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  1. Analysis
May 7, 2019

What drives China’s growing appetite for biscuits?

In his latest dispatch from China, just-food columnist Peter Peverelli unpicks the growing demand for biscuits in the country.

These columns aim to provide real insight into the cultural drivers behind various foods in China. A post on the country’s biscuits market needs to start by introducing a uniquely Chinese term: leisure food, called xiuxian shipin in Chinese.

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Entering a Chinese supermarket and looking at the signs indicating the location of the various food groups, one indication that may strike a European as unfamiliar is ‘leisure food’.

Leisure and food are a match made in heaven in any culture but there is no nation that has created a more harmonious marriage between those two concepts than the Chinese. Visit any historic or scenic site, and you will be amazed about the choice of snacks on sale there. Zooming in on the domestic tourists, you will have a hard time spotting one who is not eating, or visibly carrying food.

Leisure foods are a miscellaneous collection of foods comprising:

  • Confectionery (candy, chocolate)
  • Bakery products (biscuits, bread, pastries)
  • Processed fruits, vegetables and nuts (see one of my earlier columns on just-food)
  • Tuber or cereal products (e.g. potato crisps)
  • Dried fish and meat products (beef jerky, duck gizzards, fish cubes).

Leisure foods are also consumed at home or in the office. Many such foods also have luxury varieties given as gifts for friends. We can therefore also divide Chinese leisure foods on that basis.

Many of the most popular sites in China are far-away from the nearest inhabited area. Getting there can be time-consuming, and the best way to kill time is … by eating. Chinese airports, train stations, long-distance bus terminals and gas stations are genuine food streets, offering everything the travellers need to refuel their bodies and kill their boredom.

The group of foods Chinese typically pack for a day of leisure has become referred to as leisure food. Once Chinese started to think in terms of markets, the term leisure food became an officially recognised term. Leisure food is a separate section in Chinese food-related statistics, like the separate shelf for those products in Chinese supermarkets.

Turning to the main topic of this post: biscuits and related foods, I need to start with a short introduction of the Chinese word for biscuit: binggan. Bing is a traditional food group comprising all pancake-like foods.

The word gan means ‘dry’. Binggan was coined in Chinese, when Western biscuits were introduced by foreigners. The term developed to refer to all biscuit-like Western bakery products. Mandarin has a word quqi (q pronounced like ch in church), but this is based on the Cantonese word kuk-ki, a transliteration of the English ‘cookie’. Wafers are called weihua in Mandarin, pronounced weifa in Cantonese, also a transliteration of the English word. Finally, there is suda bing for ‘soda cracker’. This English-Cantonese influence indicates that these products were introduced in south China, through Hong Kong.

Consumption data

The consumption of binggan has been increasing steadily during recent years. The following table shows the consumption volume from 2012 to 2018, adding the estimated growth for the near future (source: Intelligence Research Group; unit metric tonnes).

The next charts show recent import volumes and values (source: China Customs through Intelligence Research Group; units metric tonnes and US dollars).

These two tables clearly indicate that imported products only make up a small portion of the domestic consumption – that is food that enters China as finished products.

Any foreign newcomer in this market needs to be willing to consider local production, as the likes of Mondelez International has with brands such as Oreo and Chips Ahoy.

The popular brands

So what types of biscuits and their likes are currently popular in China? Ronghong Internet Services operates the China Top 10 site, where you can find the ten currently most popular products of a huge variety of consumer goods. This ranking is not based on financial figures like turnover or profit. They have been composed on the basis of online feedback by consumers. Here is the current top ten for binggan.

The impact of multinationals is clearly large in this market. This food group is still perceived as rather foreign. My database of Chinese food producers includes more than 1,000 manufacturers of binggan, but the most popular brands are still foreign.

Tingshin is a Taiwanese company, so Chinese but not Mainland. Its Chef Kong brand has gained fame as China’s most popular instant noodle brand and Tinghsin diversified in other food segments, cashing in on its existing brand awareness.

The first domestic brand is Jiashili, located in Guangzhou, near Hong Kong. Regular readers may remember Jiashili from their ‘breakfast biscuits’ mentioned in my previous column. The other domestic brand is Haochidian by the Dali Group, also located in the south and also mentioned in my previous column as China’s top industrial baker.

Jiashili and Haochidian have been in the market with consistent quality for several decades. Such consistency still proves hard for most Chinese food manufacturers. The fact that both are private companies rather than state-owned enterprises may play a positive role in this respect.

Mondelez and Nestlé need no introduction here. The success of Oreo in China is based on its advertising campaigns. Garden is an established Hong Kong-based brand. Glico’s success is largely based on one product: Pocky sticks, the thin chocolate-coated pastry sticks. They are immensely popular in China.

Being foreign is a strong selling point in this market so that is easy for a foreign supplier. The main aspect on which a new foreign supplier would need to concentrate is building a unique image through advertising. In designing your advertisements, never forget the status of these products as leisure food, so show people in one of the leisurely settings indicated in the first table. Relying on exports of finished products may only work for expensive gift versions. For regular biscuits, you need to set up local production. Based on the location of the top brands, the southern coastal region seems to be the best region.

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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