Bowei Gong – Shanghai Office, Bord Bia – Irish Food Board
Total market value increased, but single brand sees frustration
The total market value of nuts and dried fruits is estimated to reach RMB 405.7bn by 2018. This value is forecasted to be growing by CAGR of 15.9% till 2023 thanks to the increasing health consciousness among consumers. The major market players, Three Squirrels and Be & Cheery, however saw a slowdown in growth in 2018 due to consumers’ alternatives to various brands.
Domestic brands leading the market
According to Mintel 2018, the biggest players under nuts category are Three Squirrels, Be & Cheery, and Qia Qia Group. Be & Cheery and Three Squirrels also lead the dried fruit category. The expansion of nuts and dried fruits category over the past five years was driven by e-commerce so internet-focused brands (Three Squirrels and Be & Cheery) have relatively higher market shares.
As bulk sales dominate the market, the market share of nuts brands are scattered. No single brand can achieve over 5% market share in either nuts or dried fruits market.
International brands joining in the competition yet difficult
Foreign brands also want to steal market share from the leading players but only Planters has already gained good brand recognitions, thanks to its long-term efforts in deepening distributional channels. Costco and Lidl have introduced their private label nuts and dried fruits brands Kirkland and Alesto into e-retailers.
Product development opportunities
1. Customisation
• Situational mix trail: it is smart to provide breakfast/lunch/afternoon-tea nut mix. It offers value-added opportunities and can be extension of SKUs.
• Variant meets the needs of specific segment: nuts mix for pregnant mothers, nuts mix for students, or for the senior.
2. Innovation
• Flavour: current market is overwhelmed by a huge amount of similar flavoured products so identical flavour can be one attractive factor for consumers.
• New product: one of the successful factors of Three Squirrels is that it paid strong attention to pecans, which was relatively lower recognisable in e-commerce.
3. Premium offerings
• Packaging: despite of consuming as snacking, nuts and dried fruits are also a common gifting choice in China. Brands such as Three Squirrels usually use gift pack image to promote products on its online store banner. Owing to preparing for Chinese Spring Festival, nuts and dried fruits gift packs are selling well during early winter.
• Identical claims: organic, free-from, charity, etc.
For more information, please contact: bowei.gong@ucdconnect.ie.
References:
Mintel, Nuts and Dried Fruits China, 2017.
Euromonitor International, Savoury Snacks in China, 2018.