Breaking through barriers The snack industry urgently needs to meet more consumer demand

According to the "2022 Leisure Snacks Global E-commerce Trend Insight Report", the scale of China's leisure snack market will exceed 1.
5 trillion yuan in 2022, with a compound annual growth rate of more than 11%, making it a large-scale consumer market
with growth potential.
Consumer demand has changed from "full" and "eating well" to "pleasing oneself" and "self-interested", and leisure snack brands have also changed with consumer demand, and the categories have been continuously upgraded and iterated, advancing in a more diversified and refined direction
.
NielsenIQ, a market monitoring and data analysis company, recently released the "2022 Leisure Snack Industry Insight Report" (hereinafter referred to as the "Report"), the "Report" pointed out that benefiting from policy support and stable economic development, the recovery of China's consumer market has shown signs of stabilization, leisure snack brands need to actively adapt to the new era and new trends, brands need to grasp consumer demand, grasp channel development changes, break through category barriers
.

The categories are further refined

From the perspective of category development, the era of relying on a cookie to "dominate the world" has long passed, and the classification of leisure snacks in the post-epidemic period has shown a refined and functional development trend
.
From the perspective of channel development, the growth rate of online and offline will converge in 2022, the online dividend period will disappear, and the growth of omni-channel will face challenges
.
From a macro perspective, despite the long-term improvement in consumption, the epidemic has repeatedly brought many uncertainties
.

The report summarizes the four eras of leisure snacks, namely the era of awakening, the era of exploration, the era of subversion and the era of splendid embroidery
.

The Age of Awakening (1990-1999) The market economy has become dominant, and for the food industry, one of the major effects of economic policy changes is to make sugar control more market-oriented
.
Therefore, the emerging categories in the casual snack track are also closely related to sugar, mostly biscuits and candy
.

Pioneering era (2000-2009) Since 2000, the leisure zero food category has entered the pioneering era
.
At this stage, residents' income further increased, and their consumption concept also changed, and they began to expect higher quality and higher technology products
.
The main development of snack zero food category is still candy and biscuits, but wafers, injection biscuits and other products with more complex manufacturing processes are developing
rapidly.
In terms of channels, many large foreign-funded chain supermarkets have entered China
.
The expansion of foreign-funded "hypermarkets" has also attracted more foreign-funded enterprises to make efforts
in the Chinese market.
Mondelēz, PepsiCo and other companies became the main promoters
of the leisure snack track at that time.

The era of disruption (2010-2019) China's rapid economic rise has ushered in an era
of disruption in the leisure snack industry.
Consumers are paying more attention to the national trend, and at the same time the demand for snack zero food categories is increasing, they are no longer satisfied with sugar supplements, but also want to obtain healthy, nutritious growth and better taste, and traditional Chinese zero food categories such as nut compote and marinated cooked food have become the protagonists
.
In terms of channels, traditional large-scale channels began to shrink, community-based and miniaturized formats developed, and near-field consumption such as convenience stores gained attention
.
At the same time, the rise of e-commerce has led to the rapid development of
local brands.

Splendid era (2020-present) From 2020, the snack zero food category has entered the Splendid era
.
Under the influence of the epidemic, consumers' demand for leisure snacks has changed again, and the leisure zero food category has also shown more functional, segmented, multi-scene and other characteristics, and functional candies, meal replacement snacks, energy bars, cheese, etc.
have received higher attention
.
During this period, new retail channels further developed, and O2O, Douyin e-commerce, video e-commerce, and community group buying emerged
.
At the same time, the development of these new channels has also led to the rise of cutting-edge brands in different segments of
leisure snacks.

In the four eras of the leisure snack industry, it can be seen that with the change of consumer demand, the category is constantly upgraded and iterated, and it is advanced to a more diversified and refined direction
.
At the same time, the change of channels has also driven the development
of different types of food enterprises.

The "Report" analyzes the development of
various categories of leisure snacks in the country in the past two years.
Among them, chocolate has maintained growth for two consecutive years, and biscuits and snacks have performed better
this year.

The "Report" analyzes the growth rate of categories in five dimensions, namely distribution, selling power, price increase/price reduction, consumption upgrade, and new products
.
The results show that the growth of the snack zero food category mainly depends on new products and price increases, while the distribution and selling power of the category are facing challenges
.
Most of the snack zero food category is still in the trend of consumption upgrading, and the categories with higher sugar content (mints, pies/cakes) are hindered
by consumption upgrading due to the trend of sugar reduction.

From the perspective of factors hindering growth, in the past two years, the selling power of almost all leisure zero food categories has declined, the selling turnaround ability of offline orders has weakened, and only chocolate categories have obvious bright spots in the store drive, and they are widely distributed in more lower-tier cities and small stores
.
The "Report" pointed out that in the future, the chocolate category can continue to develop the ability to spread goods and solve the blank spot
of hard work.
At the same time, brands can create "chocolate+" products and expand the chocolate snack business, thereby further increasing the penetration rate
.

Accelerate online and offline integration

The report emphasizes that instant retail O2O, as an incremental market, is a channel that leisure snack brands need to grasp in a timely manner
.
As an incremental market, instant retail is a channel that leisure snack brands need to grasp in a timely manner
.

Previously, the "2022 China Shopper Report" jointly released by Bain & Company and Kantar Worldpanel also pointed out that in the first three quarters of this year, the instant retail O2O channel brought a net increase
of 17% to FMCG brands.

This is also borne out by data from retail platform Meituan, where instant retail is becoming a new channel
for growth for casual snack brands.
From January to October this year, the takeaway sales of Coca-Cola products increased by 28% year-on-year, of which sugar-free flavors increased by 132%; The sales volume of local brand Genki Forest takeaway increased by 88%, and the growth rate of good shops exceeded 4 times
.
In addition, on Meituan, many supermarkets and convenience stores that have launched takeaway have listed casual snacks in a separate column and placed them in the most prominent position
on the store's takeaway display page.

The report also pointed out that compared with large channels, convenience stores and supermarkets, small grocery stores show greater growth potential and contribute the most
to brands in terms of consumption upgrading.
According to the analysis of the report, relying on the instant retail model, in the future, grocery stores will become a channel
that leisure snack brands need to focus on.

The real-time retail O2O model provides consumers with a shopping experience
of "online ordering, in-store delivery, and offline 30-minute delivery" by connecting and expanding various offline physical retail stores and relying on the logistics system of instant delivery on the platform.
Even the smallest brick-and-mortar business units, such as mom-and-pop grocery stores, can be included and share in the growth dividends
of the new format.

The "Report" shows that instant retail effectively activates physical small stores, giving grocery stores greater growth potential
.
Industry insiders believe that with the continuous development of the instant retail format of "everything at home in 30 minutes", brands and physical stores will gain incremental benefits, and the accelerated integration of online and offline is a trend
that FMCG brands such as casual snacks must grasp.

Seize new opportunities in category development

Although the casual snack track has shown an overall recovery trend, brands need to face the challenges of higher consumer demand, difficult to break through category barriers, and omni-channel growth
.
The "Report" analyzes from the three perspectives of "people, goods and venues" to help brands grasp new opportunities
in the leisure zero food category.

People: Create scarcity and elicit emotional resonance

The "Report" pointed out that the concept of fun limited increased by 39% year-on-year, and leisure snack brands have created products with limited taste, limited shape and limited IP
.
Among the sub-categories of fun limited styling, the share of sales of simple snacks increased by 468.
1%, and chocolate increased by 47.
8%.

At the same time, the brand also captures the patriotic feelings of young people and arouses emotional resonance
.
The publicity of the concept of a strong country in the food and dairy category increased by 165%.

Goods: Break through category barriers and cross new tracks

Today, consumers have a higher level of consumer demand
.
Not only do they need casual snacks to be fun and fun, but they also need to have a higher sense of
quality.
The report shows that as long as the product meets the needs of consumers, it can bring a larger share of growth
.
To upgrade products, brands need to break through category barriers and cross over to new tracks
.

Field: Omni-channel integration will be the general direction of the industry

With the change of retail channels, the rise of new retail models, online and offline integration accelerates omni-channel integration
.
Traditional channel retail giants that started offline began to shift online, while Guochao brands moved from online, franchised, and direct to offline and omni-channel
.
The report points out that it is important
to adapt to the times and deploy omni-channels.
On the one hand, the offline market is still the focus and needs to be consolidated
as a stable volume.
On the other hand, brands need to grasp new channel trends and increase O2O, Douyin live e-commerce, group buying and other layouts
.

(Zhu Meiqiao comprehensive arrangement)

China Food News (December 27, 2022, version 07).

(Responsible editor: Zhu Meiqiao)