Kraft brings Planters Peanuts to China’s competitive snacking nuts market
The $1bn nut brand is now available at mass stores and through online retailer JD.com in eight varieties including sea salt, honey and jalapeño. Kraft expects the launch to lay foundations for bringing more of its products to China in future.
Planters is the number one brand in the nuts and seeds category in the US, holding a 23.6% market share according to Nielsen data.
China’s Nuts value expected to reach $15bn by 2020
Kraft has been eyeing the Chinese market since merging with Heinz last year, according to confectionery trade body China Candy, and has spent more than $10m launching Planters in the country.
China, Latin America, Russia, India, Africa and the Middle East combined make up only 12% of Kraft’s overall business, according to the company. China is expected to be Kraft’s largest market in Asia Pacific in the next few years.
Kraft is hoping to tap growing demand for salty snacks in China with the launch.
Nuts and seeds comprise 84% of total salty snacks (excluding traditional Chinese snacks) consumption in China in 2015, according to Mintel, and has been a strong driver of growth over the past few years.
With increasing disposable income and the development of cross-border e-Commerce in China, the nut market has steadily grown around 11% year-on-year, Kraft said.
According to Chinese Industry Information, a domestic market research website, the total sales value of nuts through e-commerce is around $1.2bn.
Kraft is competitive in China’s nut market
Mintel China research head Ruyi Xu told BakeryandSnacks that the relatively premium positioning of Planters gives Kraft a competitive advantage in the China market.
“According to our research, Chinese consumers surveyed feel imported salty snacks are of better quality (53%), safer to eat (52%), come with more appealing packaging (49%) and offer healthier products (45%) than domestic ones,” she said.
However, Xu added that Planters would need to convince consumers of its value for money, given it is a new brand in the market and there are already many alternatives, including successful local brands and imported snacks people can buy from leading online retailers.
Xu suggests 23% of Chinese consumers filter by brand when searching for salty snacks, “so raising brand awareness is a crucial for Planters to get a strong foothold in the highly competitive China market".
China Candy said Planters is nearly unheard of in China, adding it faces fierce competition from domestic nut brands such as Three Squirrels, LPPZ (良品铺子), and Be & Cheery. The annual sales value of Three Squirrels is around $300m, according to China Candy.