New snack products tap on-the-go trend in China

By Dominique Patton

- Last updated on GMT

Related tags: Snack food

Popcorn is one of the fastest growing products in China's emerging
snack food market, according to new data from Euromonitor.

The traditional American snack food is expected to emerge as a top performer in this segment with an estimated retail growth of 14 per cent in 2006 over the previous year, Euromonitor forecasts. Popcorn is meeting the demand for convenience food in China's fast-growing cities where consumers are increasingly eating on-the-go. The growing number of households owning microwaves is also directly responsible for the higher popularity of microwave popcorn in China, which accounted for an estimated 80 per cent of retail value in popcorn in 2006, says Euromonitor. Crisps, a bigger category than popcorn, has also seen a significant increase in the last year, growing by over 8 per cent in current value terms in 2006. Crisp sales in China are dominated by international players like PepsiCo, which uses advanced production processes, sophisticated marketing techniques and strong financial support to promote brands like Frito-Lay. PepsiCo China has created products to cater to local consumer needs, including the recent launch of the China gourmet series in traditional flavours such as Peking Roast Duck and Spicy Crab. Chocolate confectioners are also set to benefit in China from a trade up from sugar confectionery to chocolate products as a result of the increasing purchasing power of the population. In China, the purchase of chocolate confectionery is usually planned and rarely done on impulse. Boxed assortments (bought as gifts) account for the majority of sales, accounting for 40 per cent of total retail sales in 2006, according to Euromonitor estimates. But although chocolate consumption is still a relatively new trend in China, smaller formats of boxed chocolate confectionery are gathering popularity in middle class urban areas. This is particularly relevant among high-income consumers, treating themselves to chocolate boxed assortments for daily self indulgence, claims Euromonitor. Brand examples proving especially popular among consumers include 32g format Dove Hearts, manufactured by Effem Foods and 60g format Le Conté Seduisant Milk & Rice Chocolate, manufactured by Shenzhen Le Conté Foodstuff. These new distribution formats are expected to shape the snack market in the future, says the market research report. Within boxed assortments, fun-formats are emerging, designed to be consumed on-the-go. They are expected to add value to retail sales by expanding premium branded packaged lines. They are also set to impact the distribution landscape by moving the product away from traditional street markets to supermarkets and 7-Eleven format convenience stores. The latter are expected to expand steadily in number, particularly in urban areas. Sweet and savoury snacks and chocolate confectionery will, however, remain as fairly independent segments, predicts Euromonitor. Chocolate confectionery is more expensive than sweet and savoury snacks, and generally targeted at more affluent consumers.

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