Biscuit is an important product among the leisure food. In the recent years, with the improvement of people’s living standards, there is an increasing demand for the market of leisure food. As the most important leisure food, biscuit market is greeted with a golden period of development.
In the recent years, the Chinese biscuit industry has developed rapidly with a market of tremendous potential. According to the statistics by National Bureau of Statistics of China, in 2005, the total value of biscuit industry amounted to 1,064 million Yuan, up by 41% compared with the same period of last year. The total value of tax amounted to 1,384 million Yuan, up by 51.56% compared with the same period of last year.
From the above statistics, it can be drawn that the scale of biscuit industry has been expanding constantly. Moreover, considering the domestic economy at present in China, the Chinese economy will continue to remain a continuous growth and the GNP will continue to remain the growth of 8% or so. Driven by such a high rate of economic growth, Chinese biscuit market will boast a great potential of development with a broad future.
Status of biscuit market
Market with great potential yet dominated by overseas brands
Market scale of biscuit products. Due to the large population of China, the potential demand for biscuit products is tremendous. However, the actual per capita consumption is much lower than that of annual consumption level in the world. In the recent years, with the improvement of people’s living standards, the consumption idea has changed a lot. The demand of consumers for biscuit has increased gradually. Due to the increasing investment of foreign, Hong Kong, Macao and Taiwan Enterprises, the biscuit industry has speeded up its development, thus raising the biscuit industry to an unprecedented level in terms of varieties, package and tastes. In some sense, this has started to stimulate the Chinese biscuit market and the traditional Chinese biscuit market mainly composed of State-owned biscuit enterprises has gone through profound changes.
At present, the annual per capita biscuit consumption stands at 1 kilogram or so, however, the annual per capita consumption in the developed countries amounts to 25-35 kilograms and that of the medium developed countries is 12-18 kilograms. Therefore, the Chinese biscuit market boasts huge potential of development. In the recent years, the total output of biscuit production in China has increased at an annual growth rate of 8%. However, due to the disorderly competition in the biscuit market, many biscuit production enterprises made little profit or even made a loss. Some traditional famous brand of biscuit enterprises have slumped with profits decreasing considerably. Moreover, some biscuit production enterprises have gone bankrupted or been merged. However, as the new force of biscuit industry, private enterprises are expanding their market share gradually. However, restricted by the capital and technology, they have much difficulty dominating the market. Supported by abundant capital, famous brand, advanced management and rich sale experiences, the foreign and Taiwan enterprises have basically occupied the medium-high grade biscuit market of China. The traditional large and medium biscuit enterprises have to find their markets in the interior and rural areas to compete with the local medium and small biscuit enterprises for market share. Due to the intense competition, the future of biscuit industry is not so optimistic. In the future 2-3yeares, the Chinese biscuit market will be further restructured in the constant readjustment and tend to develop in an orderly way.
Mainly medium and low grade products
In 2002, the medium and high grade product accounted for 40% of the total in biscuit market, with the market scale of over 500,000 tons; the low grade product accounted for 60% of the total with the market scale of over 800,000 tons. The high grade biscuit products in China are mainly made by foreign enterprises. Though some domestic high grade biscuit products also make part of medium and high grade products, they lag behind their counterparts of the foreign enterprises in terms of quality, package and sales methods. Therefore, the market of medium and high grade biscuit products are mainly dominated by the foreign enterprises.
Presently, in the domestic biscuit market, most of the biscuit products are medium and low grade products. The medium and low grade products in Chinese biscuit market are mainly made by small biscuit enterprises, including the biscuits in bulk. They are mainly sold to the medium and small towns and villages in China. Due to the unfavorable position in the competition with the foreign enterprises, the Chinese large and medium biscuit enterprises have began to attach importance to and explore this market correspondingly.
High grade products are mainly overseas brands
Entering Chinese market at an earlier time, the overseas and Taiwan biscuit brands thus seized the business opportunity beforehand and dominated the medium and high grade biscuit market in China. The foreign enterprises, such as Danone, Nabisco and Keebler, have occupied the lion’s share of biscuit market with their famous brand effect and strong market popularization.
With its strong market popularization, Danone has penetrated into every corner of Chinese market including the small grocery stores in the street. Danone has become extremely easy to obtain for consumers in China. And Oreo of Nabisco is best loved by children for its novel and interesting eating ways. Keebler has increased its affinity of products and shortened the distance with customers with the brand image of cartoon dwarfs. From the sample survey in Beijing, Shanghai and Guangzhou in 2002, the foreign medium and high grade biscuit has dominated the market.
Though it has not been long since the foreign and Taiwan enterprises entered the Chinese market, they occupied a large share once they entered the Chinese market due to their solid foundation, large scale, excellent quality and flexible operating methods. The biscuit brands with a higher occupation rate are almost those from the international famous brands. They seized the medium and high grade biscuit market with advanced techniques, processing directions, equipment and sales conception. However, some traditional state-owned enterprises have been lingering at the low level due to their backward technology, outdated equipment and managerial conceptions.
Low fat healthy products dominate the market
At present, when people pursue a convenient life style, they are paying more and more attention to the nutritional value of leisure food. Some nutritional and healthy biscuits such as vegetable biscuits, coarse grains biscuits and vitamin biscuits are developed one after another. In the manufacturing and processing of these products, Sodium metabisulfite are strictly prohibited and replaced by papain and neutralproteinase.　Women become the major consumption group. Women become major consumption group.