China could be Jelly Belly Candy Co.’s largest market within three years, the privately-held US confectioner has told just-food.
The jelly bean manufacturer entered China in 1997 and used a local distributor.
However, 18 months ago, Jelly Belly opened a subsidiary office in Shanghai and the company has identified China – its fifth-largest market – as one of its “priority” countries, Sharon Duncan, vice president of international operations, said.
“We have been dabbling there since 1997. We had a master distributor but who knows Jelly Belly better than us, right? We bit the bullet almost two years ago and said: ‘The only way we are going to make this work is set up a subsidiary and handle it ourselves.'”
She added: “Probably within the next two to three years, China is going to be number two or maybe even number one.”
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A number of multinational confectioners are looking to tap into growing demand in China. Hershey has made a series of investments in China in recent months, including its deal in December to buy 80% of local confectioner Shanghai Golden Monkey Food Joint Stock Co.
However, candy, rather than chocolate, is the largest confectionery category in China and Jelly Belly is working to build a business in a market where Duncan insisted the company does not have a close competitor.
“There is no-one doing gourmet jelly beans to the level we are. I’ve seen a couple of people who obviously thought could do the same thing we do but they don’t have the brand identity. The Chinese consumer is not stupid, they want Western brands We don’t really have a competitive issue yet,” she said.
Duncan said Jelly Belly is eyeing cities in western China, rather than only the major urban cities in the east. The company is also looking to build its presence online, she explained.
“The second- and third-tier cities are really looking for Western brands and they kind of get short changed as everyone wants to concentrate on the first-tier cities – Beijing, Shanghai, Guangzhou. You go into Wuhan, Chengdu, it’s definitely working,” she said. “Online sales are so important in China to get into those more rural areas as you go west. We are starting our online sales programme as we speak and we will be on the top three online sites like Tymall in China within the next 30-60 days.”
