................. 37 Figure 19: Total chewing gum historical and forecast market value, 2009-19 ................................................... 37 Figure 20: Total chewing gum historical and forecast market volume, 2009-19 ................................................ 38 Figure 21: Total chewing gum market value, by sector, 2010-14 ...................................................................... 38 Figure 22: Total chewing gum market volume, by sector, 2010-14 ................................................................... 39

MARKET SHARE ................................................................................................................................... 40

Key points ...................................................................................................................................... 40 Value market fragmentation impedes strong brand penetration .................................................... 40

Figure 23: Total sugar confectionery and chewing gum market value market shares of leading companies, 2012 and 2013 ................................................................................................................................................. 40

Volume market even more fragmented ......................................................................................... 42 Figure 24: Total sugar confectionery and chewing gum market volume market shares of leading companies, 2012 and 2013 .............................................................................................................................. 42

WHO’S INNOVATING? .......................................................................................................................... 43

Key points ...................................................................................................................................... 43 Sugar confectionery: All eyes on children ...................................................................................... 43

Figure 25: Consumption of confectionery vs snack, by age of children in household, September 2014 ........... 43 Figure 26: Top 10 claims for sugar confectionery in China, 2011-14 ................................................................ 44

Target the women .......................................................................................................................... 45 Gum confectionery innovation ....................................................................................................... 46

Figure 27: Top 10 claims for gum confectionery in China, 2011-14 .................................................................. 47

COMPANIES AND BRANDS ................................................................................................................. 49

Mars, Inc. ....................................................................................................................................... 49 Nestlé ............................................................................................................................................. 50 Fujian Yake Food Co., Ltd. ............................................................................................................ 51 Perfetti Van Melle Confectionery Co., Ltd. ..................................................................................... 52 Beijing Kangbeier Food Co., Ltd. ................................................................................................... 52 Want Want China Holdings Limited ............................................................................................... 53

THE CONSUMER – TRENDS IN CONSUMPTION OF CONFECTIONERY AND SNACKS ............... 54

Key points ...................................................................................................................................... 54 Savoury snacks are preferred over sweet confectioneries ............................................................ 54

Figure 28: Consumption of confectionery vs snack, September 2014 .............................................................. 54 Figure 29: Consumption of confectionery vs snack, by repertoire of consumption of confectionery vs snack, September 2014 ............................................................................................................................................... 55 Figure 30: Elements in sugar confectionery that are worth premium price, September 2014 ............................ 56

Functional candy is the most preferred among other sugar confectioneries ................................. 56 Figure 31: Reason for confectionery purchase, September 2014 ..................................................................... 56 Figure 32: Consumers eating more functional candy, by gender and age, September 2014 ............................ 57

THE CONSUMER – REASON FOR CONFECTIONERY PURCHASE ................................................. 58

Key points ...................................................................................................................................... 58 Most buy on purpose rather than impulsively ................................................................................ 58

Figure 33: Reason for confectionery purchase, September 2014 ..................................................................... 58 Figure 34: Reason for confectionery purchase, by monthly household income group, September 2014 .......... 59 Figure 35: Reason for confectionery purchase, by marital status, September 2014 ......................................... 60


© Mintel Group Ltd. All rights reserved. v

Inter-city differences ......................................................................................................................................... 60 Figure 36: Reason for confectionery purchase, by city, September 2014 ......................................................... 60

Impulse purchase ........................................................................................................................... 60 Figure 37: Impulse purchase reason for confectionery purchase, by age of children, September 2014 ............ 61 Figure 38: Impulse purchase reason for confectionery purchase, by gender and age, September 2014 .......... 61 Figure 39: Impulse purchase reason for confectionery purchase, by monthly household income group, September 2014 ............................................................................................................................................... 62 Inter-city differences ......................................................................................................................................... 62 Figure 40: Impulse purchase reason for confectionery purchase, by city, September 2014.............................. 62

THE CONSUMER – TYPE OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR SELF/FAMILY AND GIFTING ................................................................................................................ 63

Key points ...................................................................................................................................... 63 Individually wrapped and assorted flavours are two most considered .......................................... 63

Figure 41: Types of sugar confectionery products bought for yourself/family or gifting, September 2014 ......... 63 Self/family use consumption by demographic group ..................................................................... 64

Figure 42: Types of sugar confectionery products bought for yourself/family, by gender and age, September 2014 ............................................................................................................................................... 65 Figure 43: Types of sugar confectionery products bought for yourself/family, by age of children in household, September 2014 ............................................................................................................................. 66

Self/family use consumption by city ............................................................................................... 66 Figure 44: Types of sugar confectionery products bought for yourself/family, by city, September 2014 ........... 67

Gifting use consumption by demographic group ........................................................................... 67 Figure 45: Types of sugar confectionery products bought for gifting, by gender and age, September 2014 ..... 68 Figure 46: Types of sugar confectionery products bought for gifting, by age of children in household, September 2014 ............................................................................................................................................... 69

THE CONSUMER – OCCASION OF SUGAR CONFECTIONERY GIFTING ....................................... 70

Key points ...................................................................................................................................... 70 Chinese traditional festivals are still the major occasions ............................................................. 71

Figure 47: Occasion of sugar confectionery gifting, September 2014 ............................................................... 71 Married people have more gifting occasions ................................................................................. 72

Figure 48: Occasion of sugar confectionery gifting, by marital status, September 2014 ................................... 72 People from tier two cities are more likely to purchase as wedding gift ........................................ 73

Figure 49: Occasion of sugar confectionery gifting, by city, September 2014 ................................................... 73 Figure 50: Occasion of sugar confectionery gifting, by city tier, September 2014 ............................................. 74

THE CONSUMER – PREMIUM ELEMENT FOR SUGAR CONFECTIONERY .................................... 75

Key points ...................................................................................................................................... 75 All-natural ingredient sugar confectionery on demand in premium category ................................ 75

Figure 51: Elements in sugar confectionery that are worth premium price, September 2014 ............................ 75 Figure 52: Elements in sugar confectionery that are worth premium price, by gender and age, September 2014 ................................................................................................................................................................. 76 Figure 53: Selected claims of sugar confectionery launched in US, UK and China, 2011-June 2014 ............... 76 Figure 54: Examples of sugar confectionery claiming all-natural, China and US, May-April 2014 .................... 77

Functional ingredients need to be highlighted to claim health benefits ......................................... 77 Figure 55: Elements in sugar confectionery that are worth premium price, by monthly personal income group, September 2014 .................................................................................................................................... 78 Figure 56: Selected claims of functional ingredients and benefit for sugar confectionery, US, UK, Japan and China, 2011-June 2014 ............................................................................................................................. 78 Figure 57: Examples of sugar confectionery claiming health benefits, China and Japan, –2013 and 2014 ...... 79

THE CONSUMER – PREMIUM ELEMENT FOR GUM CONFECTIONERY ......................................... 80

Key points ...................................................................................................................................... 80 Long-lasting flavour is the key for premium price .......................................................................... 80

Figure 58: Elements in gum confectionery that are worth premium price, September 2014 .............................. 80 Figure 59: Chewing gum products launched claiming health benefits or natural ingredients as % of all such products launched over the period, 2009-14 ..................................................................................................... 81 Figure 60: Elements in gum confectionery that are worth premium price, by age, September 2014 ................. 82

Inter-city differences ....................................................................................................................... 83 Figure 61: Elements in gum confectionery that are worth premium price, by city, September 2014 .................. 83

THE CONSUMER – ATTITUDES TOWARDS SUGAR AND GUM CONFECTIONERY ...................... 84


© Mintel Group Ltd. All rights reserved. vi

Key points ...................................................................................................................................... 84 Purity and health head consumer demand prerogatives ............................................................... 84

Figure 62: Statements about sugar confectionery, September 2014 ................................................................ 84 Figure 63: Statements about sugar confectionery, by gender and age, September 2014 ................................. 86

City tier differences ........................................................................................................................ 86 Figure 64: Statements about sugar confectionery, by city tier, September 2014 .............................................. 87

APPENDIX – MARKET SIZE AND FORECAST ................................................................................... 88

Market value................................................................................................................................... 88 Figure 65: China – Total historical and forecast value retail market for sugar and gum confectionery, 2009-19 ..................................................................................................................................................................... 88

Market volume ............................................................................................................................... 88 Figure 66: China – Total historical and forecast volume retail market for sugar and gum confectionery, 2009-19 ............................................................................................................................................................ 88

APPENDIX – MARKET SEGMENTATION ............................................................................................ 89

Segment value ............................................................................................................................... 89 Figure 67: Total historical and forecast value retail market for sugar and gum confectionery, by segment, 2009-19 ............................................................................................................................................................ 89

Segment volume ............................................................................................................................ 89 Figure 68: China – Total historical and forecast volume retail market for sugar and gum confectionery, by segment, 2009-19 ............................................................................................................................................. 89

APPENDIX – THE CONSUMER – CONSUMPTION OF CONFECTIONERY AND SNACKS ............. 90

Figure 69: Consumption of confectionery vs snack, September 2014 .............................................................. 90 Figure 70: Consumption of confectionery vs snack – Chewing gum, by demographics, September 2014 ........ 91 Figure 71: Consumption of confectionery vs snack – Bubble gum, by demographics, September 2014 ........... 92 Figure 72: Consumption of confectionery vs snack – Lollipop, by demographics, September 2014 ................. 94 Figure 73: Consumption of confectionery vs snack – Hard candy, by demographics, September 2014 ........... 96 Figure 74: Consumption of confectionery vs snack – Soft candy, by demographics, September 2014 ............. 98 Figure 75: Consumption of confectionery vs snack – Crisp candy, by demographics, September 2014 ........... 99 Figure 76: Consumption of confectionery vs snack – Nougat, by demographics, September 2014 ................ 101 Figure 77: Consumption of confectionery vs snack – Functional candy, by demographics, September 2014 . 103 Figure 78: Consumption of confectionery vs snack – Savoury snacks, by demographics, September 2014... 104 Figure 79: Consumption of confectionery vs snack – Meat/seafood snacks, by demographics, September 2014 ............................................................................................................................................................... 106 Figure 80: Consumption of confectionery vs snack – Preserved fruit, by demographics, September 2014..... 108 Figure 81: Consumption of confectionery vs snack – Chocolate confectionery, by demographics, September 2014 ............................................................................................................................................. 109

Repertoire – Consumption pattern ............................................................................................... 111 Figure 82: Repertoire of consumption of confectionery vs snack, September 2014 ........................................ 111 Figure 83: Repertoire of consumption of confectionery vs snack, by demographics, September 2014 ........... 112 Figure 84: Consumption of confectionery vs snack, by repertoire of consumption of confectionery vs snack, September 2014 .................................................................................................................................. 113

APPENDIX – THE CONSUMER – REASON FOR CONFECTIONERY PURCHASE ........................ 116

Figure 85: Reason for confectionery purchase, September 2014 ................................................................... 116 Figure 86: Most popular reason for confectionery purchase, by demographics, September 2014 .................. 116 Figure 87: Next most popular reason for confectionery purchase, by demographics, September 2014 .......... 118 Figure 88: Other reason for confectionery purchase, by demographics, September 2014 .............................. 120

APPENDIX – THE CONSUMER – TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR SELF/FAMILY ............................................................................................................. 122

Figure 89: Types of sugar confectionery products bought for yourself/family, September 2014 ..................... 122 Figure 90: Types of sugar confectionery products bought for yourself/family – By packaging format, by demographics, September 2014 ..................................................................................................................... 122 Figure 91: Types of sugar confectionery products bought for yourself/family – Individually wrapped or not, by demographics, September 2014 ................................................................................................................ 124 Figure 92: Types of sugar confectionery products bought for yourself/family – Assorted or not, by demographics, September 2014 ..................................................................................................................... 126

APPENDIX – THE CONSUMER – TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING ...................................................................................................................... 128


© Mintel Group Ltd. All rights reserved. vii

Figure 93: Types of sugar confectionery products bought for gifting, September 2014 ................................... 128 Figure 94: Types of sugar confectionery products bought for gifting – By packaging format, by demographics, September 2014 ..................................................................................................................... 128 Figure 95: Types of sugar confectionery products bought for gifting – Individually wrapped or not, by demographics, September 2014 ..................................................................................................................... 130 Figure 96: Types of sugar confectionery products bought for gifting – Assorted or not, by demographics, September 2014 ............................................................................................................................................. 132

APPENDIX – THE CONSUMER – OCCASION OF SUGAR CONFECTIONERY GIFTING .............. 134

Figure 97: Occasion of sugar confectionery gifting, September 2014 ............................................................. 134 Figure 98: Most popular occasion of sugar confectionery gifting, by demographics, September 2014 ........... 134 Figure 99: Next most popular occasion of sugar confectionery gifting, by demographics, September 2014 ... 136

APPENDIX – THE CONSUMER – PREMIUM ELEMENT FOR SUGAR CONFECTIONERY ........... 138

Figure 100: Elements in sugar confectionery that are worth premium price, September 2014 ........................ 138 Figure 101: Most popular elements in sugar confectionery that are worth premium price, by demographics, September 2014 ............................................................................................................................................. 138 Figure 102: Next most popular elements in sugar confectionery that are worth premium price, by demographics, September 2014 ..................................................................................................................... 140

APPENDIX – THE CONSUMER – PREMIUM ELEMENT FOR GUM CONFECTIONERY ................ 142

Figure 103: Elements in gum confectionery that are worth premium price, September 2014 .......................... 142 Figure 104: Most popular elements in gum confectionery that are worth premium price, by demographics, September 2014 ............................................................................................................................................. 142 Figure 105: Next most popular elements in gum confectionery that are worth premium price, by demographics, September 2014 ..................................................................................................................... 144

APPENDIX – THE CONSUMER – STATEMENTS ABOUT SUGAR CONFECTIONERY ................. 146

Figure 106: Statements about sugar confectionery, September 2014 ............................................................ 146 Figure 107: Most popular statements about sugar confectionery, by demographics, September 2014 ........... 147 Figure 108: Next most popular statements about sugar confectionery, by demographics, September 2014 .. 149

APPENDIX – CHINA RESEARCH METHODOLOGY ......................................................................... 152

Introduction Sugar Confectionery China, December 2014

© Mintel Group Ltd. All rights reserved. 8

Introduction “The sugar confectionery market faces slowing growth and high fragmentation, leaving brands

vulnerable to weak market share and poor consumer loyalty. Leading companies are selling

more higher-end products to alleviate this, but have done little to target the needs of specific

consumer groups based on gender or age group lines.

Sugar confectionery products aimed at specific demographic groups could focus on functional

benefits and natural ingredients, suited to the needs of each group, such as helping with

nutrition or avoiding ailments.

The high degree of market fragmentation means margins are being squeezed and brand

penetration remains low. Online retailing offers the potential to reach more consumers across

the country and create closer communication and engagement with consumers, and from that

more responsiveness to their needs.

Fragmentation also means companies must raise economies of scale, and online retail also

provides a means by which to reduce costs while reaching more potential customers.”

– Matthew Crabbe, Director of Research, APAC

Definition

Sugar and gum confectionery follows the same definition as Mintel’s Sugar Confectionery – China,

May 2012 report. The scope of this report analysis and forecast covers both imported and locally made

sugar and gum confectioneries which are sold in China.

The market size and forecast in this report cover all sugar confectionery sales sold into the China

market through retail channels – including both bricks-and-mortar stores and online B2C (business to

consumer) retailers – such as company’s official online store, tmall.com, etc.

The sugar and gum confectionery market includes the following segments.

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.

Methodology

This is a market intelligence report published by Mintel. The consumer research exclusively

commissioned for this report was conducted by a Chinese licensed market survey agent (see Research

Methodology China for more information).

Introduction Sugar Confectionery China, December 2014


For the purposes of this report, Mintel commissioned a quantitative research survey carried out online

to explore consumer attitudes towards sugar and gum confectionery. Fieldwork was conducted in

September 2014, in four tier one cities, two tier two cities and four tier three cities of 3,000 internet

users aged 20-49. Tier one cities are Shanghai, Beijing, Guangzhou and Chengdu. Tier two and tier

three cities are Jinan, Linyi, Nantong, Hefei, Shantou and Changsha.

Abbreviations B2C Business-to-consumer CAGR Compound annual growth rate C2C Consumer-to-consumer GNPD Global New Products Database NBS National Bureau of Statistics

Executive Summary Sugar Confectionery China, December 2014


Executive Summary “The sugar confectionery market is facing the twin problems of slowing growth and high

fragmentation. Lack of differentiation between brands means more companies need to target

specific gender or age groups with products suited to their particular needs. This could include

more functional benefits and natural ingredients, or gift options and individualised product

offerings. However, companies will have to become more creative and innovative whilst also

staying financially competitive. Using more online sales channels to reach more consumers, and

reduce costs, is likely to become more important in the coming years, having barely taken off as

a feature of the industry to date.”


The market FIGURE 1: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM HISTORICAL AND FORECAST MARKET VALUE, 2009-19

SOURCE: NBS/COMPANY INFORMATION/MINTEL ESTIMATIONS

The total sugar confectionery and chewing gum market grew by 90% in value between 2010 and the

estimated value for 2014, at a CAGR (Compound annual growth rate) of 13.7%, with a slight uptick in

growth since 2012. Yet, the market is seeing slowing growth, and is forecast to grow by about 53% in

the period between 2014 and 2019, at a CAGR of about 9%. All the while, other snack food sectors,

especially salty snacks and chocolate confectionery, have been growing faster and competing for

consumer attention.

In volume terms, the total sugar confectionery and chewing gum market grew by 58.6% between 2010

and the estimated volume for 2014, at a CAGR of 9.7%. There has been a strong trend towards

consumers trading up to higher-quality, higher-priced products, and this is likely to continue over the

coming years. This trading up is being driven by rising average incomes and spending power. The

volume market is also seeing slowing growth, and is forecast to grow by about 42% in the period

between 2014 and 2019, at a CAGR of about 7%.



While the gum sector has enjoyed stronger growth in terms of both value and volume sales than was

the situation with sugar confectionery, average unit prices have actually grown faster for the latter

sector. In value terms, while sugar confectionery grew by 69% between 2010 and 2014, chewing gum

sales value grew by 74%. However, more recently it has been the sugar confectionery sector that has

grown fastest thanks to consumers trading up.

Companies and brands

Fragmentation impedes strong brand penetration FIGURE 2: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM MARKET VALUE MARKET SHARES OF LEADING COMPANIES, 2012

AND 2013

SOURCE: NATIONAL BUREAU OF STATISTICS OF CHINA/COMPANY INFORMATION/MINTEL

The sugar confectionery market remains highly fragmented, and this is making it harder for companies

to achieve more significant market shares. Lack of strong market shares leaves companies vulnerable

to shifts in the market, especially as competition is coming not only from within the sugar

confectionery market, but also from competing markets such as chocolate confectionery and salty

snacks. Even market leaders, such as Nestlé SA, have suffered from an erosion of their market shares

in 2013, compared with 2012.

To reduce vulnerability to the fragmented market, companies with wider ranges of products, more

higher-end products and with the ability to improve efficiencies of scale will be those best placed to

face off competition. Those companies quickest to embrace the potential of online retailing will also

stand a better chance of reaching more consumers while keeping costs down.



Sugar confectionery: All eyes on children

In the sugar confectionery market, children remain a key consumer segment. From Mintel’s survey

results, it was found that the incidence and proportion of consumers buying different types of sugar

confectionery generally decline the older the children in their households are. This is especially so for

impulse purchases, and indicates that not only are the key consumers children (or the parents of

children), but also that those children have a significant amount of “pester power” in influencing many

purchases.

This consumer trend is reflected in the relative significance within new product launches, captured by

Mintel’s GNPD (Global New Products Database), of products making the claim of being aimed at, or

suitable for, children aged 5-12.

Target the women

However, manufacturers would be wise not to simply focus on children, but also to develop products

and marketing strategies aimed at other demographic groups, especially women. Mintel’s consumer

survey found that while over a third of consumers (35%) agreed that they would like to try more sugar

confectionery products that were designed for a specific consumer group, this agreement rate rose to

41% among women in their thirties, and 42% of women in their twenties.

However, there are as yet very few sugar confectionery products targeted specifically at women,

indicating there is a large amount of potential for more products to target female consumers. For its

part, in 2013, leading company Yake introduced a personalised jelly candy aimed specifically at

women. However, of all the many sugar confectionery products launched in China in recent years,

Mintel’s GNPD identified very few.

This shows there is a great deal of untapped potential in developing more products aimed specifically

at women for self-use, as well as at men to buy gifts for women, especially among people in their

twenties and thirties.

Gum confectionery innovation

Reflecting the strong shift towards sugar-free gum sales in the total segment, the proportion of new

products being launched claiming to be low, no or reduced sugar products significantly increased in

2014. In the first half of the year, 75% of new products claimed to be low, no or reduced sugar

products, up from about half of new products in previous years.

But this presents a new challenge to the segment. With the low, no or reduced sugar claim having

become so ubiquitous, companies will have to develop product innovation in other areas, such as use

of natural ingredients or additional health or other functional benefits.

Breath-freshening claims also significantly jumped in the first half of 2014, reaching 15% of all new

products, up from about 10% for the previous two years. Yet this too will quickly become less of a

differentiator and more of an expected feature, meaning more companies will have to keep looking at

other features to capture consumer interest.

At present, one of the most significant new claim trends emerging was for environmentally friendly

packaging, which rose to 15% of all new products surveyed in first half of 2014, up from only 3% of

products in the previous two whole years, and none prior to that. Environmental responsibility could

become a new trend across the market, not just in the chewing gum sector.

Confectionery brands go online

Several key brands have begun marketing online recently, most using the route of establishing a

presence via social media sites, especially WeChat. For example, Wrigley’s Doublemint and 5 brands

both opened their own official WeChat accounts in the middle of 2014. Nestlé’s Frutips brand also

opened a WeChat site, in May 2014, offering online purchasing, interesting information about the

brand, and promoting the brand with a “having fun” positioning.



The local brands are also taking their place online, with Yake also launching and selling products

through Weidian, the WeChat e-commerce platform. Likewise, Kangbaier also sells via Weidian, as

well as promoting its brand through the Weibo social media platform. Such social media platforms

offer the opportunity to engage more closely with consumers, and communicate to them about new

products, flavours and promotions, as well as offering fun content such as videos and competitions.

Companies are also adding these social media presences to a wider portfolio of sites on online

supermarkets, such as yhd.com and tmall.com. Using this wide range of different online outlets

increases potential consumer reach, and therefore brand recognition and sales penetration.

Key issues

Pursuing the online sales option

Almost a quarter (23%) of those surveyed for this report had bought sugar confectionery online, rising

to over a quarter (26%) of men in their thirties. This is similar to the proportion of the Chinese

population who are shopping online, which is also about 23%. This indicates that the proportion of

people shopping online for confectionery, among the tier one to tier three urban online users surveyed

for this report, is about the same as the overall online shopping proportion.

Yet, despite such high penetration of online retailing to date, food sales still only represent under 3%

of total online retail value, despite growing by over 880% between 2009 and 2014. This indicates still

strong growth potential in online retailing for shelf-stable food products such as sugar confectionery.

An added advantage of such products is they are more likely than fresh produce to survive the delivery

process, can be bought and sent as gifts (with personalised messages) and are strongly associated with

seasonal and festival spending, where online retail has been particularly successful.

Accentuate the artisanal

Almost a quarter (24%) of surveyed consumers agreed that they would be willing to pay more for

handmade candy in specialised candy stores, rising to 25% of men in their twenties, and 26% of

women in their twenties. Young dating couples, eager to impress their loved ones with a gift of

sweetness, are therefore a key potential target market for handmade gift confections.

While consumers are trading up to buying more better-quality sugar confectionery, there is the

potential for confectionery manufacturers to extend their brands into premium-end candy store chains.

Successful examples include Mars Inc.’s chocolate confectionery brand M&M’s setting up its new

“experience” store on Shanghai’s Nanjing Road and Australian brand Sticky’s individualised candy

stores in Hong Kong and Southeast Asia.

Such a move could add wider brand presence and differentiation against competitor brands, both in the

broad retail environment, and at tourist sites and transport hubs, to capture a share of the travel gifting

market.

Segment to survive

Over a third of surveyed consumers (35%) agreed that they would like to try more candy or chewing

gum products designed for a specific group, rising to 42% among women in their twenties and 41%

among women in their thirties. Yet very few products are targeted at specific consumer groups, with

only a handful being targeted at women, for example.

As competition in the sugar confectionery market heats up, focusing products and marketing on

consumer by gender or age group could become an increasingly useful marketing strategy. This

applies not only to women and children, but also the increasing elderly consumer group. According to

predictions from the United Nations, about three in 10 Chinese people will be older than 60 by 2040.



This indicates a significant potential market for sugar confectionery products providing functional

health benefits that suit the needs of different consumer segments by age or gender. This could include

added health functions, such as minerals and vitamins to help fight off demographic-specific disorders,

and to help people control weight gain, reduce the effects of ageing or boost their immune systems.

The consumer

Consumption of confectionery and snacks FIGURE 3: CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014

“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?”

Base: 3,000 internet users aged 20-49

8

9

13

15

20

21

22

23

31

31

33

35

28

33

42

39

45

43

43

43

46

47

46

48

34

34

33

31

25

25

25

21

17

18

16

14

29

24

13

15

9

11

10

13

7

4

6

3

0 10 20 30 40 50 60 70 80 90 100

Bubble gum

Lollipop

Hard candy (including mints)

Soft candy (eg pastilles, toffee, pressed candy)

Preserved fruit (eg dried plum, preserved olive)

Nougat (eg milk, cranberry nougats)

Crisp candy (eg almond, sesame crisp candy)

Functional candy (eg VC candy, TCM throat candy)

Chewing gum

Chocolate confectionery

Meat/seafood snacks*

Savoury snacks (eg nuts, seeds, potato chips)

%

Eating more About the same Eating less Haven’t eaten this in the last 6 month

* eg jerky, pork scratching, dried fish slices SOURCE: QQSURVEY/MINTEL

The major problem facing the sugar confectionery market in China is that it is losing consumers to

other sectors, especially chocolate confectionery and savoury snacks, according to Mintel’s survey

data. Comparing the repertoire analysis of consumers’ snacking habits, sugar confectionery

consumption is very low (almost negligible) among those with a narrower range of product

consumption. This indicates many people will give up eating sugar confectionery before other types of

snacks.

The largest group (with 57% of all consumers surveyed) is people who eat 12 types of snack products,

but even among this group sugar confectionery consumption remains significantly lower than for other

snacks. The issue for the industry is how to make their sugar confectionery products more of a

conscious, first choice of snacks.

The industry is already producing more added-value products, and more products with natural

ingredients and functional health claims. However, increasing relevance to different consumer groups

will require much more specific targeting of products at consumers based on age and gender.



Reason for confectionery purchase FIGURE 4: REASON FOR CONFECTIONERY PURCHASE, SEPTEMBER 2014

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


SOURCE: QQSURVEY/MINTEL

Most consumers who make a deliberate purchase decision, rather than an impulse one, do so based on

wanting a functional benefit, such as to freshen their breath or soothe their throat. This means the

majority of consumers need a deliberate reason to buy, and that manufacturers need to provide specific

benefits in their product development and marketing to meet that demand.

Consumers earning a monthly household income of RMB12,000 or more are those most likely to

purchase deliberately across all reasons, with the exception of “to freshen my breath/soothe my throat”,

which actually ranks as more significant among people in the RMB5,000-7,999 income bracket. This

indicates that the types of product functions desired the most differ according to income group, and

that products could be marketed accordingly.



Type of sugar confectionery products bought for self/family and gifting FIGURE 5: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY OR GIFTING, SEPTEMBER 2014

“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?”

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


Assorted flavours and individually wrapped are the two most considered products for both gifting and

self-consumption. Products combining individually wrapped assorted flavours therefore show the

greatest potential in attracting more consumers. Yet, for individual consumption, there is a stronger

likelihood people will buy single-flavour packs, showing that there is a strong distinction between the

gifting and self-consumption motives.

This provides evidence that developing products for self-consumption and gifting has some benefit to

brand marketing. Thus, using different pack types in different outlets, according to likely purchase

reason in each, would be beneficial, for example, self-consume packs in convenience stores, and gift

packs in department stores. Providing a combination of both assorted and single-flavour packs can also

help to cover both gifting and self-use occasions.



Occasion of sugar confectionery gifting FIGURE 6: OCCASION OF SUGAR CONFECTIONERY GIFTING, SEPTEMBER 2014

“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?”

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


Some 45% of surveyed consumers bought sugar confectionery for gifting during Chinese traditional

festivals, especially older people in their thirties and forties. The next most important gifting occasions

were to express gratitude (38%) and as house warming gifts (36%). Men are more likely than women

to purchase it as a dating gift or during Valentine’s Day, typically men in their twenties.

It is also significant that a third of consumers (34%) bought gift candies as a holiday souvenir, which

indicates strong opportunities to market gift products at transport hubs and key vacation sites. This

could include providing promotional or seasonal pop-up outlets and in-store displays to capture

spending during these key traditional festivals.



Candy companies could use online gift ordering and delivery to provide consumers with an easy way

to send someone a birthday or anniversary gift, especially online. Online sites could encourage people

to enter details of all their friends’ and family’s key birthdays and anniversaries into a calendar that

then sends them a reminder, and a prompt towards suitable gift packs of candies, to help boost

purchasing, and save people time – and the embarrassment of forgetting someone’s birthday or

anniversary.

Premium element for sugar confectionery FIGURE 7: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE 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.”



Consumers are significantly more willing to pay more for products that are made from natural

ingredients, with almost half (48%) of respondents surveyed agreeing that natural ingredients are what

they would pay more for, especially older people in their forties.

Meanwhile, men in their twenties are those most likely to spend more on candies offering additional

health benefits, such as added vitamins or a throat-soothing function. Also, men in their thirties and

forties are those most likely to pay more for low- or no-sugar candies. Health and naturalness are

therefore key elements in driving the premiumisation of the sugar confectionery market.



Premium element for gum confectionery FIGURE 8: ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014

“Thinking about buying gum 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.”



Aside from the dominant feature of long-lasting flavour, additional health benefits or natural

ingredient use are also features with a strong level of interest among consumers in the chewing gum

sector. The percentage of all chewing gum new product launches claiming such attributes, as captured

by Mintel’s GNPD, is heavily weighted towards more recent years, with over half of the new launches

(55.3%) of products making such claims having been launched since 2013.

Just over a quarter (25.5%) of all GNPD chewing gum products made the claim of being sugar-free,

which reflects the strong consumer demand for such products, but also that this feature is no longer

such a differentiating feature.



Attitudes towards sugar and gum confectionery FIGURE 9: STATEMENTS ABOUT SUGAR CONFECTIONERY, SEPTEMBER 2014

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


^ based on 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months SOURCE: QQSURVEY/MINTEL

That over half (52%) of survey respondents stated a willingness to pay more for candies not containing

additives gives a strong indication that manufacturers need to use more natural flavours and

ingredients to attract more consumers and differentiate from competitors. This also provides

manufacturers with greater potential to achieve higher margins by selling more expensive products.

Premiumisation could also be brought about through clever use of packaging, such as bundle packs,

since over a quarter (26%) of respondents agreed they would pay reasonably more for such packs.

Another similar proportion (24%) stated their willingness to pay more for handmade candy from

specialised candy stores, raising the possibilities for more artisanal candy chains.

Three in 10 (30%) survey respondents stated that they prefer mints rather than chewing gum when

they want to freshen their breath, rising to 38% among men in their forties. This indicates another

means to target a specific consumer group with a specific function. Over a third (35%) of respondents

agreed they were interested in products designed for their specific consumer group.

Nearly four out of 10 (39%) respondents agreed that they would prefer candies containing nuts or

seeds. This shows consumers not only want natural ingredients, but also identifiable fruit and/or nut

pieces that they feel provide more of a healthy nutritional snack.



What we think

The sugar confectionery market has been slowing down in its growth, and that has put increasing

pressure on the many competing manufacturers and brands. The market remains highly fragmented,

leaving brands vulnerable due to weak market shares. While producing and selling more higher-end

products has helped many companies, and been a positive reaction to consumer demands for such

products, manufacturers have done little to target specific consumer groups.

More focused market segmentation along gender or age group lines looks to be a promising area that

has as yet been little explored. This, combined with rising consumer demand and willingness to pay

for more candies with functional benefits and natural ingredients, provides an opportunity to develop

products aimed at the specific needs of different consumer groups. This is something that has still been

little explored by the industry as yet.

Another problem with slowing market growth and a high degree of fragmentation is that margins are

being squeezed and brand penetration remains low. Online retailing offers a potential solution to this.

Not only can online retail reach many more consumers across the whole country than physical store

chains, it also creates an environment where brands can communicate and engage with consumers

more directly, learning what they like and don’t like, and responding in kind.

Online retail also offers the potential to sell more products for lower overheads, thus helping to

increase profit margins and raise economies of scale. This will become important as competition in the

market heats up, and consolidation naturally intensifies. It will be the companies that can adapt

products to more specific consumer needs, and that can embrace and utilise online retail, that are likely

to be those that best survive the coming years of intense competition.

Issues and Insights Sugar Confectionery China, December 2014


Issues and Insights “Competition in the market is forcing manufacturers to diversify their product to meet the needs

of increasingly sophisticated consumers. There are increasing new opportunities for products

aimed at specific consumer segments, such as women and the elderly. There is also the

opportunity to target high-end consumers with hand-made candies sold through high-end

stores. The rapid expansion of online retail is also creating opportunities for sugar

confectionary makers to reach many more new consumers, and engage with them directly to

learn more about their likes and spending habits.”


Pursuing the online sales option

The facts

Almost a quarter (23%) of those surveyed for this report had bought sugar confectionery online.

This rose to over a quarter (26%) of men in their thirties.

Women and men in their forties were less likely to buy confectionery online.

The implications

In 2013, the number of people in China who had shopped online reached 302 million, having nearly

trebled in number in just five years. This number of people represented about 23% of the total

population of the country. This indicates that the proportion of people shopping online for

confectionery, among the tier one to tier three urban online users surveyed for this report, is about the

same as the overall online shopping proportion.

Between 2009 and 2014 the total online retail market will have increased by a factor of 10, while the

B2C (Business-to-consumer) online retail market value in 2014 will be more than 40 times the size it

was in 2009. The combined C2C (Consumer-to-consumer) and B2C online retail market reached 10%

of total retail sales in 2012, and should surpass 15% in 2014. Mintel predicts that total online retail

sales will reach a quarter of total retail sales in China within five years.

The mobile retail market has gone from virtually nothing in 2010 to nearly a third (31.7%) of total

online B2C retail sales expected by the end of 2014.

What this indicates is that there is great potential for sugar confectionery brands to sell online. Already

there are examples of this, discussed later in the report, from sugar confectionery makers selling

products via social media platforms, to online-only chocolate confectionery brands achieving strong

sales. Yet the sugar confectionery market has still only just really entered the online retail market. In

this sense, confectionery brands lag behind chocolate confectionery and salty snacks brands. Some

small manufacturers of salty snacks have turned to popular online sales vehicles such as tmall.com and

yhd.com to directly sell products to consumers in order to save on the cost of rent.

For manufacturers, reducing the cost of production and distribution is a major challenge, given rising

costs of raw materials, labour, rents and fuel. Online shopping channels provide a cost-efficient place

to communicate the brands and product concepts to more consumers at a lower cost than negotiation

sales through, and delivering to, bricks-and-mortar retailers.

Not only does online selling help to reach more consumers, but because of the growth in mobile online

retail, brands can reach consumers when they are on the move. This provides the potential to market

sugar confectionery as a snack option when people are out and about. For instance, using satellite geo-

positioning to identify where a consumer is, brands could identify nearby stores or vending machines

for their products should a consumer wish to have a quick sugar rush.



The fragmented nature of the market, and the fact that growth is slowing and (relative to other snacks

sectors) was already quite mature, means that competition among the many brands is intensifying. The

need to be able to stand out from the crowd and offer a differentiated marketing approach is therefore

becoming more crucial. This is where online (especially mobile online) retailing can come into its

own, by building ongoing engagement with consumers outside of the shops.

Food retailing online still only represents less than 3% of total online retail sales value, but will have

grown by about 880% between 2009 and the expected total market value in 2014. For shelf-stable food

products such as sugar confectionery, that are more likely than fresh produce to survive the delivery

process, the continued rapid growth of online food sales should present even more opportunities than

in the more developed sectors of the online retail market, such as clothing and electronics.

It is likely that the companies and brands that will continue to succeed in the future sugar

confectionery market will be those quickest and best at harnessing the potential of the online retail

channel.

Accentuate the artisanal

The facts

Almost a quarter (24%) of surveyed consumers agreed that they would be willing to pay more for

handmade candy in specialised candy stores.

This rises to 25% of men in their twenties, and 26% of women in their twenties.

Women are those most likely to agree with this statement.

The implications

Given that consumers are willing and able to pay more for better-quality sugar confectionery, there is a

great deal of potential in leading confectionery brands taking their brands out of the factories and

putting them into premium-end candy store chains. There are precedents, such as Tingyi’s Master

Kong noodle brand establishing a chain of premium noodle restaurants, and chocolate confectionery

brands such as Mars’ M&M’s setting up specialist stores, such as its new “experience” store on

Shanghai’s Nanjing Road main shopping thoroughfare.

Just as selling bread in China has gone from packaged, pre-sliced loaves sold in supermarkets and

hypermarkets to artisan bakers selling bread fresh from the oven to an increasingly well-heeled urban

consumer base, so there is also potential for confectionery brands to establish artisan stores selling

high-end, handmade candies to those same wealthy urbanites. Given the slight bias towards people in

their twenties, and women, this kind of artisan shop could be a great way to tap into the gifting

business upon which sugar confectionery relies heavily.

Looking at how the surveyed consumers who had bought sugar confectionery for the purpose of

gifting have behaved in the previous six months, 25% bought such gifts in large tins or boxes, 56%

bought individually wrapped confectionaries, and 54% bought packs of assorted flavours.

This indicates that gifting leads to larger purchases, in more elaborate packaging and with more

individually wrapped flavour assortments – precisely the higher-end products that an artisanal outlet

could provide, and with the in-store experience (combining seasonal decorations, taste-testing, branded

merchandise, etc).

Shifting the brand emphasis away from just being a manufacturer, and more towards being an

exclusive retailer, can add kudos to a brand and give it a significant differentiation against its

competitor brands. Such a retail brand could work well not only in the usual retail settings of shopping

malls and main thoroughfares, but also at tourist sites and transport hubs, capturing a share of the

travel gifting market.



Such artisan shops could also provide personalised gift products. For example, Australian candy

company Sticky has opened stores in Singapore, Hong Kong, Malaysia and Indonesia which allow

people to personalise their candies with witty phrases or personal names. This could work well for

occasions such as Valentine’s Day or White Day, when boyfriends could buy their girlfriends

personalised candy with messages inside, or for wedding gifts, birthdays, etc. In Shanghai, a similar

business model can be seen in the company Candy Master, also an Australian company.

Segment to survive

The facts

Over a third of surveyed consumers (35%) agreed that they would like to try more candy or

chewing gum products designed for a specific group (such as women, children or the elderly).

This proportion rises to 42% among women in their twenties and 41% among women in their

thirties.

Although there are already some products focused on children and women (see the section Who’s

Innovating? below), these products are few in number, and none exist targeted at the elderly,

indicating there is a big potential gap to fill.

The implications

As competition in the sugar confectionery market heats up, it will be harder for brands simply to

compete as generalist product manufacturers. More companies, in order to find a new competitive

niche where there is less competition, are already looking at becoming specialists focused on certain

consumer groups. If 35% of consumers are receptive to trying products aimed specifically at their

demographic group, then this is a wise move.

This is especially the case for brands targeting the female market in particular, with interest in such

products being higher among women in their twenties and thirties. But, according to Mintel’s GNPD

(Global New Products Database), the offering thus far is still very scant, with very few products aimed

specifically at a female market, and most of those being aimed at children.

Women, from their teens to their thirties, would appear to be a key segment that manufacturers should

be focusing on, either with existing products, or with products adapted to suit the needs of women.

These could be low or no-fat/sugar products that help women to enjoy confectionery without fear of

putting on weight, or providing additional healthy functions, such as throat-soothing or added vitamins

or minerals – for example, with calcium or added Vitamin D to help avoid osteoporosis, especially for

older women.

The elderly should also not be ignored. China’s over-65 population is growing as a proportion of the

total population as the country ages. China’s rapidly changing demographic profile with a falling birth

rate and enhanced longevity suggests that the country’s population pyramid will increasingly trend

towards an older society in the coming decades. The NBS (National Bureau of Statistics) has indicated

that it expects (even with the ongoing liberalising of the One-Child Policy) that China’s population

number of 12-19-year-olds will drop by a significant 18.2% over 2010-20. China’s teenage population

is set to decline further still to approximately 9.1% of the total population in 2050, from 13.8% today.



FIGURE 10: THE POPULATION OF OVER-60S IN CHINA, 2000-15 2000 2005 2010 2015

As a % of the Chinese population 10.66 13.01 14.85 16.91 Number of people (million) 132.49 167.42 197.97 233.06 Number of women (million) 66.59 85.50 100.24 116.96 % women 50.26 51.07 50.64 50.18 Number of people (million):

60-64 39.35 50.70 66.37 85.64 65-69 37.18 42.72 45.89 51.77 70-74 27.90 34.48 37.37 38.04 75-79 16.06 22.01 26.70 32.30 80-84 8.25 11.84 14.09 16.71 85-89 2.76 4.25 5.79 6.74 90-94 0.87 1.16 1.33 1.36 95+ 0.13 0.25 0.42 0.50 Total 132.49 167.42 197.97 233.06

SOURCE: NATIONAL BUREAU OF STATISTICS (NBS)

According to the China National Committee on Ageing, some 200 million Chinese adults were over

age 60 as of 2013. Nearly three out of 10 Chinese people will be older than 60 by 2040, according to

predictions from the United Nations. This marks the decline in the number of economically active

people in China, in contrast to the increasing proportion of elderly dependents.

This also shows that there will be a significant potential market for sugar confectionery products that

can focus on older people, also providing functional health benefits that suit the needs of older people,

such as added minerals and vitamins to help fight off degenerative disease, added dietary fibre or

traditional Chinese medicinal ingredients used to help alleviate the problems of ageing.

Trend Application Sugar Confectionery China, December 2014


Trend Application

Trend: Sense of the Intense

Sense of the Intense is a trend identified by Mintel which suggests intense physical and sensory

experience give life, brands and products a deeper meaning.

The stat: More than a third of consumers (37%) say they are interested in trying sugar confectionery

products with innovative flavours, rising to 40% of men in their thirties.

The issue: This is a high proportion, and it indicates that many consumers are simply not excited by

the flavours available. It is possible that boredom with the available sugar confectionery products is

what is driving more consumers to consider other alternatives, such as chocolate confectionery,

leading to the slowing of the sugar confectionery market (see The Market, below).

In the past 30 years of economic reforms, China’s consumers have witnessed massive and continuing

rapid changes. Not only have the products in the shops completely changed and are being continually

renewed with new ideas, but the way they shop, the way they travel, where and how they live, and

even their cities have all completely changed. People have come to expect change and innovation.

With rapidly rising average incomes, consumers have also come to expect better products for their

money, not only better ingredients and health benefits, but also more of an experience. This is where

sugar confectionery products are still in “catch-up” mode. Manufacturers are only recently getting to

grips with offering consumers more natural ingredients and health functions in their candies. But there

has still been a lack of an “experience”. Some manufacturers, discussed below, have begun to

experiment with online retail via social media, using online competitions and promotions, but they are

only just beginning to develop the idea of there being an experience attached to their brands.

In a highly fragmented market, where consumers consider flavour, ingredients and benefits above

brand, brand loyalty is very weak. To increase loyalty, brands need to encourage consumers to identify

with them, and the only way to do that successfully is to get people excited about the product.

The idea: This is where the idea of sensory stimulation can come in to help brands differentiate from

their competitors. Offering innovative and unusual flavours of sugar confectionery could help to

satiate the expectation of the new and challenging among consumers, and deflect the idea of sugar

confectionery being boring or un-challenging. Jelly Belly of the US, which has already been selling in

China for many years and has several imitators, is a good example of offering different unusual

flavours of sweets to consumers.



Companies could produce more seasonally limited flavours, such as summer fruit assortments.

Mintel’s survey data found that 38% of consumers would like to see more candy products designed for

summer, this rising to 41% among women in their twenties. Such seasonal flavours could add repeat

points of interest throughout the year through which to engage with consumers, run online

competitions and have pop-up promotions in stores. Marketing could challenge consumers to try

something new, to rate new flavours in return for special offers, contribute to social media forums

where people can rank their favourite flavours, or even combinations of flavours.

This seasonality focus could help sugar confectionery to increase purchasing during key festive

shopping occasions. According to Mintel’s report Festive Foods – China, July 2013, while 61% of

people had bought sugar confectionery as a gift for family or friends in the previous 12 months, this

proportion rose to 73% for chocolates. Creating seasonal flavours could help sugar confectionery

products reach a much higher proportion of consumer spending thanks to creating more of a seasonal

experience and making the products more interesting as gifts.

Trend: Cool Vending

Cool Vending is a Mintel trend about how consumer expectations of what, when and where they

can buy have changed vending machines forever.

The stat: Two thirds (66%) of consumers surveyed had bought sugar confectionery on impulse in the

previous six months, and a third (32%) when prompted by seeing products displayed at a store

checkout.

The issue: Consumers may be more likely to make a deliberate purchase of sugar confectionery (93%

of surveyed consumers had made a deliberate purchase in the previous six months), but there is a great

deal of scope in capturing their attention when they are tempted to snack.

Consumers have become used to constant access and shopping without going to shops (or dealing with

service staff) thanks to the rapid and widespread growth of online retail. The convenience of vending

machines is that they don’t require people to spend time going into shops and searching for what they

are looking for – they can walk past, see something they like and buy it.

Vending machines are becoming increasingly visible in main transport hubs, shopping centres and

even in offices. According to a September 2013 article in the Want China Times, there were only

40,000 vending machines across the whole of China, much less than the reported 5 million in

operation in Japan. There is therefore still great scope to expand the vending machine delivery market

for snacks, including sugar confectionery.

The idea: One way to achieve additional market penetration is by selling through vending machines.

According to Mintel’s survey of where snack consumers bought their snacks in April 2012, 6% said

they had bought from vending machines in the past three months. In the survey for the report

Traditional Chinese Snacks – China, March 2013, it was found that 13% of people had bought snacks

from vending machines in the previous six months.



The vending machine idea is interesting because there are vending machines selling beverages or even

chocolate but seldom sugar confectionery. Through vending machines, brands can more easily reach

the busy people on the go who do not have time to always buy a snack from a shop. Vending machines

also provide the opportunity for a brand to stand out in a location where other competing brands are

not present, unlike the situation on the supermarket or hypermarket shelves. The vending machines

shown below stock both snacks and confectionery products and are situated in subway stations in

Shanghai.

In a similar vein, other potential new brand penetration opportunities also exist at petrol station

convenience stores, where hungry drivers can be attracted to buy snacks for the road as they pay for

their petrol at the pump, rather than in-store. Convenience being the key to the potential success of

selling via vending machines, developments such as an online smartphone application that allows

users to pay for a vending machine purchase without cash could also help to increase impulse sales

and raise consumer interest in a particular brand.

Trend: Help Me Help Myself

Help Me Help Myself talks about how consumers are learning new ways to nudge themselves

towards better habits and how brands could play to help.

The stat: More than a third (36%) of consumers who have bought sugar confectionery in the previous

six months would pay more for additional health benefits from the products they buy, over a quarter

(28%) of those buying chewing gum. A quarter (25%) of sugar confectionery purchasers would pay

more for low/no-sugar confectionery, rising to 30% for chewing gum.

The issue: The rapid change in the lifestyles of Chinese consumers has led to rapid changes in their

diets. In the past 30 years, people have gone from rationing on many basic foods to a situation where

they can afford to buy a wide variety of fresh produce and processed foods, both in stores for home

consumption and when eating out.

According to a study produced by the University of Washington’s Institute for Health Metrics and

Evaluation, published in the medical journal The Lancet and reported in the Wall Street Journal, China

had a rapid increase in obesity rates in the last 30 years, with 46 million Chinese adults now being

classed as obese, and a further 300 million classed as overweight. According to the study, which

researched weight trends in 188 countries, over 28% of adult men and 27% of adult women in China

are overweight or obese.



While the causes of this epidemic are complex, the increased consumption of high-fat and sugar foods,

combined with increasingly sedentary lifestyles, are key components. This poses a challenge for sugar

confectionery, which is mainly comprised of sugar. Clearly, developing more low- and no-sugar lines

is a first step to proactively becoming part of the solution, rather than the problem. But manufacturers

could also do more to engage with children and parents about portion control, daily calorific intake,

taking more exercise, etc.

Avoiding more people becoming obese also needs to focus on children’s health and diet. According to

the same study, China’s child obesity situation is “alarming”, the findings indicating that almost a

quarter (23%) of boys under the age of 20 and 14% of girls are overweight or obese, significantly

higher than in comparative high-income countries in Asia, such as Japan and South Korea.

Manufacturers can provide a better image for their products not just by using less or no sugar, adding

natural ingredients, adding vitamins, minerals or dietary fibre, but also by suggesting how often it is

appropriate for children (or adults) to eat their product, what they should avoid eating their product

with (such as soft drinks) and how much exercise they should undertake to burn off the extra

carbohydrate. This might result in less frequent sales, but by improving the functional ingredients,

manufacturers could charge more per unit, and make up for slower sales.

It would also arguably show that a brand of candy actively takes care of its consumers, and helps them

to avoid the health issues associated with poor diet and lack of exercise. By taking responsibility to

help people help themselves, brands could both differentiate themselves from their competitors, and

win a significant public relations result.

Market Size and Forecast Sugar Confectionery China, December 2014


Market Size and Forecast

Key points

Total market value growth is continuing to slow, having achieved a CAGR (Compound

annual growth rate) of only 13.7% between 2009 and 2013, compared to higher rates for

other snack markets.

Total market volume growth was even slower, at only 9.7% CAGR, indicating both

mounting competitive pressure within the market, and a shift towards more consumers

purchasing higher-priced products.

Not only is competitive pressure mounting from within the market, but it is also coming

from other competing snack market sectors, especially chocolate confectionery and salty

snacks.

These combined factors are likely to cause rationalisation and consolidation within the

market, with more innovative companies producing higher-quality products surviving at the

expense of the mass of less innovative companies with lower-quality, lower-priced products.

Value growth slow: driven by trading up

The total sugar confectionery and chewing gum market grew by 90% in value between 2010 and the

estimated value for 2014, at a CAGR of 13.7%, with a slight uptick in growth since 2012. However,

the market is seeing slowing growth, and is forecast to grow by about 53% in the period between 2014

and 2019, at a CAGR of about 9%.

FIGURE 11: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM HISTORICAL AND FORECAST MARKET VALUE, 2009-19




In volume terms, the total sugar confectionery and chewing gum market grew by 58.6% between 2010

and the estimated volume for 2014, at a CAGR of 9.7%, also with a slight uptick in growth since 2012,

but then levelling off. This indicates that not only did average unit sales values grow over the historical

period, but this trend is likely to continue over the coming years. This reflects a trading up to higher-

value products by more consumers, thanks to rising incomes and spending power – as well as stronger

demand for better-quality products. The volume market is also seeing slowing growth, and is forecast

to grow by about 42% in the period between 2014 and 2019, at a CAGR of about 7%.

Volume growth even slower: time for new innovation FIGURE 12: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM HISTORICAL AND FORECAST MARKET VOLUME, 2009-19


The slowing market growth rates and shift towards more consumers buying more higher-end products

will create challenges for competing manufacturers in what is still a highly fragmented market. The

competitive pressure will also be heightened by the growing costs of production and marketing, from

raw materials, to rising employment costs and logistics costs. The resulting squeeze on profit margins

will favour the larger companies with greater economies of scale, and it is likely that the industry will

see greater consolidation in the coming years due to the combination of these factors.

In order to remain competitive, manufacturers will need to become much more innovative. Stronger

growth has been seen in other competing sectors, such as savoury snacks, chocolate confectionery and

baked goods. As consumers have shifted their spending more towards these competitor products, sugar

confectionery and gum makers would do well to learn from the innovations that have raised interest in

those sectors.



Sugar confectionery lagging behind competing sectors

One of the main problems for the sugar confectionery market is that it is struggling to compete with

more dynamic snack alternatives, and this indicates that sugar confectionery manufacturers need to

become more innovative in developing new products that keep up with the changing tastes of

consumers. The main direct competing sector for sugar confectionery is chocolate confectionery,

which grew at nearly twice the speed of sugar confectionery total market value between 2009 and

2013.

FIGURE 13: COMPARATIVE TOTAL MARKET VALUE GROWTH FOR COMPETING SNACK FOOD OPTIONS, 2009-13 % growth, 2009-13

Sweet bakery 231.6 Chocolate confectionery 106.8 Snack bars 92.0 Biscuits (cookies & crackers) 78.5 Salty snacks 75.1 Sugar and gum confectionery 65.4 SOURCE: MINTEL MARKET SIZES

Not surprisingly, given this competition from chocolate, some new products in the sugar confectionery

market are featuring chocolate as a primary flavour. For example, Japanese brand A&J launched these

Kyoto chocolate-flavoured boiled sweets in China during the latter half of 2014. The product retails in

a 31g pack featuring a Japanese geisha design.

However, simply trying to add popular flavours, such as chocolate, in order to ride on the growth in

that market is not sufficient for the market to develop. As the market has been slowing, there has been

a shift towards consumers buying more expensive, higher-quality products. For this extra cost,

consumers are demanding more functional benefits. In order to compete with these faster-growing

sectors, sugar confectionery makers should learn to incorporate some of the successful marketing

techniques and product development trends of their competitors in other snack sectors. This will

increasingly be in the realm of providing more functional benefits, as has been the major trend in those

competing markets.

How competing sectors are innovating

Some new domestic chocolate brands have been able to capitalise on the rapid growth in online

shopping by striking a balance between product quality, price and the convenience and market

penetration of online shopping. For example, there are chocolate confectionery brands like AMOVO

(by Beijing Meiyiyang Foods Ltd) and CAKOVE (by Taicang Nike Foods Ltd) which only sell their

chocolates via popular online retailers such as Tmall and Yihaodian. According to the sales data

published on the Tmall website, AMOVO was able to achieve over RMB10 million in annual sales in

2013 through this online-only business model.



We discuss how some leading sugar confectionery brands have embraced direct online selling via

WeChat in the Who’s Innovating? section below. However, most are only recent entrants to the online

market. What online retailing helps to do is not only raise awareness of products, and allows for more

personalised consumer engagement, but it also allows for much greater penetration into the market,

reaching people when they are not in stores, and even in regions where a company’s products are not

yet distributed.

Despite being domestic brands, AMOVO and CAKOVE have been highlighting the use of natural

ingredients (eg, cocoa instead of cocoa butter substitutes) of high quality (eg, imported from Europe)

in the manufacture of their chocolate products. This ties in well with consumers placing more

importance on high-quality ingredients rather than brands. It is the quality of ingredients that sugar

confectionery consumers also want. Nearly half (48%) of those surveyed for this report agreed that

they would pay more for sugar confectionery products made with more natural ingredients. The second

most important choice factor in choosing products that consumers would pay more for was that

products contain additional health benefits, chosen by over a third (36%) of survey respondents.

Sugar confectionery products making more functional claims about nutrition and health are illustrated

below, and we are seeing an increasing number of such claims in new product launches. This makes

sense, as this is also a trend being seen in the salty snacks market, another sector growing faster than

sugar confectionery, despite being quite mature and already very large.

Within salty snacks, nuts and seeds are the biggest sector, and they have derived much of their appeal

in recent years on being a healthier alternative to other salty snacks. The healthy benefits of nuts have

been promoted by many manufacturers using overt functional claims. An example is nut brand

Cherikoff, which has launched an assorted nuts product, for which the manufacturer highlights that

nuts contain fibre, niacin, B Vitamins, folic acid, magnesium, zinc, copper, potassium, antioxidants

and Vitamin E. Nut processors also highlight ideas such as nuts helping lower cholesterol levels and

reducing the risk of coronary heart disease and myocardial infarction.

Candy containing nuts could similarly target the 39% of consumers surveyed for this report who

agreed that they prefer candy containing nuts/seeds as they are better for health than regular candies.

Playing up this healthier aspect could help sugar confectionery manufacturers to raise consumer

interest. Developing sugar confectionaries, such as nougats, that contain nuts and dried fruit could also

create opportunities, as seen in the other snacks sectors, to promote the healthy aspects of sugar

confectionery products with these (preferably “natural”) ingredients.

Market Segmentation Sugar Confectionery China, December 2014


Market Segmentation

Key points

Sugar confectionery still dominates the total market, with about 80% of total market value,

and while chewing gum had been the faster-growing sector until recently, sugar

confectionery is now growing faster.

Sugar confectionery has been growing faster thanks to more companies in that sector

developing more higher-end products, adding greater value in sales where volume sales have

been flagging, and in response to consumer demand for better-quality candies.

Within the sugar confectionery segment, it is the fruit-flavoured candies and mints sectors

where growth has been strongest thanks to continued consumer interest and greater new

product innovation, especially using natural ingredients and added functional features.

Consumer demand for low- or no-sugar chewing gums has ensured that the sector continues

to be the fastest growing in the chewing gums segment.

Overall picture

While the gum sector has enjoyed stronger growth in terms of both value and volume sales than was

the situation with sugar confectionery, average unit prices have actually grown faster for the latter

sector. In value terms, while sugar confectionery grew by 69% between 2010 and 2014, chewing gum

sales value grew by 74%. In volume terms, sugar confectionery sales grew by 46% in the same period,

while gum sales grew 57%. The result was that average sugar confectionery unit values grew by 15%

versus only 11% period price growth for chewing gum.

What this signifies is a stronger shift towards more expensive products among consumers in the sugar

confectionery sector. This further shows that the competitor in this sector needs to become even more

focused on developing higher-end products to meet the trading up demands of consumers, as their

average incomes and spending power continue to grow, especially in lower tier cities. Developing

higher-end products can also help mitigate against rising production costs and narrowing margins.

FIGURE 14: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM MARKET VALUE AND VOLUME, BY BROAD CATEGORY, 2010-14 2010 2011 2012 2013 2014 RMB bn: Sugar confectionery 45.01 50.52 57.22 66.18 75.96 Gum 10.84 12.93 14.80 16.88 18.85 Total 55.85 63.45 72.02 83.06 94.81

Tonnes (000): Sugar confectionery 1,339.16 1,456.86 1,592.88 1,792.66 1,957.31 Gum 79.76 93.22 106.39 118.24 125.41 Total 1,418.93 1,550.08 1,699.27 1,910.89 2,082.72

SOURCE: MINTEL

Sugar confectionery

The sugar confectionery sector grew by 90% between 2009 and the anticipated value for 2014, at a

CAGR of 13.7%. Yet, the future market is facing slowing growth rates. Expected forecast CAGR from

2014-19 is about 9%, with an overall period growth of about 52% in value.



FIGURE 15: TOTAL SUGAR CONFECTIONERY HISTORICAL AND FORECAST MARKET VALUE, 2009-19

SOURCE: MINTEL

Volume sales in the sugar confectionery sector grew by 58% between 2009 and the anticipated value

for 2014 (compared to 90% growth in value), at a CAGR of 9.6%. Future volume sales will also slow

down, and Mintel expects the sector CAGR in the 2014-19 period to be about 7%, with an overall

period growth of about 41% in volume.

This further indicates that average product prices will continue to rise as operating costs increase while

consumers spend more on more expensive products.

FIGURE 16: TOTAL SUGAR CONFECTIONERY HISTORICAL AND FORECAST MARKET VOLUME, 2009-19

SOURCE: MINTEL



The total sugar confectionery sector grew by 68.8% between 2010 and the estimated value for 2014.

The sectors that grew faster than the total market value were fruit-flavoured soft sugar confectionery,

which grew by 79.7% over the same period, mints (with a growth of 73.9%) and the fastest-growing

sector of functional sugar confectionery, which enjoyed an 82.3% value growth rate over the same

period. The sectors with growth below the total value market were hard candies (62.4% growth

between 2010 and 2014), other flavoured soft sugar confectionery (up by 63.5%) and other sugar

confectionery (68.5%).

The other flavoured soft and sugar confectionery candies sectors are those where consumer interest has

therefore waned most strongly. Part of this was due to people not buying milk-flavoured sweets in the

wake of the 2008 melamine in milk scandal, from which milk sweets have struggled to recover.

Consumers have shown a preference for fruit flavours and functional benefits (such as breath-

freshening from mints) as their spending power has increased. It is these relatively small but fast-

growing sectors where consumer interest is growing, and towards which manufacturers are gravitating.

Along with overall value growth, average unit values have grown most strongly for fruit soft sugar

confectionery (with average unit values growing by 22.9% between 2010 and 2014), mints (prices

growing by 22.7% in the same period) and functional sugar confectionery, where price growth was the

highest, at 30.3%. In contrast, non-fruit-flavoured soft sugar confectionery average prices only grew

by 4.6% over the same period, and hard candy prices by 5.4%.

Manufacturers focusing on the sectors where average values have gone up fastest will be those making

higher profits and becoming more competitive. As consolidation is forced upon the industry by

slowing market growth, the companies in the sectors where average unit prices have grown the least

will be those most vulnerable to going under.

FIGURE 17: TOTAL SUGAR CONFECTIONERY MARKET VALUE, BY SECTOR, 2010-14 2010 2011 2012 2013 2014 RMB bn RMB bn RMB bn RMB bn RMB bn

Fruit soft sugar confectionery 8.11 9.21 10.67 12.52 14.57 Other flavoured soft sugar confectionery 15.26 17.20 19.42 22.07 24.95 Mints 4.06 4.58 5.25 6.07 7.06 Hard 10.46 11.53 12.85 14.83 16.99 Functional sugar confectionery 2.93 3.32 3.82 4.56 5.34 Other sugar confectionery 4.19 4.68 5.22 6.12 7.06 Sugar confectionery 45.01 50.52 57.22 66.18 75.96 SOURCE: MINTEL

While volume sales have been slower than value across all sectors, the trend with value sales growth is

similar in that the same sectors (fruit soft sugar confectionery, functional sugar confectionery and

mints) are those growing faster than the overall market. What is most significant across all sectors is

that growth is slowing, owning to a natural maturing of the market, but also due to competition from

other, more dynamic snack sectors and the broader slowing of China’s economy.

This will only create further pressure for consolidation in the market, particularly in the larger sectors

of hard candies and non-fruit-flavoured confectionery. The relatively faster growth in the fruit,

functional and mints sectors will likely draw in more competitors, who will develop new products to

compete in these sectors, again adding to the competitive pressure within those sectors.

In order to survive the growing competitive pressure, companies will need to stand out from their

competitors by innovating more, and developing better-differentiated products. These will also require

more imaginative and innovative marketing and advertising, especially more proactive use of social

media and in-store promotions to build consumer rapport.



FIGURE 18: TOTAL SUGAR CONFECTIONERY MARKET VOLUME, BY SECTOR, 2010-14 2010 2011 2012 2013 2014

Tonnes (000)

Tonnes (000)

Tonnes (000)

Tonnes (000)

Tonnes (000)

Fruit soft sugar confectionery 251.46 278.47 312.36 357.56 393.19 Other flavoured soft sugar confectionery 411.62 447.45 490.73 545.67 583.56 Mints 100.59 110.85 122.57 138.80 155.02 Hard 371.43 396.69 424.20 472.57 519.51 Functional sugar confectionery 75.44 83.81 92.47 106.03 117.02 Other sugar confectionery 128.63 139.59 150.57 172.03 189.02 Sugar confectionery 1,339.16 1,456.86 1,592.88 1,792.66 1,957.31 SOURCE: MINTEL

Chewing gum

Chewing gum value sales grew in line with the sugar confectionery sector, achieving growth of 90%

between 2009 and the anticipated value for 2014, at a CAGR of 13.7%. While the future market is also

facing slowing growth rates, the chewing gum sector is expected to grow slightly faster than the sugar

confectionery sector, with a forecast CAGR from 2014-19 of about 9.6%, with an overall period

growth of about 58% in value.

This growth will be driven by a similar mixture of consumers trading up to higher-value, better-quality

products with more functional benefits, as is also the case in sugar confectionery.

FIGURE 19: TOTAL CHEWING GUM HISTORICAL AND FORECAST MARKET VALUE, 2009-19

SOURCE: MINTEL

Volume sales in the chewing gum sector grew by 67% between 2009 and the anticipated value for

2014 (compared to 90% growth in value), at a CAGR of 10.8%, faster than was the case in the sugar

confectionery sector. As with that sector, future volume sales will continue to slow down, and Mintel

forecasts the chewing gum sector will have a CAGR in the 2014-19 period of about 8%, with an

overall period growth of about 47% in volume.



FIGURE 20: TOTAL CHEWING GUM HISTORICAL AND FORECAST MARKET VOLUME, 2009-19

SOURCE: MINTEL

The real star sector within the chewing gum segment is sugar-free, the value of which has almost

doubled between 2010 and the estimated value for 2014 (rising by almost 95%). This sector has

enjoyed very fast annual growth rates, as high as 25% in 2011, slowing to 13% in 2014. This compares

with regular sugar chewing gum value sales, which declined by about 4% in 2011, with sales

remaining flat since then, due to consumers making the switch to sugar-free. The strong growth in

sugar-free gum also stands in contrast with bubble gum, which only managed to grow by about 18%

over the 2010-14 period, with annual growth rates falling from 4.5% in 2011 to below 4% in 2014.

FIGURE 21: TOTAL CHEWING GUM MARKET VALUE, BY SECTOR, 2010-14 2010 2011 2012 2013 2014

RMB bn RMB bn RMB bn RMB bn RMB bn

Regular 1.77 1.70 1.68 1.68 1.70 Sugar-free 8.40 10.53 12.38 14.43 16.36 Bubble 0.67 0.70 0.73 0.76 0.79 Total 10.84 12.93 14.80 16.88 18.85

SOURCE: MINTEL

In volume terms, while the total segment grew by 57% between 2010 and the estimated figure for

2014, most of that growth came from the sugar-free sector, which saw volume sales increase by 87.4%

over the period. This was much faster than the 12.5% growth seen for bubble gum and the 22% decline

in volume sales of regular sugar chewing gum.

The market growth trends reflect consumer preferences for low- or no-sugar gum. The survey

conducted for this report found that the factors consumers were most willing to pay more for when

buying gum confectionery included significant interest in low-sugar and natural ingredients.



Long-lasting flavour was the most highly rated choice factor, with 39% of respondents saying they

would pay more for gum products with sustained flavour. This was followed by 30% saying they

would pay more for low/no-sugar gum, and 28% for products containing additional health benefits,

such as being vitamin-fortified or throat-soothing. A similar proportion of survey respondents (27%)

stated they would pay more for gum made using natural ingredients (such as fruit juice or natural

sweeteners).

This indicates that growth will certainly continue to shift towards the sugar-free sector, and that

competitors in that sector will increasingly need to differentiate themselves by adopting more

functional benefits, such as breath-freshening, vitamin fortification and other health benefits, or a

combination of these.

FIGURE 22: TOTAL CHEWING GUM MARKET VOLUME, BY SECTOR, 2010-14 2010 2011 2012 2013 2014

Tonnes (000) Tonnes (000) Tonnes (000) Tonnes (000) Tonnes (000)

Regular 17.73 16.51 15.56 14.73 13.82 Sugar-free 55.80 70.33 84.26 96.75 104.58 Bubble 6.23 6.38 6.57 6.76 7.01 Total 79.76 93.22 106.39 118.24 125.41

SOURCE: MINTEL

Market Share Sugar Confectionery China, December 2014


Market Share

Key points

While Mars Inc. has a strong overall value market share, the market remains highly

fragmented, and this is creating a drag on brand share development, with even Mars seeing

its value share decline in 2013, compared with 2012.

The situation in terms of volume sales shares is even worse, with fragmentation being such

that 68% of the total market is attributed to the many “other” small manufacturers.

Consolidation in the market is inevitable, given slowing market growth, and the companies

best positioned to survive that will be those innovating new, higher-end products and

building product and brand portfolios across several segments.

It is also likely that the companies that embrace and utilise online retailing will be those best

positioned to survive the mounting competition in the coming years.

Value market fragmentation impedes strong brand penetration FIGURE 23: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM MARKET VALUE MARKET SHARES OF LEADING COMPANIES, 2012 AND 2013

SOURCE: MINTEL

The sugar confectionery market remains highly fragmented, and this creates problems for companies

to achieve more resounding national market shares. Lack of strong market shares means that those

shares are vulnerable to shifts in the market, and as the Chinese consumer market continues to grow

rapidly, and competition for their interest rises, not only within the sugar confectionery market, but

also from competing markets such as chocolate confectionery and salty snacks, that vulnerability is

exacerbated by fragmentation. This is even the case for market leaders, such as Nestlé SA, which saw

its market share eroded in 2013, compared with 2012.



A good example of the effects of vulnerability is in the chewing gum sector. Both Lotte and Orion saw

significant declines in ex-factory sales in 2013. Lotte suffered a 32.5% decline in sales, and Orion a

9% decline, leading to drops in market share. Without being able to establish stronger market shares, it

is difficult for companies to build any loyalty among consumers, and sustain ongoing marketing

campaigns to raise consumption among existing customers and build reputation that can lead to

winning new customers.

Being tied to one specific product group, such as chewing gum, has also proven to be a hindrance

rather than a help. There is logic in the idea that focusing on one core segment, and doing that well,

should help to build a strong business. But this only works when significant market share can be built,

and with it a strong brand presence that can attract and keep consumers. In China, the leading sugar

confectionery companies are those with more diverse product offerings, spread over a wider spectrum

of different segments. This creates more flexibility to adapt to weakening positions in one segment,

and to build upon growth in stronger ones, reducing overall business risk.

Because of the fragmented nature of the market, the establishment of significant, truly national (or

significant regional) brands is still a few years away. In the meantime, companies need to be able to

build portfolios of relatively strong regional brands that have the potential to grow into more

substantial brands, given the right marketing. These can, of course, be developed in-house. However,

effort can be saved, and additional market share and revenue stream accrued, by acquiring already

established, relatively successful brands.

An example of this kind of brand accrual came in December 2013, when US predominantly-chocolate

confectionery company Hershey’s bought an 80% stake in Shanghai Jinsihou Food, a company for

which sales of non-chocolate confectionery represent 75% of revenues, mainly in tier two and tier

three cities in Central and Eastern China among higher-income consumers. Based on the demographics

alone, this seems like a smart move, given that average income growth is rising faster in the lower tier

cities, and it is in the tier two and three cities where the middle income groups are also emerging

fastest because of this continued gain in average income.

As the market continues to grow slowly, and competition from other snack options impinges on

growth potential for sugar confectionery, it is highly likely that such merger and acquisition activity

will increase. The companies most likely to remain buffered from the rising competition in the sugar

confectionery market will be those with significant business in other markets, such as chocolate

confectionery and salty snacks. Such competitors include Mars Inc., Nestlé, Want Want and Hershey.

Those confined to the sugar confectionery market, such as Perfetti and many of the domestic players,

will find themselves more vulnerable, especially those confined to a specific narrow sector within the

market, such as the chewing gum companies Orion and Lotte.



Volume market even more fragmented FIGURE 24: TOTAL SUGAR CONFECTIONERY AND CHEWING GUM MARKET VOLUME MARKET SHARES OF LEADING COMPANIES, 2012 AND 2013

SOURCE: MINTEL

If the sugar confectionery market share by value were not fragmented enough, the volume market is

even more so. The difference between the two shows how important it has become for manufacturers

to focus on higher-end, better-quality, relatively higher-priced products. As the market slows, this

highly fragmented market will see the demise of many smaller-scale, lower-quality, lower-priced

brands and manufacturers, as more consumers across the country (including in lower tier cities) trade

up to better-quality products.

This will afford some release on the competitive pressure in the market, but fragmentation will remain

a feature for some years to come. This is why building strong portfolios of brands with existing

consumer traction and the potential to grow into more regionally or nationally significant brands is so

important. Without these, the slow growth in the market will leave no room for business growth as

competition becomes more head-to-head.

As well as building brand traction, it will also be the companies that can build economies of scale that

will survive the rationalisation process. Reducing costs will become as important as increasing sales.

This is where getting into online retailing will be important, as well as focusing more on higher-value

products. Harnessing the potential of online retail channels to reach more consumers, across more of

China, at lower costs and with the added bonus of accruing consumer data that can help in proactive

social media and other online marketing, can help with improving profitability, increase revenues and

raise economies of scale. It is likely that the companies that are best able to survive the rationalisation

of the sugar confectionery market will be those that embrace and innovate in online marketing, a

process that has only really just begun.

Who’s Innovating? Sugar Confectionery China, December 2014


Who’s Innovating?

Key points

The children’s market continues to be a key segment both for competitive development and

for new product innovation, with more new products now specifically targeting children.

Women are a demographic group that have been under-served by new product development,

and targeting women is likely to be an area where more companies will focus in the coming

years in order to build sales.

Use of natural ingredients and added functional ingredients is increasing, and this is

becoming an area where more competitors can raise the added value of their products.

Sugar confectionery: All eyes on children

Generally speaking the incidence and proportion of consumers buying different types of sugar

confectionery declines the older the children in the household are, as seen in the data results for the

survey conducted for this report. This shows that the key consumers are children (or the parents of

children) who are about 12 years old and younger.

FIGURE 25: CONSUMPTION OF CONFECTIONERY VS SNACK, BY AGE OF CHILDREN IN HOUSEHOLD, SEPTEMBER 2014


Eating more All Households with

children aged 0-4 5-9 10-15 16-18

Base: internet users aged 20-49 3,000 808 712 590 221 % % % % %

Chewing gum 31 36 33 30 19 Bubble gum 8 11 10 7 7 Lollipop 9 15 10 6 6 Hard candy (including mints) 13 16 15 12 15 Soft candy (eg pastilles, toffee, pressed candy) 15 19 15 16 11 Crisp candy (eg almond, sesame crisp candy) 22 27 27 23 28 Nougat (eg milk, cranberry nougats) 21 27 27 20 19 Functional candy (eg VC candy, TCM throat candy) 23 28 29 25 23 SOURCE: QQSURVEY/MINTEL

This consumer trend is reflected in the relative significance within new product launches, captured by

Mintel’s GNPD, of products making the claim of being aimed at, or suitable for, children aged 5-12.



FIGURE 26: TOP 10 CLAIMS FOR SUGAR CONFECTIONERY IN CHINA, 2011-14 2011 2012 2013 2014 (Jan-Jun)

% % % %

Children (5-12) 9.7 9.0 11.1 11.5 Low/no/reduced sugar 7.9 12.1 7.3 6.8 No additives/preservatives 7.2 5.5 7.3 5.3 Other (functional) 3.1 7.4 5.7 4.1 Halal 3.8 2.0 5.0 4.4 Vitamin/mineral-fortified 3.6 3.7 3.2 2.6 Female 2.1 2.9 1.4 3.8 Breath-freshening 1.5 1.8 3.2 2.1 Convenient packaging 1.5 1.4 1.4 0.6 Low/no/reduced fat 1.0 0.4 2.5 0.9 SOURCE: MINTEL GNPD

Many companies are now combining the targeting of younger children with added benefits, such as

healthier or more natural ingredients.



For example, this Mei Zi Zi brand fruit juice soft candy claims to contain added Vitamin C. The product retails in an 80g pack, 20g of which is additional for free, and features the popular

cartoon character SpongeBob SquarePants.

The product therefore combines the children (5-12), and vitamin/mineral-fortified positioning claims.

This Qifeng brand fruit gummy candy with dietary fibre takes the healthy ingredients in another direction. This product retails in a 238g pack featuring a popular Doraemon cartoon character. As well as marketing the product at children aged 5-12, the product also claims to be high in or have added fibre, and to contain no

additives or preservatives. This aims to attract the children through the flavours and cartoon character association, as well

as parents given the nutritional benefits.

This Guanwo brand goji berry product is described as gummy candy made with selected goji berries. The goji berry cakes

claim to be processed according to a modern technique. According to the manufacturer, goji berry nourishes kidneys and liver, strengthens eyesight and calms the mind. This product is

free from colourings and preservatives and retails in a 158g pack featuring a WeChat link. Again, this product is attempting to win

over parents by providing additional nutritional benefits.

SOURCE: MINTEL GNPD

Target the women

Mintel’s consumer survey found that while over a third of consumers (35%) agreed that they would

like to try more sugar confectionery products that were designed for a specific consumer group, this

agreement rate rose to 41% among women aged in their thirties, and 42% of women in their twenties.

However, there are as yet very few sugar confectionery products targeted specifically at women,

indicating there is a large amount of potential for more products to target female consumers. For its

part, in 2013, leading company Yake introduced a personalised jelly candy aimed specifically at

women. However, of all the many sugar confectionery products launched in China in recent years,

Mintel’s GNPD has identified very few.



One example is this Hai Wang assort fruit-flavoured calcium plus Vitamin C Candy. The pack comprises of strawberry, apple, blueberry, orange, lemon

and cantaloupe flavours. According to the manufacturer, calcium helps strengthen bones and teeth. This product retails in a 240g pack. Also available is a fruit jelly candy with collagen for women, which contains

added collagen and is designed to help maintain skin texture.

This Haimazhuangyuan candy is specifically targeted at postnatal women, and has been QS-certified. This product retails in a 320g pack. This

product therefore focuses on an even more niche segment, that being women who have recently given birth.

However, other candies targeted at female consumers tend to be more child-focused. This Yi Mei Jian nutritional soft candy for children is available

in a tropical fruit flavour, and retails in a 218g pack. Also available in this range is a nutritional soft candy for women, which also comes in a tropical

fruit flavour and is distributed via pharmacies.

Made by Sanrio, this Hello Kitty Green Tea Flavoured Gummy is available in a 60g can featuring Hello Kitty cartoon characters. The product is aimed at children (aged 5-12), and women. Most products specifically targeting a female market are also targeting children. There are few products targeting

adult or teenage women, and this is a potential market for new development, and product differentiation.

SOURCE: MINTEL GNPD

Gum confectionery innovation

Reflecting the strong shift towards sugar-free gum sales in the total segment, the proportion of new

products being launched that claim to be low, no or reduced sugar products has significantly increased

in 2014, with the first half of the year already seeing 75% of new products making this claim, leaping

up from about half of all new products in recent years. This means that this claim is no longer such a

standout differentiating claim, and companies are having to focus more on other new claims.



Breath-freshening claims also significantly jumped in the first half of 2014, already reaching 15% of

all new products in that period, up from about 10% in the previous two whole years, and only 5% in

2011. The same proportion of new products were also claiming to be suitable for children aged 5-12,

up from 13% in 2012. However, one of the most significant new claim trends was in the realm of

environmentally friendly packaging, rising to 15% of all new products surveyed in first half of 2014, a

significant jump from only 3% of products making this claim in the previous two whole years, and

none prior to that.

FIGURE 27: TOP 10 CLAIMS FOR GUM CONFECTIONERY IN CHINA, 2011-14

2011 2012 2013 2014 (Jan-Jun)

% % % %

Low/no/reduced sugar 58 55 46 75 Breath-freshening 5 10 9 15 Children (5-12) - 13 6 15 Vitamin/mineral-fortified 16 3 3 5 Convenient packaging 5 - 9 5 Ethical – Environmentally friendly package

- 3 3 15

On-the-go 5 - 9 - Social media - - 6 5 Added calcium 5 3 - 5 Female - - 3 5 SOURCE: MINTEL GNPD

This all shows that chewing gum manufacturers have already begun to diversify their products, based

on functional claims, in order to differentiate themselves in the market and meet the diversifying needs

of consumers.



In terms of products claiming to be suitable for, or aimed at, children aged 5-12, this NBA Xylitol chewing gum was made available in a

newly designed 30g pack containing 15 pieces in April 2014. This gum features a special NBA sports formula and comes with added with

xylitol and vitamins. This product is available in pineapple and orange flavours, along with classic mint, passion fruit and mango and green tea

and mint. Added vitamins will attract parents who feel their children need added nutrition. The association with basketball, one of the most

popular sports in China, will both attract many children, and have a positive association with (and assumed endorsement of) the fitness of

professional athletes.

The recent emergence of environmentally friendly packaging as a new product claim is also a way of adding new interest to the product

without the need to change the actual product formula. This Meiji Xylish lemon and mint-flavoured sugar-free chewing gum with xylitol has been

repackaged, and is now available in a newly designed 50g pack that comes with environmentally friendly wrapping paper for disposing of the

gum. This product also sells in crystal mint flavour with a breath-freshening functional claim. Such an ethical claim can work well with

consumers who are increasingly aware of environmental problems, and who feel they want to do something positive to reduce their

environmental impact.

Social media is another new claim to have surfaced on packaging in the past year and a half, and although still found only on a small proportion of new product packaging, this represents a new way for manufacturers

to add a new feature without necessarily having to change product formulation. This Stride shuimi watermelon-flavoured sugar-free

chewing gum has been repackaged, and is now available in a 49g pack containing 35 units and featuring its WeChat link and a promotion to win

prizes. This can be an effective way to engage with consumers, and build marketing databases of existing customers to help build purchase

frequency.

SOURCE: MINTEL GNPD

Companies and Brands Sugar Confectionery China, December 2014


Companies and Brands

Mars, Inc.

URL: http://www.mars.com

Established in 1911 and initially entered China in 1930s by marketing Wrigley chewing gum.

Now, Mars has seven factories and three innovation centres in China. Mars China business has five

main units covering Wrigley chewing gum and sugar confectionery, Mars Chocolate, Mars Pet care,

Royal Canin Pet food and Mars Drinks.

In 1989, Wrigley Confectionery (China) Co., Ltd. was established in Guangzhou. Wrigley’s

diversified brand portfolio covers: Doublemint (chewing gum and mint sweets), Extra (chewing gum),

5 (chewing gum), Juicy Fruit (chewing gum), Spearmint (chewing gum), Cool (chewing gum), Dada

(bubble gum), Zhenzhibang (lollipop), Sugus (soft sweets) and Skittles (sugar confectionery).

In November 2012, Wrigley Yonghe factory came into operation, this being Wrigley’s largest, most

advanced and sustainable gum and confectionery manufacturing facility. With the Yonghe factory,

Wrigley’s capacity in China will increase by 60% by 2016. Also in November 2012, Wrigley launched

“5” sugar-free chewing gum in China. The product series targets the young group with a black package

showing youthful personality.

Recent campaigns and promotions include the “5” brand chewing gum initiative “Great adventure

game package” (大冒险游戏包) with “Truth or Dare” words on each piece of gum package to

motivate spirits of bravery and challenge the younger (post-1990s) generation to be more adventurous.

Wrigley invited Li Zhiting (a young male Chinese actor, and recognised as an artist with a spirit of

adventure) to endorse the promotion. In early April 2014, Li Zhiting started his “brave and

challenging” topic on Weibo, with topics such as “I dare, do you dare?”

In October 2014, the Extra chewing gum brand started promoting its new visual brand image to

enhance Extra’s oral care professional image of the brand.

The Extra chewing gum brand’s new oral care image

The Doublemint and 5 brands both opened their own official WeChat accounts in the middle of 2014.

The Doublemint WeChat account introduces offline store activities, and is a good example of online-

to-offline consumer engagement.



Doublemint WeChat account

Nestlé

URL: http://www.nestle.com

Nestlé started business in Mainland China with the establishment of a sales centre in Shanghai in 1908.

According to Nestlé’s most recent financial report, in Q1-Q3 2014, the company achieved an organic

revenue growth rate of 4.5% globally, within which, developed markets grew by only 0.5% while

emerging markets (including China) grew 9.5%. By division, its sugar confectionery business grew

4.1% year on year.

Nestlé’s diversified product portfolio covers dairy and nutrition products, drinks, cooking products,

coffee, chocolate and sugar confectionery, ice cream, pet food as well as Nestlé professional catering

and beverage solution.

In China, Nestlé has partnered with a number of companies like Yinlu, Hsu Fu Chi, Taitai Le, Wyeth

Nutrition and etc., and operates 33 factories in Greater China. The two sugar confectionery brands

under Nestlé are Polo (宝路) and Frutips (趣满果). Polo is mint sweets and Frutips is fruit soft sweets.

Apart from developing own brands, Nestlé extended its sugar confectionery business by acquiring Hsu

Fu Chi in 2011.

In June 2014, Nestlé’s third research and development centre based in Dongwan went into operation,

this being its first sugar confectionery research and development centre in China. The centre indicates

Nestlé’s support for the development of its Hsu Fu Chi acquisition, and its aim to build consumers’

trust in its brands.

Frutips opened its own official WeChat account in May 2014, and the account offers online purchasing

channels and some interesting topics about the brand, promoting a “having fun” brand positioning.



Frutips WeChat account

Fujian Yake Food Co., Ltd.

URL: http://www.yakefood.com

Yake was founded in 1993 in Jinjiang, Fujian. Yake’s business covers confectionery, jelly and bakery

products. Yake sugar confectionery brand portfolio includes Yake V9 vitamin sweets (authorised

healthcare food by State Food and Drug Administration, also known as the first vitamin sweets in

China), Yake Yiya (雅客益牙) chewing gum, Yake VQ fruit soft sweets, Nongdian (浓点) hard

sweets and Youmiao (悠妙) milk soft sweets. Yake also offers large family, gift and wedding candy

packages.

Celebrity Zhou Xun (a famous Chinese actress) has endorsed Yake V9 vitamin sweets since 2003. In

August 2014, Yake invited TFBOYS (a popular musical group in Asia with three young boys, giving

consumers the image of positive energy) as the brand spokesmen, and launched the new product series

Yake Bower chocolate for them to endorse.

Apart from the mainstream online and offline sales channels like supermarkets, yhd.com, and

tmall.com, Yake also launches products through Weidian, which is a WeChat e-commerce platform.



Yake’s WeChat e-commerce platform

Perfetti Van Melle Confectionery Co., Ltd.

URL: http://www.perfettivanmelle.com

Perfetti Van Melle is one of the world’s largest confectionery and chewing gum manufacturers and

distributors by selling products in over 150 countries. Perfetti’s sales break down as 64% sugar

confectionery and 36% chewing gum, with Asia-Pacific now representing 39% of global sales, which

reached €2,487 million in 2013.

Perfetti Van Melle Confectionery (China) Co., Ltd. is a merged corporation by Perfetti Van Melle

Confectionery Company based in Shanghai and Shenzhen.

The Group’s brands launched in China include Alpenliebe (阿尔卑斯), Mentos (曼妥思), Big Babol

(比巴卜), Fruittella (浮特拉), Chupa Chups (珍宝珠), covering hard candies, mint sweets, bubble

gum, fruit soft sweets and lollipops.

Big Babol was launched as a limited edition promotion in November 2014, in association with Aobi

Island, which is a virtual reality web game focused on children in China aged 6-14.

Beijing Kangbeier Food Co., Ltd.

URL: http://www.madajiefood.com

Kangbeier was founded in Beijing in 1991. Its business covers sugar confectionery, chocolate, jelly,

Beijing specialities and snack foods. Kangbeier launched Maikezi cereal chocolate product series (麦

可滋系列谷类巧克力产品) in 2012, and Maikezi oat chocolate (麦可滋燕麦巧克力) became star

product in 2013. The company’s main brand is Sister Ma.

In August 2014, Kangbeier introduced new star product – “To my love” chocolate (致爱巧克力), and

invited Zhao Liying (a Chinese actress) to endorse the product.

Apart from the mainstream online and offline sales channels like supermarkets, yhd.com, and

Tmall.com, Kangbeier also launches products through Weidian, which is a WeChat e-commerce

platform. Kangbeier promotes the channel through its official Weibo account.



Kangbeier’s Sister Ma WeChat e-commerce platform

Want Want China Holdings Limited

URL: http://www.want-want.com

Started in Taiwan, Want Want entered Mainland China in 1992. The company’s main business

includes rice crackers, dairy and beverages, snack foods (including: candy, baby-melts, jelly, nuts,

biscuits and puffed snacks) and alcoholic drinks.

In Want Want’s first half financial report for 2014, the company reported that 2014 half-year revenues

had increased 5.6% compared to the same period in 2013, which is well down on the 2013 group year-

on-year growth rate of 13.7% compared to 2012. During the first half of 2014, snack foods accounted

for 30.1% of total revenue.

Want Want’s sugar confectionery business has one main brand called Wangzai (旺仔) and one sub-

brand called Hey New (黑妞), and the product portfolio covers QQ gummies, milk chewy, lollipops,

tube sweets and fruit juice gummies. Want Want also offers Chinese New Year Candy Box.

According to the 2013 annual report, Want Want is targeting its sugar confectionery at the wedding

candy market, owing to the brand advantage of red packaging. In the report, the company management

states that “We will make an effort to penetrate in the wedding banquet and celebration market by

leveraging on our unique brand advantage and ‘China red’ packaging.”

The Consumer – Trends in Consumption of Confectionery Sugar Confectionery and Snacks China, December 2014


The Consumer – Trends in Consumption of

Confectionery and Snacks

Key points

One of the most pressing problems for the sugar confectionery market is competition from

other snack foods for the attention and spending of consumers.

Compared to chocolate and savoury snacks, sugar and gum overall see a lower percentage of

people who have increased consumption over the past six months and a higher percentage

who have reduced consumption.

To mitigate competition from other snacking categories, two key areas where consumers

would pay more for sugar confectionery are natural ingredients and added functional health

benefits, areas where the more innovative companies are already making headway.

Younger consumers, especially those in their twenties and thirties, are those most likely to

seek out functional candies, especially among women.

Savoury snacks are preferred over sweet confectioneries FIGURE 28: CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014



8

9

13

15

20

21

22

23

31

31

33

35

28

33

42

39

45

43

43

43

46

47

46

48

34

34

33

31

25

25

25

21

17

18

16

14

29

24

13

15

9

11

10

13

7

4

6

3

0 10 20 30 40 50 60 70 80 90 100

Bubble gum

Lollipop

Hard candy (including mints)

Soft candy (eg pastilles, toffee, pressed candy)


Nougat (eg milk, cranberry nougats)

Crisp candy (eg almond, sesame crisp candy)

Functional candy (eg VC candy, TCM throat candy)

Chewing gum

Chocolate confectionery

Meat/seafood snacks*


%

Eating more About the same Eating less Haven’t eaten this in the last 6 month

* eg jerky, pork scratching, dried fish slices SOURCE: QQSURVEY/MINTEL



There is a major problem facing the sugar confectionery market in China. Compared to other snack

options, it is losing consumers. Not only is the total sugar confectionery market growing more slowly

than competitor sectors, such as chocolate confectionery and savoury snacks, but according to Mintel’s

survey data, consumers are switching off from eating sugar confectionery and increasingly consuming

other products.

Looking at the repertoire analysis of consumers’ snacking habits, eating sugar confectionery is very

low (almost negligible) among those with a narrower range of product consumption. The largest group

(with 57% of all consumers surveyed) is people who eat 12 types of snack products, but even among

this group sugar confectionery consumption is still significantly lower than for other snacks, apart

from chewing gum.

This shows sugar confectionery to be the last choice of snack for most people. The issue to resolve is

how to create products that can attract people so as to make sugar confectionery more of a conscious,

positive snacking choice.

FIGURE 29: CONSUMPTION OF CONFECTIONERY VS SNACK, BY REPERTOIRE OF CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014 Eating more All Eating 1-7

types Eating 8-9

types Eating 10

types Eating 11

types Eating

12 types

Base: internet users aged 20-49 3,000 313 309 267 383 1,712 % % % % % %

Chewing gum 31 9 15 21 39 37 Bubble gum 8 1 2 2 5 12 Lollipop 9 - 2 2 6 13 Hard candy 13 1 3 6 9 19 Soft candy 15 2 5 9 13 21 Crisp candy 22 4 7 15 22 30 Nougat 21 4 9 16 17 28 Functional candy 23 6 9 18 25 30 Savoury snacks 35 12 24 39 39 41 Meat/seafood snacks 33 7 21 29 36 40 Preserved fruit 20 2 9 16 19 27 Chocolate confectionery 31 10 20 27 28 38 SOURCE: QQSURVEY/MINTEL

For the industry, turning this situation around means finding out why consumers don’t buy sugar

confectionery products, and what it is about competing products that they do like that makes them

prefer these to sugar confectionery. That more consumers were willing to pay more for sugar

confectionery made from natural ingredients and containing additional health benefits indicates that

they would otherwise not choose sugar confectionery products due to a lack of these features – and

that other snack products offer more incentive to buy by providing more of these features.

It is easy to see why sugar confectionery would not be immediately associated with health benefits

among consumers, being made principally of sugar, and therefore hardly beneficial to people’s diet,

weight control or dental hygiene. If sugar confectionery products can offer more nutritional benefits,

rather than just sweetness and flavour, this could help to attract more consumers. After all, 39% of

consumers surveyed for this report stated that they prefer candy containing nuts/seeds (eg peanut milk

nougat, almond crisp candy) as they are better for health than regular candies.



More than half (52%) stated that they would be willing to pay more for candy/gum with no additives

(eg artificial sweetener, colourants, preservatives). As with the health image of sugar confectionery, it

is likely that many consumers are put off consuming these products because they perceive them to use

artificial flavourings and other additives. Using natural ingredients might cost more, but if consumers

are willing to pay more for these, this provides an opportunity for sweet makers not just to attract more

consumers, but also to sell them more expensive, and potentially higher-margin, products, such as

candies including real fruit juices or preserved fruit pieces.

FIGURE 30: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sugar confectionery %

Made from natural ingredients (eg fruit juice, natural sweetener) 48 Contains additional health benefits (eg vitamin-fortified, throat-soothing) 36 Available in a variety pack (eg I can choose the flavours I like) 35

Low calories 29 Low/no sugar 25 Convenient packaging (eg resealable pack, small portable pack) 25 Appealing packaging design (eg cartoon packaging, premium packaging) 24 Unique product shape (eg animal-shaped candy, multi-colour candies) 22 Imported products 17 SOURCE: QQSURVEY/MINTEL

Functional candy is the most preferred among other sugar confectioneries

Among the sugar confectionaries, functional products are those with the highest incidence of people

eating more and the lowest incidence of people eating less, among all the sugar confectionery

products, apart from chewing gum. These are products that offer medicated, breath-freshening or

energy-giving functions.

Some 93% of all people surveyed had made a deliberate purchase. Of these, 60% (nearly two thirds)

had done so to freshen their breath or soothe their throat. Sating hunger, or to get an energy boost, was

the lowest-ranking function, but was still cited by nearly a quarter (24%) of respondents.

FIGURE 31: REASON FOR CONFECTIONERY PURCHASE, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 All %

Deliberate purchase (net) 93

To freshen my breath/soothe my throat 60 For sharing when socialising with my family members/friends 41 To stock up 38 When I fancy something sweet 37 For special events (eg birthday, new year) 29 As a gift (eg for family, friends, business partners) 27 To sate hunger/get an energy boost 24 SOURCE: QQSURVEY/MINTEL

Purchasing of candy for gifting or socialising are significant reasons for buying them, beyond for

personal consumption. This indicates that the sugar confectionery market has two main consumer

roles; that of a gift or treat for special occasions and social events, which is more of a group (non-

personal) purchase, and personal purchasing for own consumption.



In terms of the latter role, it is functionality that stands out as the key reason to buy. This would

indicate that products aimed at the own-use consumer segment should focus more on the functionality

of their products than those aimed at the gifting/socialising market.

What is also clear from Mintel’s survey data is that it is younger consumers (aged 20-39) who are

those most likely to have consumed more functional candies in the previous six months. This was

significantly more the case among women, especially those in their twenties.

If candy makers are able to provide more products with such functional benefit features, it is therefore

younger people (and especially younger women) who would be the most open to eating more of these

products. Price would also not be an inhibitor, with people being more likely to pay more for

beneficial functions, as shown above, and people with household incomes of RMB12,000 per month

or over being significantly more likely to have eaten more functional candies (28%) than the average

for all people who had eaten them (23%).

FIGURE 32: CONSUMERS EATING MORE FUNCTIONAL CANDY, BY GENDER AND AGE, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Eating more Functional candy (eg VC candy, TCM throat candy) %

All 23 Gender:

Male 22 Female 24 Age:

20-29 25 30-39 25 40-49 20 Gender and age group:

Male, 20-29 24 Male, 30-39 24 Male, 40-49 19 Female, 20-29 27 Female, 30-39 25 Female, 40-49 22 SOURCE: QQSURVEY/MINTEL

The Consumer – Reason for Confectionery Purchase Sugar Confectionery China, December 2014


The Consumer – Reason for Confectionery Purchase

Key points

While most (93%) consumers make deliberate purchases of sugar confectionery, there is still

a significant two thirds (66%) who also buy on impulse.

One of the most significant deliberate purchase reasons is to freshen breath, which explains

why the mints sector continues to be one of the fastest growing.

Impulse purchasing tends to be highest among young adults and people with younger

children in their household, indicating a strong level of “pester power” purchasing among

younger parents.

Most buy on purpose rather than impulsively FIGURE 33: REASON FOR CONFECTIONERY PURCHASE, SEPTEMBER 2014






Functionality is the key lure for consumers to buy sugar candy, as discussed in the previous section,

and this is further indicative that most consumers make a deliberate purchase decision, rather than an

impulse one, by a ratio of almost three to two. This means the majority of consumers need a deliberate

reason to buy, and that manufacturers need to provide that reason in their marketing.

Among those reasons, most show an above-average rating among those consumers earning a monthly

household income of RMB12,000 or more, with the exception of “to freshen my breath/soothe my

throat”, which actually ranks as more significant among people in the RMB5,000-7,999 income

bracket. This would indicate that mass-market products would do well to focus on these functions in

targeting lower-income consumers, including those younger people more likely to seek out

functionality, as demonstrated in the preceding section.

This lower income group is also more likely to purchase as a stock-up product, presumably when on

special offer.

FIGURE 34: REASON FOR CONFECTIONERY PURCHASE, BY MONTHLY HOUSEHOLD INCOME GROUP, SEPTEMBER 2014 Monthly household income

All RMB4,999 or below

RMB5,000-7,999

RMB8,000-9,999

RMB10,000-11,999

RMB12,000 or above

Base: internet users aged 20-49

3,000 201 684 337 364 1414

% % % % % %

Deliberate purchase (net) 93 87 93 91 96 94 To freshen my breath/soothe my throat

60 54 64 62 62 57

For sharing when socialising with my family members/friends

41 29 39 39 38 45

To stock up 38 30 39 36 34 39 When I fancy something sweet

37 33 36 34 37 39

For special events 29 18 24 30 25 33 As a gift 27 15 23 25 25 32 To fill hunger/get an energy boost

24 22 22 20 18 27


As well as the functionality of personal health or energy, another key “function” of sugar

confectionery is that of being a focus for sharing occasions and during family or social events. This is

especially the case for married respondents. Married couples are significantly more likely to buy sugar

confectionery for such social and celebratory purposes, with opportunities for gift variety packs aimed

at this eating occasion.

This function extends to the act of gifting. Married couples are more likely than singletons to buy

candy as a gift, presumably often for such social gatherings and celebrations.

This shows that candy fits into two key functional roles for deliberate purchase: the personal and the

social functions. They are quite different in their demographic target groups, and need to be marketed

in different ways. The personal functionality needs to be easy to reach for consumers, with such

functional products being located where people go often, such as convenience stores. The gifting

function will be more of a planned purchase along with other gifting and celebratory purchasing, and

therefore better suited to supermarkets and hypermarkets.



FIGURE 35: REASON FOR CONFECTIONERY PURCHASE, BY MARITAL STATUS, SEPTEMBER 2014 Marital status All Single Married

Base: internet users aged 20-49 3,000 615 2,350 % % %

Deliberate purchase (net) 93 93 94 To freshen my breath/soothe my throat 60 60 60 For sharing when socialising with my family members/friends 41 35 43 To stock up some 38 40 37 When I fancy something sweet 37 40 36 For special events (eg birthday, new year) 29 21 31 As a gift (eg for family, friends, business partners) 27 21 28 SOURCE: QQSURVEY/MINTEL

Inter-city differences

However, marketing cannot rely on such simple broad categories, due to the strong variation in

deliberate purchasing reasons seen across different cities. In Jinan, for instance, Mintel sees

particularly strong deliberate purchasing for both personal functional and social functional reasons.

This shows that there could be an opportunity for sugar confectionery marketers to combine the

personal and social functions to target the maximum potential consumers. Gift packs of candies that

have a functional, health-promoting aspect could be particularly popular.

However, growing the potential market also needs the expansion of more regular, non-occasional

purchasing. Sugar candies that have a daily beneficial function can help to build that opportunity to

increase daily, purposeful snacking consumption, which is where sugar confectionery struggles against

other snacking options.

FIGURE 36: REASON FOR CONFECTIONERY PURCHASE, BY CITY, SEPTEMBER 2014

All

Sh

an

gh

ai

Beijin

g

Gu

an

gzh

ou

Ch

en

gd

u

Jin

an

Lin

yi

Nan

ton

g

Hefe

i

Sh

an

tou

Ch

an

gs

ha


3,000 300 300 300 300 300 300 300 300 300 300

% % % % % % % % % % %

On purpose 93 90 93 91 94 93 93 93 95 95 96 To freshen my breath/soothe my throat

60 57 59 55 59 64 64 57 64 59 61

For sharing when socialising with my family members/friends

41 40 37 44 40 45 38 34 45 44 42

For special events 29 22 26 24 34 32 27 29 32 30 32 As a gift 27 20 27 27 29 34 25 26 28 28 26 SOURCE: QQSURVEY/MINTEL

Impulse purchase

It is perhaps not surprising that it is those people with younger children (0-9) who are more likely to

purchase candy on impulse, giving in to the “pester power” of children who see candies displayed at

the supermarket checkout, or similar situation.



FIGURE 37: IMPULSE PURCHASE REASON FOR CONFECTIONERY PURCHASE, BY AGE OF CHILDREN, SEPTEMBER 2014

Respondents with children aged 0-4 5-9 10-15 16-18

Base: internet users aged 20-49 808 712 590 221 % % % %

Impulsive purchase (net) 71 70 64 65 Bought when seeing the products at checkout area

36 34 28 30

After seeing promotions (eg free sampling) 30 30 31 33 I was attracted by appealing product packs/product display

29 33 29 23

Attracted by online special offering (eg Groupon, big discount during Nov 11th)

25 28 21 20


It tends to be men and women in the youngest age group, presumably with the younger children, who

are most prone to being bent by the will of their children to buy at the checkout. However, when

buying for themselves, Mintel sees a different set of trends. For instance, it is women of all ages who

are more likely to respond to special promotions or free sampling, while younger women tend to be

those more likely to respond to appealing packaging and displays.

Cute cartoon characters and strong colours are a way of attracting such younger women, such as was

displayed at the opening of Mars Inc’s M&M World store in Shanghai, in July 2014. Product displays

in stores that can attract attention at prominent places can help to increase the likelihood of impulse

purchases among adults looking for a treat, especially among women.

Men are less likely to be purchase buyers unless they have young children, or are attracted by special

offers – particularly younger men, presumably on lower incomes because of their youth and therefore

more likely to be sensitive to a bargain.

FIGURE 38: IMPULSE PURCHASE REASON FOR CONFECTIONERY PURCHASE, BY GENDER AND AGE, SEPTEMBER 2014 All Male,

20-29 Male, 30-39

Male, 40-49

Female, 20-29

Female, 30-39

Female, 40-49

Base: internet users aged 20-49 3,000 500 500 500 500 500 500 Impulse purchase (net) 66 69 67 61 70 66 65 Bought when seeing the products at checkout area

32 37 35 30 34 30 27

After seeing promotions (eg free sampling)

29 27 29 25 30 29 32

I was attracted by appealing product packs/product display

27 25 27 24 31 29 26


23 26 21 18 27 23 23


Yet, the impulse buying seems to be less about cost and more about experience, because the survey

findings show that people on monthly incomes of RMB12,000 or more tend to be those who are most

impulsive. Those on lower incomes, especially in the RMB5,000-7,999 bracket, are those most likely

to respond to special promotions and free sampling, including online special offers.

This indicates that there are a range of different strategies for positioning sugar confectioneries, for

both planned and impulse purchases, in order to gain better sales. To make such marketing successful

requires adapting the range of methods used to reach different consumers at different times and places.



FIGURE 39: IMPULSE PURCHASE REASON FOR CONFECTIONERY PURCHASE, BY MONTHLY HOUSEHOLD INCOME GROUP, SEPTEMBER 2014 All RMB4,999

or below RMB5,000-

7,999 RMB8,000-

9,999 RMB10,000-

11,999 RMB12,000

or above

Base: internet users aged 20-49 3,000 201 684 337 364 1,414 Impulse purchase (net) 66 55 67 61 63 69 Bought when seeing the products at checkout area

32 30 32 34 29 33

After seeing promotions (eg free sampling)

29 26 32 27 29 28

I was attracted by appealing product packs/product display

27 17 23 23 23 33


23 20 23 20 20 25



This marketing mix will also be greatly determined by the city in which the marketing is conducted.

For instance, people from Chengdu and Changsha appear to be more likely to purchase on impulse, but

do so for differing reasons. Those in Chengdu are those most likely to be prompted to buy by special

promotions, drawn in by attractive packaging and displays and online special offers, while those in

Changsha are more likely to give into “pester power” at the checkout. This supports the view that

marketing strategy mix needs to be adapted to suit local conditions in each city, based on consumer

habits and the local retail landscape.

FIGURE 40: IMPULSE PURCHASE REASON FOR CONFECTIONERY PURCHASE, BY CITY, SEPTEMBER 2014

All

Sh

an

gh

ai

Beijin

g

Gu

an

gzh

ou

Ch

en

gd

u

Jin

an

Lin

yi

Nan

ton

g

Hefe

i

Sh

an

tou

Ch

an

gs

ha


3,000 300 300 300 300 300 300 300 300 300 300

% % % % % % % % % % %

Impulse purchase 66 59 65 63 74 66 67 65 65 68 70 Bought when seeing the products at checkout area

32 30 34 25 33 31 36 30 37 31 38

After seeing promotions 29 25 33 27 32 32 25 26 29 29 29 I was attracted by appealing product packs/product display

27 21 23 31 31 26 28 28 27 30 25

Attracted by online special offering

23 18 23 20 28 25 20 22 23 29 23


The Consumer – Type of Sugar Confectionery Products Sugar Confectionery Bought for Self/Family and Gifting China, December 2014


The Consumer – Type of Sugar Confectionery

Products Bought for Self/Family and Gifting

Key points

The most sought-after features from sugar confectionery products both for gifting and

self/family consumption are assorted flavours and individually wrapped products.

For self/family use, portable packaging is the more desired format, while for gifting, large

boxed assortments are preferred.

Products for gifting are more significantly sought after by people in their twenties, indicating

that the young couples market is a key segment for marketing of sugar confectionery gift

packs.

Individually wrapped and assorted flavours are two most considered FIGURE 41: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY OR GIFTING, SEPTEMBER 2014






Overall when it comes to either gifting or self-consumption, assorted flavours and individually

wrapped are the two most considered products. Products combining individually wrapped assorted

flavours therefore show the greatest potential in attracting more consumers to show an interest.

However, for individual consumption, there is a stronger likelihood of people consuming single-

flavour packs, showing that there is a strong distinction between the gifting and self-consumption

motives.

Providing a combination of both assorted and single-flavour packs can help to cover both occasions for

consumer use. However, it is important to note that there are key differences in motives for both self-

consumption and gifting among the consumers surveyed.

Self/family use consumption by demographic group

Beginning with self-consumption, Mintel sees significant variation between the genders and age

groups in terms of products most likely to be bought. For instance, in terms of packaging men in their

thirties and forties are those more likely to buy loose products, or those in a jar, while men in their

thirties are those most likely to buy sweets in a box or bag. However, among women portable boxes

are more likely to be bought, perhaps being more convenient to them, which is also perhaps the motive

why women in their twenties and thirties are more likely to buy candies in a tube.

Men in their twenties and thirties are those more likely to buy non-individually wrapped candies, while

women across all ages are those most likely to buy individually wrapped.

In terms of flavour assortment, it is interesting that as men get older, they tend to become more likely

to want different flavours in a pack, and less likely to want the same flavour in a pack, while among

women the reverse appears to be true.

What this shows is that different people display different consuming trends according to their age or

gender, and marketing of confectionery products should be attuned to (and reflect) these differences,

perhaps showing the versatility of a product that can be bought in both singe-flavour or assorted

flavour packs (perhaps as a multipack) to fulfil the desires of all the family.



FIGURE 42: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY, BY GENDER AND AGE, SEPTEMBER 2014 All Male,

20-29 Male, 30-39

Male, 40-49

Female, 20-29

Female, 30-39

Female, 40-49

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

2,917 490 484 485 490 488 480

% % % % % % %

By packaging format: Portable box (eg plastic, tin, paper) 19 20 18 18 23 19 20 Loose 15 15 18 17 14 13 14 Portable tube 15 16 13 12 16 17 15 Glass/plastic jar 13 13 14 14 13 13 13 Big plastic/tin box 13 13 15 12 14 13 11 Paper/plastic bag 13 12 13 12 12 11 14 Individually wrapped or not: Individually wrapped 56 53 55 56 58 59 57 Non-individually wrapped 31 37 35 29 34 27 27 Assorted or not: Different flavours in one pack 49 46 49 50 55 50 43 Same flavour in one pack 39 44 42 35 37 36 41 I haven’t bought sugar confectionery for this purpose in the last 6 months

12 10 10 15 9 15 15


It is also interesting that it is men and women of older age groups, mostly in their forties, who are

those most likely not to have bought sugar confectionery in the previous six months. This coincides

with families where the children are aged 16-18. However, it is families with these older children who

are more likely to have bought loose candies, or those packaged in glass or plastic jars. This indicates

an opportunity to target these older families with products packaged in this way, especially with

individually wrapped candies, containing an assortment of flavours.

At the other end of the age scale, families with children aged 0-4 are those more likely to buy products

in a portable box or tube, non-individually wrapped and with a single flavour per pack. Clearly the age

of children in the family therefore has a link to the consuming trends among the adults in the family,

and this indicates an area for attention for companies marketing their products in a way that

distinguishes between these two age groups, and how consuming trends change with age.



FIGURE 43: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY, BY AGE OF CHILDREN IN

HOUSEHOLD, SEPTEMBER 2014 All 0-4 5-9 10-15 16-18


2,917 800 697 579 215

% % % % %

By packaging format: Portable box (eg plastic, tin, paper) 19 21 17 18 15 Loose 15 16 14 13 20 Portable tube 15 17 14 13 14 Glass/plastic jar 13 13 15 15 16 Big plastic/tin box 13 14 16 13 8 Paper/plastic bag 13 10 14 16 12 Individually wrapped or not: Individually wrapped 56 59 59 60 60 Non-individually wrapped 31 33 32 28 25 Assorted or not: Different flavours in one pack 49 51 51 47 53 Same flavour in one pack 39 41 40 41 32 I haven’t bought sugar confectionery for this purpose in the last 6 months

12 9 9 12 15


Self/family use consumption by city

Candy purchasing for self-consumption also shows great variation across the cities. For example,

Shanghai is the city where consumers are least likely to have bought sugar confectionery either for self

or family use, or (as seen below) for gifting. The higher tier cities are where consumers tend to be

slightly more likely not to have bought sugar confectionery products in the prior six months, and when

doing so tend to prefer portable tubes and single flavours. However, overall it would appear that

different regional markets have different economic and demographic dynamics affecting the market in

different ways, in regard to purchase for self-consumption, and this shows that marketing strategies

need to be adapted to fit with those dynamics in each city.



FIGURE 44: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY, BY CITY, SEPTEMBER 2014

All

Sh

an

gh

ai

Be

ijing

Gu

an

gzh

ou

Ch

en

gd

u

Jin

an

Lin

yi

Na

nto

ng

He

fei

Sh

an

tou

Ch

an

gs

ha


2,917 288 289 289 293 294 289 294 293 293 295

% % % % % % % % % % %

By packaging format: Portable box 19 15 18 18 20 22 22 17 19 23 19 Loose 15 13 19 10 15 17 14 14 20 9 19 Portable tube 15 16 14 17 15 16 17 14 14 12 11 Glass/plastic jar 13 11 13 14 14 11 13 18 14 12 14 Big plastic/tin box 13 15 15 13 12 9 11 13 15 14 13 Paper/plastic bag 13 14 13 12 11 11 12 11 10 20 12 Individually wrapped or not: Individually wrapped 56 51 56 59 56 59 61 54 54 56 56 Non-individually wrapped 31 32 35 26 29 27 28 32 38 34 33 Assorted or not: Different flavours in one pack 49 39 52 48 45 50 53 48 53 47 55 Same flavour in one pack 39 45 40 36 41 36 36 39 39 43 34 I haven’t bought sugar confectionery for this purpose in the last 6 months

12 16 9 16 14 14 11 14 8 10 11


Gifting use consumption by demographic group

Big portable plastic/tin box packaging containing individually wrapped assorted flavours is preferred

for gifting overall, but this varies among consumers according to their age group and gender, as is the

case with self-consumption. The most significant consumers tend to be women in their twenties and

thirties, indicating that it is these women who are more likely to be thinking about making gift

purchases. This would indicate that marketing of gift packs of candies should focus more towards the

women, who are the most likely purchasing decision-makers.

Again, as with self-consumption purchasing, consumers in their thirties and forties are those most

likely not to have bought candies for gifting. This indicates that they are shifting their gift buying onto

products other than candies, which shows that confectionery makers should adapt their products to

better appeal to this older age group, and perhaps learn lessons from other snack sectors where gifting

is prevalent, such as chocolate confectionery and savoury snacks.



FIGURE 45: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING, BY GENDER AND AGE, SEPTEMBER 2014 All Male,

20-29 Male, 30-39

Male, 40-49

Female, 20-29

Female, 30-39

Female, 40-49


2,917 490 484 485 490 488 480

% % % % % % %

By packaging format: Portable box (eg plastic, tin, paper) 25 23 25 25 28 26 21 Loose 14 14 13 13 17 14 15 Portable tube 14 14 15 12 13 13 16 Glass/plastic jar 11 14 13 11 10 10 10 Big plastic/tin box 10 11 12 7 11 10 8 Paper/plastic bag 9 11 10 8 10 8 8 Individually wrapped or not: Individually wrapped 56 55 57 53 59 57 56 Non-individually wrapped 27 33 30 23 30 24 21 Assorted or not: Different flavours in one pack 54 52 55 51 60 58 49 Same flavour in one pack 29 35 32 25 30 23 28 I haven’t bought sugar confectionery for this purpose in the last 6 months

17 13 13 24 11 19 23


There is strong evidence in the consumer survey results to indicate that the decline in gift buying of

sugar confectionery products is directly linked to age of children. The likelihood of consumers buying

most product formats seems to decline significantly where children in the family reach the age of 10 or

above. This would indicate that the key reason for buying candy gifts is to give to children, probably

friends of their children.

It could be that parents are buying less sugar confectionery because their children’s tastes have moved

away from liking sugar confectionery once they get older. It could also be the case, as discussed in the

following section, that because gift buying of candy is linked to special occasions, it is of declining

relevance to children’s special occasions that could affect this decline in gift buying.

There is therefore a potential opportunity for candy companies to adapt their products to appeal more

to older children, and to be relevant to more special-occasion gifting.



FIGURE 46: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING, BY AGE OF CHILDREN IN HOUSEHOLD, SEPTEMBER 2014 All 0-4 5-9 10-15 16-18


2,917 800 697 579 215

% % % % %

By packaging format: Portable box 25 27 23 25 22 Loose 14 16 16 15 16 Portable tube 14 13 16 15 14 Glass/plastic jar 11 12 11 11 8 Big plastic/tin box 10 11 11 8 6 Paper/plastic bag 9 11 9 7 9 Individually wrapped or not: Individually wrapped 56 59 59 57 54 Non-individually wrapped 27 31 27 25 21 Assorted or not: Different flavours in one pack 54 61 57 55 50 Same flavour in one pack 29 29 29 27 26 I haven’t bought sugar confectionery for this purpose in the last 6 months 17 11 14 18 25 SOURCE: QQSURVEY/MINTEL

The Consumer – Occasion of Sugar Confectionery Gifting Sugar Confectionery China, December 2014


The Consumer – Occasion of Sugar Confectionery

Gifting

Key points

While seasonal festivals remain the key reason for gift buying, thank you and house warming

are also important reasons, while dating among young couples is also highly significant.

For married couples, the seasonal, thank you and house warming reasons are more

significant gifting occasions.

Dating gifts and wedding presents are key gifting occasions for younger people, with

potential for developing individualised products containing personal messages.



Chinese traditional festivals are still the major occasions FIGURE 47: 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


Chinese traditional festivals are still the main occasions (45%) when people purchase sugar

confectionery for gifting, especially older people in their thirties and forties. This is followed by

people who purchase sugar confectionery to express gratitude (38%) and during house-warming

occasions (36%). Men are more likely than women to purchase it as a dating gift or during Valentine’s

Day, typically those in their twenties.

That over a third of consumers (34%) bought gift candies as a holiday souvenir indicates strong

opportunities for marketing more strongly at train stations and airports. This could include having

special promotional pop-up outlets, or seasonal displays in-store, to capture spending during the key

Chinese traditional festivals.



Birthdays and anniversaries are also a significant reason for gift buying, and this would be a useful

hook for more year-round marketing, to give people a reason to buy outside of key festivals and

holiday travel. Candy companies could use online gift ordering and delivery to provide consumers

with an easy way to send someone a birthday or anniversary gift. Online sites could encourage people

to enter details of all their friends’ and family’s key birthdays and anniversaries into a calendar that

then sends them a reminder, and a prompt towards suitable gift packs of candies, to help boost

purchasing, and save people time – and the embarrassment of forgetting someone’s birthday or

anniversary.

Married people have more gifting occasions

Married couples are much more likely to buy sugar confectionery as a gift during most occasions, with

singles only being more likely (42%) to buy during the occasion of dating, Valentine’s Day or Chinese

Valentine’s Day. Of the singletons, it is men in their twenties who were most likely to have bought

candies for these occasions, with nearly half of singe men in their twenties (48%) having done so.

Married people are therefore those most open to buying candies for different celebratory occasions,

and are therefore those best marketed to in the context of different gifting scenarios – be these singular

festival events or for more frequent family or friends anniversaries or birthdays. This fits with the

gifting consumption trends seen by age group and gender, as well as by age of children in the

household, as discussed in the preceding section.

Becoming a more accepted gifting idea for married couples when buying gifts will mean not only

adapting products to suit consumer needs, but also devising ways of making it easier for people to buy

and send/give candy as a gift. This could include, as discussed above, providing online ordering and

key event reminders, as well as devising advertising that constantly reminds consumers that candy can

be used as a gift, and different occasions when candy can fulfil the gifting role.

For the singletons, not only can key festivals be a good opportunity for marketing candy as a gift for

the one they love, but also they could perhaps be persuaded to buy as gifts for more regular events,

such as birthdays, anniversaries, work promotions, etc. by framing advertising in this way. This could

also be an application of an online candy ordering site, or an app that allows consumers to send a

candy gift from their mobile phones.

FIGURE 48: OCCASION OF SUGAR CONFECTIONERY GIFTING, BY MARITAL STATUS, SEPTEMBER 2014 Single Married

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

511 1,887

% %

During Chinese traditional festivals (eg Chinese New Year, Mid- Autumn Festival)

34 48

As a thank you gift 36 39 As a house warming (eg when visiting as a guest, visiting client) 29 38 For dating/Valentine’s Day/Chinese Valentine’s Day 42 33 As a souvenir (eg when return from holiday, travelling abroad) 28 35 As a birthday/anniversary gift 30 33 On Mother’s Day/Father’s Day/Children’s Day 19 34 For celebration (eg promotion, have a good news, graduation) 22 31 As a wedding gift 16 24 During Western festivals (eg Christmas, Easter Day, Halloween) 17 21 As a farewell gift 16 16 Average number of occasions 2.9 3.5




People from tier two cities are more likely to purchase as wedding gift

In terms of gifting occasion difference across the tier one and two cities, people from tier two cities

appeared to be more likely than the tier one cities to purchase sugar confectionery as a wedding gift.

This is especially predominant in Jinan (29%) and Hefei (29%).

FIGURE 49: OCCASION OF SUGAR CONFECTIONERY GIFTING, BY CITY, SEPTEMBER 2014

All

Sh

an

gh

ai

Be

ijing

Gu

an

gzh

ou

Ch

en

gd

u

Jin

an

Lin

yi

Na

nto

ng

He

fei

Sh

an

tou

Ch

an

gs

ha


2,420 215 258 235 248 242 241 228 254 255 244

% % % % % % % % % % %

During Chinese traditional festivals

45 38 45 48 48 55 40 39 48 49 42

As a thank you gift 38 44 36 37 43 35 37 39 40 38 36 As a house warming 36 33 29 43 40 39 34 33 38 41 33 For dating/Valentine’s Day/Chinese Valentine’s Day

35 32 37 28 36 35 39 35 35 36 38

As a souvenir 34 36 34 34 33 39 34 29 30 35 32 As a birthday/anniversary gift

32 32 32 34 35 35 28 29 33 33 29

On Mother’s Day/Father’s Day/Children’s Day

31 25 30 31 30 28 29 30 33 31 42

For celebration 29 25 28 26 32 30 29 26 34 32 31 As a wedding gift 22 19 21 17 17 29 24 19 29 25 22 During Western festivals 20 17 22 17 17 19 22 16 17 29 20 As a farewell gift 16 11 18 16 19 14 15 18 18 16 17 SOURCE: QQSURVEY/MINTEL

Tier one city consumers are more likely to use for regular gifting for personal events throughout the

year, while tier two and three city consumers are more likely to buy at key festivals and events. This

points to an opportunity not only to promote more regular gifting using candy among lower tier

consumers, but also that candy can be an appropriate and sophisticated gift idea for consumers in tier

one cities. This further exemplifies how marketing strategies need to be adapted to individual cities’

local economic and demographic circumstances.



FIGURE 50: OCCASION OF SUGAR CONFECTIONERY GIFTING, BY CITY TIER, SEPTEMBER 2014 All Tier one Tier two and three


2,420 956 1,464

%

During Chinese traditional festivals 45 45 46 As a thank you gift 38 40 37

As a house warming 36 36 36 For dating/Valentine’s Day/Chinese Valentine’s Day 35 33 36 As a souvenir 34 34 33 As a birthday/anniversary gift 32 33 31

On Mother’s Day/Father’s Day/Children’s Day 31 29 32 For celebration 29 28 30 As a wedding gift 22 18 25 During Western festivals 20 18 20 As a farewell gift 16 16 16 SOURCE: QQSURVEY/MINTEL

The Consumer – Premium Element for Sugar Confectionery Sugar Confectionery China, December 2014


The Consumer – Premium Element for Sugar

Confectionery

Key points

Natural ingredients and added functional health benefits are the key drivers behind most

consumers’ incentive to trade up to higher-value sugar confectionery products.

Products launched in China claiming to provide natural ingredients are significantly fewer

than in the UK or US, indicating that there is still a great deal of room for new product

development in this area.

While products launched in China claiming functional health benefits are greater than seen

in the UK or US, they are still relatively few compared to Japan, indicating there is also

room to develop more new products with such benefits.

All-natural ingredient sugar confectionery on demand in premium category FIGURE 51: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014






It is not surprising that people are more willing to pay more for food products that are made from

natural ingredients, this includes sugar confectionery. Almost half of the respondents surveyed said

that natural ingredients are the most important element that they would like to see if products are

charged at premium price, especially older people in their forties.

While men in their twenties are those most likely to buy premium candies that have an additional

health benefit, such as added vitamins or a throat-soothing function, men in their thirties and forties are

those who would pay more for low- or no-sugar candies.

Health and naturalness are therefore key elements in driving the premiumisation of the sugar

confectionery market, and are among the top features sought after among premium chewing gum

products (see following section).

FIGURE 52: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY GENDER AND AGE, SEPTEMBER

2014

All Male, 20-29

Male, 30-39

Male, 40-49

Female, 20-29

Female, 30-39

Female, 40-49


2,917 490 484 485 490 488 480

% % % % % % %

Made from natural ingredients (eg fruit juice, natural sweetener)

48 45 46 51 48 47 54

Contains additional health benefits (eg vitamin-fortified, throat-soothing)

36 39 36 36 36 31 37

Available in a variety pack (eg I can choose the flavours I like)

35 34 33 33 38 36 33

Low calories 29 30 26 30 28 29 30 Convenient packaging (eg resealable pack, small portable pack)

25 23 26 25 28 22 27

Low/no sugar 25 24 28 28 20 25 25 Appealing packaging design (eg cartoon packaging, premium packaging)

24 29 25 22 28 24 18

Unique product shape (eg animal-shaped candy, multi-coloured candies)

22 22 24 18 24 24 20

Imported products 17 19 20 14 13 17 18 SOURCE: QQSURVEY/MINTEL

However, according to Mintel’s GNPD, China has a relatively low level of new products being

launched that claim to be made using all-natural ingredients, compared to the situation in the US or

UK. This points to a key opportunity for candy makers to focus more on both the use of more natural

ingredients (or making existing use more prominent) as well as products with more functional health

benefits.

FIGURE 53: SELECTED CLAIMS OF SUGAR CONFECTIONERY LAUNCHED IN US, UK AND CHINA, 2011-JUNE 2014 US UK China % % %

All-natural product 4.1 1.5 0.4 SOURCE: MINTEL GNPD

Although relatively few, there are products in the market that already highlight this “100% natural”

feature as a key competitive product attribute:



FIGURE 54: EXAMPLES OF SUGAR CONFECTIONERY CLAIMING ALL-NATURAL, CHINA AND US, MAY-APRIL 2014

Lovely Candy Co. Superfruit Chews are made with real fruit and are gluten- and GMO-free. The all-natural

product also consists of the other flavours: blueberry, cranberry and raspberry.

The product retails in a 6-oz. pack and sold at

USD3.99.

SnackStar Mang Guo Kou Wei Xing Ren Mi Guo (Mango Flavoured Almond Rice Stix) is 100% natural,

free from trans fat and made from non-GMO ingredients. This product retails in a 100g pack and

price at RMB14.80.

SOURCE: MINTEL GNPD

Functional ingredients need to be highlighted to claim health benefits

Almost four in 10 (36%) respondents surveyed say they are willing to pay more for sugar

confectionery that consists of additional health benefits, this is typically among the low earners (37%-

38% of those who earn monthly personal income less than RMB10,000 per month vs 31% of those

who earn more than RMB10,000).



FIGURE 55: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY MONTHLY PERSONAL INCOME

GROUP, SEPTEMBER 2014

All RMB4,999 or below

RMB5,000-9,999

RMB10,000 or above


2,917 940 1,279 698

% % % %

Made from natural ingredients (eg fruit juice, natural sweetener)

48 49 51 44

Contains additional health benefits (eg vitamin-fortified, throat-soothing)

36 38 37 31

Available in a variety pack (eg I can choose the flavours I like)

35 34 36 33

Low calories 29 29 30 27 Convenient packaging (eg resealable pack, small portable pack)

25 26 25 24

Low/no sugar 25 24 27 23 Appealing packaging design (eg cartoon packaging, premium packaging)

24 24 24 26

Unique product shape (eg animal-shaped candy, multi-coloured candies)

22 21 21 25

Imported products 17 13 18 21 SOURCE: QQSURVEY/MINTEL

Although the number of launches of functional sugar confectioneries is higher than other countries

(typically US and UK), the functional sugar confectionery produced locally is often not labelled

clearly with the functional ingredients contained.

FIGURE 56: SELECTED CLAIMS OF FUNCTIONAL INGREDIENTS AND BENEFIT FOR SUGAR CONFECTIONERY, US, UK, JAPAN AND

CHINA, 2011-JUNE 2014 US UK Japan China % % % %

Vitamin/mineral-fortified 1.0 0.5 10.2 3.3 High/added fibre - 0.1 2.2 0.4 Beauty benefits - 0.1 1.9 0.8 Added calcium - - 1.7 0.6 SOURCE: MINTEL GNPD

This means that in order to convince those low earners to pay more for sugar confectionery,

highlighting the health benefits and the amount of functional ingredients associated could be more

appealing to these people. For example, Brown Sugar candy has a description on its packaging about

the health benefits offered by its products, however, there is no mention of the amount of the nutrition

that it contains. In contrast, Fibre-Rich Grapefruit Candy from Japan has highlighted the amount of

fibre it consists in a candy.



FIGURE 57: EXAMPLES OF SUGAR CONFECTIONERY CLAIMING HEALTH BENEFITS, CHINA AND JAPAN, –2013 AND 2014

Brown Sugar Plum Hard Candy is described as a combination of nutritious and delicious pure brown sugar and top grade natural plum. According to the

manufacturer, brown sugar helps to lighten skin pigmentation, whiten and purify skin. Plum is low in fat

and sodium, free from cholesterol, and rich in fibre, potassium, calcium, Vitamin A, Vitamin B1, and Vitamin

B2. This product retails in a 128g pack containing individual sachets.

Nobel Gyutto Manzoku Healthy Premium Shokumotu Senni Grapefruits Candy (Fibre-Rich Grapefruit Candy) features rich grapefruit flavour. A serving of one unit is said to contain 1.2g dietary fibre, which is equivalent to

the edible part of one whole grapefruit. The healthy product retails in a 90g pack featuring individually

wrapped units.

SOURCE: MINTEL GNPD

The Consumer – Premium Element for Gum Confectionery Sugar Confectionery China, December 2014


The Consumer – Premium Element for Gum

Confectionery

Key points

Chewing gum consumers are most likely to pay a premium for longer-lasting taste, but are

also demanding low- or no-sugar products.

About a quarter of consumers would pay more for added health benefits (28%) or natural

ingredients (27%), and these claims have seen a recent spike in new product launch claims.

There is growing potential for more breath-freshening products, and there may also be an

as-yet untapped market for smoking cessation chewing gum products.

Long-lasting flavour is the key for premium price FIGURE 58: ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014






Aside from the dominant feature of long-lasting flavour, and as has been seen with sugar

confectionery, additional health benefits or natural ingredient use are features with a strong level of

interest among consumers. Taken from Mintel’s GNPD, the percentage of all chewing gum products

claiming attributes such as breath-freshening, other (functional), low/no/reduced calorie,

low/no/reduced sugar, all-natural product, GMO-free, no additives/preservatives, vitamin/mineral-

fortified or diabetic is heavily weighted towards more recent years, with over half of the new launches

(55.3%) of products making these claims having been launched in 2013 or 2014.

Just over a quarter (25.5%) of all GNPD chewing gum products made the claim of being sugar-free,

which reflects the strong consumer demand for such products.

FIGURE 59: CHEWING GUM PRODUCTS LAUNCHED CLAIMING HEALTH BENEFITS OR NATURAL INGREDIENTS AS % OF ALL SUCH

PRODUCTS LAUNCHED OVER THE PERIOD, 2009-14

SOURCE: MINTEL GNPD

Only one product, launched in 2013, claims to help smokers stop smoking.

From Mintel’s survey results, 29% of men chose containing additional health benefits as an element in

gum confectionery that is worth paying a premium price for, compared to only 26% of women. As

men are more likely to be smokers, this could be significant.

About 24.2% of people in China are regular smokers (or about 300 million people), according to a

report published by the Journal of the American Medical Association. The study also concludes that

China is amongst several countries where smoking prevalence is over 40% among men and below 5%

among women, making this a distinctly male issue. The World Health Organization estimated in 2010

that some 53% of Chinese men smoked.

The Chinese government is currently considering a ban on smoking indoors in all public places, as part

of a wider campaign to reduce the social and healthcare costs of smoking-related disease. If brought in,

such regulation could be the spur for many men to try to give up smoking, and this could present an

opportunity to gum manufacturers, to add ingredients that can help smokers (particularly men) to give

up.



Haitai Eundan Kou Xiang Tang (Chewing Gum) is said to contain natural chicle, which is designed to help smokers to stop smoking. This product retails in a 17g pack featuring its Facebook link. This South Korean product retails in China for

RMB8.80 for 50g.

SOURCE: MINTEL GNPD

Age also has a significant role in the switch from choosing chewing gum simply for long-lasting

flavour, more towards natural ingredients or additional health benefits. Natural ingredients are

particularly sought by people in their forties, and this could be a key marketing strategy to win over

those older consumers, in conjunction with health benefits and breath-freshening functions.

FIGURE 60: ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY AGE, SEPTEMBER 2014

All 20-29 30-39 40-49


2,917 980 972 965

% % % %

Long-lasting flavour 39 42 37 38 Low/no sugar 30 31 31 28 Contains additional health benefits (eg vitamin-fortified, throat-soothing)

28 27 28 28

Made from natural ingredients (eg fruit juice, natural sweetener) 27 24 26 31 Convenient packaging (eg resealable pack, small portable pack) 24 27 23 23 New product design (eg fruit liquid inside, sandwich strips) 22 26 21 19 Available in a variety pack (eg I can choose the flavours I like) 21 21 21 23 Low calories 19 18 17 21 Appealing packaging design (eg cartoon packaging, premium packaging)

17 20 16 14

Imported products 13 13 15 11 SOURCE: QQSURVEY/MINTEL

Products containing long-lasting flavour with other functions, such as breath-freshening, can be a way

to meet both the demand for lasting flavour and additional benefits.

This Perfetti Van Melle Mentos pure fresh mint-flavoured centre-filled sugar-free chewing gum contains green tea and is said to freshen

breath. The product retails in a 56g pack containing approximately 35 units. Retails at RMB11.50 for a 56g pack.

SOURCE: MINTEL GNPD

Mondelēz’ Stride highlights its chewing gum’s long-lasting flavour.



This watermelon-flavoured sugar-free chewing gum has been repackaged in June 2014, and is now available in a 49g pack

containing 35 units and featuring its WeChat link. The pack features a promotion to win prizes.

SOURCE: MINTEL GNPD


About four in 10 respondents deem that they are willing to pay a premium for long-lasting flavour for

gum confectionery, this is especially more pronounced among people from tier two or three cities

(41% versus those from tier one cities) such as Shantou (43%) and Hefei (42%).

FIGURE 61: ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY CITY, SEPTEMBER 2014

All

Sh

an

gh

ai

Beijin

g

Gu

an

gzh

ou

Ch

en

gd

u

Jin

an

Lin

yi

Nan

ton

g

Hefe

i

Sh

an

tou

Ch

an

gs

ha


2,917 288 289 289 293 294 289 294 293 293 295

% % % % % % % % % % %

Long-lasting flavour 39 31 38 36 39 40 41 39 42 43 41 Low/no sugar 30 32 30 30 23 26 30 30 32 33 34 Contains additional health benefits

28 23 29 29 30 34 22 29 25 25 28

Made from natural ingredients

27 22 26 32 28 30 26 24 31 24 27

Convenient packaging 24 25 22 30 25 22 26 21 27 24 23 New product design 22 24 20 20 22 20 23 25 22 23 25 Available in a variety pack 21 16 19 20 22 26 25 21 27 17 21 Low calories 19 18 20 18 19 20 16 19 18 20 20 Appealing packaging design

17 17 18 14 16 17 14 16 21 16 19

Imported products 13 14 10 16 15 8 12 15 12 14 12 SOURCE: QQSURVEY/MINTEL

The Consumer – Attitudes towards Sugar and Gum Confectionery Sugar Confectionery China, December 2014


The Consumer – Attitudes towards Sugar and Gum

Confectionery

Key points

While half (52%) of survey respondents would pay more for additive-free sugar

confectionaries, nearly four in 10 (39%) would prefer products containing healthy

ingredients such as nuts and seeds.

Significantly more women in their twenties and thirties are interested in products designed

for a specific consumer group, indicating that there is big potential in marketing products

targeted specifically at women.

Consumers in lower tier cities appear to be more open to trying products with new flavours

and healthy ingredients, indicating strong potential to test new products outside of the tier

one cities.

Purity and health head consumer demand prerogatives FIGURE 62: STATEMENTS ABOUT SUGAR CONFECTIONERY, SEPTEMBER 2014



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



More than half (52%) of survey respondents stated that they would be willing to pay more for candies

not containing additives. This gives a strong indication that manufacturers need both to use more

natural flavours and ingredients, and to market these more proactively to attract more consumers and

differentiate from competitors. It also shows that there is greater potential for manufacturers to derive

higher margins by selling more expensive products that can boast such natural ingredients. Such

premiumisation could also take the form of more bundle packs, given that over a quarter (26%) of

respondents agreed they would be willing to pay reasonably more for bundle packs, while a similar

proportion (24%) stated they would be willing to pay more for handmade candy in specialised candy

stores.

Such natural and health features tend to be slightly more attractive to people in their forties, especially

men, and so marketing of products boasting these claims could market more specifically to this

consumer group, as well as the wider market. There might also be potential in developing products

aimed at specific sections of the population, such as older people. Some 30% of survey respondents

stated that they prefer mints rather than chewing gum when they want to freshen their breath, but this

proportion rose to 38% among men in their forties. More than a third (35%) of respondents agreed that

they would like to try more candy/gum products designed for a specific group.

Nearly four out of 10 (39%) respondents agreed that they would prefer candies containing nuts or

seeds. This shows consumers not only want natural ingredients, but also identifiable fruit and/or nut

pieces that they feel provides more of a healthy nutritional snack. A good example of this kind of

product is a seasonal limited edition Christmas candy house from Starbucks:

“It contains chocolate flavour nougat candies and toffee nut flavour nougat candies. The candy house can also be used as a Piggy Bank!” This box of candies sells for

RMB58. This gift idea is among a series of seasonal products that focuses on chocolates, biscuits and cakes. The fact that this candy is also chocolate-flavoured further illustrates how sugar confectionery is having to compete with a consumer

preference for chocolate products.

Similar proportions of survey respondents would like to see more candy products designed for summer

(38%) and expressed an interested in trying sugar products with innovative flavours (37%). This

indicates there is good scope for manufacturers to develop seasonal flavours to attract attention, and

provide a kind of “limited edition” buzz about a product, especially for unusual fruit flavours. This

could also be a useful way to test new flavours on the market, and measure consumer response.



Nearly a fifth of consumers (18%) try to avoid eating sweets/gum products containing xylitol as it will

cause harm to their health, although this response rate rose to 22% among men in their forties, again

indicating that products targeted at older consumers’ specific needs could prove a good opportunity. At

the other end of the age scale, while 15% of all consumers said they dislike the taste of traditional

Chinese medicine in herbal candy, this rose to 18% among people in their twenties, further indicating

the opportunity to develop age group-specific products.

Another interesting result from the consumer survey was that nearly a quarter (23%) of people had

bought candy/gums online in the last six months, rising to 26% among men in their thirties. This is

relatively high, and shows a great deal of potential to use online marketing to promote more premium

products, gift packs and consumer group-specific products, using consumer purchasing histories to

tailor marketing more to individual likes and needs.

FIGURE 63: STATEMENTS ABOUT SUGAR CONFECTIONERY, BY GENDER AND AGE, SEPTEMBER 2014 All Male,

20-29 Male, 30-39

Male, 40-49

Female, 20-29

Female, 30-39

Female, 40-49

Base: internet users aged 20-49 3,000 500 500 500 500 500 500 % % % % % % %

I am willing to pay more for candy/gum with no additives

52 50 51 54 52 51 52

I prefer candy containing nuts/seeds as they are better for health than regular candies

39 37 40 43 38 37 40

I would like to see more candy products designed for summer

38 36 38 37 41 37 37

I am interested in trying sugar products with innovative flavours

37 38 40 36 37 37 33

I would like to try more candy/gum products designed for a specific group

35 31 32 30 42 41 34

I prefer mints rather than chewing gum when I want to freshen my breath

30 30 33 38 28 23 30

I am willing to pay reasonably more for bundle packs

26 28 29 24 24 26 25

I am willing to pay more for handmade candy in specialised candy stores

24 25 25 19 26 24 24

I have bought candy/gums online in the last 6 months

23 23 26 22 22 23 22

I try to avoid eating sweets/gum products containing xylitol as it will cause harm to the health

18 19 17 22 18 16 16

I dislike the taste of traditional Chinese medicine in herbal candy

15 18 16 12 18 15 11


City tier differences

As well as generational and gender differences, the survey data also highlights some differences in

consumer attitudes between tier one and lower tier cities. For instance, consumers in tier two and three

cities tend to be those more likely to agree that they prefer candy containing nuts/seeds as they are

better for health, would like to see more candy products designed for summer and are interested in

trying sugar products with innovative flavours. They are also those more likely to be willing to pay

reasonably more for bundle packs.



Lower tier city consumers are therefore perhaps a more willing test market for new flavours and

products that can then be rolled out to a wider territory, including tier one cities. As lower tier city

consumers are as likely to buy online as those in tier one cities, the use of online promotions for new

products could also work well in gaining new interest. Special online promotions for seasonal new

products, or time-limited offers, could be marketed through both fixed and mobile device access.

Using QR code scans at point of sale for people to take advantage of such special offers could also

help to encourage more immediate interest and impulse purchase.

FIGURE 64: STATEMENTS ABOUT SUGAR CONFECTIONERY, BY CITY TIER, SEPTEMBER 2014 All Tier

one Tier two and

three

Base: internet users aged 20-49 3,000 1,200 1,800 % % %

I am willing to pay more for candy/gum with no additives 52 51 52 I prefer candy containing nuts/seeds as they are better for health than regular candies

39 37 41

I would like to see more candy products designed for summer 38 36 39 I am interested in trying sugar products with innovative flavours 37 35 38 I would like to try more candy/gum products designed for a specific group 35 35 35 I prefer mints rather than chewing gum when I want to freshen my breath 30 30 30 I am willing to pay reasonably more for bundle packs 26 24 28 I am willing to pay more for handmade candy in specialised candy stores 24 23 25 I have bought candy/gums online in the last 6 months 23 23 23 I try to avoid eating sweets/gum products containing xylitol as it will cause harm to the health

18 19 18

I dislike the taste of traditional Chinese medicine in herbal candy 15 14 16 SOURCE: QQSURVEY/MINTEL

Appendix – Market Size and Forecast Sugar Confectionery China, December 2014


Appendix – Market Size and Forecast

Market value FIGURE 65: CHINA – TOTAL HISTORICAL AND FORECAST VALUE RETAIL MARKET FOR SUGAR AND GUM CONFECTIONERY, 2009-19 Total Index % At 2014 prices Index % RMB bn annual change RMB bn annual change

2009 50 53 na 59 62 na 2010 56 59 11.2 64 67 7.8 2011 63 67 13.6 69 72 7.6 2012 72 76 13.5 76 80 10.6 2013 83 88 15.3 85 90 12.4 2014 (est) 95 100 14.2 95 100 11.0 2015 (fore) 105 111 10.8 99 104 4.4 2016 (fore) 115 121 9.5 105 110 5.8 2017 (fore) 125 132 8.8 110 116 4.8 2018 (fore) 135 143 8.2 115 121 4.4 2019 (fore) 146 154 7.7 121 127 5.4 SOURCE: NBS/COMPANY INFORMATION/MINTEL MARKET SIZES

Market volume FIGURE 66: CHINA – TOTAL HISTORICAL AND FORECAST VOLUME RETAIL MARKET FOR SUGAR AND GUM CONFECTIONERY, 2009-19 Total Index % tonnes (000s) annual change

2009 1,313 63 na 2010 1,419 68 8.1 2011 1,550 74 9.2 2012 1,699 82 9.6 2013 1,911 92 12.5 2014 (est) 2,083 100 9.0 2015 (fore) 2,255 108 8.3 2016 (fore) 2,428 117 7.7 2017 (fore) 2,602 125 7.2 2018 (fore) 2,776 133 6.7 2019 (fore) 2,952 142 6.3 SOURCE: NBS/COMPANY INFORMATION/MINTEL MARKET SIZES

Appendix – Market Segmentation Sugar Confectionery China, December 2014


Appendix – Market Segmentation

Segment value FIGURE 67: TOTAL HISTORICAL AND FORECAST VALUE RETAIL MARKET FOR SUGAR AND GUM CONFECTIONERY, BY SEGMENT, 2009-19 Sugar confectionery Chewing gum Total RMB bn RMB bn RMB bn

2009 40 10 50 2010 45 11 56 2011 51 13 63 2012 57 15 72 2013 66 17 83 2014 (est) 76 19 95 2015 (fore) 84 21 105 2016 (fore) 92 23 115 2017 (fore) 100 25 125 2018 (fore) 108 28 135 2019 (fore) 116 30 146 SOURCE: NBS/COMPANY INFORMATION/MINTEL MARKET SIZES

Segment volume FIGURE 68: CHINA – TOTAL HISTORICAL AND FORECAST VOLUME RETAIL MARKET FOR SUGAR AND GUM CONFECTIONERY, BY

SEGMENT, 2009-19 Sugar confectionery Chewing gum Total Tonnes (000s) Tonnes (000s) Tonnes (000s)

2009 1,238 75 1,313 2010 1,339 80 1,419 2011 1,457 93 1,550 2012 1,593 106 1,699 2013 1,793 118 1,911 2014 (est) 1,957 125 2,083 2015 (fore) 2,117 137 2,255 2016 (fore) 2,279 149 2,428 2017 (fore) 2,441 161 2,602 2018 (fore) 2,604 173 2,776 2019 (fore) 2,767 185 2,952 SOURCE: NBS/COMPANY INFORMATION/MINTEL MARKET SIZES

Appendix – The Consumer – Consumption of Sugar Confectionery Confectionery and Snacks China, December 2014


Appendix – The Consumer – Consumption of

Confectionery and Snacks FIGURE 69: CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014


Base: 3,000 internet users aged 20-49 Eating more About the

same Eating

less Haven’t eaten this in the last

6 months % % % %

Chewing gum 31 46 17 7 Bubble gum 8 28 34 29 Lollipop 9 33 34 24 Hard candy (including mints) 13 42 33 13 Soft candy (eg pastilles, toffee, pressed candy)

15 39 31 15

Crisp candy (eg almond, sesame crisp candy) 22 43 25 10 Nougat (eg milk, cranberry nougats) 21 43 25 11 Functional candy (eg VC candy, TCM throat candy)

23 43 21 13


35 48 14 3

Meat/seafood snacks (eg jerky, pork scratching, dried fish slice)

33 46 16 6


20 45 25 9

Chocolate confectionery 31 47 18 4 SOURCE: QQSURVEY/MINTEL



FIGURE 70: CONSUMPTION OF CONFECTIONERY VS SNACK – CHEWING GUM, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less

Haven’t eaten this in the last

6 months % % % %

All 3,000 31 46 17 7 Gender: Male 1,500 30 47 16 7 Female 1,500 31 45 18 6 Age: 20-29 1,000 38 43 15 4 30-39 1,000 30 47 17 6 40-49 1,000 24 47 19 10 Gender and age group: Male, 20-29 500 39 44 13 4 Male, 30-39 500 29 48 16 6 Male, 40-49 500 23 48 19 10 Female, 20-29 500 37 43 16 4 Female, 30-39 500 30 45 18 7 Female, 40-49 500 25 47 19 9 Monthly personal income I: RMB4,999 or below 993 26 43 22 9 RMB5,000-9,999 1,300 31 47 16 6 RMB10,000 or above 707 37 47 11 5 Monthly personal income II: RMB2,999 or below 282 25 40 23 12 RMB3,000-5,999 1,116 27 45 20 7 RMB6,000 or above 1,602 34 47 14 5 Monthly personal income III: RMB2,999 or below 282 25 40 23 12 RMB3,000-5,999 1,116 27 45 20 7 RMB6,000-9,999 895 32 47 16 5 RMB10,000 or above 707 37 47 11 5 Monthly household income I: RMB7,999 or below 885 28 42 21 9 RMB8,000-11,999 701 29 46 19 7 RMB12,000 or above 1,414 33 48 13 5 Monthly household income II: RMB4,999 or below 201 20 44 24 11 RMB5,000-9,999 1,021 30 42 20 7 RMB10,000 or above 1,778 32 48 14 6 Monthly household income III: RMB4,999 or below 201 20 44 24 11 RMB5,000-7,999 684 30 41 21 8 RMB8,000-9,999 337 30 45 19 7 RMB10,000-11,999 364 28 47 18 7 RMB12,000 or above 1,414 33 48 13 5



Marital status: Single 615 35 43 18 4 Married 2,350 30 47 17 7 Children in household: Yes 2,092 31 47 16 6 No 293 21 46 17 15 Age of children: 0-4 808 36 44 15 5 5-9 712 33 48 13 7 10-15 590 30 47 17 6 16-18 221 19 49 23 8 City: Shanghai 300 23 47 21 9 Beijing 300 32 49 12 7 Guangzhou 300 32 42 20 6 Chengdu 300 31 46 18 5 Jinan 300 33 42 18 7 Linyi 300 34 45 14 7 Nantong 300 24 52 19 5 Hefei 300 32 45 17 6 Shantou 300 35 43 17 6 Changsha 300 31 47 14 8 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 29 46 18 7

Tier 2 and Tier 3 (Jinan, Linyi, Nantong, Hefei, Shantou, Changsha)

1,800 31 46 17 7

Education level: High school or below 182 23 40 21 16 College/University 2,523 31 46 17 6 Postgraduate or above 295 35 46 13 5 SOURCE: QQSURVEY/MINTEL

FIGURE 71: CONSUMPTION OF CONFECTIONERY VS SNACK – BUBBLE GUM, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less

Haven’t eaten this in the last 6 months

% % % %

All 3,000 8 28 34 29 Gender: Male 1,500 8 29 34 29 Female 1,500 8 28 35 30 Age: 20-29 1,000 9 31 37 23 30-39 1,000 9 30 33 28 40-49 1,000 6 24 33 37



Gender and age group: Male, 20-29 500 10 34 35 21 Male, 30-39 500 9 30 31 29 Male, 40-49 500 6 21 36 37 Female, 20-29 500 8 28 39 25 Female, 30-39 500 9 29 35 27 Female, 40-49 500 6 27 30 37 Monthly personal income I: RMB4,999 or below 993 6 25 35 34 RMB5,000-9,999 1,300 6 28 36 30 RMB10,000 or above 707 14 33 30 22 Monthly personal income II: RMB2,999 or below 282 5 23 31 41 RMB3,000-5,999 1,116 5 27 37 31 RMB6,000 or above 1,602 10 30 33 26 Monthly personal income III: RMB2,999 or below 282 5 23 31 41 RMB3,000-5,999 1,116 5 27 37 31 RMB6,000-9,999 895 7 29 36 29 RMB10,000 or above 707 14 33 30 22 Monthly household income I: RMB7,999 or below 885 6 24 34 36 RMB8,000-11,999 701 6 28 38 28 RMB12,000 or above 1,414 10 31 33 26 Monthly household income II: RMB4,999 or below 201 6 21 34 38 RMB5,000-9,999 1,021 5 25 36 34 RMB10,000 or above 1,778 10 31 33 26 Monthly household income III: RMB4,999 or below 201 6 21 34 38 RMB5,000-7,999 684 6 25 34 35 RMB8,000-9,999 337 4 26 39 31 RMB10,000-11,999 364 7 31 36 26 RMB12,000 or above 1,414 10 31 33 26 Marital status: Single 615 8 31 37 25 Married 2,350 8 28 34 30 Children in household: Yes 2,092 8 28 34 29 No 293 6 24 28 43 Age of children: 0-4 808 11 32 35 22 5-9 712 10 30 33 26 10-15 590 7 25 32 36 16-18 221 7 25 35 33



City: Shanghai 300 6 22 33 38 Beijing 300 11 27 33 30 Guangzhou 300 10 28 37 25 Chengdu 300 9 31 31 30 Jinan 300 6 23 38 33 Linyi 300 6 33 34 26 Nantong 300 5 37 30 28 Hefei 300 8 28 37 27 Shantou 300 11 28 33 27 Changsha 300 7 27 38 29 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 9 27 33 31


1,800 7 29 35 28


FIGURE 72: CONSUMPTION OF CONFECTIONERY VS SNACK – LOLLIPOP, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample size Eating

more About the

same Eating

less Haven’t

eaten this in the last 6 months

% % % %

All 3,000 9 33 34 24 Gender: Male 1,500 7 31 35 27 Female 1,500 11 34 33 22 Age: 20-29 1,000 11 39 34 17 30-39 1,000 10 35 33 23 40-49 1,000 6 25 36 33 Gender and age group: Male, 20-29 500 9 40 34 17 Male, 30-39 500 8 31 35 26 Male, 40-49 500 4 22 37 37 Female, 20-29 500 12 37 34 16 Female, 30-39 500 12 38 31 19 Female, 40-49 500 8 27 35 29 Monthly personal income I: RMB4,999 or below 993 8 31 37 24 RMB5,000-9,999 1,300 8 32 35 25 RMB10,000 or above 707 11 36 30 22



Monthly personal income II: RMB2,999 or below 282 9 27 38 27 RMB3,000-5,999 1,116 8 32 37 24 RMB6,000 or above 1,602 10 34 32 24 Monthly personal income III: RMB2,999 or below 282 9 27 38 27 RMB3,000-5,999 1,116 8 32 37 24 RMB6,000-9,999 895 8 33 33 25 RMB10,000 or above 707 11 36 30 22 Monthly household income I: RMB7,999 or below 885 9 29 36 27 RMB8,000-11,999 701 7 32 39 22 RMB12,000 or above 1,414 10 35 31 24 Monthly household income II: RMB4,999 or below 201 8 28 38 26 RMB5,000-9,999 1,021 8 30 36 26 RMB10,000 or above 1,778 9 35 33 23 Monthly household income III: RMB4,999 or below 201 8 28 38 26 RMB5,000-7,999 684 9 30 35 27 RMB8,000-9,999 337 7 30 38 25 RMB10,000-11,999 364 8 34 39 20 RMB12,000 or above 1,414 10 35 31 24 Marital status: Single 615 9 36 36 19 Married 2,350 9 32 34 25 Children in household: Yes 2,092 10 32 35 24 No 293 4 31 28 37 Age of children: 0-4 808 15 38 33 14 5-9 712 10 35 31 24 10-15 590 6 27 35 31 16-18 221 6 20 42 32 City: Shanghai 300 6 23 37 33 Beijing 300 8 34 31 27 Guangzhou 300 9 32 35 23 Chengdu 300 9 34 28 29 Jinan 300 9 32 35 24 Linyi 300 9 33 32 26 Nantong 300 8 33 32 26 Hefei 300 6 37 38 19 Shantou 300 13 36 34 17 Changsha 300 11 31 41 17 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 8 31 33 28


1,800 9 34 35 22




FIGURE 73: CONSUMPTION OF CONFECTIONERY VS SNACK – HARD CANDY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less

Haven’t eaten this in

the last 6 months

% % % %

All 3,000 13 42 33 13 Gender: Male 1,500 12 41 34 13 Female 1,500 14 42 32 12 Age: 20-29 1,000 14 44 33 9 30-39 1,000 14 41 33 13 40-49 1,000 10 40 34 16 Gender and age group: Male, 20-29 500 13 47 30 10 Male, 30-39 500 13 38 35 14 Male, 40-49 500 9 39 38 15 Female, 20-29 500 15 42 35 8 Female, 30-39 500 14 45 30 11 Female, 40-49 500 12 40 30 18 Monthly personal income I: RMB4,999 or below 993 10 40 37 14 RMB5,000-9,999 1,300 12 42 33 13 RMB10,000 or above 707 18 45 28 10 Monthly personal income II: RMB2,999 or below 282 9 42 34 16 RMB3,000-5,999 1,116 11 40 36 13 RMB6,000 or above 1,602 15 43 31 12 Monthly personal income III: RMB2,999 or below 282 9 42 34 16 RMB3,000-5,999 1,116 11 40 36 13 RMB6,000-9,999 895 12 41 33 13 RMB10,000 or above 707 18 45 28 10 Monthly household income I: RMB7,999 or below 885 10 40 35 15 RMB8,000-11,999 701 12 42 36 11 RMB12,000 or above 1,414 15 43 31 12 Monthly household income II: RMB4,999 or below 201 6 42 38 13 RMB5,000-9,999 1,021 11 39 35 15 RMB10,000 or above 1,778 14 43 31 11



Monthly household income III: RMB4,999 or below 201 6 42 38 13 RMB5,000-7,999 684 11 39 34 16 RMB8,000-9,999 337 11 37 39 13 RMB10,000-11,999 364 12 45 33 10 RMB12,000 or above 1,414 15 43 31 12 Marital status: Single 615 12 44 35 9 Married 2,350 13 41 33 13 Children in household: Yes 2,092 13 41 33 12 No 293 9 39 31 22 Age of children: 0-4 808 16 45 30 9 5-9 712 15 42 31 12 10-15 590 12 39 33 15 16-18 221 15 34 38 13 City: Shanghai 300 12 38 33 17 Beijing 300 11 43 33 13 Guangzhou 300 15 40 35 10 Chengdu 300 13 43 29 14 Jinan 300 9 38 38 15 Linyi 300 14 41 30 16 Nantong 300 11 45 34 10 Hefei 300 12 43 33 13 Shantou 300 18 43 30 9 Changsha 300 12 43 36 9 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 13 41 33 14


1,800 13 42 33 12




FIGURE 74: CONSUMPTION OF CONFECTIONERY VS SNACK – SOFT CANDY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


the last 6 months

% % % %





1,200 15 37 32 16


1,800 15 41 31 13


FIGURE 75: CONSUMPTION OF CONFECTIONERY VS SNACK – CRISP CANDY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


the last 6 months

% % % %








1,200 20 43 27 10


1,800 24 44 23 9


FIGURE 76: CONSUMPTION OF CONFECTIONERY VS SNACK – NOUGAT, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %

All 3,000 21 43 25 11 Gender: Male 1,500 19 45 25 11 Female 1,500 23 42 24 11 Age: 20-29 1,000 22 43 25 10 30-39 1,000 23 45 22 10 40-49 1,000 19 42 27 12 Gender and age group: Male, 20-29 500 22 45 23 10 Male, 30-39 500 20 46 23 11 Male, 40-49 500 14 44 30 12 Female, 20-29 500 22 41 28 10 Female, 30-39 500 25 44 21 10 Female, 40-49 500 23 40 24 13 Monthly personal income I: RMB4,999 or below 993 15 43 28 13 RMB5,000-9,999 1,300 22 44 24 10 RMB10,000 or above 707 28 43 21 8 Monthly personal income II: RMB2,999 or below 282 13 40 30 17 RMB3,000-5,999 1,116 17 44 27 12 RMB6,000 or above 1,602 25 43 23 9



Monthly personal income III: RMB2,999 or below 282 13 40 30 17 RMB3,000-5,999 1,116 17 44 27 12 RMB6,000-9,999 895 23 44 24 9 RMB10,000 or above 707 28 43 21 8 Monthly household income I: RMB7,999 or below 885 16 42 27 15 RMB8,000-11,999 701 18 45 27 10 RMB12,000 or above 1,414 26 43 22 9 Monthly household income II: RMB4,999 or below 201 12 40 32 15 RMB5,000-9,999 1,021 17 43 27 13 RMB10,000 or above 1,778 25 44 23 9 Monthly household income III: RMB4,999 or below 201 12 40 32 15 RMB5,000-7,999 684 17 43 25 15 RMB8,000-9,999 337 16 44 31 10 RMB10,000-11,999 364 20 46 24 10 RMB12,000 or above 1,414 26 43 22 9 Marital status: Single 615 19 41 30 10 Married 2,350 22 44 23 11 Children in household: Yes 2,092 23 44 24 10 No 293 16 45 20 19 Age of children: 0-4 808 27 44 21 7 5-9 712 27 41 22 10 10-15 590 20 43 25 12 16-18 221 19 44 29 9 City: Shanghai 300 15 45 26 14 Beijing 300 20 45 24 11 Guangzhou 300 22 40 28 10 Chengdu 300 22 42 23 12 Jinan 300 20 42 28 10 Linyi 300 22 40 26 12 Nantong 300 20 49 20 11 Hefei 300 21 40 30 8 Shantou 300 27 47 18 8 Changsha 300 21 43 25 12 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 20 43 25 12


1,800 22 43 24 10




FIGURE 77: CONSUMPTION OF CONFECTIONERY VS SNACK – FUNCTIONAL CANDY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %





1,200 23 42 22 12


1,800 24 43 21 13


FIGURE 78: CONSUMPTION OF CONFECTIONERY VS SNACK – SAVOURY SNACKS, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %








1,200 33 50 14 4


1,800 37 47 14 2

Education level: High school or below 182 34 44 18 4 College/University 2,523 35 49 14 3 Postgraduate or above 295 42 46 11 - SOURCE: QQSURVEY/MINTEL

FIGURE 79: CONSUMPTION OF CONFECTIONERY VS SNACK – MEAT/SEAFOOD SNACKS, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %

All 3,000 33 46 16 6 Gender: Male 1,500 31 46 18 5 Female 1,500 34 46 14 6 Age: 20-29 1,000 39 44 14 3 30-39 1,000 32 48 14 6 40-49 1,000 28 45 19 8 Gender and age group: Male, 20-29 500 36 45 16 3 Male, 30-39 500 32 46 16 6 Male, 40-49 500 27 46 21 6 Female, 20-29 500 42 42 13 3 Female, 30-39 500 32 51 12 6 Female, 40-49 500 28 45 17 10 Monthly personal income I: RMB4,999 or below 993 28 46 21 6 RMB5,000-9,999 1,300 34 46 15 6 RMB10,000 or above 707 38 46 12 5 Monthly personal income II: RMB2,999 or below 282 26 45 22 6 RMB3,000-5,999 1,116 29 47 19 6 RMB6,000 or above 1,602 36 45 13 5



Monthly personal income III: RMB2,999 or below 282 26 45 22 6 RMB3,000-5,999 1,116 29 47 19 6 RMB6,000-9,999 895 35 45 14 6 RMB10,000 or above 707 38 46 12 5 Monthly household income I: RMB7,999 or below 885 31 43 20 6 RMB8,000-11,999 701 27 50 18 5 RMB12,000 or above 1,414 36 46 12 6 Monthly household income II: RMB4,999 or below 201 29 41 24 5 RMB5,000-9,999 1,021 30 45 19 6 RMB10,000 or above 1,778 35 47 13 5 Monthly household income III: RMB4,999 or below 201 29 41 24 5 RMB5,000-7,999 684 32 43 19 6 RMB8,000-9,999 337 26 50 19 5 RMB10,000-11,999 364 27 51 18 4 RMB12,000 or above 1,414 36 46 12 6 Marital status: Single 615 34 47 14 4 Married 2,350 33 45 16 6 Children in household: Yes 2,092 34 45 15 5 No 293 21 47 22 10 Age of children: 0-4 808 40 42 14 3 5-9 712 33 46 13 8 10-15 590 31 47 16 6 16-18 221 34 46 16 4 City: Shanghai 300 25 52 16 7 Beijing 300 33 43 19 6 Guangzhou 300 34 43 18 5 Chengdu 300 26 48 18 8 Jinan 300 32 47 16 5 Linyi 300 33 47 12 8 Nantong 300 31 51 13 5 Hefei 300 35 43 17 5 Shantou 300 38 45 13 4 Changsha 300 39 40 17 5 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 30 47 18 6


1,800 35 45 15 5




FIGURE 80: CONSUMPTION OF CONFECTIONERY VS SNACK – PRESERVED FRUIT, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %





1,200 19 43 27 10


1,800 21 47 24 8


FIGURE 81: CONSUMPTION OF CONFECTIONERY VS SNACK – CHOCOLATE CONFECTIONERY, BY DEMOGRAPHICS, SEPTEMBER

2014 Base: 3,000 internet users aged 20-49 Sample

size Eating more

About the same

Eating less


% % % %








1,200 31 47 18 4


1,800 31 47 18 4


Repertoire – Consumption pattern FIGURE 82: REPERTOIRE OF CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014


Base: 3,000 internet users aged 20-49 All %

Eating 1-7 types 10 Eating 8-9 types 10 Eating 10 types 9 Eating 11 types 13 Eating 12 types 57 None 1 SOURCE: QQSURVEY/MINTEL



FIGURE 83: REPERTOIRE OF CONSUMPTION OF CONFECTIONERY VS SNACK, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size Eating 1-7

types Eating 8-9

types Eating

10 types Eating

11 types Eating

12 types None

% % % % % %

All 3,000 10 10 9 13 57 1 Gender: Male 1,500 11 10 9 13 56 1 Female 1,500 10 10 9 12 58 - Age: 20-29 1,000 7 8 9 14 62 - 30-39 1,000 11 9 9 10 61 1 40-49 1,000 14 14 9 14 48 1 Gender and age group: Male, 20-29 500 9 7 7 14 64 - Male, 30-39 500 11 9 11 10 58 1 Male, 40-49 500 13 15 10 15 47 1 Female, 20-29 500 5 10 10 14 61 - Female, 30-39 500 10 8 8 10 63 - Female, 40-49 500 14 13 9 13 50 1 Monthly personal income I:

RMB4,999 or below 993 11 11 10 16 51 1 RMB5,000-9,999 1,300 11 11 9 11 57 - RMB10,000 or above 707 9 7 8 11 65 1 Monthly personal income II:

RMB2,999 or below 282 13 13 13 13 46 1 RMB3,000-5,999 1,116 10 11 9 16 53 1 RMB6,000 or above 1,602 10 9 8 11 61 - Monthly personal income III:

RMB2,999 or below 282 13 13 13 13 46 1 RMB3,000-5,999 1,116 10 11 9 16 53 1 RMB6,000-9,999 895 11 11 9 11 59 - RMB10,000 or above 707 9 7 8 11 65 1 Monthly household income I:

RMB7,999 or below 885 12 13 9 16 49 1 RMB8,000-11,999 701 9 11 9 14 57 - RMB12,000 or above 1,414 10 8 9 11 62 - Monthly household income II:

RMB4,999 or below 201 13 9 11 17 48 1 RMB5,000-9,999 1,021 11 14 9 16 50 1 RMB10,000 or above 1,778 10 9 9 11 62 -



Monthly household income III:

RMB4,999 or below 201 13 9 11 17 48 1 RMB5,000-7,999 684 12 15 8 15 50 1 RMB8,000-9,999 337 10 11 9 17 52 1 RMB10,000-11,999 364 9 10 9 10 62 - RMB12,000 or above 1,414 10 8 9 11 62 - Marital status: Single 615 8 10 8 14 59 - Married 2,350 11 10 9 13 57 1 Children in household: Yes 2,092 10 10 9 13 58 - No 293 20 13 11 9 46 1 Age of children: 0-4 808 6 6 8 13 67 - 5-9 712 12 8 8 11 60 1 10-15 590 11 14 9 14 51 1 16-18 221 10 13 13 14 51 - City: Shanghai 300 13 13 13 14 47 1 Beijing 300 9 14 9 13 54 - Guangzhou 300 7 10 9 9 64 1 Chengdu 300 14 11 6 16 53 - Jinan 300 10 11 12 15 52 1 Linyi 300 11 12 8 10 58 1 Nantong 300 11 10 8 12 59 - Hefei 300 11 7 7 13 62 - Shantou 300 8 7 7 16 62 - Changsha 300 11 7 11 11 60 - Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 11 12 9 13 55 1


1,800 10 9 9 13 59 -

Education level: High school or below 182 17 9 9 15 48 2 College/University 2,523 11 11 9 12 57 - Postgraduate or above 295 5 8 10 15 61 - SOURCE: QQSURVEY/MINTEL

FIGURE 84: CONSUMPTION OF CONFECTIONERY VS SNACK, BY REPERTOIRE OF CONSUMPTION OF CONFECTIONERY VS SNACK, SEPTEMBER 2014 All Eating 1-7

types Eating 8-9

types Eating

10 types Eating

11 types Eating

12 types

Base: internet users aged 20-49 3,000 313 309 267 383 1,712 % % % % % %

Chewing gum: Eating more 31 9 15 21 39 37 About the same 46 36 47 50 39 49 Eating less 17 17 25 24 20 14 Haven’t eaten this in the last 6 months 7 39 13 6 1 -



Bubble gum: Eating more 8 1 2 2 5 12 About the same 28 4 6 9 17 43 Eating less 34 6 14 18 38 45 Haven’t eaten this in the last 6 months 29 90 78 71 40 - Lollipop: Eating more 9 - 2 2 6 13 About the same 33 2 10 15 24 47 Eating less 34 9 22 34 45 39 Haven’t eaten this in the last 6 months 24 89 66 49 25 - Hard candy (including mints): Eating more 13 1 3 6 9 19 About the same 42 12 25 39 42 51 Eating less 33 19 39 45 44 30 Haven’t eaten this in the last 6 months 13 68 33 11 5 - Soft candy (eg pastilles, toffee, pressed candy):

Eating more 15 2 5 9 13 21 About the same 39 7 20 32 42 50 Eating less 31 13 36 47 41 30 Haven’t eaten this in the last 6 months 15 79 39 12 5 - Crisp candy (eg almond, sesame crisp candy):

Eating more 22 4 7 15 22 30 About the same 43 17 35 42 44 50 Eating less 25 22 40 34 31 20 Haven’t eaten this in the last 6 months 10 57 18 9 4 - Nougat (eg milk, cranberry nougats): Eating more 21 4 9 16 17 28 About the same 43 17 33 36 48 51 Eating less 25 19 36 36 30 21 Haven’t eaten this in the last 6 months 11 60 22 12 5 - Functional candy (eg VC candy, TCM throat candy):

Eating more 23 6 9 18 25 30 About the same 43 15 32 40 39 51 Eating less 21 17 29 26 28 19 Haven’t eaten this in the last 6 months 13 62 30 16 8 - Savoury snacks (eg nuts, seeds, potato chips):

Eating more 35 12 24 39 39 41 About the same 48 44 55 44 46 49 Eating less 14 27 18 16 14 10 Haven’t eaten this in the last 6 months 3 17 3 1 1 - Meat/seafood snacks (eg jerky, pork scratching, dried fish slice):

Eating more 33 7 21 29 36 40 About the same 46 34 44 45 43 50 Eating less 16 26 24 22 20 11 Haven’t eaten this in the last 6 months 6 34 11 4 1 -



Preserved fruit (eg dried plum, preserved olive):

Eating more 20 2 9 16 19 27 About the same 45 21 40 46 45 51 Eating less 25 27 30 30 32 22 Haven’t eaten this in the last 6 months 9 50 20 7 4 - Chocolate confectionery: Eating more 31 10 20 27 28 38 About the same 47 38 50 49 48 49 Eating less 18 27 25 22 22 13 Haven’t eaten this in the last 6 months 4 25 6 2 1 - SOURCE: QQSURVEY/MINTEL

Appendix – The Consumer – Reason for Confectionery Purchase Sugar Confectionery China, December 2014


Appendix – The Consumer – Reason for

Confectionery Purchase FIGURE 85: REASON FOR CONFECTIONERY PURCHASE, SEPTEMBER 2014



On purpose 93

To freshen my breath/soothe my throat 60 For sharing when socialising with my family members/friends 41 To stock up some 38 When I fancy something sweet 37 For special events (eg birthday, new year) 29 As a gift (eg for family, friends, business partners) 27 To fill hunger/get an energy boost 24 Impulsive purchase 66

Bought when seeing the products at checkout area 32 After seeing promotions (eg free sampling) 29 I was attracted by appealing product packs/product display 27 Attracted by online special offering (eg Groupon, big discount during Nov 11th) 23 I haven’t bought any sugar/gum confectionery in the last 6 months 3


FIGURE 86: MOST POPULAR REASON FOR CONFECTIONERY PURCHASE, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size On

purpose To

freshen my

breath/ soothe

my throat

For sharing when

socialising with my family

members/ friends

To stock

up some

When I fancy

something sweet

% % % % %

All 3,000 93 60 41 38 37 Gender: Male 1,500 94 62 40 36 35 Female 1,500 92 57 41 40 39 Age: 20-29 1,000 95 60 36 40 42 30-39 1,000 92 59 45 37 34 40-49 1,000 93 60 41 36 35 Gender and age group: Male, 20-29 500 96 60 36 36 41 Male, 30-39 500 93 62 46 38 34 Male, 40-49 500 94 65 40 34 31 Female, 20-29 500 94 60 36 44 43 Female, 30-39 500 92 57 45 37 34 Female, 40-49 500 91 54 43 39 38



Monthly personal income I: RMB4,999 or below 993 91 61 35 37 36 RMB5,000-9,999 1,300 95 63 44 38 38 RMB10,000 or above 707 94 53 44 38 37 Monthly personal income II: RMB2,999 or below 282 87 57 30 32 31 RMB3,000-5,999 1,116 92 62 39 38 35 RMB6,000 or above 1,602 95 59 44 39 39 Monthly personal income III: RMB2,999 or below 282 87 57 30 32 31 RMB3,000-5,999 1,116 92 62 39 38 35 RMB6,000-9,999 895 96 63 44 40 41 RMB10,000 or above 707 94 53 44 38 37 Monthly household income I: RMB7,999 or below 885 91 62 37 37 35 RMB8,000-11,999 701 93 62 38 35 36 RMB12,000 or above 1,414 94 57 45 39 39 Monthly household income II: RMB4,999 or below 201 87 54 29 30 33 RMB5,000-9,999 1,021 92 64 39 38 35 RMB10,000 or above 1,778 95 58 43 38 39 Monthly household income III: RMB4,999 or below 201 87 54 29 30 33 RMB5,000-7,999 684 93 64 39 39 36 RMB8,000-9,999 337 91 62 39 36 34 RMB10,000-11,999 364 96 62 38 34 37 RMB12,000 or above 1,414 94 57 45 39 39 Marital status: Single 615 93 60 35 40 40 Married 2,350 94 60 43 37 36 Children in household: Yes 2,092 94 60 45 39 37 No 293 87 54 25 27 29 Age of children: 0-4 808 96 62 43 42 43 5-9 712 93 56 49 41 37 10-15 590 94 63 44 36 37 16-18 221 95 62 49 36 33 City: Shanghai 300 90 57 40 27 38 Beijing 300 93 59 37 38 34 Guangzhou 300 91 55 44 43 43 Chengdu 300 94 59 40 37 41 Jinan 300 93 64 45 33 36 Linyi 300 93 64 38 37 32 Nantong 300 93 57 34 37 34 Hefei 300 95 64 45 38 36 Shantou 300 95 59 44 46 38 Changsha 300 96 61 42 42 39



Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 92 57 40 36 39


1,800 94 61 41 39 36

Education level: High school or below 182 90 59 41 34 31 College/University 2,523 93 60 40 37 38 Postgraduate or above 295 94 59 45 44 37 SOURCE: QQSURVEY/MINTEL

FIGURE 87: NEXT MOST POPULAR REASON FOR CONFECTIONERY PURCHASE, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size For

special events

(eg birthday, new year)

As a gift (eg for family, friends,

business partners)

To fill hunger/ get an energy boost

Impulsive purchase

Bought when

seeing the

products at

checkout area

% % % % %

All 3,000 29 27 24 66 32 Gender: Male 1,500 30 29 22 66 34 Female 1,500 27 25 25 67 31 Age: 20-29 1,000 25 23 24 69 35 30-39 1,000 31 30 25 66 33 40-49 1,000 30 27 23 63 29 Gender and age group: Male, 20-29 500 25 26 24 69 37 Male, 30-39 500 32 32 23 67 35 Male, 40-49 500 33 29 20 61 30 Female, 20-29 500 25 21 23 70 34 Female, 30-39 500 30 28 27 66 30 Female, 40-49 500 28 26 26 65 27 Monthly personal income I: RMB4,999 or below 993 22 19 21 63 31 RMB5,000-9,999 1,300 32 31 25 68 33 RMB10,000 or above 707 32 31 27 67 32 Monthly personal income II: RMB2,999 or below 282 18 12 17 60 30 RMB3,000-5,999 1,116 26 24 22 65 32 RMB6,000 or above 1,602 33 32 26 68 33 Monthly personal income III: RMB2,999 or below 282 18 12 17 60 30 RMB3,000-5,999 1,116 26 24 22 65 32 RMB6,000-9,999 895 33 32 26 68 34 RMB10,000 or above 707 32 31 27 67 32



Monthly household income I: RMB7,999 or below 885 23 21 22 64 31 RMB8,000-11,999 701 27 25 19 62 31 RMB12,000 or above 1,414 33 32 27 69 33 Monthly household income II: RMB4,999 or below 201 18 15 22 55 30 RMB5,000-9,999 1,021 26 23 21 65 32 RMB10,000 or above 1,778 32 30 26 68 33 Monthly household income III: RMB4,999 or below 201 18 15 22 55 30 RMB5,000-7,999 684 24 23 22 67 32 RMB8,000-9,999 337 30 25 20 61 34 RMB10,000-11,999 364 25 25 18 63 29 RMB12,000 or above 1,414 33 32 27 69 33 Marital status: Single 615 21 21 24 67 36 Married 2,350 31 28 24 66 31 Children in household: Yes 2,092 32 30 24 68 32 No 293 23 20 20 54 25 Age of children: 0-4 808 30 28 26 71 36 5-9 712 34 32 28 70 34 10-15 590 35 30 24 64 28 16-18 221 35 27 16 65 30 City: Shanghai 300 22 20 19 59 30 Beijing 300 26 27 26 65 34 Guangzhou 300 24 27 22 63 25 Chengdu 300 34 29 24 74 33 Jinan 300 32 34 26 66 31 Linyi 300 27 25 22 67 36 Nantong 300 29 26 27 65 30 Hefei 300 32 28 25 65 37 Shantou 300 30 28 27 68 31 Changsha 300 32 26 21 70 38 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 27 26 23 65 30


1,800 30 28 25 67 34

Education level: High school or below 182 30 20 20 58 28 College/University 2,523 28 27 23 66 32 Postgraduate or above 295 34 30 29 74 39 SOURCE: QQSURVEY/MINTEL



FIGURE 88: OTHER REASON FOR CONFECTIONERY PURCHASE, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size After seeing promotions

(eg free sampling)

I was attracted

by appealing product packs/

product display

Attracted by online special

offering (eg Groupon, big

discount during Nov

11th)

I haven’t bought any sugar/gum

confectionery in the last 6

months

% % % %

All 3,000 29 27 23 3 Gender: Male 1,500 27 25 22 3 Female 1,500 30 29 24 3 Age: 20-29 1,000 29 28 26 2 30-39 1,000 29 28 22 3 40-49 1,000 29 25 20 4 Gender and age group: Male, 20-29 500 27 25 26 2 Male, 30-39 500 29 27 21 3 Male, 40-49 500 25 24 18 3 Female, 20-29 500 30 31 27 2 Female, 30-39 500 29 29 23 2 Female, 40-49 500 32 26 23 4 Monthly personal income I: RMB4,999 or below 993 29 20 23 5 RMB5,000-9,999 1,300 29 30 24 2 RMB10,000 or above 707 27 32 22 1 Monthly personal income II: RMB2,999 or below 282 29 18 21 9 RMB3,000-5,999 1,116 30 23 22 4 RMB6,000 or above 1,602 28 31 24 1 Monthly personal income III: RMB2,999 or below 282 29 18 21 9 RMB3,000-5,999 1,116 30 23 22 4 RMB6,000-9,999 895 29 31 26 1 RMB10,000 or above 707 27 32 22 1 Monthly household income I: RMB7,999 or below 885 31 21 23 5 RMB8,000-11,999 701 28 23 20 3 RMB12,000 or above 1,414 28 33 25 1 Monthly household income II: RMB4,999 or below 201 26 17 20 8 RMB5,000-9,999 1,021 30 23 22 4 RMB10,000 or above 1,778 28 31 24 2



Monthly household income III: RMB4,999 or below 201 26 17 20 8 RMB5,000-7,999 684 32 23 23 4 RMB8,000-9,999 337 27 23 20 4 RMB10,000-11,999 364 29 23 20 2 RMB12,000 or above 1,414 28 33 25 1 Marital status: Single 615 27 27 24 4 Married 2,350 29 27 23 2 Children in household: Yes 2,092 30 29 24 2 No 293 24 15 15 8 Age of children: 0-4 808 30 29 25 1 5-9 712 30 33 28 2 10-15 590 31 29 21 2 16-18 221 33 23 20 3 City: Shanghai 300 25 21 18 4 Beijing 300 33 23 23 4 Guangzhou 300 27 31 20 4 Chengdu 300 32 31 28 2 Jinan 300 32 26 25 2 Linyi 300 25 28 20 4 Nantong 300 26 28 22 2 Hefei 300 29 27 23 2 Shantou 300 29 30 29 2 Changsha 300 29 25 23 2 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 29 27 22 3


1,800 28 27 24 2


Appendix – The Consumer – Types of Sugar Confectionery Sugar Confectionery Products Bought for Self/Family China, December 2014


Appendix – The Consumer – Types of Sugar

Confectionery Products Bought for Self/Family FIGURE 89: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY, SEPTEMBER 2014


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

By packaging format: Portable box (eg plastic, tin, paper) 19 Loose 15 Portable tube 15 Glass/plastic jar 13 Big plastic/tin box 13 Paper/plastic bag 13 Individually wrapped or not: Individually wrapped 56 non-individually wrapped 31 Assorted or not - Different flavours in one pack 49 Same flavour in one pack 39 I haven’t bought sugar confectionery out of this purpose in the last 6 months 12


FIGURE 90: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY – BY PACKAGING FORMAT, BY

DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample

size Portable box (eg plastic,

tin, paper)

Loose Portable tube

Glass/ plastic

jar

Big plastic/ tin box

Paper/ plastic

bag

% % % % % %

All 2,917 19 15 15 13 13 13 Gender: Male 1,459 19 17 13 14 13 13 Female 1,458 20 13 16 13 13 12 Age: 20-29 980 21 14 16 13 14 12 30-39 972 18 15 15 13 14 12 40-49 965 19 16 13 13 11 13 Gender and age group: Male, 20-29 490 20 15 16 13 13 12 Male, 30-39 484 18 18 13 14 15 13 Male, 40-49 485 18 17 12 14 12 12 Female, 20-29 490 23 14 16 13 14 12 Female, 30-39 488 19 13 17 13 13 11 Female, 40-49 480 20 14 15 13 11 14



Monthly personal income I: RMB4,999 or below 940 20 18 15 11 11 11 RMB5,000-9,999 1,279 21 14 15 15 13 13 RMB10,000 or above 698 17 12 14 14 16 14 Monthly personal income II: RMB2,999 or below 258 20 21 15 8 9 10 RMB3,000-5,999 1,075 20 16 15 13 11 11 RMB6,000 or above 1,584 19 13 14 14 15 14 Monthly personal income III: RMB2,999 or below 258 20 21 15 8 9 10 RMB3,000-5,999 1,075 20 16 15 13 11 11 RMB6,000-9,999 886 21 15 14 14 14 13 RMB10,000 or above 698 17 12 14 14 16 14 Monthly household income I: RMB7,999 or below 845 21 17 15 12 10 11 RMB8,000-11,999 679 20 18 14 14 13 10 RMB12,000 or above 1,393 18 13 14 14 15 15 Monthly household income II: RMB4,999 or below 185 17 19 14 12 11 9 RMB5,000-9,999 982 21 16 15 12 12 11 RMB10,000 or above 1,750 19 14 14 14 14 14 Monthly household income III: RMB4,999 or below 185 17 19 14 12 11 9 RMB5,000-7,999 660 22 16 15 12 10 12 RMB8,000-9,999 322 20 17 14 11 15 10 RMB10,000-11,999 357 20 18 14 16 11 10 RMB12,000 or above 1,393 18 13 14 14 15 15 Marital status: Single 593 21 15 15 12 13 14 Married 2,292 19 15 14 14 13 12 Children in household: Yes 2,053 19 15 15 14 14 13 No 271 18 13 11 12 8 9 Age of children: 0-4 800 21 16 17 13 14 10 5-9 697 17 14 14 15 16 14 10-15 579 18 13 13 15 13 16 16-18 215 15 20 14 16 8 12 City: Shanghai 288 15 13 16 11 15 14 Beijing 289 18 19 14 13 15 13 Guangzhou 289 18 10 17 14 13 12 Chengdu 293 20 15 15 14 12 11 Jinan 294 22 17 16 11 9 11 Linyi 289 22 14 17 13 11 12 Nantong 294 17 14 14 18 13 11 Hefei 293 19 20 14 14 15 10 Shantou 293 23 9 12 12 14 20 Changsha 295 19 19 11 14 13 12




1,159 18 14 15 13 14 13


1,758 20 15 14 14 13 13

Education level: High school or below 170 21 19 16 9 7 8 College/University 2,457 20 14 15 13 13 13 Postgraduate or above 290 13 19 13 18 17 13 SOURCE: QQSURVEY/MINTEL

FIGURE 91: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY – INDIVIDUALLY WRAPPED OR NOT, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample size Individually

wrapped Non-individually

wrapped % %

All 2,917 56 31 Gender: Male 1,459 55 34 Female 1,458 58 29 Age: 20-29 980 55 35 30-39 972 57 31 40-49 965 57 28 Gender and age group: Male, 20-29 490 53 37 Male, 30-39 484 55 35 Male, 40-49 485 56 29 Female, 20-29 490 58 34 Female, 30-39 488 59 27 Female, 40-49 480 57 27 Monthly personal income I: RMB4,999 or below 940 53 31 RMB5,000-9,999 1,279 60 30 RMB10,000 or above 698 53 34 Monthly personal income II: RMB2,999 or below 258 53 31 RMB3,000-5,999 1,075 56 30 RMB6,000 or above 1,584 57 32 Monthly personal income III: RMB2,999 or below 258 53 31 RMB3,000-5,999 1,075 56 30 RMB6,000-9,999 886 60 31 RMB10,000 or above 698 53 34 Monthly household income I: RMB7,999 or below 845 53 33 RMB8,000-11,999 679 58 30 RMB12,000 or above 1,393 57 31



Monthly household income II: RMB4,999 or below 185 54 29 RMB5,000-9,999 982 54 33 RMB10,000 or above 1,750 58 31 Monthly household income III: RMB4,999 or below 185 54 29 RMB5,000-7,999 660 53 34 RMB8,000-9,999 322 56 31 RMB10,000-11,999 357 60 29 RMB12,000 or above 1,393 57 31 Marital status: Single 593 53 36 Married 2,292 57 30 Children in household: Yes 2,053 59 30 No 271 41 30 Age of children: 0-4 800 59 33 5-9 697 59 32 10-15 579 60 28 16-18 215 60 25 City: Shanghai 288 51 32 Beijing 289 56 35 Guangzhou 289 59 26 Chengdu 293 56 29 Jinan 294 59 27 Linyi 289 61 28 Nantong 294 54 32 Hefei 293 54 38 Shantou 293 56 34 Changsha 295 56 33 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu) 1,159 56 31 Tier 2 and Tier 3 (Jinan, Linyi, Nantong, Hefei, Shantou, Changsha)

1,758 57 32

Education level: High school or below 170 59 21 College/University 2,457 56 32 Postgraduate or above 290 58 34 SOURCE: QQSURVEY/MINTEL



FIGURE 92: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR YOURSELF/FAMILY – ASSORTED OR NOT, BY

DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample size Different

flavours in one pack

Same flavour in one pack

I haven’t bought sugar

confectionery out of this purpose in the last 6 months

% % %

All 2,917 49 39 12 Gender: Male 1,459 48 40 12 Female 1,458 49 38 13 Age: 20-29 980 50 40 9 30-39 972 49 39 12 40-49 965 47 38 15 Gender and age group: Male, 20-29 490 46 44 10 Male, 30-39 484 49 42 10 Male, 40-49 485 50 35 15 Female, 20-29 490 55 37 9 Female, 30-39 488 50 36 15 Female, 40-49 480 43 41 15 Monthly personal income I: RMB4,999 or below 940 47 38 15 RMB5,000-9,999 1,279 51 39 10 RMB10,000 or above 698 47 40 13 Monthly personal income II: RMB2,999 or below 258 46 38 16 RMB3,000-5,999 1,075 49 37 14 RMB6,000 or above 1,584 49 40 10 Monthly personal income III: RMB2,999 or below 258 46 38 16 RMB3,000-5,999 1,075 49 37 14 RMB6,000-9,999 886 51 40 8 RMB10,000 or above 698 47 40 13 Monthly household income I: RMB7,999 or below 845 49 37 14 RMB8,000-11,999 679 49 39 12 RMB12,000 or above 1,393 48 40 11 Monthly household income II: RMB4,999 or below 185 45 38 17 RMB5,000-9,999 982 50 37 13 RMB10,000 or above 1,750 49 40 11 Monthly household income III: RMB4,999 or below 185 45 38 17 RMB5,000-7,999 660 50 37 13 RMB8,000-9,999 322 48 39 13 RMB10,000-11,999 357 50 39 12 RMB12,000 or above 1,393 48 40 11



Marital status: Single 593 50 40 11 Married 2,292 48 39 13 Children in household: Yes 2,053 50 40 11 No 271 39 32 29 Age of children: 0-4 800 51 41 9 5-9 697 51 40 9 10-15 579 47 41 12 16-18 215 53 32 15 City: Shanghai 288 39 45 16 Beijing 289 52 40 9 Guangzhou 289 48 36 16 Chengdu 293 45 41 14 Jinan 294 50 36 14 Linyi 289 53 36 11 Nantong 294 48 39 14 Hefei 293 53 39 8 Shantou 293 47 43 10 Changsha 295 55 34 11 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 46 40 14


1,758 51 38 11

Education level: High school or below 170 48 32 20 College/University 2,457 49 39 12 Postgraduate or above 290 50 43 7 SOURCE: QQSURVEY/MINTEL

Appendix – The Consumer – Types of Sugar Confectionery Sugar Confectionery Products Bought for Gifting China, December 2014


Appendix – The Consumer – Types of Sugar

Confectionery Products Bought for Gifting FIGURE 93: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING, SEPTEMBER 2014

“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 gifting?”

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

By packaging format: Big plastic/tin box 25 Glass/plastic jar 14 Paper/plastic bag 14 Portable box (eg plastic, tin, paper) 11 Portable tube 10 Loose 9 Individually wrapped or not: Individually wrapped 56 non-individually wrapped 27 Assorted or not: Different flavours in one pack 54 Same flavour in one pack 29 I haven’t bought sugar confectionery out of this purpose in the last 6 months

17


FIGURE 94: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING – BY PACKAGING FORMAT, BY


size Big

plastic/ tin box

Glass/ plastic

jar

Paper/ plastic

bag

Portable box (eg plastic,

tin, paper)

Portable tube

Loose

% % % % % %

All 2,917 25 14 14 11 10 9 Gender: Male 1,459 24 14 14 12 10 10 Female 1,458 25 15 14 10 10 8 Age: 20-29 980 25 16 13 12 11 11 30-39 972 26 13 14 12 11 9 40-49 965 23 14 14 10 7 8



Gender and age group: Male, 20-29 490 23 14 14 14 11 11 Male, 30-39 484 25 13 15 13 12 10 Male, 40-49 485 25 13 12 11 7 8 Female, 20-29 490 28 17 13 10 11 10 Female, 30-39 488 26 14 13 10 10 8 Female, 40-49 480 21 15 16 10 8 8 Monthly personal income I:

RMB4,999 or below 940 23 12 13 10 11 11 RMB5,000-9,999 1,279 27 16 13 11 9 9 RMB10,000 or above 698 23 13 17 12 10 7 Monthly personal income II:

RMB2,999 or below 258 24 12 14 9 10 10 RMB3,000-5,999 1,075 24 13 12 12 10 10 RMB6,000 or above 1,584 25 16 15 11 10 8 Monthly personal income III:

RMB2,999 or below 258 24 12 14 9 10 10 RMB3,000-5,999 1,075 24 13 12 12 10 10 RMB6,000-9,999 886 27 17 13 10 9 9 RMB10,000 or above 698 23 13 17 12 10 7 Monthly household income I:

RMB7,999 or below 845 23 13 12 11 9 11 RMB8,000-11,999 679 25 16 11 11 10 10 RMB12,000 or above 1,393 25 14 16 11 10 8 Monthly household income II:

RMB4,999 or below 185 25 10 12 10 12 9 RMB5,000-9,999 982 24 15 12 11 9 11 RMB10,000 or above 1,750 25 14 15 12 10 8 Monthly household income III:

RMB4,999 or below 185 25 10 12 10 12 9 RMB5,000-7,999 660 23 14 12 12 9 11 RMB8,000-9,999 322 25 17 11 8 10 10 RMB10,000-11,999 357 24 15 11 14 10 10 RMB12,000 or above 1,393 25 14 16 11 10 8 Marital status: Single 593 25 13 14 14 10 10 Married 2,292 24 15 14 11 10 9 Children in household: Yes 2,053 25 15 15 11 10 9 No 271 18 10 8 7 7 10 Age of children: 0-4 800 27 16 13 12 11 11 5-9 697 23 16 16 11 11 9 10-15 579 25 15 15 11 8 7 16-18 215 22 16 14 8 6 9



City: Shanghai 288 22 12 14 11 8 7 Beijing 289 25 16 13 15 9 12 Guangzhou 289 24 16 13 13 8 7 Chengdu 293 22 17 10 12 12 11 Jinan 294 23 10 18 10 11 11 Linyi 289 25 11 17 10 9 11 Nantong 294 26 14 13 11 8 6 Hefei 293 26 19 12 13 9 9 Shantou 293 24 16 14 12 12 10 Changsha 295 28 14 14 7 11 8 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 23 15 13 13 9 9


1,758 25 14 15 10 10 9

Education level: High school or below 170 22 10 14 12 8 8 College/University 2,457 25 15 14 11 10 9 Postgraduate or above 290 24 16 16 11 8 13 SOURCE: QQSURVEY/MINTEL

FIGURE 95: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING – INDIVIDUALLY WRAPPED OR NOT, BY

DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample size Individually

wrapped Non-individually

wrapped % %

All 2,917 56 27 Gender: Male 1,459 55 29 Female 1,458 57 25 Age: 20-29 980 57 32 30-39 972 57 27 40-49 965 54 22 Gender and age group: Male, 20-29 490 55 33 Male, 30-39 484 57 30 Male, 40-49 485 53 23 Female, 20-29 490 59 30 Female, 30-39 488 57 24 Female, 40-49 480 56 21 Monthly personal income I: RMB4,999 or below 940 54 26 RMB5,000-9,999 1,279 59 26 RMB10,000 or above 698 53 30 Monthly personal income II: RMB2,999 or below 258 55 23 RMB3,000-5,999 1,075 55 27 RMB6,000 or above 1,584 57 27



Monthly personal income III: RMB2,999 or below 258 55 23 RMB3,000-5,999 1,075 55 27 RMB6,000-9,999 886 60 26 RMB10,000 or above 698 53 30 Monthly household income I: RMB7,999 or below 845 56 25 RMB8,000-11,999 679 57 27 RMB12,000 or above 1,393 56 28 Monthly household income II: RMB4,999 or below 185 56 23 RMB5,000-9,999 982 56 26 RMB10,000 or above 1,750 56 28 Monthly household income III: RMB4,999 or below 185 56 23 RMB5,000-7,999 660 56 26 RMB8,000-9,999 322 56 26 RMB10,000-11,999 357 57 27 RMB12,000 or above 1,393 56 28 Marital status: Single 593 54 33 Married 2,292 57 26 Children in household: Yes 2,053 58 27 No 271 45 16 Age of children: 0-4 800 59 31 5-9 697 59 27 10-15 579 57 25 16-18 215 54 21 City: Shanghai 288 48 27 Beijing 289 57 32 Guangzhou 289 53 28 Chengdu 293 56 28 Jinan 294 58 24 Linyi 289 61 23 Nantong 294 51 26 Hefei 293 58 28 Shantou 293 58 29 Changsha 295 61 22 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu) 1,159 54 29 Tier 2 and Tier 3 (Jinan, Linyi, Nantong, Hefei, Shantou, Changsha)

1,758 58 25

Education level: High school or below 170 61 13 College/University 2,457 56 27 Postgraduate or above 290 56 33 SOURCE: QQSURVEY/MINTEL



FIGURE 96: TYPES OF SUGAR CONFECTIONERY PRODUCTS BOUGHT FOR GIFTING – ASSORTED OR NOT, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample

size Different

flavours in one pack

Same flavour in one pack

I haven’t bought sugar

confectionery out of this purpose in the last 6 months

% % %

All 2,917 54 29 17 Gender: Male 1,459 53 31 17 Female 1,458 56 27 17 Age: 20-29 980 56 32 12 30-39 972 56 28 16 40-49 965 50 26 24 Gender and age group: Male, 20-29 490 52 35 13 Male, 30-39 484 55 32 13 Male, 40-49 485 51 25 24 Female, 20-29 490 60 30 11 Female, 30-39 488 58 23 19 Female, 40-49 480 49 28 23 Monthly personal income I: RMB4,999 or below 940 51 29 19 RMB5,000-9,999 1,279 57 28 15 RMB10,000 or above 698 54 29 17 Monthly personal income II: RMB2,999 or below 258 50 28 22 RMB3,000-5,999 1,075 54 29 18 RMB6,000 or above 1,584 55 29 16 Monthly personal income III: RMB2,999 or below 258 50 28 22 RMB3,000-5,999 1,075 54 29 18 RMB6,000-9,999 886 57 29 14 RMB10,000 or above 698 54 29 17 Monthly household income I: RMB7,999 or below 845 53 27 19 RMB8,000-11,999 679 54 29 17 RMB12,000 or above 1,393 54 30 16 Monthly household income II: RMB4,999 or below 185 46 33 21 RMB5,000-9,999 982 55 26 19 RMB10,000 or above 1,750 54 30 16 Monthly household income III: RMB4,999 or below 185 46 33 21 RMB5,000-7,999 660 56 26 19 RMB8,000-9,999 322 55 27 18 RMB10,000-11,999 357 54 30 16 RMB12,000 or above 1,393 54 30 16



Marital status: Single 593 52 34 14 Married 2,292 55 28 18 Children in household: Yes 2,053 57 28 15 No 271 39 23 39 Age of children: 0-4 800 61 29 11 5-9 697 57 29 14 10-15 579 55 27 18 16-18 215 50 26 25 City: Shanghai 288 42 33 25 Beijing 289 60 29 11 Guangzhou 289 56 26 19 Chengdu 293 53 32 15 Jinan 294 51 31 18 Linyi 289 57 27 17 Nantong 294 50 28 22 Hefei 293 58 28 13 Shantou 293 58 29 13 Changsha 295 58 25 17 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 53 30 18


1,758 55 28 17

Education level: High school or below 170 50 24 26 College/University 2,457 54 29 17 Postgraduate or above 290 58 31 11 SOURCE: QQSURVEY/MINTEL

Appendix – The Consumer – Occasion of Sugar Sugar Confectionery Confectionery Gifting China, December 2014


Appendix – The Consumer – Occasion of Sugar

Confectionery Gifting FIGURE 97: 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 All %

During Chinese traditional festivals (eg Chinese New Year, Mid-Autumn Festival) 45 As a thank you gift 38 As a house warming (eg when visiting as a guest, visiting client) 36 For dating/Valentine’s Day/Chinese Valentine’s Day 35 As a souvenir (eg when return from holiday, travelling abroad) 34 As a birthday/anniversary gift 32 On Mother’s Day/Father’s Day/Children’s Day 31 For celebration (eg promotion, have a good news, graduation) 29 As a wedding gift 22 During Western festivals (eg Christmas, Easter Day, Halloween) 20 As a farewell gift 16 None of the above 3 SOURCE: QQSURVEY/MINTEL

FIGURE 98: MOST POPULAR OCCASION OF SUGAR CONFECTIONERY GIFTING, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,420 internet users aged 20-49 who have purchased sugar/gum confectionery for gifting in the last 6 months Sample

size During

Chinese traditional

festivals (eg Chinese

New Year, Mid-Autumn

Festival)

As a thank you gift

As a house

warming (eg when visiting

as a guest, visiting client)

For dating/ Valentine’s

Day/ Chinese

Valentine’s Day

As a souvenir (eg when

return from

holiday, travelling abroad)

As a birthday/

anniversary gift

% % % % % % All 2,420 45 38 36 35 34 32 Gender: Male 1,217 44 39 37 39 33 34 Female 1,203 46 38 36 31 34 31 Age: 20-29 866 36 36 33 42 30 32 30-39 817 48 39 38 35 36 36 40-49 737 53 41 39 27 36 29



Gender and age group: Male, 20-29 428 35 35 31 48 27 32 Male, 30-39 421 45 41 40 39 38 37 Male, 40-49 368 54 39 41 30 36 31 Female, 20-29 438 38 37 34 37 33 31 Female, 30-39 396 51 36 36 31 34 34 Female, 40-49 369 52 42 38 25 35 27 Monthly personal income I: RMB4,999 or below 757 42 33 31 33 26 28 RMB5,000-9,999 1,084 48 41 39 35 36 35 RMB10,000 or above 579 44 39 40 39 38 32 Monthly personal income II: RMB2,999 or below 200 40 25 27 29 19 26 RMB3,000-5,999 883 45 36 32 34 30 29 RMB6,000 or above 1,337 46 42 41 37 38 35 Monthly personal income III: RMB2,999 or below 200 40 25 27 29 19 26 RMB3,000-5,999 883 45 36 32 34 30 29 RMB6,000-9,999 758 48 44 41 36 38 37 RMB10,000 or above 579 44 39 40 39 38 32 Monthly household income I: RMB7,999 or below 682 42 36 30 34 29 30 RMB8,000-11,999 565 45 38 36 34 30 30 RMB12,000 or above 1,173 47 40 40 37 38 34 Monthly household income II:


RMB4,999 or below 146 36 29 28 29 25 17 RMB5,000-7,999 536 44 38 31 35 30 33 RMB8,000-9,999 264 48 38 38 35 31 32 RMB10,000-11,999 301 42 38 34 33 30 29 RMB12,000 or above 1,173 47 40 40 37 38 34 Marital status: Single 511 34 36 29 42 28 30 Married 1,887 48 39 38 33 35 33 Children in household: Yes 1,743 49 39 38 33 35 33 No 166 43 35 37 32 31 28 Age of children: 0-4 716 46 36 40 39 33 32 5-9 601 47 42 38 34 37 35 10-15 473 54 41 41 27 37 34 16-18 162 57 43 37 28 34 28 City: Shanghai 215 38 44 33 32 36 32 Beijing 258 45 36 29 37 34 32 Guangzhou 235 48 37 43 28 34 34 Chengdu 248 48 43 40 36 33 35 Jinan 242 55 35 39 35 39 35 Linyi 241 40 37 34 39 34 28 Nantong 228 39 39 33 35 29 29 Hefei 254 48 40 38 35 30 33 Shantou 255 49 38 41 36 35 33 Changsha 244 42 36 33 38 32 29




956 45 40 36 33 34 33


1,464 46 37 36 36 33 31

Education level: High school or below 125 57 37 37 31 26 34 College/University 2,036 45 38 36 35 33 32 Postgraduate or above 259 41 41 36 40 40 35


FIGURE 99: NEXT MOST POPULAR OCCASION OF SUGAR CONFECTIONERY GIFTING, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,420 internet users aged 20-49 who have purchased sugar/gum confectionery for gifting in the last 6 months Sample

size On

Mother’s Day/

Father’s Day/

Children’s day

For celebration

(eg promotion,

have a good news,

graduation)

As a wedding

gift

During Western

festivals (eg Christmas, Easter Day, Halloween)

As a farewell

gift

None of the above

% % % % % % All 2,420 31 29 22 20 16 3 Gender: Male 1,217 30 29 22 19 16 3 Female 1,203 32 30 22 20 16 3 Age: 20-29 866 25 27 21 19 16 3 30-39 817 38 31 25 21 18 2 40-49 737 29 29 21 19 14 3 Gender and age group: Male, 20-29 428 24 29 23 19 19 4 Male, 30-39 421 37 29 23 19 17 2 Male, 40-49 368 29 28 21 20 12 3 Female, 20-29 438 27 25 18 20 13 3 Female, 30-39 396 39 34 27 22 19 3 Female, 40-49 369 29 31 21 18 17 4 Monthly personal income I: RMB4,999 or below 757 28 25 21 14 13 4 RMB5,000-9,999 1,084 31 31 21 20 16 3 RMB10,000 or above 579 33 32 26 26 21 2 Monthly personal income II: RMB2,999 or below 200 28 25 17 11 9 6 RMB3,000-5,999 883 28 26 20 16 13 3 RMB6,000 or above 1,337 33 32 24 23 20 2 Monthly personal income III: RMB2,999 or below 200 28 25 17 11 9 6 RMB3,000-5,999 883 28 26 20 16 13 3 RMB6,000-9,999 758 33 32 23 21 18 3 RMB10,000 or above 579 33 32 26 26 21 2 Monthly household income I: RMB7,999 or below 682 29 26 20 15 13 4 RMB8,000-11,999 565 30 25 19 17 13 2 RMB12,000 or above 1,173 32 33 25 24 20 3



Monthly household income II:


RMB4,999 or below 146 20 20 16 12 10 4 RMB5,000-7,999 536 32 28 21 15 14 4 RMB8,000-9,999 264 34 25 19 18 15 3 RMB10,000-11,999 301 26 26 18 16 12 2 RMB12,000 or above 1,173 32 33 25 24 20 3 Marital status: Single 511 19 22 16 17 16 4 Married 1,887 34 31 24 21 16 3 Children in household: Yes 1,743 35 32 24 21 17 2 No 166 19 26 19 19 10 4 Age of children: 0-4 716 36 30 26 20 17 1 5-9 601 40 34 26 25 21 3 10-15 473 32 31 20 22 15 4 16-18 162 31 34 27 16 18 1 City: Shanghai 215 25 25 19 17 11 3 Beijing 258 30 28 21 22 18 5 Guangzhou 235 31 26 17 17 16 3 Chengdu 248 30 32 17 17 19 3 Jinan 242 28 30 29 19 14 2 Linyi 241 29 29 24 22 15 3 Nantong 228 30 26 19 16 18 3 Hefei 254 33 34 29 17 18 2 Shantou 255 31 32 25 29 16 3 Changsha 244 42 31 22 20 17 3 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

956 29 28 18 18 16 4


1,464 32 30 25 20 16 3



Appendix – The Consumer – Premium Element for Sugar Confectionery Sugar Confectionery China, December 2014


Appendix – The Consumer – Premium Element for

Sugar Confectionery FIGURE 100: ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014


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

Made from natural ingredients (eg fruit juice, natural sweetener) 48 Contains additional health benefits (eg vitamin-fortified, throat-soothing) 36 Available in a variety pack (eg I can choose the flavours I like) 35 Low calories 29 Convenient packaging (eg resealable pack, small portable pack) 25 Low/no sugar 25 Appealing packaging design (eg cartoon packaging, premium packaging) 24 Unique product shape (eg animal-shaped candy, multi-coloured candies) 22 Imported products 17 New product design (eg fruit liquid inside, sandwich strips) - Long-lasting flavour - None of the above 2 SOURCE: QQSURVEY/MINTEL

FIGURE 101: MOST POPULAR ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample

size Made from

natural ingredients

(eg fruit juice,

natural sweetener)

Contains additional

health benefits

(eg vitamin-fortified, throat-

soothing)

Available in a

variety pack (eg I

can choose

the flavours I

like)

Low calories

Convenient packaging

(eg resealable pack, small

portable pack)

Low/ no

sugar

% % % % % % All 2,917 48 36 35 29 25 25 Gender: Male 1,459 47 37 34 28 25 27 Female 1,458 50 35 36 29 26 23 Age: 20-29 980 47 38 36 29 26 22 30-39 972 47 33 34 28 24 27 40-49 965 52 36 33 30 26 26 Gender and age group: Male, 20-29 490 45 39 34 30 23 24 Male, 30-39 484 46 36 33 26 26 28 Male, 40-49 485 51 36 33 30 25 28 Female, 20-29 490 48 36 38 28 28 20 Female, 30-39 488 47 31 36 29 22 25 Female, 40-49 480 54 37 33 30 27 25



Monthly personal income I: RMB4,999 or below 940 49 38 34 29 26 24 RMB5,000-9,999 1,279 51 37 36 30 25 27 RMB10,000 or above 698 44 31 33 27 24 23 Monthly personal income II: RMB2,999 or below 258 55 41 37 23 24 18 RMB3,000-5,999 1,075 49 35 34 30 26 26 RMB6,000 or above 1,584 47 35 34 29 25 25 Monthly personal income III: RMB2,999 or below 258 55 41 37 23 24 18 RMB3,000-5,999 1,075 49 35 34 30 26 26 RMB6,000-9,999 886 50 38 36 31 25 26 RMB10,000 or above 698 44 31 33 27 24 23 Monthly household income I: RMB7,999 or below 845 49 40 35 28 26 23 RMB8,000-11,999 679 50 35 36 29 26 26 RMB12,000 or above 1,393 47 34 34 30 24 25 Monthly household income II:


RMB4,999 or below 185 52 42 30 25 26 19 RMB5,000-7,999 660 49 39 36 28 26 24 RMB8,000-9,999 322 53 39 38 27 27 24 RMB10,000-11,999 357 48 31 34 31 25 28 RMB12,000 or above 1,393 47 34 34 30 24 25 Marital status: Single 593 47 38 37 27 25 21 Married 2,292 49 35 34 29 25 26 Children in household: Yes 2,053 49 35 34 30 26 27 No 271 46 33 36 26 23 21 Age of children: 0-4 800 49 36 35 29 26 26 5-9 697 47 35 34 30 26 24 10-15 579 50 32 32 28 26 27 16-18 215 49 40 37 33 25 31 City: Shanghai 288 52 35 30 28 27 17 Beijing 289 45 37 35 34 22 22 Guangzhou 289 54 37 33 26 28 20 Chengdu 293 44 33 40 27 26 27 Jinan 294 51 38 38 33 24 29 Linyi 289 43 35 42 28 25 26 Nantong 294 49 32 30 27 23 26 Hefei 293 49 40 32 28 27 27 Shantou 293 47 32 33 31 23 29 Changsha 295 49 39 33 26 27 25 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 49 36 34 29 26 22


1,758 48 36 35 29 25 27





FIGURE 102: NEXT MOST POPULAR ELEMENTS IN SUGAR CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY


size Appealing packaging design (eg

cartoon packaging, premium

packaging)

Unique product shape

(eg animal-shaped candy, multi-

coloured candies)

Imported products

New product design (eg fruit liquid inside,

sandwich strips)

Long-lasting flavour

None of the above

% % % % % %

All 2,917 24 22 17 - - 2 Gender: Male 1,459 25 21 18 - - 2 Female 1,458 23 22 16 - - 2 Age: 20-29 980 28 23 16 - - 2 30-39 972 25 24 18 - - 2 40-49 965 20 19 16 - - 2 Gender and age group: Male, 20-29 490 29 22 19 - - 1 Male, 30-39 484 25 24 20 - - 2 Male, 40-49 485 22 18 14 - - 2 Female, 20-29 490 28 24 13 - - 3 Female, 30-39 488 24 24 17 - - 1 Female, 40-49 480 18 20 18 - - 1 Monthly personal income I:

RMB4,999 or below 940 24 21 13 - - 3 RMB5,000-9,999 1,279 24 21 18 - - 1 RMB10,000 or above 698 26 25 21 - - 1 Monthly personal income II:

RMB2,999 or below 258 25 23 12 - - 4 RMB3,000-5,999 1,075 23 21 14 - - 3 RMB6,000 or above 1,584 25 22 20 - - 1 Monthly personal income III:

RMB2,999 or below 258 25 23 12 - - 4 RMB3,000-5,999 1,075 23 21 14 - - 3 RMB6,000-9,999 886 25 20 19 - - 1 RMB10,000 or above 698 26 25 21 - - 1



Monthly household income I:

RMB7,999 or below 845 22 21 15 - - 3 RMB8,000-11,999 679 24 21 13 - - 1 RMB12,000 or above 1,393 26 23 20 - - 1 Monthly household income II:

RMB4,999 or below 185 22 22 17 - - 4 RMB5,000-9,999 982 23 19 14 - - 3 RMB10,000 or above 1,750 26 23 19 - - 1 Monthly household income III:

RMB4,999 or below 185 22 22 17 - - 4 RMB5,000-7,999 660 22 20 15 - - 3 RMB8,000-9,999 322 23 17 11 - - 2 RMB10,000-11,999 357 25 24 14 - - 1 RMB12,000 or above 1,393 26 23 20 - - 1 Marital status: Single 593 27 24 17 - - 2 Married 2,292 24 21 17 - - 2 Children in household: Yes 2,053 24 22 18 - - 2 No 271 19 16 13 - - 3 Age of children: 0-4 800 26 24 15 - - 2 5-9 697 25 24 21 - - 1 10-15 579 23 23 17 - - 2 16-18 215 18 20 14 - - 2 City: Shanghai 288 21 18 25 - - 2 Beijing 289 23 22 15 - - 3 Guangzhou 289 29 18 21 - - 1 Chengdu 293 28 25 12 - - 2 Jinan 294 21 20 11 - - 2 Linyi 289 20 26 15 - - 3 Nantong 294 25 21 22 - - 1 Hefei 293 30 21 15 - - 1 Shantou 293 24 22 18 - - 1 Changsha 295 24 27 15 - - 3 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 25 21 18 - - 2


1,758 24 23 16 - - 2

Education level: High school or below 170 21 21 14 - - 6 College/University 2,457 25 22 17 - - 2 Postgraduate or above 290 24 24 20 - - 2 SOURCE: QQSURVEY/MINTEL

Appendix – The Consumer – Premium Element for Sugar Confectionery Gum Confectionery China, December 2014


Appendix – The Consumer – Premium Element for

Gum Confectionery FIGURE 103: ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, SEPTEMBER 2014


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

gum %

Long-lasting flavour 39 Low/no sugar 30 Contains additional health benefits (eg vitamin-fortified, throat-soothing) 28 Made from natural ingredients (eg fruit juice, natural sweetener) 27 Convenient packaging (eg resealable pack, small portable pack) 24 New product design (eg fruit liquid inside, sandwich strips) 22 Available in a variety pack (eg I can choose the flavours I like) 21 Low calories 19 Appealing packaging design (eg cartoon packaging, premium packaging) 17 Imported products 13 Unique product shape (eg animal-shaped candy, multi-coloured candies) - None of the above 3 SOURCE: QQSURVEY/MINTEL

FIGURE 104: MOST POPULAR ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months Sample

size Long-lasting flavour

Low/ no

sugar

Contains additional

health benefits

(eg vitamin-fortified, throat-

soothing)

Made from natural

ingredients (eg fruit

juice, natural

sweetener)

Convenient packaging

(eg resealable pack, small

portable pack)

New product design (eg fruit liquid inside,

sandwich strips)

% % % % % % All 2,917 39 30 28 27 24 22 Gender: Male 1,459 40 31 29 27 25 21 Female 1,458 38 29 26 27 24 23 Age: 20-29 980 42 31 27 24 27 26 30-39 972 37 31 28 26 23 21 40-49 965 38 28 28 31 23 19 Gender and age group: Male, 20-29 490 40 30 30 26 27 24 Male, 30-39 484 38 34 29 24 23 20 Male, 40-49 485 41 28 29 32 24 20 Female, 20-29 490 44 32 24 22 26 29 Female, 30-39 488 36 28 26 29 24 23 Female, 40-49 480 35 28 27 30 23 18



Monthly personal income I: RMB4,999 or below 940 42 31 27 24 26 24 RMB5,000-9,999 1,279 39 29 29 30 24 21 RMB10,000 or above 698 35 31 25 26 23 23 Monthly personal income II: RMB2,999 or below 258 47 32 25 21 25 27 RMB3,000-5,999 1,075 41 30 28 25 26 22 RMB6,000 or above 1,584 37 30 28 29 23 22 Monthly personal income III: RMB2,999 or below 258 47 32 25 21 25 27 RMB3,000-5,999 1,075 41 30 28 25 26 22 RMB6,000-9,999 886 38 29 30 31 23 21 RMB10,000 or above 698 35 31 25 26 23 23 Monthly household income I: RMB7,999 or below 845 43 32 27 25 27 24 RMB8,000-11,999 679 39 28 28 28 23 21 RMB12,000 or above 1,393 37 30 28 28 24 22 Monthly household income II: RMB4,999 or below 185 41 36 24 23 29 24 RMB5,000-9,999 982 42 30 28 27 24 24 RMB10,000 or above 1,750 37 29 28 27 24 21 Monthly household income III: RMB4,999 or below 185 41 36 24 23 29 24 RMB5,000-7,999 660 44 30 28 26 26 24 RMB8,000-9,999 322 39 31 28 31 20 24 RMB10,000-11,999 357 38 25 27 24 24 19 RMB12,000 or above 1,393 37 30 28 28 24 22 Marital status: Single 593 44 33 29 24 25 24 Married 2,292 38 29 27 28 24 22 Children in household: Yes 2,053 38 30 28 28 24 22 No 271 34 27 21 28 26 21 Age of children: 0-4 800 39 30 29 26 25 25 5-9 697 36 30 28 28 25 21 10-15 579 39 30 28 31 22 20 16-18 215 44 29 29 28 20 21 City: Shanghai 288 31 32 23 22 25 24 Beijing 289 38 30 29 26 22 20 Guangzhou 289 36 30 29 32 30 20 Chengdu 293 39 23 30 28 25 22 Jinan 294 40 26 34 30 22 20 Linyi 289 41 30 22 26 26 23 Nantong 294 39 30 29 24 21 25 Hefei 293 42 32 25 31 27 22 Shantou 293 43 33 25 24 24 23 Changsha 295 41 34 28 27 23 25 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 36 29 28 27 26 21


1,758 41 31 27 27 24 23





FIGURE 105: NEXT MOST POPULAR ELEMENTS IN GUM CONFECTIONERY THAT ARE WORTH PREMIUM PRICE, BY


size Available in

a variety pack (eg I

can choose the flavours

I like)

Low calories

Appealing packaging design (eg

cartoon packaging, premium

packaging)

Imported products

Unique product

shape (eg animal-shaped candy, multi-

coloured candies)

None of the above

% % % % % % All 2,917 21 19 17 13 - 3 Gender: Male 1,459 22 18 19 13 - 3 Female 1,458 20 20 15 12 - 4 Age: 20-29 980 21 18 20 13 - 2 30-39 972 21 17 16 15 - 3 40-49 965 23 21 14 11 - 4 Gender and age group: Male, 20-29 490 23 18 21 13 - 2 Male, 30-39 484 22 17 20 16 - 4 Male, 40-49 485 22 19 15 12 - 3 Female, 20-29 490 18 19 19 13 - 3 Female, 30-39 488 20 18 13 13 - 3 Female, 40-49 480 23 22 14 9 - 5 Monthly personal income I:

RMB4,999 or below 940 21 18 16 11 - 4 RMB5,000-9,999 1,279 21 21 17 12 - 3 RMB10,000 or above 698 23 16 18 16 - 3 Monthly personal income II:

RMB2,999 or below 258 17 20 14 10 - 5 RMB3,000-5,999 1,075 21 18 16 11 - 4 RMB6,000 or above 1,584 22 19 18 14 - 2 Monthly personal income III:

RMB2,999 or below 258 17 20 14 10 - 5 RMB3,000-5,999 1,075 21 18 16 11 - 4 RMB6,000-9,999 886 21 22 19 13 - 2 RMB10,000 or above 698 23 16 18 16 - 3 Monthly household income I:

RMB7,999 or below 845 21 17 16 10 - 5 RMB8,000-11,999 679 20 20 16 11 - 4 RMB12,000 or above 1,393 22 19 18 15 - 2




RMB4,999 or below 185 19 18 16 11 - 6 RMB5,000-9,999 982 21 18 15 10 - 4 RMB10,000 or above 1,750 22 19 18 14 - 3 Monthly household income III:

RMB4,999 or below 185 19 18 16 11 - 6 RMB5,000-7,999 660 22 17 16 10 - 4 RMB8,000-9,999 322 18 18 15 10 - 3 RMB10,000-11,999 357 21 21 18 12 - 4 RMB12,000 or above 1,393 22 19 18 15 - 2 Marital status: Single 593 19 19 19 13 - 3 Married 2,292 22 19 17 13 - 3 Children in household: Yes 2,053 23 19 17 13 - 3 No 271 16 15 11 13 - 7 Age of children: 0-4 800 22 17 19 13 - 2 5-9 697 24 19 17 14 - 3 10-15 579 22 22 17 12 - 3 16-18 215 24 20 13 8 - 4 City: Shanghai 288 16 18 17 14 - 6 Beijing 289 19 20 18 10 - 5 Guangzhou 289 20 18 14 16 - 3 Chengdu 293 22 19 16 15 - 2 Jinan 294 26 20 17 8 - 4 Linyi 289 25 16 14 12 - 4 Nantong 294 21 19 16 15 - 1 Hefei 293 27 18 21 12 - 2 Shantou 293 17 20 16 14 - 3 Changsha 295 21 20 19 12 - 3 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,159 19 19 16 13 - 4


1,758 23 19 17 12 - 3

Education level: High school or below 170 24 16 11 6 - 8 College/University 2,457 21 19 17 13 - 3 Postgraduate or above 290 22 18 19 13 - 3


Appendix – The Consumer – Statements about Sugar Confectionery Sugar Confectionery China, December 2014


Appendix – The Consumer – Statements about Sugar

Confectionery FIGURE 106: STATEMENTS ABOUT SUGAR CONFECTIONERY, SEPTEMBER 2014



I am willing to pay more for candy/gum with no additives (eg artificial sweetener, colourants, preservatives)

52

I prefer candy containing nuts/seeds (eg peanut milk nougat, almond crisp candy) as they are better for health than regular candies

39

I would like to see more candy products designed for summer (eg cool-flavour candies to soothe my throat, containing herbs for decreasing internal heat)

38

I am interested in trying sugar products with innovative flavours (eg mix of savoury taste, sharp sour taste)

37

I would like to try more candy/gum products designed for a specific group (eg for women, kids-specific, the elder)

35

I prefer mints rather than chewing gum when I want to freshen my breath 30 I am willing to pay reasonably more for bundle packs (including gift pack) of candies and snacks 26 I am willing to pay more for handmade candy in specialised candy stores 24 I have bought candy/gums online in the last 6 months^ 23 I try to avoid eating sweets/gum products containing xylitol as it will do cause harm to the health 18 I dislike the taste of traditional Chinese medicine in herbal candy (eg grass jelly, Lo Han Kuo, honeysuckle flower)

15

None of the above 2 ^ 2,917 internet users aged 20-49 who have purchased sugar/gum confectionery in the last 6 months SOURCE: QQSURVEY/MINTEL



FIGURE 107: MOST POPULAR STATEMENTS ABOUT SUGAR CONFECTIONERY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size I am willing to pay more for candy/gum

with no additives (eg

artificial sweetener, colourants,

preservatives)

I prefer candy

containing nuts/seeds (eg peanut

milk nougat, almond

crisp candy) as they are

better for health than

regular candies

I would like to see more

candy products designed

for summer (eg cool-flavour

candies to soothe my

throat, containing herbs for

decreasing internal

heat)

I am interested in trying

sugar products

with innovative flavours

(eg mix of savoury

taste, sharp sour

taste)

I would like to try

more candy/ gum

products designed

for a specific

group (eg for

women, kids-

specific, the elder)

I prefer mints rather than

chewing gum

when I want to freshen

my breath

% % % % % % All 3,000 52 39 38 37 35 30 Gender: Male 1,500 52 40 37 38 31 34 Female 1,500 52 39 38 36 39 27 Age: 20-29 1,000 51 38 38 38 36 29 30-39 1,000 51 39 38 39 37 28 40-49 1,000 53 42 37 35 32 34 Gender and age group:

Male, 20-29 500 50 37 36 38 31 30 Male, 30-39 500 51 40 38 40 32 33 Male, 40-49 500 54 43 37 36 30 38 Female, 20-29 500 52 38 41 37 42 28 Female, 30-39 500 51 37 37 37 41 23 Female, 40-49 500 52 40 37 33 34 30 Monthly personal income I:

RMB4,999 or below 993 52 36 37 31 33 31 RMB5,000-9,999 1,300 54 44 39 40 37 32 RMB10,000 or above 707 47 35 35 40 35 27 Monthly personal income II:

RMB2,999 or below 282 51 35 37 30 30 28 RMB3,000-5,999 1,116 52 38 37 33 33 31 RMB6,000 or above 1,602 51 41 39 41 37 30 Monthly personal income III:


RMB7,999 or below 885 52 39 39 35 34 30 RMB8,000-11,999 701 52 38 36 32 32 29 RMB12,000 or above 1,414 51 41 38 40 37 31




RMB4,999 or below 201 47 30 33 28 27 23 RMB5,000-9,999 1,021 53 40 39 36 35 31 RMB10,000 or above 1,778 51 40 37 38 36 31 Monthly household income III:

RMB4,999 or below 201 47 30 33 28 27 23 RMB5,000-7,999 684 54 41 40 37 36 32 RMB8,000-9,999 337 53 37 37 35 32 27 RMB10,000-11,999 364 52 38 35 30 33 31 RMB12,000 or above 1,414 51 41 38 40 37 31 Marital status: Single 615 51 35 38 35 33 30 Married 2,350 52 41 38 38 36 30 Children in household:

Yes 2,092 53 42 39 39 37 30 No 293 43 31 30 26 24 32 Age of children: 0-4 808 54 43 41 43 41 28 5-9 712 51 39 39 42 38 28 10-15 590 53 42 39 37 35 31 16-18 221 56 47 38 33 34 37 City: Shanghai 300 50 36 34 32 29 30 Beijing 300 51 38 36 31 33 29 Guangzhou 300 53 35 32 40 35 30 Chengdu 300 48 40 40 38 42 33 Jinan 300 53 43 36 38 40 34 Linyi 300 50 37 40 38 33 29 Nantong 300 50 37 36 38 32 22 Hefei 300 54 43 44 38 33 37 Shantou 300 51 42 38 36 37 28 Changsha 300 57 44 41 42 35 31 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 51 37 36 35 35 30


1,800 52 41 39 38 35 30





FIGURE 108: NEXT MOST POPULAR STATEMENTS ABOUT SUGAR CONFECTIONERY, BY DEMOGRAPHICS, SEPTEMBER 2014 Base: 3,000 internet users aged 20-49 Sample

size I am willing

to pay reasonably

more for bundle packs

(including gift pack) of candies

and snacks

I am willing to pay

more for handmade candy in

specialised candy stores

I have bought candy/ gums

online in the last

6 months^

I try to avoid eating

sweets/ gum

products containing xylitol as it

will do cause

harm to the health

I dislike the taste of

traditional Chinese

medicine in herbal candy

(eg grass jelly, Lo Han

Kuo, honeysuckle

flower)

None of the above

% % % % % % All 3,000 26 24 23 18 15 2 Gender: Male 1,500 27 23 24 20 15 2 Female 1,500 25 25 22 17 15 2 Age: 20-29 1,000 26 26 22 19 18 2 30-39 1,000 28 25 25 17 16 3 40-49 1,000 25 22 22 19 12 2 Gender and age group: Male, 20-29 500 28 25 23 19 18 2 Male, 30-39 500 29 25 26 17 16 3 Male, 40-49 500 24 19 22 22 12 2 Female, 20-29 500 24 26 22 18 18 1 Female, 30-39 500 26 24 23 16 15 2 Female, 40-49 500 25 24 22 16 11 2 Monthly personal income I: RMB4,999 or below 993 22 19 18 18 17 4 RMB5,000-9,999 1,300 27 25 25 18 13 1 RMB10,000 or above 707 30 29 26 21 16 1 Monthly personal income II: RMB2,999 or below 282 19 13 16 16 17 6 RMB3,000-5,999 1,116 23 22 19 18 16 3 RMB6,000 or above 1,602 30 27 27 19 14 1 Monthly personal income III:


RMB7,999 or below 885 23 21 20 17 17 3 RMB8,000-11,999 701 23 21 19 17 14 2 RMB12,000 or above 1,414 30 27 27 19 15 1 Monthly household income II:

RMB4,999 or below 201 20 15 18 16 16 7 RMB5,000-9,999 1,021 24 23 20 17 16 3 RMB10,000 or above 1,778 28 26 25 19 15 1



Monthly household income III:

RMB4,999 or below 201 20 15 18 16 16 7 RMB5,000-7,999 684 24 23 20 18 17 2 RMB8,000-9,999 337 25 22 20 16 14 3 RMB10,000-11,999 364 22 21 19 18 13 2 RMB12,000 or above 1,414 30 27 27 19 15 1 Marital status: Single 615 25 23 19 20 18 2 Married 2,350 26 24 24 18 14 2 Children in household: Yes 2,092 28 25 25 18 15 1 No 293 18 18 17 17 11 7 Age of children: 0-4 808 28 27 27 17 18 1 5-9 712 30 28 27 16 13 2 10-15 590 28 22 23 21 13 2 16-18 221 24 29 21 18 14 - City: Shanghai 300 21 26 22 16 13 4 Beijing 300 25 19 27 21 13 3 Guangzhou 300 22 23 21 16 15 1 Chengdu 300 26 23 21 23 16 2 Jinan 300 28 21 23 18 15 2 Linyi 300 33 23 22 15 19 2 Nantong 300 24 21 21 18 15 1 Hefei 300 26 28 26 21 20 2 Shantou 300 33 30 26 15 13 2 Changsha 300 23 26 21 19 12 1 Tier: Tier 1 (Beijing, Shanghai, Guangzhou, Chengdu)

1,200 24 23 23 19 14 3


1,800 28 25 23 18 16 2


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

Appendix: Research methodology

Appendix – China Research Methodology Sugar Confectionery China, December 2014


Appendix – China Research Methodology For its China report series, Mintel has commissioned exclusive consumer research through QQsurvey

China, a Chinese licensed market survey agent. Online consumer research is run in ten cities,

completing 300 interviews per city with a total sample size of 3,000.

Our consumer research is based on a random sample of internet respondents from a panel recruited

by QQsurvey China online research (see more details below).

In each wave, we survey four major tier 1 cities ie Shanghai, Beijing, Guangzhou and Chengdu.

For tier 2 and tier 3 cities, we rotate amongst a selection of cities based on size and economic

development (see below).

The research is not representative of the population as a whole, and is not being analysed as such.

Mintel applies a quota-sampling approach with quotas on age, sex and monthly household income

in these cities.

Our sample data can only be considered as indicative of urban consumers in those regions rather

than representative of China as a whole.

For category reports (e.g. chocolate confectionery), consumers will typically be asked about usage,

frequency, location of purchase, consumption occasion, brand usage and a series of attitudinal

statements about the category.

Lifestyle reports cover a broader range of attitudinal and behavioural topics.

Confidence levels

Statistical confidence levels of +/- 2% or 3% can be applied to the data, depending on sample size and

percentage of respondents. For example, if 20% of a total sample of 1,000 adults say that they do

something, you can be 95% certain that the figure for the population lies between 17% and 23%. For a

sample of 3,000 adults, you can be 95% certain that the figure lies between 18% and 22%.

Consumer research is stored in a database supervised by Mintel's statisticians. Additional analysis of

information too abundant to be included in published reports can be made available.

Sample sizes by city

When the overall population of a city is large enough (> 20,000), sample size is not determined by the

size of population. It is only when the population becomes quite small (eg less than 10,000) that the

sample size calculation is affected.

As a result a sample size of 300 per city across all 10 cities in our survey was set. Statistically, this

enables us to apply a confidence level at 95% with a margin of error of 5.66%.

Sampling methodology and sampling structure

According to government figures, there are 645 cities in China. These cities are very different in terms

of size, economic development, culture, history and lifestyle. To meet Mintel’s client interests (by

region, by tier), ten cities are selected in each wave of research based on their geographic coverage and

level of economic development (GDP and per capita income).

The table below shows an example of cities covered:



Region Tier 1 cities Tier 2 cities Tier 3 cities Total

North China Beijing Shenyang 2 East China Shanghai Hangzhou Ningbo 3 Middle China N/A Wuhan 1 West China Chengdu N/A 1 South China Guangzhou Fuzhou Dongguan 3 Total 4 4 2 10

Note 1: tier 2 and tier 3 cities in the table above are shown as examples only Note 2: Mintel defines the tier levels of cities in China as follows:

Tier 1: Major economic hubs

Tier 2: Provincial capital cities

Tier 3: Cities at the level between provincial capital cities and local townships

Within each city, our sampling structure is presented below.

Gender & Age

Monthly household income

(RMB)

Tier 1 city Total Male

20-29

Male

30-39

Male

40-49

Female

20-29

Female

30-39

Female

40-49 4K-10K 10K-16K 16K+

Beijing 300 50 50 50 50 50 50 100 100 100

Shanghai 300 50 50 50 50 50 50 100 100 100

Guangzhou 300 50 50 50 50 50 50 100 100 100

Chengdu 300 50 50 50 50 50 50 100 100 100

Tier 2/3 city Total Male

20-29

Male

30-39

Male

40-49

Female

20-29

Female

30-39

Female

40-49 4K-7K 7K-14K 14K+

City 1 300 50 50 50 50 50 50 100 100 100

City 2 300 50 50 50 50 50 50 100 100 100

City 3 300 50 50 50 50 50 50 100 100 100

City 4 300 50 50 50 50 50 50 100 100 100

City 5 300 50 50 50 50 50 50 100 100 100

City 6 300 50 50 50 50 50 50 100 100 100

Total 3,000 500 500 500 500 500 500 1,000 1,000 1,000

Our research partner - QQsurvey

* Founded in 2006, headquartered in Shanghai, with an office in Beijing

* Online panel size - 2,300,000 (by Jan 2014)

* Recruited over 330,000 new panellists in 2013

* Owns the interactive panel website: www.1diaocha.com

* Member of the China Market Research Association (CMRA)

* Completed more than 1,300 projects and interviewed 600,000 samples in 2013

* Provides panel data for major multinational research companies, including IPSOS, GMI, TNS,

Lightspeed, and have done projects for the likes of Nielsen, Kantar, Intage, Pulse, SSI, ResearchNow

(further details in the Appendix).

http://www.1diaocha.com/



QQ’s sampling and Quality control

1.Screening

Exclude those who:

have participated in any survey project in the past three months

are working in any sensitive or related industries

have participated in previous Mintel surveys

have not met sample criteria.

2.Sampling

System will output all qualified panellists

Random sample 30,000 panellists and send out first wave of invitations via SMS or email

Random sample another 30,000 panellists and send out second wave of invitations

Random sample final batch of 30,000 panellists and send out third wave of invitations

3. Quality control

Each panellist has provided QQsurvey with his or her own IP address together with all personal

information

Each panellist needs to use the same IP address and cookie as registered IP address and cookie to

participate in any survey project, and he or she can participate in the same survey project only

once

Each respondent can use the weblink they have received once only.

A sample will be deleted if the respondent:

has given an answer to any open-ended question that is judged as of poor quality

has failed in any trap questions

has given any inconsistent answers, or contradicted his or her registered information

has given answers following certain patterns

has taken an extraordinary length of time to complete the questionnaire

is considered an outlier.



Further Analysis

Mintel employs a variety of quantitative data analysis techniques to enhance the value of our consumer

research. The techniques used vary form one report to another. Below show some of the techniques

more commonly used.

Repertoire Analysis

This technique is used to create consumer groups based on reported behaviour or attitudes. Consumer

responses of the same value (or list of values) across a list of survey items are tallied into a single

variable. The repertoire variable summarizes the number of occurrences in which the value or values

appear among a list of survey items. For example, a repertoire of brand purchasing might produce

groups of those that purchase 1-2 brands, 3-4 brands and 5 or more brands. Each subgroup should be

large enough (ie N=75+) to analyze.

Cluster Analysis

This technique used to assign a set of individual people to groups called clusters on the basis of one or

more question responses, so that respondents within the same cluster are in some sense closer or more

similar to one another than to respondents that were grouped into another cluster

Correspondence Analysis

This is a statistical visualisation method for picturing the associations between rows (image, attitudes)

and columns (brands, products, segments, etc.) of a two-way contingency table. It allows us to display

brand images (and/ or consumer attitudes towards brands) related to each brand covered in this survey

in a joint space that is easy to understand. The significance of the relationship between a brand and its

associated image is measured using the Chi-square test. If two brands have similar response patterns

regarding their perceived images, they are assigned similar scores on underlying dimensions and will

then be displayed close to each other in the perceptual map

CHAID analysis

CHAID (Chi-squared Automatic Interaction Detection), a type of decision tree analysis, is a target

group identification method that is used to highlight key target groups in a sample by identifying

which sub-groups are more likely to show a particular characteristic. This analysis subdivides the

sample into a series of subgroups that share similar characteristics towards a specific response variable

and allows us to identify which combinations have the highest response rates for the target variable.

It is commonly used to understand and visualize the relationship between a variable of interest such as

“interest in trying a new product” and other characteristics of the sample such as demographic

composition.

Key Driver Analysis

Key driver analysis can be a useful tool in helping to prioritise focus between different factors which

may impact key performance indicators (eg satisfaction, likelihood to switch providers, likelihood to

recommend a brand, etc). Using correlations analysis or regression analysis we can get an

understanding of which factors or attributes of a market have the strongest association or “link” with a

positive performance on key performance indicators (KPIs). Hence we are able to identify which

factors or attributes are relatively more critical in a market category compared to others and ensures

that often limited resources can be allocated to focusing on the main market drivers.



APPENDIX

Statistical Forecasting

Statistical modelling

For the majority of reports, Mintel produces five-year forecasts based on an advanced statistical

technique known as ‘multivariate time series auto-regression’ using the statistical software package

SPSS.

The model is based on historical market size data taken from Mintel’s own market size database and

supplemented by published macroeconomic and demographic data from various private and public

sources such as the NBS (National Bureau of Statistics of China) and the EIU(The Economist

Intelligence Unit).

The model searches for relationships between actual market sizes and a selection of relevant and

significant macroeconomic and demographic determinants (independent variables) to identify those

predictors having the most influence on the market.

Factors used in a forecast are stated in the relevant report section alongside an interpretation of their

role in explaining the development in demand for the product or market in question.

Qualitative insight

At Mintel we understand that historic data is limited in its capacity to act as the only force behind the

future state of markets. Thus, rich qualitative insights from industry experts regarding future events

that might impact upon various markets play an invaluable role in our post statistical modelling

evaluation process.

As a result, the Mintel forecast complements a rigorous statistical process with in-depth market

knowledge and expertise to allow for additional factors or market conditions outside of the capacity of

the statistical forecast.

The Mintel fan chart

Forecasts of future economic outcomes are always subject to uncertainty. To raise awareness amongst

our clients and to illustrate this uncertainty, Mintel has introduced a new way of displaying market size

forecasts in the form of a fan-chart.

Next to historical market sizes and a current year estimate, the fan chart illustrates the probability of

various outcomes for the market value/volume over the next five years.



At a 95% confidence interval, we are saying that 95 out of 100 times, the forecast will fall within these

outer limits, which we call the best and worst case forecast as these, based on the statistically driven

forecast, are the highest (best case) and lowest (worst case) market sizes the market is expected to

achieve.

Over the next five years, the widening bands successively show the developments that occur within

95%, 90%, 70% and 50% probability intervals. Statistical processes predict the central forecast to fall

within the darker shaded area which illustrates 50% probability ie a 5 in 10 chance.

A general conclusion: Based on our current knowledge of given historic market size data as well as

projections for key macro- and socio-economic measures that were used to create the forecast, we can

assume that in 95% of the time the actual market size will fall within the purple shaded fan. In 5% of

all cases this model might not be correct due to random errors and the actual market size will fall out

of these boundaries.

Weather analogy

To illustrate uncertainty in forecasting in an everyday example, let us assume the following weather

forecast was produced based on the meteorologists’ current knowledge of the previous weather

condition during the last few days, atmospheric observations, incoming weather fronts etc.

Now, how accurate is this forecast and how certain can we be that the temperature on Saturday will

indeed be 15°C?

To state that the temperature in central Shanghai on Saturday will rise to exactly 15°C is possible but

one can’t be 100% certain about that fact.

To say the temperature on Saturday will be between 13°C and 17°C is a broader statement and much

more probable.

In general, we can say that based on the existing statistical model, one can be 95% certain that the

temperature on Saturday will be between 13°C and 17°C, and respectively 50% certain it will be

between about 14.5°C and 15.5°C. Again, only in 5% of all cases this model might not be correct due

to random errors and the actual temperature on Saturday will fall out of these boundaries and thus will

be below 13°C or above 17°C.



(To learn more about uncertainty in weather forecasts visit:

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html)

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html

Documents

Sugar confectionery china - december 2014