In recent years, China's snack market has undergone significant changes. Meat snacks and protein/energy bars have become the fastest-growing categories, while the overall market for spicy strips, dried tofu, and seasoned vegetable products has expanded to nearly 100 billion yuan. The snack industry has moved beyond mere taste satisfaction, gradually shifting towards functionality and health orientation, with products targeting specific consumer groups emerging. In the past two years, the rise of bulk snack stores and discount snack shops has made the term 'snacks' surpass 'beverages' as the most watched keyword in the food industry. Channel reforms are also impacting the snack landscape; the three major snack giants that previously seized online or chain opportunities have seen their performance challenged in this wave of change, but they are actively embracing change and seeking new growth points. Snacks are both a red ocean and a blue ocean. According to Euromonitor International, China's snack market reached 465.324 billion yuan in 2022 (different institutions vary in their forecasts; this article primarily uses Euromonitor data), with CITIC Securities reporting a compound annual growth rate of 7.1% from 2008 to 2022. We predict that over the next decade, the Chinese snack market is expected to release an additional 200 billion yuan in growth space. Each market transformation harbors opportunities to create new blue oceans, and brands that perceive opportunities early and position themselves ahead will reap the rewards. This article reviews the development history of China's snack market from the perspectives of categories and channels, explores opportunities for the industry in the next decade, and provides insights for snack companies to find new growth drivers.
China's Snack Market: Continuous Category Differentiation
The evolution of snack categories is a relay race chasing consumer demand. Candies and preserved fruits bring sweet flavors, while potato chips and biscuits offer crispy enjoyment, satisfying consumers' pursuit of taste pleasure. Emerging categories such as nuts and meat snacks meet consumers' needs for health and nutrition. Personalized taste preferences have driven the development of new categories like spicy strips and seasoned vegetable products. The two core drivers of China's snack category development are, on one hand, the pursuit of pleasurable experiences, and on the other, the emphasis on health and nutrition, with consumers expecting a 'relaxed and enjoyable food experience.'
China's snack categories continue to differentiate Image source: Weibo @Dove Yue Shike, Tmall @Qiaqia Food Official Flagship Store, Maxing JD Self-operated Flagship Store
As consumer health awareness continues to rise, the evolution of snack categories will also change. Products that meet health needs will usher in new growth opportunities, while those that satisfy taste pleasure, such as high-sugar, high-oil, and high-salt snacks, may face slower growth or even contraction. Based on the order of category emergence and growth trends, we divide existing snack categories into classic categories and high-growth categories.
What Drives the Development of China's Snack Industry?
In the past, the development of China's snack industry was driven by classic categories such as candy and chocolate. With the rise of health awareness, the growth rate of classic categories has gradually slowed or even declined. In the future, the growth momentum of China's snack market is expected to come from high-growth categories such as meat snacks and nuts, as well as the health-oriented, functional, and premium upgrades of traditional categories like candy and biscuits. The development of these emerging categories will be the main driving force for the future growth of China's snack market.
(I) Classic Categories: The Snack Foundation
1. Candy: Sweetness Remains, but Enthusiasm Fades
China's candy industry has undergone a significant transformation from 'not having enough sugar' to 'eating less sugar.' In the early 1950s, White Rabbit creamy candy was rebranded as a 'luxury item' of that era, becoming a sweet memory for multiple generations of Chinese people. After the reform and opening-up, domestic and foreign candy brands jointly innovated in form and flavor, leading to rapid development of China's candy industry. In 1994, Hsu Fu Chi launched its New Year candy series, making crispy heart candy and nougat a Spring Festival staple; Golden Monkey entered with its milk candy, becoming another national brand. Subsequently, Perfetti Van Melle entered China, bringing Alpenliebe milk candy, Mentos soft candy, and Chupa Chups lollipops. In the early 2000s, Japanese brands UHA Mikakuto and Fujiya brought specialty milk candy and multi-flavor fruit candies, respectively. While candy products greatly diversified, the impact of foreign brands on domestic brands became increasingly evident. In 2014, Hsu Fu Chi, already acquired by Nestlé, saw its market share drop to third place domestically. That same year, another domestic brand, Golden Monkey, was acquired by a subsidiary of Hershey. Although Golden Monkey returned after being acquired by Henan Yuxiang Food in 2018, foreign brands still dominate China's candy market. In 2018, the top five players in China's candy industry were all foreign brands/enterprises: Mars Wrigley (22%), Nestlé (8%), Alpenliebe (7%), Mondelez International (7%), and Ferrero (4%).
Hsu Fu Chi New Year candy Image source: JD @Hsu Fu Chi JD Self-operated Flagship Store
Currently, a more urgent issue in China's candy market is the contraction in market size. Euromonitor International data shows that China's candy and snack market reached 59.99 billion yuan in 2022, declining by 11.1% and 8.7% year-on-year in 2020 and 2022, respectively. In 2020, the CR3 of China's candy market was 20%, compared to the US (35.8%) and Japan (30.4%), indicating significant room for improvement. The gum market has also shown a downward trend, with market size shrinking from 18.7 billion yuan in 2014 to 11.35 billion yuan in 2022. This trend is related to increased health awareness and the rise of mobile payments, which reduced the need for change. Additionally, traditional jelly has been affected by health consciousness, slowing its growth. Facing market contraction, the candy market is seeking solutions in sugar reduction and functionality. A 2021 Ipsos survey showed that 55% of consumers reduced their sugar intake. Chinese candy brands are following the sugar reduction trend, such as Lao Jin Mo Fang's 'Li Zhen Bang' lollipops with trehalose, and Want Want's low-sugar YA-MI sparkling candy. Jelly has also undergone health upgrades, with konjac jelly featuring low fat and high fiber growing rapidly. Leading brands like Xizhilang and Qinqin have launched related products, and the emerging brand 'ZUO Yixia' achieved double-digit growth in the first half of 2023. Additionally, the functional candy track is hot. According to Zhiyan Consulting, China's functional candy market reached 23.556 billion yuan in 2020. In 2021, functional candy brand BuffX secured a Series A funding of tens of millions, and another functional candy brand minayo surpassed 100 million yuan in sales in the first half of 2022.
Qinqin Food's konjac jelly Image source: Qinqin Food official website
2. Chocolate: Foreign Dominance, Domestic Breakthrough
Since foreign brands entered the Chinese market, they have gradually established dominance in the chocolate market. In recent years, with the rise of health trends, domestic brands have begun to break through. In 1951, Shanghai Yimin Food launched the first domestic chocolate brand, 'Happiness Brand.' Over the next 20 years, products such as Guangming Brand nut chocolate, Kuaile Brand crispy chocolate, and Shang'er Brand coin chocolate were introduced. After the reform and opening-up, foreign chocolate brands entered the market one after another: Ferrero became the representative of high-end chocolate in Chinese minds; Dove targeted couples and young women, becoming the embodiment of romance; Snickers stood out with its 'sweep away hunger' marketing creativity. Under the impact of foreign brands, domestic chocolate brands fell on the defensive. Domestic brands Hsu Fu Chi and Golden Monkey were acquired by Nestlé and Hershey, respectively, and Jindee一度停产 in 2016 due to poor management, leaving domestic chocolate brands in silence. Foreign brands dominate the chocolate market, with Dove's market share exceeding 20% for many consecutive years.
Dove Silky Smooth Milk Chocolate Image source: JD @Dove Flagship Store
Since 2019, emerging Chinese chocolate brands have grown rapidly through e-commerce channels, with sub-categories like dark chocolate and truffle chocolate emerging. In 2020, 'Daily Dark Chocolate,' positioned as 'sugar-free,' became the top seller in Tmall's dark chocolate category and has maintained that position. Brands such as Jindee (resumed production after being acquired by Haolinyin in 2016), Gefengsong, and Bainuo have also launched dark chocolate products, and Ferrero Rocher's new premium dark chocolate series debuted in China in 2022. The competition between new and old brands has led to category explosion; during the 2021 'Double 11' period, dark chocolate products grew by 90%, becoming the fastest-growing sub-category in recent years. New sub-categories are still emerging; Nuofan Truffle, focusing on truffle chocolate products, saw sales grow 60% to 800 million yuan in 2022.
Daily Dark Chocolate Image source: Tmall @Daily Dark Chocolate Flagship Store
China's chocolate market competition pattern is relatively stable, with slowing market growth. Euromonitor International data shows that from 2020 to 2022, China's chocolate market size grew from 20.9 billion to 22.07 billion yuan, with moderate growth. Over the past decade, Dove, Kinder, Nestlé, Ferrero, and Snickers have consistently been the top five brands, with a CR5 of 69.1% in 2022. While growth slows, China's chocolate consumption level remains low. According to Statista, per capita annual chocolate consumption in Japan, South Korea, and Singapore in 2022 was 27 times, 10.5 times, and 5.5 times that of mainland China, respectively (see chart below). In the future, sugar reduction remains a trend in the chocolate sector. According to Beijes Consulting, the global sugar-free chocolate market has about 2 billion yuan in growth space by 2028.
Comparison of per capita annual chocolate consumption (including forecasts) Data source: Statista
3. Biscuits: More Than Just Filling
Before the 1980s, China's biscuit industry was limited by raw materials and technology, with small production scale and relatively single product types. Products like Qingdao Food's calcium milk biscuits and Taikang Food's Wannianqing biscuits represented the level of Chinese biscuit enterprises at that time. After the reform and opening-up, classic products such as Want Want Senbei, Want Want Snow Crisp, Hsu Fu Chi French wafer, and Jiashili jam-filled biscuits were born, ushering in a 'hundred flowers blooming' stage for China's biscuit market.
Qingshi calcium milk biscuits, Want Want Snow Crisp, Want Want Senbei Image source: Tmall @Qingshi Flagship Store, Tmall @Want Want Food Flagship Store
Since the 1990s, foreign brands have further injected fresh blood into China's biscuit market, creating the classic pairing of chocolate and biscuits. Oreo brought chocolate sandwich biscuits, Chips Ahoy! paired chocolate chips with cookies, and Glico focused on stick-shaped chocolate-coated biscuits. However, differences in taste preferences between East and West once caused foreign brands to stumble in the Chinese market. In the early 2000s, Oreo entered China but sold poorly due to overly sweet taste. A series of localization improvements, including sugar reduction and flavor enhancement, turned its fortunes around, with sales tripling in some regions. Subsequently, Oreo focused on young people, continuously innovating in flavor, packaging, and marketing. Euromonitor International data shows that from 2014 to 2022, Oreo's market share in the sweet biscuit category rose from 12.2% to 19.4%, firmly holding the top spot in China's biscuit brand sales.
Oreo Birthday Cake Flavored Biscuits Image source: Tmall @Mondelez Official Flagship Store
Euromonitor International data shows that in 2022, China's packaged biscuit market reached 48.67 billion yuan, accounting for about 10% of the entire snack market. In recent years, the biscuit category has seen sluggish growth; since 2015, the year-on-year growth rate of the biscuit market has fallen to single digits, with a 1.01% decline in 2022 (see chart below).
China's biscuit market size Data source: Euromonitor International
Although biscuit market growth has slowed, flavor and texture innovation still bring growth opportunities. According to a survey by Barry Callebaut, over 50% of consumers try new biscuits due to unique flavors. Some brands are innovating with seasonal flavors, Sichuan-style spicy flavors, and crossover flavors, launching products like Baicol Orange Passion Fruit Biscuits, Huangji Braised Flavor Biscuits, and Nestlé Yuanyang Milk Tea Flavored Wafers. The '2023 Tmall Biscuit and Puffed Food Industry Trend Report' shows that thin crispy biscuits continue to expand market share, with growth of 19%. Meanwhile, niche flavors like Q-elastic and multi-layered textures are growing at over 70%. Additionally, sub-categories such as wafers, thin crisps, cookies, and sandwich biscuits are driving growth in the biscuit industry. Beyond flavor innovation and sub-categories, biscuits also have growth opportunities in health, functionality, and premiumization. For example, emerging brand Baoji Unicorn's high-fiber meal replacement coarse grain biscuits sell well on JD, with over 500,000 reviews; Masala's low-GI biscuits incorporate konjac, tartary buckwheat, and buckwheat, with over 200,000 reviews on JD. More biscuits are incorporating medicinal and edible ingredients and premium raw materials, a trend evident on Tmall. The '2023 Tmall Biscuit and Puffed Food Industry Trend Report' points out that biscuits with black rice, yam, and monkey head mushroom rank in the top three for market size growth, and biscuits with premium ingredients like black truffle and ham are recognized by consumers.
Masala low-GI biscuits Image source: JD @DGI Official Flagship Store
4. Potato Chips: Happy, Not Fat
Potato chips, once creating happiness through flavor, are now transforming towards guilt-free enjoyment. In the 1990s, foreign brands like Lay's and Pringles entered China, but their high prices deterred many consumers, allowing domestic chips targeting the mid-to-low-end market to rise. In 2003, Capricorn emerged, leveraging spokesperson Jay Chou and a youthful positioning to break through the chip wars and gradually secure the top spot among domestic chips. According to Euromonitor International data for 2022, its brand market share was 17.3%, second only to Lay's. With rising consumption levels, chips have become a classic category on shelves. To capture consumers' hearts and stomachs, chip brands continuously innovate with flavors. After classic flavors like original, tomato, and barbecue, fresh flavors like cucumber and lime have become new classics. In recent years, under the idea of crossover innovation, novel and quirky chip flavors have emerged endlessly; Lay's has launched over 200 flavors globally.
Lay's Hot Pot Flavor Series Image source: Weibo @Lay's Official Weibo
Texture innovation has also enriched the 'chip universe.' Chips have expanded from round to wavy, square, and triangular shapes, with giants like Lay's, Capricorn, and Orion expanding their product lines accordingly. Chips remain delicious, but consumers are increasingly unwilling to pay for traditional chips that are 'high oil, high salt, high calorie.' The growth rate of China's chip market has been slowing since 2010, with a year-on-year growth of only 1.8% in 2020 and a decline of 0.9% in 2022 (see chart below). Additionally, Euromonitor International data shows that China's chip market is highly concentrated and dominated by foreign brands, with a CR5 of 76.7% in 2022, and Lay's holding a 50.8% market share.
China's potato chip market size Data source: Euromonitor International
Removing the 'junk food' label has become the major direction for the chip category. A common approach is upgrading raw materials. Lay's has launched original-cut taro chips and yam thin slices in China, adding ingredients like red dates, goji berries, black sesame, and chia seeds. In 2021, Lab Snacks launched a high-protein chip category, and its cod chip product quickly became a top-three category item, surpassing one million in sales. Additionally, reducing oil and saturated fat is another path to healthier chips. In November 2023, Lay's core product lines in China adopted a formula with '50% less saturated fat.'
Lab Snacks high-protein chips Image source: WeChat official account @Lab Snacks
5. Ice Cream: The Choice Between Flavor and Price
In the 1920s, 'Meinv Pai' popsicles kicked off the development of China's ice cream industry. At the founding of the People's Republic, Yimin Food Factory No. 1 launched 'Guangming Brand' cold drinks, maintaining the top market share until 1993. In the 1990s, Wall's and Häagen-Dazs entered China, challenging Guangming's leading position. Subsequently, Yili and Mengniu rose through channel expansion, advertising, and more affordable prices, competing with foreign brands. In recent years, ice cream brands have adopted premium strategies to seek new growth space. In 2017, Mengniu tested the premium market with its 20-yuan Dilan Shengyue fruit yogurt ice cream. In 2018, Zhong Xue Gao, positioned as 'China's premium ice cream,' ranked first in Tmall's 'Double 11' ice cream category for four consecutive years. In 2022, Mengniu launched Moutai ice cream, with sales exceeding 200,000 yuan within 7 hours of launch.
Moutai ice cream Image source: WeChat official account @Xiaomao i Moutai
In the summer of 2022, public opinion events like 'won't melt when burned' and 'ice cream刺客' backfired on Zhong Xue Gao's premium image. However, this does not mean premium ice cream has faded. According to incomplete statistics from CBNData, in 2023, major ice cream brands released over 70 new products, with mid-to-high-end products priced above 10 yuan per piece accounting for 51%. Premium ice cream is segmenting the market, but affordable ice cream has a broader audience base. A 2022 consumer survey showed that 70.9% of consumers accept prices between 3-10 yuan per piece, while only 1.4% accept prices above 20 yuan. Aipus's monthly sales statistics show that sales of products priced 3-10 yuan and above 20 yuan account for 61.04% and 5.7%, respectively. China's ice cream market concentration is relatively low. Euromonitor data shows that in 2022, only 7 single brands had a market share exceeding 2%, such as Qiaolezi and Cornetto. Yili leads with a 21% share, followed by Unilever and Nestlé with 10.5% and 3.1%, respectively. Improving taste, enhancing health attributes, and increasing portability are the main directions for ice cream innovation. Innova Market Insights reports that over half of consumers buy ice cream because it's 'delicious.' Besides taste, health is also a major attraction; in 2022, on Taobao and Tmall, sales of ice cream with keywords like low-calorie and low-sugar increased by 59.5% year-on-year. To expand consumption scenarios, ice cream forms are becoming smaller and more portable, such as Wall's Daifuku ice cream and Yili Qixuan 'Xuan Linglong' mini-packaged ice cream.
Yili Qixuan 'Xuan Linglong' ice cream Image source: Yili
6. Preserved Fruits and Dried Fruits: The Advancing Fruit
Preserved fruits and dried fruits come in many varieties and have a considerable scale. According to Euromonitor data, the market size for preserved fruits and dried fruits in 2022 was 23.98 billion yuan, accounting for about 4.9% of China's snack market share. From handicraft workshops to modern production, from single products to combined products, preserved fruits and dried fruits continue to advance.
Common preserved fruit and dried fruit products Image source: Tmall @Beicaowei Flagship Store, Tmall @Songhao Food Specialty Store
Early preserved fruit and dried fruit industries were limited by traditional business models and developed slowly. To improve efficiency and quality, some enterprises began introducing mechanical equipment; for example, Quanzhou Yuanhetang Preserved Fruit Factory expanded its total output to 3,240 tons through several rounds of investment and expansion in the 1960s. Since 2000, preserved fruit and dried fruit enterprises have continuously innovated in product forms, sub-categories, and standardization. In 2005, Yanjin Shop launched independent bulk packaging, which was more portable than large packages and naked forms. Liuliumei saw business opportunities in the high health value of green plums, focusing on green plum snacks, with single-product sales exceeding 100 million yuan in 2009. In 2010, Haoxiangni led the formulation of the national standard for 'ready-to-eat red dates,' which was officially implemented. Subsequently, the market size of ready-to-eat red dates grew at a rate exceeding 10%, accounting for 80% of annual red date processing volume. Preserved fruits and dried fruits are moving towards healthy ingredients and innovative forms. New ingredients like prunes, blueberries, and durian are driving the creation of new blockbuster products; Liuliumei's prune series has annual sales exceeding 200 million yuan. Traditional dried fruit products with reduced sugar and no additives are growing rapidly; sugar-free and additive-free dried mango and plum products on Tmall have grown by over 120%. Combined preserved fruit products are standing out; milk dates account for over 10% of Tmall's red date sales. The medicinal and edible homologous track is growing rapidly; Haoxiangni's strategic blockbuster product 'Hong Xiaopai' achieved cumulative e-commerce sales exceeding 100 million yuan within one year of launch.
Haoxiangni strategic blockbuster product Hong Xiaopai Image source: JD @Haoxiangni Official Flagship Store
Growth in the preserved fruit and dried fruit market also comes from an increase in consumer numbers and average order value. Tmall data shows that in 2021, the number of consumers and average order value in the preserved fruit and dried fruit industry increased by 3.5% and 3%, respectively. Different demographics have different preferences: post-70s are willing to pay high prices for healthy categories like tangerine peel and vegetable crisps, while post-95s and post-00s prefer innovative plum flavors and additive-free preserved fruits. The preserved fruit and dried fruit market has low concentration and a relatively fragmented competitive landscape, with a CR5 of 28% in 2022, lower than candy (30.7%) and chocolate (69.1%). In the same year, major brand market shares were all below 10%; only Liuliu Orchard, Haoxiangni, and Yida are vertical category enterprises, while the rest are comprehensive snack brands. In terms of sub-categories, traditional products hold a large market share. Combining consumption scale on Tmall in 2020 and 2021, dried fruit, dates, and plums rank in the top three sub-categories. The diversification and low concentration of sub-categories in the preserved fruit and dried fruit market also indicate great potential for cultivating more brands in the future.
(II) High-Growth Categories: New Industry Momentum
1. Nuts: The Chosen One of Healthy Snacks
Nuts are a category growing rapidly on the health wave. After the reform and opening-up, nut snacks began a process of branding. Brands like Shazi Guazi and Qiaqia Guazi stood out in Anhui's roasted goods industry with flavor and marketing advantages. Qiaqia also used technological innovation to switch from roasted to boiled seeds, solving problems like hard shells and sticky hands. The establishment of offline sales channels brought high growth to standardized packaged nuts. Qiaqia's quantified packaged nuts opened the national market through supermarket channels and advertising, with sales quickly reaching 400 million yuan in 2001. Three Squirrels, founded in 2012, opened the door to online channels for tree nuts, ranking first in Tmall's 'Double 11' leisure snack category for eight consecutive years.
Qiaqia fragrant sunflower seeds Image source: Qiaqia official website
The rapid development of nuts has benefited from endorsement by authoritative institutions. In 2007, the US FDA classified nuts as a Grade B health food, supporting their health functions. According to Kantar's 2022 nut industry report, supplementing daily nutrition and trace elements and maintaining dietary balance are the two main reasons consumers buy nuts. After health awareness became widespread, small-packaged mixed nuts quickly became popular. In 2015, Wolong pioneered the daily nuts category, with sales exceeding 200 million bags in 2016. Subsequently, other brands launched more differentiated products, such as Qiaqia's 'Little Yellow Bag' highlighting 'freshness' advantages, Three Squirrels' yogurt daily nuts, and Laiyifen's 'Yi Tian Yi Dai' series featuring high-content probiotics. In December 2023, a search for 'daily nuts' on JD returned over 1,300 products and 156 related brands.
Daily nut products from various brands Image source: Wolong official website, Qiaqia official website, Laiyifen APP
Category innovation has led to industry scale explosion. According to research by Qianzhan Industry Research Institute, the mixed nut market expanded from 3.2 billion to 11.5 billion yuan from 2017 to 2021. Mixed nuts hold the main market share, with a category share of 28%, followed by sunflower seeds and peanuts in second and third place; 2022 Tmall nut market data also confirms the advantages of these three categories. Nut brands are fiercely competing for market share. Over the past five years, Qiaqia and Three Squirrels have been vying for the top spot, with the third to fifth players each holding less than 10% market share; Beicaowei, Liangpin Shop, Ganyuan, Wolong, and Laiyifen have all squeezed into the top five.
Member's Mark wasabi-flavored macadamia nuts, OEM by Ganyuan Image source: Sam's Club WeChat mini-program
2. Meat Snacks: The Gifted Player Enters
Meat snacks are a gifted player, naturally high in protein. In this article, 'meat snacks' include two major categories: meat and seafood snacks, i.e., cooked meat products primarily made from livestock, poultry, fish, and seafood. Before the 1990s, ham sausages offered a new way to eat meat due to their delicious taste, portability, and novelty. In 2004, Nongfu Spring's Mother's brand beef sticks rose to prominence with their brand story and Western-style grilled positioning, representing a quality upgrade in meat snacks. Even with a relatively high price per small bag, they quickly became popular in the market. Dried pork slices started early but developed slowly due to channel limitations and outdated processes. Shuangyu brand dried pork slices were once a high-end snack in Shanghai theaters and dance halls, but later mainly relied on large supermarkets and direct-operated stores, developing very slowly. According to its official website, Shuangyu currently has about 20 direct-operated stores. Another dried pork brand, Rongxing, struggled to scale due to raw material shortages and complex processes. It was comprehensive brands like Liangpin Shop and Beicaowei that truly brought dried pork slices into the snack spotlight. Leveraging these brands' channels and OEM cooperation models, the dried pork slice category became popular on both production and sales sides. In 2021, Liangpin Shop's dried pork slice series achieved terminal sales exceeding 500 million yuan, accounting for one-tenth of the annual output value of leisure food enterprises in Jingjiang City, which specializes in dried pork slices.
Liangpin Shop hand-torn dried pork Image source: Taobao @Liangpin Shop Healthy Snacks Flagship Store
Unlike dried pork slices, leisure braised products accelerated from the start. Zhou Hei Ya, with its distinctive 'sweet and spicy' flavor, started in Hubei and successively launched modified atmosphere packaging and vacuum granule packaging for freshness and portability. Juewei, leveraging channel and supply chain advantages, opened 2,200 specialty stores in four years and entered Tmall and JD from 2011. Since 2017, the focus of meat snacks has gradually shifted from pursuing deliciousness to emphasizing health and nutritional value. Light meal brand Uoxing created the ready-to-eat chicken breast category, targeting weight management and fitness scenarios, and with the help of content e-commerce, sold a cumulative 220 million packs. Subsequently, this track attracted new and old players like Tyson, Hormel, and Shark Fit. Mr. Kangaroo, with its 'shredded' and good beef product characteristics, has been the top seller in Douyin e-commerce's 'meal replacement beef' category for three consecutive years.
Mr. Kangaroo 'shredded' beef and chicken breast products Image source: Mr. Kangaroo
Emerging brands are breaking through with sub-categories. Wang Xiaolu entered the braised snack track with fresh braised pig trotters, launching tiger skin chicken feet in 2019 and focusing on Tmall. During the 2023 'Double 11' period, Wang Xiaolu ranked first on Tmall's meat snack list and first in Douyin's chicken category. China's meat snack competition landscape is fragmented, with leading companies holding low market shares. In 2022, the leading seafood snack companies Jinzai and Laiyifen each held a 6.4% market share, while Japan's leading company Natori held 20.3%; China's leading meat snack companies Zhou Hei Ya and Liangpin Shop held 4.6% and 3.9%, respectively, while US and Japanese leaders held 49.6% and 27.5%. Euromonitor International data shows that China's broad meat snack market reached 90.52 billion yuan in 2022, with a projected compound annual growth rate of over 9% from 2022 to 2027.
3. Other Flavored Snacks: 'Grassroots' Take the Big Stage
In this article, 'other flavored snacks' include seasoned flour products, leisure vegetable products, and dried tofu products. The rise of other flavored snacks is a journey of transforming 'grassroots' ingredients into modern delicacies. The scale of other flavored snacks is approaching 100 billion yuan. Under Frost & Sullivan's statistical scope, the seasoned flour product market was 45.5 billion yuan in 2021, with leisure vegetable products and leisure dried tofu products at 28.6 billion and 18.2 billion, respectively. Under Euromonitor's scope, the total market for these three categories was 74.5 billion yuan in the same year. The market structure for other flavored snacks is relatively fragmented, with leading companies in seasoned flour products and leisure vegetable products holding market shares of 14.3% and 20%, respectively, and less than 5% in leisure dried tofu products.
Seasoned flour products, leisure vegetable products, dried tofu products Image source: Weilong official website
Spicy strip companies and the industry are moving towards standardization and health. In 2014, Weilong moved into a fully automated factory and used workshop promotional videos to improve the stereotype of spicy strips as 'junk food.' The industry standard for 'seasoned flour products' clearly stipulates salt and fat reduction; under the new regulations, the number of companies shrank to over 150, but spicy strip output value grew to 50 billion yuan. In 2022, spicy strips brought Weilong 2.719 billion yuan in revenue, accounting for 58.7% of total revenue; this may be the charm of 'grassroots.' Leisure vegetable products, represented by konjac, have become the new favorite in the low-calorie snack world. In the first quarter of 2021, konjac snacks on Tmall grew by 47%. Additionally, Konjac Shuang became Weilong's second blockbuster product with annual sales exceeding 1 billion yuan, and vegetable products led by it contributed 1.693 billion yuan to Weilong's revenue in 2022, accounting for 36.6% of total revenue. In 2021, beverage brand Genki Forest also joined the konjac track, launching Wanglala 'konjac-made tripe.' In October 2023, Weilong and Yanjin Shop both increased their efforts, with the 'Little Witch' vs. 'Big Demon King' battle heating up. China's konjac market has exceeded 40 billion yuan, and the konjac snack track faces intense homogeneous competition; deep processing of konjac may provide a breakthrough. For example, 'Yizhi Konjac,' a konjac deep-processing company listed in February 2023, had total operating revenue of 447 million yuan in 2022, with konjac powder accounting for 83.22% of total revenue.
Weilong 'Little Witch' and Yanjin Shop 'Big Demon King' konjac-made tripe Image source: Weilong official website, JD @Yanjin Shop Leisure Snacks Flagship Store
Leisure dried tofu products are based on local flavors, forming representative regional brands. For example, in the Sichuan-Chongqing region, 'Haobashi' Nanxi dried tofu is a representative product, with sales exceeding 300 million in 2021. In the Jiangsu-Zhejiang region, the representative brand is Zuming, with operating revenue of 1.487 billion yuan in 2022, a year-on-year increase of 11.24%. The next decade for other flavored snacks will be on the fast track. Euromonitor predicts that China's other flavored snack category will have a compound annual growth rate of 7.1% from 2022 to 2027, higher than the snack industry average (5.9%).
4. Protein/Energy Bars: The Spinach of the New Era's Popeye
Protein/energy bars have high nutrition and strong satiety, like the spinach that gives Popeye 'super strength.' Protein bars and energy bars differ in main ingredients. Protein bars are primarily composed of protein, usually from whey protein, casein, or legumes; energy bars are made from carbohydrates, usually from whole grains, oats, and dried fruits. For the Chinese market, protein/energy bars are new, but the market structure is already taking shape. According to Euromonitor International, as of 2022, the total retail size of China's protein/energy bar market was 1.164 billion yuan, accounting for about 2.4% of the global total. The CR6 in China is 67%, with MuscleTech and ffit8's parent company ranking in the top two; except for the top six, all other players have market shares below 1%.
ffit8 protein bar Image source: WeChat official account @ffit8
Protein/energy bars have become the preferred choice in meal replacement, sports, and body management scenarios. Protein has become one of the most common sports nutrition labels; 97% of sports nutrition products launched in the US in 2021 emphasized protein content. China's emerging protein bar brand ffit8 sold 10.5 million protein bars in 2020, with total sales reaching 117 million yuan, and completed three financing rounds in 2021. Liangpin Shop's Liangpin Feiyang and Mengniu's Maisheng launched protein bar products in 2020 and 2023, respectively. In the next decade, protein/energy bars are expected to become a high-potential track. Globally, Mordor Intelligence predicts a compound annual growth rate of 5.34% for the protein bar market over the next five years, with the Asia-Pacific market growing fastest; the energy bar market is expected to grow at a CAGR of 3.32%. For China, QYResearch predicts that the protein/energy bar market will reach 451 million yuan by 2028, with a CAGR of 12.99%.
The Next Decade of Snacks
Where Are the Opportunities?
Combining the history of China's snack categories, channel reforms, and the development of snack markets in developed countries, we predict the development trends of China's snacks over the next decade. We predict that in the next decade of China's snack market: 1. The snack market will grow by 200 billion yuan; 2. Health, functionality, and premiumization are trends across all snack categories; 3. Premiumization is evident in sugar and chocolate, nuts, and meat snacks; 4. Offline channels represented by bulk snack stores will enhance cost-effectiveness; 5. Online channel dividends shift to live-stream e-commerce and instant retail; 6. Snack exports present opportunities.
(I) Growth Space of 200 Billion Yuan
We predict that in the next decade, China's snack market will grow by nearly 40%, with nearly 200 billion yuan in growth space. Euromonitor International predicts a compound annual growth rate of 3.4% for China's snack market from 2024 to 2028. If this growth rate continues, the snack market is expected to reach 682.2 billion yuan by 2033, compared to 488.35 billion yuan in 2023, an increase of about 40%, with nearly 200 billion yuan in growth space. Categories that cater to health, functionality, and premiumization trends, such as nuts, meat snacks, other flavored snacks, and protein/energy bars, will continue to grow, with meat snacks maintaining their position as the largest sub-category and further expanding market share. Traditional categories like candy, chocolate, chips, and biscuits will see slower growth or decline, but emerging sub-categories based on these, with health, functionality, and premium upgrades, will grow rapidly. In terms of channels, over the next decade, we expect bulk snack stores and snack discount formats, as the most dynamic channels, to continue seizing market share from traditional supermarkets; live-stream e-commerce will take over online channel dividends, potentially surpassing traditional e-commerce platforms; and instant retail channels will carry daily consumption needs due to their convenience and efficiency.
Changes in China's snack sales channel share from 2009 to 2023 (excluding snack discount channel data) Data source: Euromonitor International
(II) Key Trends
1. Snackification: Small Bites, Big Meals
Snackification was named the top 'global snack trend' for 2023 by Innova Market Insights. The boundary between snacks and meals is blurring, with consumers frequently replacing meals with snacks. Mondelez International's '2022 Global Snacking Report' states that 71% of consumers snack at least twice a day, and 60% say they replace meals with snacks. This trend is more pronounced among younger consumers. A 2021 Exploding Topics survey found that about 70% of millennials prefer snacks to meals, and about 90% of respondents replace at least one meal with a snack each week. Snackification has made snack categories with meal replacement attributes stand out. Dingxiang Doctor's insights into the meal replacement industry point out that nuts, protein/energy bars, and meat snacks are typical representatives of meal replacement products. Daily nuts are packaged according to the daily recommended intake standard, opening up a market of 6-7 billion yuan. China's protein/energy bar market is expected to grow at a CAGR of 12.99% from 2022 to 2028, reaching 451 million yuan by 2028. Meat snacks will also maintain high growth, with Euromonitor International predicting a CAGR of over 9% from 2022 to 2027.
ffit8 protein bar Image source: ffit8
2. Health: Addition and Subtraction
The global food market is embracing health. The UK government and Singapore's Health Promotion Board use policies to encourage healthier food. According to Emergen Research, the global healthy snack market was $90.62 billion in 2022, with a projected CAGR of 6.4% from 2023 to 2032. In China, healthy snacks also have high growth potential. Bloomberg data predicts that China's health food market will reach 1,140.8 billion yuan in 2025, a year-on-year increase of 5.6%; as one of its sub-tracks, healthy snacks have broad growth prospects. Meanwhile, Chinese consumers' health awareness is translating into action. Mondelez International's '2022 Global Snacking Report' states that 80% of Chinese consumers have the habit of checking nutrition labels on snacks. Previously, consumers' perception of healthy snacks was strongly tied to categories like nuts. Now, health covers all categories, with the approach being 'addition' and 'subtraction.' Adding healthy ingredients is one path. Chia seeds, kale, and other healthy ingredients are favored by snack brands; for example, Haomaiduo Black Gold Cheese Crispy Biscuits add chia seeds, old national brand Weilong launched a new kale whole wheat biscuit, and m&m's introduced chickpea chocolate beans. 'Addition' through technologies like low-temperature baking, freeze-drying, non-frying, and low-temperature dehydration also adds health value, commonly seen in nuts, preserved fruits, and meat snacks.
m&m's chickpea baked chocolate beans Image source: Taobao @Hema
The 'subtraction' approach to snack health is relatively simple, focusing on sugar reduction, low GI (low glycemic index), salt reduction, and saturated fat reduction. Through sweeteners and zero-added sugar, sugar and chocolate and ice cream categories have shed their overly sweet image. Daily Dark Chocolate, Dove, and Mars Wrigley's Skittles have all launched zero-sugar products. In 2020, Tmall sales of low-fat ice cream increased by 131% year-on-year, and sugar-free ice cream grew by 128%. 'Qingyou' and 'Kemiku' focus on sugar-free ice cream; in 2022, Zhong Xue Gao's 'Youth' series,主打 low sugar and high fiber, achieved sales of 20 million yuan in 72 days. Low-GI snacks, as an extension of the sugar reduction trend, target diabetics, dieters, and fitness enthusiasts. Low-GI snacks are common in categories like biscuits, nuts, and chocolate. Chinese medical nutrition brand 'Masala' launched low-GI snacks with cumulative sales exceeding 1.5 million from 2016 to 2022. In December 2023, Mars Wrigley also launched a low-GI Snickers.
Mars Wrigley low-GI Snickers Image source: Tmall @Snickers Flagship Store
Snack companies in savory biscuits, chips, and nuts have also positioned early for 'health subtraction.' Mondelez International has reduced sodium by 5% in its products since 2017, and its Ritz brand launched low-salt soda crackers with only 30mg sodium. In 2022, Lay's launched chips in China with 50% less saturated fat. Earlier, PepsiCo also announced it would reduce sugar, salt, and saturated fat in multiple products by 2025.
Lay's chips with 50% less saturated fat Image source: Lay's
3. Functionalization: Caring for Segmented Groups
From 2016 to 2021, China's functional food market grew from 137 billion to 196.1 billion yuan, making it the world's largest market. In the future, the functional snack track holds great expansion potential. Adding functional elements is one path to functional snacks. In China, the trend of adding functional elements to candy is evident, while the chocolate category is still in the exploration stage. In 2020, China's functional candy market reached 23.556 billion yuan. Chinese functional candy brand BuffX achieved sales exceeding 10 million yuan within three months of launch in 2020, and similar brand minayo surpassed 100 million yuan in sales in the first half of 2022. In contrast, Chinese brands like Bohe Health, BII, and Yikena have tested probiotic chocolate, but market response has been limited. 'Medicinal and edible homology' is another path to functional snacks. Magic Mirror market reports show that the Taobao and Tmall market for medicinal and edible homologous products exceeded 20 billion yuan in 2022, a year-on-year increase of 22.3%. Ingredients like bird's nest, black sesame, ginseng, and goji berries are very popular; black sesame balls saw a 105.9% year-on-year sales increase during the 2022 Spring Festival. The 'medicinal and edible homology' concept is also hot globally; US ice cream brand Enlightened has launched ice cream products with herbal tea ingredients like dandelion root, turmeric root, and ginger root.
US brand Enlightened fruit-flavored functional popsicles Image source: Enlightened
In the future, China's chip and ice cream categories have yet to develop functional products. European and American markets are launching functional chips; US brand Mindright has launched 'POPED CHIPS' with ginseng and L-theanine, and UK brand Insane Grain's gut health chips contain sorghum and probiotics. Functional ice cream also has market potential. In 2021, Mintel's China ice cream report noted that 65% and 61% of consumers are interested in ice cream with Chinese medicinal food ingredients and probiotics, respectively. Snack brands can develop products for segmented groups, such as functional snacks for the elderly. By 2035, China's population aged 60 and above is expected to exceed 400 million, accounting for over 30%, entering severe aging. Facing aging issues, Japanese brand LIFESMART has launched memory-maintaining chocolate. Some Chinese companies are also positioning; Tangyou Baobao focuses on professional food for diabetics and secured a Series A+ funding of tens of millions in 2022. Masala customizes snacks for surgical patients and diabetics, completing a nearly 100 million yuan Series A+ funding in April 2023. Brands can also develop snacks for specific health issues. According to Ipsos surveys, gastrointestinal issues, sleep problems, and immunity are the main health concerns (see chart below). Probiotic, GABA, and vitamin gummies have emerged accordingly. Additionally, China's weight management market is relatively single, mainly focusing on fat-reducing products. In this era of 'body anxiety,' drawing on Japan, lowering cholesterol is also an innovation direction.
Top 10 overall health concerns in 2021 and 2022 Data source: Ipsos, 36Kr Research Institute
4. Premiumization: From 1.0 to 2.0
Premium ice cream brand Zhong Xue Gao was impacted by the 'ice cream刺客' public opinion, and Liangpin Shop, as a representative of premium snacks, implemented its largest price reduction in 17 years due to the rise of bulk snack and discount stores... Snack consumption seems to be downgrading, but these are all 'price' downgrades and do not affect the premiumization of snacks with quality as the main body. Premiumization is a continuous process; Mordor Intelligence predicts that the global premium snack market will grow at a CAGR of 4.8% from 2022 to 2027, higher than the average growth rate of the snack market, and China's premium snacks account for a much lower proportion of the snack market than Europe, America, and Japan, indicating huge growth space. We divide China's snack premiumization into two stages: 1.0 to 2.0. The 1.0 stage of snack premiumization is represented by the three snack giants: Three Squirrels, Laiyifen, and Liangpin Shop. Their premiumization measures include high-quality raw materials, innovative packaging design, building premium brand images, expanding product lines, and strengthening online and offline sales channels. But the most notable feature of the 1.0 stage is that brands cover all categories; Three Squirrels, Laiyifen, and Liangpin Shop involve multiple categories such as nuts, preserved fruits, and meat snacks. The 2.0 stage of snack premiumization will continue to focus on raw material upgrades (better and fresher ingredients) as the core, with a series of upgrades in process, packaging, brand, flavor, and experience. However, 2.0 will focus more on single categories or segmented groups (needs), carrying out health, functional, or customized upgrades, while paying more attention to resonating with consumers in branding. Cheese Dr. is a brand that focuses on both cheese products and segmented groups. In terms of products, it chooses to make more nutritious natural cheese, establishes a cheese grading system (drawing on the segmentation method of milk powder), helps parents choose stage-appropriate formulas for their babies, and through the 'Dr.' IP and a new generation of brand image and packaging design, quickly wins the hearts of parents and occupies the top spot in the premium cheese market share.
Rich and mellow cheese sticks Image source: JD @Cheese Dr. (Dr.Cheese) JD Self-operated Flagship Store
Mr. Kangaroo focuses on sports nutrition and healthy light meal products, targeting health-conscious consumers. Addressing consumers' biggest concerns about meat snacks, such as 'synthetic, meat quality, and Hextech,' it emphasizes 'good ingredients,' creating blockbuster products with its 'shredded' and good beef characteristics, topping Tmall's ready-to-eat fitness beef list. It also uses the kangaroo to reinforce the 'healthy' image, with strong recognition in both name and packaging visuals. Additionally, there is Masala, a medical nutrition brand focusing on segmented needs and groups; Masala has launched four product series: special medical foods, nutritionally fortified foods, DGI foods for diabetics, and weight-control foods for those losing weight or fearing weight gain. There are also more brands focusing on 'single products,' such as Weilong's 'Little Witch' and Yanjin Shop's 'Big Demon King,' which create blockbuster products for the konjac vegetarian tripe category, meeting young consumers' needs for novelty and health through packaging and image design.
Mr. Kangaroo chicken breast product with double-layer packaging design; the inner packaging (small package in the middle) directly contains the product (chicken breast) and uses stronger fresh-keeping aluminum foil material Image source: Tangchen Jiexun
(III) Growth Opportunities Under Channel Diversification
The fate of snack brands is closely tied to channels. The rise of new channels is both an opportunity and a crisis for brands. Dove, Lay's, and Qiaqia relied on supermarket channels to become category kings; Liangpin Shop and Laiyifen leveraged chain operations, and Three Squirrels leveraged e-commerce platforms to grow into Chinese snack giants. In recent years, Three Squirrels, Liangpin Shop, and Laiyifen have seen declining sales in traditional channels and failed to seize the opportunities of change in time, leading to declining or slowing performance. Three Squirrels exceeded 10 billion yuan in revenue in 2019, but performance has declined year after year since; in 2022, revenue was 7.293 billion yuan, and in the first half of 2023, revenue decreased by 29.67% year-on-year. In the first three quarters of 2023, Liangpin Shop's revenue was 5.999 billion yuan, down 14.33% year-on-year, and Laiyifen's revenue was 3.002 billion yuan, down 7.61%. There is light in the darkness: Three Squirrels' 2023 semi-annual report shows that its Tmall revenue was 844 million yuan, down 29.49%, and JD revenue was 659 million yuan, down 41.11% year-on-year; however, on Douyin, it grew against the trend, with revenue rising to 436 million yuan, an increase of 28.61%. Meanwhile, Yanjin Shop, which seized the opportunities of bulk snack stores and Douyin earlier, has achieved sustained high growth, from 1.399 billion yuan in 2019 to 2.894 billion yuan in 2022, with 2023 performance expected to reach 4.1-4.2 billion yuan (close to Laiyifen). Brands that foresee and embrace change earlier will enjoy the dividends.
1. Offline Formats: Bulk Snack Stores Drive Ultimate Cost-Effectiveness
Bulk snack stores and other offline formats are continuously competing on snack cost-effectiveness, providing growth opportunities for brands. As of October 2023, the number of snack collection stores in China exceeded 22,000. Snacks Busy, as a leading brand, opened over 4,000 stores in six years, and after merging with Zhao Yiming, its store count exceeded 6,500, firmly ranking first. Wanchen Biology (mainly under the Haoxianglai brand) follows with over 4,000 stores, while waist brands like Ai Snacks and Tangchao have store counts mostly between 500 and 2,000. The popularity of bulk snack stores is inseparable from the underlying logic of hard discounts. By reducing distribution links and saving entry fees, bulk snack stores lower average product prices; for example, at Snacks Busy, a 40g bag of Lay's chips sells for 2.9 yuan, 1-2 yuan cheaper than supermarkets and convenience stores. On the basis of low margins attracting traffic, combined with high turnover and scale effects, bulk snack stores have become one of the most dynamic channels. The popularity of bulk snack stores has also brought growth to snack brands. With Snacks Busy as its largest customer, Yanjin Shop's revenue in the first three quarters of 2023 increased by 52.54% year-on-year. Other brands positioned in bulk snack stores, such as Ganyuan Food and Jinzai Food, saw net profit increases of 139.21% and 47.49% year-on-year in the first three quarters of 2023, respectively. In addition to strengthening channel cooperation, snack brands have also begun investing in bulk snack store channels. In December 2023, Haoxiangni and Yanjin Shop jointly invested 1.05 billion yuan in Snacks Busy.
Interior of a Snacks Busy store Image source: Snacks Busy official website
In the next decade, this dark horse will continue to grow. iiMedia Consulting data shows that in the next two years, the market size of China's snack collection stores will exceed 120 billion yuan. Securities institutions also predict that the number of bulk snack stores nationwide may reach 116,000 or 50,000, compared to the current 22,000, with room to double or more. Currently, with capital support, some chain brands may face quality issues or financial crises due to overly rapid expansion, but the business model of bulk snack stores has been validated both domestically and internationally. Warehouse membership stores like Sam's Club and Costco provide opportunities for cost-effective large-packaged snacks. On one hand, large-packaged products like Sam's Club instant noodle buckets are self-promoting and have become a social currency for online 'check-ins.' Additionally, large packages offer tangible cost-effectiveness; for example, Sam's Club's 525g large-packaged Ferrero Rocher hazelnut wafer chocolate averages 2.8 yuan per piece, far lower than the 4.5 yuan per piece on traditional e-commerce channels. With Sam's Club, Metro, and Costco increasing their presence in China, warehouse membership stores are an important opportunity for snack channels. In response to the discount wave, snack giants are also actively transforming; Liangpin Shop also positioned in bulk snack stores in 2022 and, in 2023, implemented its largest price adjustment since its founding 17 years ago. Three Squirrels is also promoting its own brand community snack stores, practicing 'premium cost-effectiveness' with its own brand.
Sam's Club 525g 42-piece Ferrero chocolate Image source: Taobao @Miaoxingren Membership Store Daigou
2. Live-Stream E-commerce: Taking Over Online Dividends, Brand Self-Broadcasting Ushers in Opportunities
Live-stream e-commerce is competing with traditional e-commerce platforms for the top spot. NielsenIQ data shows that most snack manufacturers have seen declining sales shares on Tmall, while snack manufacturers' growth on Douyin has exceeded 80% (see chart below). Jiuqian data shows that in 2023, Douyin's market share in meat snacks surpassed Tmall and JD, and the gap with other platforms in categories like nuts and preserved fruits is gradually narrowing. Three Squirrels, which started on Tmall, saw its revenue on Tmall and JD decline by 29.49% and 41.11% year-on-year in the third quarter of 2023.
Sales growth rates of snack manufacturers across channels Data source: NielsenIQ
The explosion of the live-stream e-commerce market is based on short video content consumption and interest-based content seeding. According to QuestMobile statistics, as of the first half of 2022, short video users' total time accounted for nearly 30% of total time spent by Chinese mobile internet users. With the popularity of short video consumption, live-stream e-commerce uses interest-based content, influencer live streams, and other seeding forms to drive snack consumption. The dividends of influencer live streams driven by personal IP content have peaked, and brand self-broadcasting is experiencing an explosion. iResearch data shows that in 2019, influencer live stream market share peaked, while enterprise self-broadcasting rose rapidly from 30.5% in 2019 to 49.8% in 2022. In April 2021, Liangpin Shop achieved over 20 million yuan in sales and 276,000 brand fans through brand self-broadcasting on Kuaishou. Wang Xiaolu drove growth through content building and store self-broadcasting, once topping Douyin's leisure snack content power list; during the 2023 618 period, its total GMV on Douyin increased by 108% month-on-month. In 2023, Three Squirrels achieved 500% growth on Douyin's live-stream e-commerce channel. Douyin and Kuaishou are also focusing on shelf e-commerce, supplementing scenarios like search and shelf displays. In 2022, Douyin e-commerce GMV grew by 80% year-on-year, with shelf scenario GMV accounting for 30%. The dual efforts of live-stream e-commerce provide growth opportunities for snack brands. In December 2023, during Douyin's 'Fun Snack Festival,' activity topic videos exceeded 2,300, and GMV from new mall entrances and external mall searches grew by 66%.
Wang Xiaolu tiger skin chicken feet Data source: Wang Xiaolu
3. Instant Retail: Instant Needs Stimulate New Vitality
Instant retail is a high-growth track. In 2021, the instant retail leisure snack market was 17.9 billion yuan, expected to reach 82.6 billion yuan by 2025, with a CAGR of 46.6% from 2020 to 2025. Compared to food delivery, instant retail covers tens of thousands of SKUs, with richer categories and more refined fulfillment chains, involving multiple players like platforms and offline physical stores. Instant retail has inherent advantages for snack business. On one hand, instant retail adapts to the multi-time, multi-scenario consumption characteristics of snacks. Meituan's 2022 instant retail leisure food category white paper shows that, compared to other channels, snack consumption times in instant retail are relatively evenly distributed, with all-day consumption characteristics. In addition to home and office scenarios, holiday scenarios bring high growth to brands on instant retail channels. During the 2023 New Year period, Mondelez International's sales on JD Daojia increased by 169% year-on-year, with several Oreo biscuit gift boxes achieving triple-digit growth. On the other hand, instant retail combined with daily promotional mechanisms easily triggers impulse consumption, fitting the high-frequency, high-impulse characteristics of snacks. Meituan's white paper states that 21% of consumption is due to order bundling (full reduction promotions). JD Daojia's leisure snack category saw a 29% year-on-year increase in average order value in 2022, ranking third in platform impulse order volume. Instant retail has a promising future. Sub-categories like braised products, pastries, nuts and roasted seeds, dried meat and jerky, puffed/fried, and sugar and chocolate are favored on instant retail platforms (see chart below). Liangpin Shop's sales on instant retail platforms like Meituan and Pupu in the first half of 2023 increased by 72% year-on-year; sales of spicy strips, chips, and crispy noodles all grew by nearly or over 100%. Snack brands can seize the characteristics of instant retail channels, where consumers favor new products, multiple specifications, and internet-famous products, and position accordingly.
Consumer snack category preferences on instant retail channels (February-August 2022) Data source: Meituan, Kantar Consulting
(IV) Opportunities for Going Global
Chinese snacks have 'quietly' gone global. Yili and Mengniu's ice cream has achieved good results in Southeast Asia. In 2022, Mengniu's overseas revenue was 4.595 billion yuan, a year-on-year increase of 49.5%; its ice cream brand Aixue ranked first in Indonesia and second in the Philippines. In 2022, Yili's overseas business revenue increased by 52.2% year-on-year, with its Joyday ice cream ranking fifth in Indonesia. Hsu Fu Chi, through a 'precise reach' channel strategy, achieved doubled growth in North America. Weilong announced the establishment of an overseas business development center in March 2023. Qiaqia's approach to going global is creative: sunflower seeds are not only teaching aids in Korean Chinese language classes but also atmosphere pieces at overseas New Year festivals; the most classic operation is the tutorial and soulful illustrations on packaging, making it easy for foreign consumers to learn how to crack seeds. This method, mainly based on cultural exchange experiences, makes product localization more natural. Riding this seed-eating trend, Qiaqia, with its 30,000-ton annual production factory in Thailand and nearly 100 overseas distributors, further controls costs and improves product freshness, achieving overseas revenue of 235 million yuan in the first half of 2023, a year-on-year increase of 10.66%. In the next decade, Chinese snacks going global will leverage category advantages, overseas channels, and the large overseas Chinese population to gain growth opportunities in markets like Southeast Asia and North America. Chinese specialty flavors, such as spicy and savory snacks, will be an advantage. For example, spicy strips have gone global through international media like BBC and YouTube, now exported to over 160 countries, driving significant growth in overseas sales for brands like Weilong, whose overseas sales reached 65.474 million yuan in 2022. Other savory snacks are also growing significantly overseas. From 2020 to 2022, Juewei Food achieved annual revenue growth of over 20% in Singapore, Canada, and Hong Kong and Macau markets.
On YouTube, creators post videos eating spicy strips Image source: YouTube screenshot
Additionally, cross-border e-commerce and overseas Chinese supermarkets have become important channels for Chinese snack brands. For example, Three Squirrels has set up flagship stores on e-commerce platforms in Southeast Asia and North America, achieving significant growth in specific markets. Southeast Asia is an ideal market due to its large overseas Chinese population and cultural affinity with China, while the North American market, with its Chinese and international student groups and social media discussion heat, offers huge market potential for Chinese snack brands.
Summary
In the next decade, China's snack market has broad growth space. In addition to catering to demands for health, functionality, and snackification, snacks will also combine with segmented scenarios like outdoor activities and food play, as well as personalized needs of segmented groups, to grow new categories and forms. Snack channels each have their focus, and the trend of omni-channel layout is evident. Under the 'catfish effect' of bulk snack stores, offline snack channels are optimizing supply chains and competing on cost-effectiveness; live-stream e-commerce and instant retail leverage platform advantages to provide new online growth.
In the next decade, the snack industry will still be a competition of fundamentals and imagination.