30+ industry experts, 100+ B2B platform founders, and 800+ manufacturer friends gathered in Fuzhou to jointly explore the path of internet transformation for the FMCG industry. Snack foods refer to foods eaten during leisure or rest time. Although difficult to define, they cover a wide range. In recent years, snack foods have experienced rapid development and upgrading. Below, we can summarize and analyze the current situation of China's snack food industry from four levels: industry, channels, consumption, and competition. I. Industry Overview: Product flavors influenced by popular dishes; market landscape becoming fragmented Currently, the entire snack food industry is developing unevenly: the biscuit category is declining, puffed food varieties are being renewed, the baking category is expanding, Korean, Japanese, and European bread and cake innovations are rapid, various nut products are emerging strongly, and imported snack foods have entered a stage of rapid development... In summary, today's snack food industry has the following characteristics.

  1. Snack food stores are developing rapidly, with channels undergoing personalized transformation In recent years, snack food stores have developed rapidly, not only innovating channels but also greatly promoting the development of the snack food industry in various regions. Snack food stores offer a rich variety of products, with high average transaction values and high conversion rates of potential customers. A snack food store of about 100-200 square meters can generate daily revenue of 10,000-20,000 yuan, or even exceed 20,000 yuan.
  2. The flavors of Chinese and Western dishes influence the categories and flavors of snack foods Today's snack food companies are adept at finding consumer taste trends from popular restaurant flavors, thereby launching new products with unique flavors, such as Orion's fresh matcha flavor, Lay's fragrant cheese and vegetable flavors, Oishi's Kung Pao Chicken potato chips, and various brands of fries with ketchup or sweet chili sauce. In recent years, potato chip flavors derived from dishes have enriched Lay's product line; product innovation has also brought PepsiCo an 8% net revenue increase over the past three years, achieving rapid performance improvement.
  3. Urban baking industry is increasingly developed, stimulating consumer purchase demand Bakery shops popular in various cities are deeply influenced by the Taiwanese baking industry and have developed rapidly in the past two years.
  4. Cross-border e-commerce and e-commerce platforms are booming, and imported foods will usher in a period of rapid development According to the American Food Industry Association, by 2018, China will become the world's largest importer of food products, with the mainland's imported food market size reaching 480 billion yuan. The imported food industry is in an accelerated start-up phase. Import e-commerce can be divided into several major categories: 1. Platforms represented by Tmall and Taobao; 2. Vertical platforms represented by JD.com, Yihaodian, and SF; 3. Cross-border shopping companies, NetEase Kaola, and overseas agents; 4. Independent vertical websites.
  5. Industrialization and scale levels continue to improve Let's analyze these two models: External M&A model: For example, after Mondelez (Kraft) acquired Danone and Nabisco, it now has six large biscuit production bases in mainland China. Internal expansion model: For example, PepsiCo's food business in China has grown to six food production plants (located in Beijing, Guangdong, Shanghai, Wuhan, etc.) and seven sustainable demonstration farms. Among them, the Wuhan plant increased its capacity by $50 million last year, doubling its production capacity, showing remarkable performance.
  6. Market is transitioning from concentration to fragmentation In relatively segmented markets, domestic brands have performed commendably. Second- and third-tier brands, with their innovation capabilities, have the conditions and foundation to break through and rise. Strategic positioning is crucial for enterprises. Finding market segmentation is equivalent to finding an innovative path in a fiercely competitive market environment. The segmented market cake can be gradually enlarged, forming unique advantages and increasing barriers for competitors to enter. II. Channels: Fragmented consumer market gradually forming In recent years, not only have consumers' shopping concepts become more personalized, but channels have also changed. Today's channels are fragmented, from one to many, forming a fragmented consumer market. We can see the changes in today's channels through some familiar brands. For example, Dove chocolate's modern trade channels account for only 60%, Master Kong's modern trade channels account for only 14%, and Want Want's less than 11%. III. Consumption: Meal replacement and leisure are the two major directions; raw material accessibility determines depth With consumer upgrading and channel personalization trends, snack food upgrades are unprecedentedly active, and the entire industry scale is rapidly expanding. It is reported that the daily number of online snack food transactions has exceeded 2 million and continues to grow rapidly. The growth momentum mainly comes from three types of consumers: high-income groups, young people, and mobile e-commerce shoppers. Their consumption mainly reflects the following characteristics:
  7. Product function determines two major future development directions 1. Meal replacement function direction. The meal replacement concept of baked goods made from rice and flour is gradually being explored. Many baked products are being positioned as breakfast substitutes, and can also be consumed during meeting breaks or while traveling. 2. Pure snack direction. The concept of snacks made from potatoes, seafood, and other unconventional raw materials will be strengthened, such as fries, cookies, coated biscuits, chocolate wafers, and potato chips.
  8. Product packaging and flavor are the top choices for most consumers On the basis of flavor, continuously pursuing product added value has become an inevitable choice for companies to differentiate their products.
  9. Family consumption and tourism consumption become the main consumption directions In family consumption, the mainstream consumer group has changed, with the target shifting from children to a broader population. The market is further segmented, and consumption motives have also changed. Meal replacement and leisure consumption have become the norm for white-collar workers' snack consumption. Tourism consumption is passive consumption. Traditional specialty snack foods and imported foods, due to their uniqueness in region, craftsmanship, and flavor, have won the favor of tourism consumers.
  10. Consumption is greatly influenced by the development of catering culture First, influenced by Western catering culture: "European-style small bread" and "European-style cakes" are classic examples of industrializing fresh pastries. In addition, a large part of the flavor changes in snack foods are influenced by Western cuisine, such as chocolate, tiramisu, blueberry, and cheese flavors, which are widely used in biscuits, cakes, bread, puffed foods, and pastries. Influenced by Western catering culture (such as afternoon tea, meeting breaks, birthday parties, etc.), new Western-style baked products will easily gain market recognition, saving the process of market cultivation, such as croissants and macarons. Second, influenced by traditional catering culture: For example, Oishi not only designs and produces original-flavored potato chips but also extends to twelve different flavors, such as onion, braised beef, curry beef, lamb, and mustard flavors. In addition, Glico launched pork bone spicy hot pot flavored crackers, Master Kong launched black pepper steak flavored crisps, and there are also black rice steamed cakes and Jinhua crispy cakes, all deeply influenced by traditional culture. IV. Competition: Multi-brand strategy and regional production layout are mainstream Under the current competitive landscape, many snack food companies are strengthening their own strength, seeking the most appropriate strategies and layouts with differentiated advantages.
  11. "Multi-brand strategy" is the business expansion strategy of mainstream enterprises Leading companies such as Kraft, Dali, Orion, and Want Want all adopt this strategic model.
  12. Mainstream enterprises are positioning themselves in segmented industries Many companies are striving for the most favorable position in segmented categories.
  13. Regional production layout is gradually becoming mainstream Many leading companies with strong strength are focusing on regional markets and carrying out gradual market layouts. It is reported that the overall snack food market is expanding at an average annual compound growth rate of over 16.70%, with an annual output value of 905.018 billion yuan (2014), and it is expected to reach 1,992.528 billion yuan by 2019. In today's market environment, consumer demand is diversified and personalized, and the prospects for snack foods will become even brighter. This article is compiled from Mr. Li Chao's "Latest Development Trends of China's Snack Food Industry" from Shanghai Lianzhi Zhida Consulting Management Group, with slight deletions and modifications. New Food Era · New Distribution —— 2016 China "FMCG + Internet" Summit Forum —— This is a grand event focused on how FMCG industry channels should transform under the general trend of Internet+ transformation Conference Agenda 08:00-09:00 Registration 09:00-09:05 Host opening 09:05-09:35 2016 China FMCG Industry Trend Analysis Report - Zhao Bo 09:35-10:05 FMCG Enterprise Transformation Strategy and Path - Liu Chunxiong 10:05-10:35 Opportunities and Challenges Brought by FMCG Channel Transformation - Liu Zhao, CEO of Waiqin 365 10:35-11:05 Reconstructing Distribution Channel System, Promoting Urban Retail Upgrade - Tian Yuan, General Manager of Alibaba Retail Link Backend 11:05-11:25 Channel Efficiency in the Internet Era - Fu Xiaoyun, Vice President of Benlai Holding 11:25-12:00 Roundtable Forum - Brand Transformation: Improvement vs. Reconstruction? Guests: Liu Zhao, Liu Chunxiong, Fang Gang, Chen Feng, Shi Zhengchuan, Deng Xia 12:00-13:30 Lunch 13:30-13:50 Dealer Transformation: City Distribution Trends - Wang Qi, CEO of Weijie City Distribution 13:50-14:20 Roundtable Forum - Why Dealers Should Do Logistics in Transformation Guests: Zhao Bo, Wang Qi, Liu Zhongmin, Tang Guangliang, Wang Cheng, Sheng Yan 14:20-14:40 How FMCG Enterprises Leverage the Internet to Take Off - Wang Hui, E-commerce Operations Director of Xijiu 14:40-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy - Su Xiaoxin, Vice President of Zhongshang Huimin 15:00-15:20 Category Value and B2B E-commerce Development Strategy - Wang Chaocheng, CEO of Yijiupi 15:20-15:40 Supply Chain Finance as a Lubricant for B2B to Drive Traditional Business - Chen Xian, CEO of 51 Order 15:40-16:00 Zhanghe Cloud Factory Helps Upgrade FMCG Supply Chain - Yang Lixiang, CEO of Zhanghe Tianxia 16:00-16:30 Integrating Small and Micro Retail, Reconstructing Business Ecosystem - Miao Dong, Vice President of Quanshi 16:30-16:50 B2B Investment Principles and Ideas - Zhao Mingwei, Vice President of Junlian Capital 17:00-17:30 Roundtable Forum - Who is the King of FMCG B2B Models? Guests: Fu Xiaoyun, Zhuang Jianzhong, Jiang Tao, Zeng Weiqin 17:30-19:30 Dinner For manufacturer friends who want to transform, this grand event is not to be missed. Interested friends can long-press the QR code below or click "Read Original" to register. Registration: Long-press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]