Chocolatiers eye nation's robust confectioneries market

A Hsu Fu Chi employee monitors production data at the company's biscuit factory in Dongguan, Guangdong province, in October. CHINA DAILY

China's consumption of chocolate and other sweets is witnessing robust growth this year, as more people pass by shops selling such products after a three-year pandemic kept many indoors for long stretches.

In September, Dongguan, Guangdong province-based snack maker Hsu Fu Chi witnessed a 30-percent year-on-year increase in its candy product sales. Specifically, sales of its soft candies surged 79 percent.

To meet surging demand, the company invested 120 million yuan ($16.8 million) in the construction of a new gummy workshop in Dongguan. The production facility, covering nearly 6,000 square meters, was put into operation on Sept 28 and is capable of churning out over 10,000 metric tons of juice soft candies annually.

After the COVID-19 pandemic, increased outdoor activities and strolls through traffic-heavy retail spaces have boosted consumers' purchasing appetite for candies and chocolates.

"Among all snacks, candy is one of the fastest-recovering subcategories. A major reason behind the sales recovery of candy is that consumers are getting back to outdoor consumption scenarios this year," said a recent report from market research firm Kantar Worldpanel.

Sales of chocolate have seen a robust recovery. At 1 pm on a typical weekday afternoon, a Laderach outlet in Taikoo Li shopping center, Shanghai, receives constant customer flows. Priced at 99 yuan for 100 grams, or 399 yuan for 24 pieces, the Swiss-branded fresh chocolates — which are flown straight from Switzerland — enjoy great popularity among Chinese consumers.

"Please help me pack and serve the fresh chocolate of my favorite flavor as usual. Thank you," a regular told the shop assistant. The 40-year-old public relations manager spends around 200 yuan on chocolate and chocolate-centric products every month. Her favorite flavor in the store is pistachio dark.

Such rapidly growing demand is attracting foreign chocolatiers to place more emphasis on the Chinese market. In August, Italian chocolate and confectionery maker Ferrero Group appointed Zhang Suyi as the group's general manager of China. Zhang is the first local head since Ferrero entered the Chinese market. The Italian firm said this appointment not only highlights its further attention to, and confidence in, the Chinese market, but also marks a new phase in Ferrero's development in the world's second-largest economy.

Zhang said that in order to better meet the needs of Chinese consumers, Ferrero will focus on developing new consumption scenarios — such as special occasions like Valentine's Day and International Women's Day — for consumers to enjoy chocolate. Meanwhile, it will further expand new emerging channels, including online-to-offline, wedding banquets, corporate welfare and group purchasing to boost sales.

In terms of product innovation, in September, Ferrero launched its new brand, Black Forest, in the Chinese market, which is from the Ferrara brand, acquired by Ferrero in the US. The launch of Gummy Bears and Juicy Burst was also the first time Ferrero entered the gummy candy market segment in China.

In the future, in addition to chocolate, Ferrero will introduce new products to help the company grow faster in the sweet packaged food market, said Zhang.

"Against the backdrop of overall consumption recovery in China, its candy and chocolate market is witnessing a revival. Specifically, the country's candy consumption market is far from being saturated. It is embracing an upgrade instead," said Yang Yu, a senior retail expert and founder of online business information provider Yilan Commerce.

"In recent years, we invested 180 million yuan in the intelligent transformation of our production lines to raise output value. However, this was not enough to meet the strongly recovering market demand. This is why we invested in the new gummy workshop this time," said Liu Xinggang, president of Hsu Fu Chi.

"Compared to a decade ago, consumers' shopping scenarios today are more complicated and refined. We have to grasp business opportunities under various scenarios so as to offer high-quality products to consumers at every place and for all occasions," Liu said.

Meanwhile, it is noteworthy that low-sugar and sugar-free candies and chocolates are increasingly favored by the market, as consumers seek to strike a balance between enjoying delicious snacks and maintaining health.

"This subcategory, which is more consumer-friendly, is where enterprises may want to explore," Yang said.