China insights on category
opportunities for Australian exporters
February 2016
Author: Rod Arenas, FIAL Manager Market Development
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Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Specific Category Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Muesli and granola. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
NPD – New Product Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trends and Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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Introduction
We set out to ascertain, and to gain intelligence on consumer “food” trajectory within China, in
order to gage the level of interest on new opportunities on possible future demand and trends.
It is critical for Australian exporters to understand
both the opportunities and challenges as
competition is fierce with more than 25+ power
countries from around the globe wanting a slice of
the Chinese “middle class” consumer.
In China, consumers constantly refer to Australian
food brand as superior quality, revealing both the
immediate advantage and set of mind perception
Australian brand holds in China over other countries,
and also the ongoing concerns in China regarding
food safety (and increasingly, brand authenticity).
The strength of our food brand, coupled with the falling
Australian dollar, proximity to China and signing of the
China-Australia Free Trade Agreement, suggests that
we have never been better placed to grow our food
and beverage exports to the Chinese market.
Increased purchasing power in China has helped fuel
demand for protein rich and premium imported foods,
while well-publicised domestic food safety scandals
have further spurred demand for food imports in China.
The magnitude of the shift to online purchasing
among Chinese consumers – and the subsequent
opportunities this has created for Western food
manufacturers – is unprecedented.
The enormous potential of the Chinese market is clear
– yet everyone wants a serving, and our competitors
are playing the game hard. Premium supermarkets
in first tier cities such as Beijing and Shanghai
feature products from all over the globe, all jostling
for attention on crowded shelves with attractive
packaging designs, innovative flavors and strong
brand messaging via marketing and promotions.
To succeed in China, Australian manufacturers need
to be better informed about what Chinese consumers
want ‘imported products currently sold in China’s
leading supermarkets are a good guide’.
Our report study focuses on the food and beverage
products that are planogramed and currently on
supermarket shelves in China – which international
competitors’ brands and products are selling well;
what are the products’ features; how are the products
being positioned and promoted; and what are the
opportunities for Australian food manufacturers in
these categories.
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Specific Category Analysis
Muesli and granola
Traditional breakfasts in China can vary considerably
– including variations across different regions.
Chinese breakfast foods include: bread buns and
meat buns; fried breads sticks; soy milk; congee;
Chinese-style pancakes; hard boiled eggs;
dumplings; and noodles.
These foods may be prepared at home or purchased
at street vendors for take away, often to be eaten at
work. Although oatmeal has gained acceptance in
the Chinese market as a high-fibre source, marketed
to older consumers in particular, a home breakfast
of muesli and milk is therefore a significant leap for
many Chinese.
Domestically produced milk is also usually watered
down – and so for those consumers wishing to pair
their imported muesli with imported milk, and possibly
imported yoghurt, the costs can be considerable.
The price of a given muesli product can also
vary significantly between different supermarket
retailers, including hypermarkets and online stores.
Small‑format stores, such as independent imported
food stores and convenience stores, are often located
close to high-rise apartments, and tend to charge a
premium for the added convenience.
Consumer feedback on some muesli brands
on China’s online sales platforms highlights the
‘foreignness’ of muesli for many Chinese. Comments
suggest the overwhelming majority of consumers
enjoy the taste of muesli, but they often complain
the muesli is ‘too hard to chew’. Online selling gives
manufacturers the opportunity to detail product
benefits, and how best to consume it.
According to a number of Chinese supermarket
operators, expats are still the largest purchasers
of muesli, yet young, health-conscious white collar
workers are driving sales growth among the local
consumer market. International supermarkets now
feature a large variety of muesli and granola products,
while the imported sections of hypermarkets and
regular supermarkets, whether in first tier or lower
tier cities, often carry a small selection of muesli –
typically of German origin.
Muesli bars opportunities
Demand for muesli bars has grown strongly in recent
years in China, where branding tends to promote their
function as a source of energy, and as a meal substitute.
Nuts, fruit and yoghurt are a common feature in muesli
bars, while rice bars and ‘soy bars,’ localized to the
Chinese market, are also available (SoyJoy is the
largest domestic manufacturer of these bars).
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Large value packs of granola bars (42g individual
serving sizes) were observed at some premium
international supermarkets and will become
increasingly popular in China given their perceived
function as a fast and convenient breakfast substitute.
Selected product information
Product
Retailer
Manufacturer
Origin
Serving size
Fruit Muesli
Parkson
Jason
Germany
1kg
Price (Rmb)
52.90
Fruit Muesli
Walmart
Rosalo
Germany
1kg
44.50
Original Muesli
Ole
Familia
Switzerland
225g
39.90
Crunchy Muesli (e.g. Raspberry Yoghurt) Jenny Lou’s
Kolln
Australia
375g
66.80
Granola (e.g. Mango Macadamia)
Lizi’s
UK
400g
78.00
City Shop
Major brands (Muesli)
• Jasons, Hahne, Musli Land, Familia, Kolln, Emco
Niche brands (Muesli)
• Carman’s, Bear Naked, Lizi’s Granola, Dorset Cereals, Back to Nature
Major brands (Muesli bars)
• Nature Valley, Alpen, Corny, Mother Earth, Mr Kanny
Niche brands (Muesli bars)
• Nice & Natural, Carman’s, Lizi’s Granola, Dorset Cereals
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NPD – New Product Development
Muesli imported from Germany, and packaged
and distributed under the Chinese brand ‘Jason,’
is the dominant muesli brand in China. Jason
muesli features clear plastic packaging, limited
brand messaging or images, yet detailed nutritional
information prominently displayed on the front of the
packaging, written in both German and Chinese.
Other German muesli brands are also commonly
sold at Chinese supermarkets, and tend to use clear
plastic packaging. (Unlike many Australian muesli
products, German muesli also tends to include corn
flakes in the muesli mix). Some muesli brands at
international supermarkets now feature snap-lock
packaging to retain freshness, while a popular granola
product comes in milk carton-style packaging.
Snack sized muesli packs are not yet common
in Chinese supermarkets, but distributors expect
demand for this format to grow.
Some domestic muesli manufacturers are producing
low-cost muesli in premium, re-sealable packaging,
featuring flavors tailored to local tastes (blueberry,
redbean, cranberry and black sesame).
Brand messaging includes ‘cleansing’ and ‘fibre’,
appealing to the common Chinese preference for food
that performs specific health functions for the body.
Imported muesli brands in China often emphasise
the origins of the oats in their branding, using farm
imagery such as wheat fields, windmills and tractors
on the packaging.
Images of nuts and large pieces of fruit – particularly
berries – and milk being poured into a bowl of
muesli also regularly feature on muesli packaging.
(Chinese believe that dairy products have excellent
health benefits.) ‘Fruit muesli’ is most common, while
crunchy, sweet granola style products, or muesli with
added chocolate, are also popular.
Niche flavors include:
• pineapple
• papaya
• mango
• cranberry
• cashew nuts
• macadamia nuts.
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Trends and Opportunities
Australian muesli is well-represented in China’s
supermarkets and interest from Chinese distributors,
wholesalers and buyers was strong.
Online sales platforms in China give manufacturers
the opportunity to educate consumers on a product
category (and its health benefits) that many Chinese
may be unfamiliar with.
Consumer online feedback on imported muesli
constantly refers to the ‘nutritional value’ of the
product, while consumers also seem to value the
function of muesli bars as a breakfast substitute.
Granola products that use innovative flavors and/
or packaging also have excellent prospects in the
Chinese market. Oats and dairy are highly-regarded
among young and old Chinese consumers alike for
their health benefits.
There is a clear culture shift occurring, and we
foresee appetite from Chinese consumers on this
category will continue to expand and develop.
Muesli bars are
expected to continue
their stable sales
growth among young,
white-collar Chinese
workers – and there
may be opportunities
for manufacturers of
healthier bars to target
this group.
For further information on
this report please contact:
Rod Arenas
FIAL Manager Market Development
[email protected]