Table Of Contents :
Overview 1
Catalyst 1
Summary 1
Executive Summary 2
New Product Launches: a Global Perspective 2
New Product Launches in China 2
Product Launch Analysis 3
Introduction 4
Product Launch Analytics 4
Market Data Analytics 5
Definitions 6
Table of Contents 7
List of Figures 8
List of Tables 9
New Product Launches: a Global Perspective 10
Overview 10
Key trends driving new product launches globally 11
Increasing health concerns 11
Movement toward natural/organic ingredients 15
Changing lifestyle 17
Increasing buying power in the young consumer segment 21
Premiumization 22
Growing demand for functional benefits from gum products 23
Increasing impulse purchases 24
Experimentation with flavors and ingredients 25
New product launches by confectionery categories 26
Comparison of China with leading countries globally 27
Examples of innovative launches 28
New Product Launches in China 30
Overview 30
Key trends driving new product launches in China 32
Burgeoning middle class and higher living standards 33
China has overtaken Japan to become the world's second-largest economy after the US. Rising incomes amounting to a higher standard of living, a burgeoning middle class segment and a greater willingness to experiment with new products is driving the market towards better quality confectionery. Chinese customers are becoming more selective and are actively seeking quality products. This trend is expected to drive the number of new product launches from deep-pocketed companies which emphasize quality rather than price. 33
China's burgeoning middle class is expected to grow at a compound annual growth rate (CAGR) of 3.1% over 2005-15. Datamonitor anticipates the middle class population to see exponential growth, primarily driven by growth in the lower middle class segment. 34
""Over the next 20 years more people will migrate to China's cities for higher-paying jobs. These working consumers, once the country's poorest, will steadily climb the income ladder, creating a new and massive middle class."" 34
Diana Farell, Ulrich Gersch and Elizabeth Stephenson of the McKinsey Global Institute (MGI) 34
It is further anticipated that manufacturers are likely to capture this potential growth market with a multitude of offerings to tap into this segment. 34
High potential rural markets 34
The rural population in China accounts for over 55% of the total population. Although this proportion is in decline, the market remains virtually untapped. With the rise in per capita income leading to high standards of living and with increased competition in urban markets, manufacturers are eyeing the high potential within the rural markets. 34
The confectionery market in China has witnessed a flurry of new product launches catering to the rural markets. Competition is limited to regional players with a very high perceived demand for low-end products. The rural markets are extremely price-sensitive and dominated by local market participants. 34
In order to drive rural consumption, the Chinese government aims to create jobs, lower distribution costs and improve product quality and availability in rural areas. As a part of these efforts, the government is expected to set up over 150,000 stores with a potential to create 775,000 jobs. 34
Rising incomes in rural areas coupled with the government's plans to boost rural retail facilities are expected to drive the confectionery market, leading to associated new product launches looking to tap into the increasing demand within the market. 35
Health consciousness 36
Rising disposable incomes, better product exposure and the rise in diseases associated indulgent lifestyles are leading to increased awareness of health issues and the benefits of healthy products. The confectionery market is no exception, and healthy confectionery products are anticipated to gain popularity as increasing number of health-conscious consumers adopt confectionery by substituting unhealthy ingredients for nutritious ingredients. 36
China is also plagued by the 'little emperor' phenomenon, where a single child is pampered by both two parents and two sets of grandparents. These children are exposed to a wealth of confectioneries and snacks, leading to diseases like obesity and tooth decay. 36
A study conducted by the Chinese national task force on childhood obesity and presented at the annual meeting of the World Health Organization states that ""almost one in five children under seven is overweight and more than 7% are obese."" In a sample of 80,000 children from 11 major cities, the study found an increase of 156% in the number of obese children between 1996 and 2006. Meanwhile, the number of overweight children grew by 52% during the same period. 36
Thus, parents are increasingly concerned about the problems of obesity and tooth decay among children, leading to the demand for healthy confectionery even in the children's segment. 36
Entry of foreign players providing a boost to the market 37
Confectionery products: a preferred gift item 38
Category growth versus launch analysis 39
Leading players and their new product launch trends 41
Product Launch Analysis 45
By flavor and fragrances 45
Overview 45
With an ever-increasing competitive scenario, the market is witnessing a wide variety of new product launches with distinct flavors and added fragrances to create product differentiation and thereby capture market share. Chocolate was the most popular flavor among new product launches in 2009 primarily due the universal appeal of the flavor. Sesame is used as a key ingredient in traditional Chinese cuisine and is also used for its medicinal values, from treating infections to stimulating brain activities. Due to its medicinal and nutritional benefits, sesame is the second most preferred flavor in China. Heavy adoption of fruit- and nut-based flavors like strawberry, orange, peanuts and almond indicate the changing consumer behavior towards health-oriented confectionery products. Mint is the preferred flavor for gum-based confectionery and is most popular among men. 45
Top flavor/fragrance: chocolate 46
Product examples: chocolate flavor/fragrance 48
By packaging material 49
Overview 49
Top packaging material: plastic 50
Product examples: plastic packaging 52
By price point 53
Overview 53
CONCLUSION 55
Highlights 55
Methodology 56
Methodology overview 56
Primary sources of data 56
Secondary sources of data 56
APPENDIX 57
Future reading 57
Feedback 57
Ask the analyst 57
Datamonitor consulting 57
Disclaimer 57
List of Tables
Table 1: Confectionery market definitions 6
Table 2: Top 10 players in the Chinese confectionery market by market share and new product launches, 2009 42
List of Figures
Figure 1: New product launches in the global confectionery market, by country, 2009 10
Figure 2: Percentage of obese and overweight adults globally 12
Figure 3: Examples of product launches that use the 'healthy' claim, 2009 13
Figure 4: Examples of product launches that use the 'no sugar' claim, 2009 14
Figure 5: Examples of product launches that use the 'low calorie' claim, 2009 15
Figure 6: Examples of products claiming to contain 'no additives', 'no artificial colors', 'no artificial flavors' or 'no sweeteners', 2007, 2008 and 2009 16
Figure 7: Consumers' responses to the question: 'compared to six months ago, to what extent do you feel the following have improved or worsened?' 17
Figure 8: Examples of energy bars and snack items launched in 2009 18
Figure 9: Examples of new products with packaging that encourages consumption on-the-go, 2009 19
Figure 10: Examples of new products that are comforting and relaxing for consumers, 2009 20
Figure 11: Consumption in the global confectionery market (%), by age group, 2008 21
Figure 12: Examples of product launches targeted at children, 2009 22
Figure 13: Examples of product launches in the premium product segment, 2009 23
Figure 14: Examples of product launches in the gum segment that offer functional benefits or are sugar-free, 2009 24
Figure 15: New product launches in the global confectionery market, by category, 2009 26
Figure 16: Top 10 countries based on number of new confectionery product launches, 2009 28
Figure 17: Some global examples of innovative product launches in 2009 29
Figure 18: Chinese sugar prices, 2008- 09 30
Figure 19: New product launches in the Chinese confectionery market, by category, 2009 31
Figure 20: Asia Pacific per capita chocolate consumption (kilograms) 2009 32
Figure 21: Growth of middle class segment in China, 1985-2025 33
Figure 22: Comparison of per capita income in urban and rural China, 2005-09 35
Figure 23: New product launches which are marketed as healthy in the Chinese confectionery market, 2009 37
Figure 24: New product launches in the Chinese confectionery market which are marketed with unique flavor and packaging, 2009 38
Figure 25: Consumption of gum, by demographic, 2003-08 40
Figure 26: Contribution to and growth in total new confectionery product launches in China, by category, 2008-09 41
Figure 27: Top five confectionery companies' contributions to new product launches in China, by category, 2009 43
Figure 28: New product launches in the Chinese confectionery market, by flavor/fragrance, 2008-09 45
Figure 29: Contribution to and growth in total new confectionery product launches in China, by flavor/fragrance, 2008-09 46
Figure 30: New product launches in the Chinese confectionery market with chocolate flavor/fragrance, by category, 2009 47
Figure 31: Examples of launches with chocolate flavor/fragrance, 2009 48
Figure 32: Contribution to and growth in total new confectionery product launches in China, by packaging material, 2008-09 50
Figure 33: New product launches in the Chinese confectionery market using plastic as a packaging material, by category, 2009 51
Figure 34: Examples of launches with plastic packaging 52
Figure 35: New product launches in the Chinese confectionery market, by price point, 2009 54
Figure 36: Conclusion 55
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