Arcor, a leading Argentinean producer of sweets, has formally entered the Chinese market. This underscores a trend among major Latin American food producers to gain a foothold in the massive Chinese consumer market. With over 326 million residents under the age of 15, China is a vast market with an appetite for a wide range of sweets and other western food products.
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The company will invest US$600,000 this year in Chinese television advertising for the first product to be introduced there – Butter Toffee. The first challenge faced by Arcor was to accustom Chinese children to eat their product year round. By tradition, toffee and similar candies are consumed mainly in the last three months of the Chinese year.
Arcor’s entry into China is the culmination of five years of taste tests, trips to China, and market analyses. Management expects to sell US$10m worth of sweets in the Asian market during 2001, up 40% from last year. In order to fully capitalise on China’s market potential, the company redesigned its packaging to incorporate appropriate text and graphics.
When Arcor entered the US market, it changed the taste of its candies to suit the market, but not so with China. After careful analysis it was determined that the key to success is to offer a variety of toffee flavours, including chocolate, coconut, coffee, hazelnut, milk, and peanut. Expansion in China this year should go a long way toward achieving Arcor’s goal of expanding global exports by 10%.
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