Click to read the original article for details. Snacks, as a supplement to regular meals, have gradually upgraded to become the 'fourth meal' of the day. When mentioning 'snacks', many people think they are just for leisure and supplementation, without much 'presence'. However, a recent report released by the Ministry of Commerce, titled 'Report on the Development of the Snack Industry under Consumption Upgrade' (hereinafter referred to as the 'Snack Report'), shows that the annual total output value of China's snack industry has reached 2.21564 trillion yuan. What does over 2 trillion yuan mean? This figure is close to the annual GDP of Liaoning Province, exceeding that of about half of the provinces (cities and districts) in the country. Snacks, as a supplement to regular meals, have gradually upgraded to become the 'fourth meal' of the day. People consume various snacks, and snacks also meet people's diverse needs. What is the logic behind the rapid development of the snack industry? More Snacks in the 'Shopping Cart' Small twisted doughnuts sold 15 tons in 4 days, totaling 2 million pieces; small crispy cakes sold 10,769 pieces in 4 days; an 8-year-old snack brand is expected to exceed 10 billion yuan in revenue in 2019... China's snack industry is exploding at an unprecedented speed. Snacks are foods corresponding to 'staple foods' and have long not been considered essential consumer goods. However, in recent years, snack categories have become increasingly rich, including nuts and fried seeds, preserved fruits and dried fruits, puffed foods, dried meat and meat jerky, cakes and pastries, and chocolates, which are all available. Their proportion in the 'shopping cart' is also increasing. The Snack Report shows that from 2006 to 2016, the total output value of the snack industry showed a rapid upward trend, growing from 424.036 billion yuan to 2.21564 trillion yuan, an increase of 422.51%. Relevant calculations show that by 2020, the total output value of the snack industry will approach 3 trillion yuan. By industry classification, the output value of vegetable, fruit and nut processing, meat product and by-product processing, and convenience food ranks in the top three of the overall snack scale, accounting for 26.5%, 21.22%, and 18.01% respectively. 'I like chocolate, pineapple cakes, potato chips... China's snack varieties are simply too rich. I choose different snacks in different scenarios. For example, when working, I choose snacks like chocolate and biscuits that can fill the stomach and provide energy; when relaxing, I choose snacks like potato chips and cola that make the brain secrete more dopamine. I often buy brands like I-Mei and Calbee, and I also buy many domestic brands,' said Ye Jiaqi, who is studying in Beijing. The developed online shopping has prompted consumers to no longer buy snacks sporadically, but to buy in large packages and in bulk. A few days ago, Ye Yuanyuan, who works in Henan, bought a large box of snacks from the Three Squirrels online flagship store, including daily nuts, lactic acid bacteria pocket bread, crystal zongzi, beef granules, and hand-torn squid, with a complete variety. Ye Yuanyuan said that she used to often buy puffed foods, but now she buys the most nuts, yogurt, and fruits, and sometimes buys some bread and biscuits. The variety of choices is changing, but the habit of eating snacks remains unchanged. Experts say that with the acceleration of consumption upgrades and the rapid rise of emerging retail channels, the snack industry has entered the fast lane and become the most promising and dynamic industry in the future FMCG market. At present, this industry has nurtured many well-known brands and listed companies, such as 'Three Squirrels', 'Baicaowei', 'Zhou Hei Ya', and 'Lai Yifen', with broad future space. Snacks Are Becoming More Personalized What do people value when choosing snacks? And in what scenarios do they consume snacks? Li Jiapan from Hubei prefers sweets and first pays attention to taste, while also valuing brands when choosing snacks. 'When under pressure, snacks can especially relieve stress and instantly forget all worries. But I don't eat without restraint; I pay attention to controlling calorie intake.' Li Jiapan's view represents the voice of a considerable number of young people. In addition to requirements for health, nutrition, and brand, the 'appearance' of snacks is also receiving increasing attention. 'The Want Want brand has been working hard on packaging in recent years, and Want Want milk has even launched a 56-ethnic version of the milk can. Everyone likes beautiful things. Although I know the taste hasn't changed, just looking at the can makes me want to own it. Specifically, I usually eat snacks while binge-watching shows, using all senses, which is a very pleasant experience,' said Ye Yuanyuan. The Ministry of Commerce's Snack Report shows that in recent years, snacks with characteristics such as 'natural', 'no additives', 'origin', and 'one-day packaging' have grown faster in the market. During interviews, many people said that while eating regular meals well, snacks are increasingly becoming an indispensable part of life. Consumers can meet more scenario-based needs, gain more emotional resonance, and enjoy a relaxed and entertaining leisure experience while consuming leisure foods. From the supply of snack products on major e-commerce platforms, more and more brands are endowing products with personalized characteristics that fit people's psychological states. For example, the cocktail brand RIO's tipsy series has launched the slogan 'One Person's Little Drink', conveying the concepts of individuality, youth, and independence. Another example is a recent survey released by 58.com, 'Workplace Snack Guide', which shows that office snack culture is developed in Nanjing, Suzhou, Hangzhou, and other places, and snacks have become an 'important tool' for bringing colleagues closer. The 'dirty bun' and other 'internet celebrity' snacks that are hot on the market reflect the pervasive characteristics of fashion and trends in the Internet age. From 'Bargain Hunting' to 'Quality Seeking' Behind the hot consumption are the huge opportunities for consumption upgrades and snack enterprises and e-commerce. 'I often buy snacks at offline convenience stores or supermarkets because snacks generally satisfy my instant experience and the demand is urgent. If it's a common, easy-to-get, and popular snack, I usually buy it offline. If it's an internet celebrity snack or foreign snack, I find a purchasing agent or buy it on an e-commerce platform. But now, offline experience stores like snack houses are also increasing, and foreign products are relatively complete,' said Chu Xiangyu, who lives in Shanghai. Data shows that in 2018, the national per capita disposable income actually increased by 6.5%, and the Engel coefficient dropped to 28.4%, a decrease of 0.9 percentage points from the previous year. Analysts say that income growth is an important support for the booming snack industry. Under the premise of improved living standards, people have more choices in snack consumption, and their requirements for product quality are also constantly improving, moving from the original 'bargain hunting' to 'quality seeking'. Driven by diversified, multi-scenario, high-quality, and high-frequency consumption demands, snack enterprises are also building upgrade maps. The Snack Report shows that these upgrades mainly include several aspects: First, industrial chain upgrade: full contact with customers and accurate positioning. At present, many enterprises are carrying out layout of the entire industrial chain and full categories, accurately tapping their own operating advantages, grasping market trends, and continuously improving according to customers' requirements for product characteristics, purchase channels, and their changes. Second, quality control upgrade: overall control from the source to the supply chain. Many enterprises have realized that they must not only meet basic safety and hygiene standards but also be as fresh as possible, with both flavor and taste, while also being healthier and more nutritious. Third, product upgrade: multi-dimensional innovation from appearance to connotation. Adhere to innovation, deeply cultivate products, and fully consider the specific requirements of customer groups in multiple dimensions such as consumption scenarios, logistics processes, and purchase methods. Fourth, channel upgrade: seek the 'best interface' that fits customer needs. In addition, there is image upgrade, combining brand promotion with improving customer experience. Fifth, positioning upgrade: find a suitable position in the gradient of consumption upgrades. However, the Snack Report also points out that the current development of the snack industry has shortcomings such as homogeneous competition, limited corporate profit space, 'heavy marketing and promotion, light product research and development', and slow brand internationalization. In this regard, experts believe that the government should create a good business environment and policy regulatory environment for the healthy development of the domestic snack industry; enterprises should accelerate digital transformation, build an ecological closed loop, capture changes in consumer demand, carry out differentiated operations, adhere to the dual-wheel drive of deep specialization and comprehensive integration, solidly enhance the attractiveness of snack products, and at the same time leverage cross-border e-commerce to promote brand internationalization. Source: People's Daily