As such, Calbee will be riding on the success of its granola product Frugra — launched in China last year — by introducing new cereal product Mygla this month.
Unlike Frugra, Mygla does not contain any fruits, in order to suit the preferences of consumers who have food allergies or do not enjoy granola that comes with fruit.
“Some of our consumer like to eat granola without fruit, either because they dislike some of the fruits added, or due to fruit allergy. With Mygla, customer can select and add fruits or nuts they prefer. We believe Mygla can offer a wide variety of selection to our customer in China,” a spokeswoman told FoodNavigator-Asia.
Asked how they can stand out from competitors, she said that “product texture and containing lots of dietary fibre” is what they are focusing on.
Calbee first forayed into China’s cereal market last year through the sale of Frugra, with oats, rye, coconuts and nuts as the main ingredients, hoping that it would trigger a “breakfast revolution”.
Nearly one year after the launch, it is observed that Frugra is especially popular with the youngsters in the China market.
As of March this year, net sales of Frugra in Greater China has fetched 8,718 million yen, which is a 67.1% increase, according to the firm’s financial results report.
However, domestic Frugra business in Japan remained “stagnant”, as the number of new consumers has dwindled.
CEO Akira Matsumoto had earlier expressed high hopes for the China market, hoping it will contribute to one-third of Calbee’s international sales by 2020.
Moving forward, the spokeswoman said that Calbee will continue to launch new cereal products in China this year.
There is also the possibility of producing cereal products exclusive to the China market. The firm also mentioned that they intend to work with Alibaba, by utilising data accumulated by the latter to jointly develop new products.
Although there is no plan for local cereal production in China currently, the spokeswoman said that Calbee is dedicating its newly-built Kyoto factory to meet production demand for the China market. Calbee will produce Mygla at its Hokkaido factory before its Kyoto factory goes into operation.
China’s cereal market is expected to post a value CAGR of 6% at constant 2017 prices over the forecast period to reach sales of 9 billion yuan in 2022, a Euromonitor report said.
In the race for more Chinese customers, PepsiCo China and Guilin Sea Mild Biology Technology Development are some of the strongest rivals that Calbee will need to face.
PepsiCo China’s Quaker cereal is the leader of the China’s breakfast cereals market, with a value share of 18% last year.
Guilin Sea Mild Biology Technology Development, renowned for its hot cereals, came in second with a value share of 15%.