Where Does The Fast-Growing Chinese Chocolate Win?

Since the reform and opening-up, China’s first-generation chocolate companies are still in the early development stages. It is unfair to compare them with the “century-old shops” of those international brands. Nestlé, Mars, Ferrero, Hershey, these international chocolate giants, after nearly a century of market precipitation, brands are quite mature, and they are well aware of market development and operations.

It is precisely because these excellent chocolate companies have entered the Chinese market one after another, which has intensified market competition. Domestic companies are unwilling to lag and are increasingly improving in raw materials, equipment, products, and marketing, thus accelerating domestic chocolate companies’ growth. Objectively speaking, on a global scale, there are few countries whose chocolate industry can develop to the level of China in such a short period.

1 Selection and innovation of chocolate raw materials

Nowadays, domestic chocolate manufacturers add more cocoa, add more nutrients, and are compatible with more cocoa vegetable oils. The cocoa butter substitute chocolate produced by a unique process is very close to pure cocoa butter in taste and flavor.

Even the manufacturers are hard to distinguish, so cocoa butter should not be overly demonized. Although domestic companies currently focus on cocoa butter substitute chocolate, pure cocoa butter products have great market potential and are also the future development trend of chocolate. It is just that the promotion and market acceptance of pure cocoa butter products requires a process.

2 Iterative upgrade of mechanical equipment

The difference in chocolate is mainly reflected in two aspects: one is the raw material, and the other is the equipment. Although the domestic chocolate business started late and the time for chocolate production is not long, many domestic chocolates are moving towards the high-end direction with the upgrading of the consumption structure. More and more manufacturers import complete foreign sets of chocolate equipment.

Consumers’ quality requirements have caused manufacturers to renew their production equipment to ensure high-quality products. As a result, some advanced machinery and equipment have been introduced into the country. On the one hand, manufacturers have improved product quality; on the other hand, many domestic machinery companies have rushed to invest in technology.

In the torrent of research and development, learning from each other’s strengths and improving technology has significantly improved the level of my country’s chocolate machinery and equipment, not only meeting the needs of domestic chocolate companies but also exporting to foreign countries.

In the past two years, the domestic chocolate equipment has been updated very quickly, especially the Chocolate Conche Machine and Chocolate Ball Mill. Manufacturers are becoming more and more aware of making ‘good chocolate.’ The fineness, smoothness, and flavor of chocolate are very particular. Whether it is pure fat or fat substitute, domestic manufacturers are paying more and more attention to chocolate quality.

Chocolate Ball Mill qmj1000 1
Chocolate Ball Mill qmj1000 1

3 Chocolate products are a breakthrough

According to the “2016-2022 China Chocolate Market Operation Situation and Investment Strategy Research Report” released by Zhiyan Consulting, China’s chocolate market’s per capita consumption is far below the world level. Since 2015, due to the slowdown in macroeconomic growth, chocolate Sales began to show a downward trend.

As of 2016, China’s chocolate retail volume has dropped by 4% overall. From the perspective of industry insiders, the economic downturn, the decrease in retail traffic, and the impact of offline chocolate sales on online channels have brought challenges to chocolate manufacturers that rely on mass consumption channels, including Dove and Hershey. And foreign brands such as Ferrero.

Although from the data point of view, the sales volume of chocolate has declined, the supply of chocolate raw materials and auxiliary materials has not decreased. Still, it has increased because chocolate has been divided into products to take a large part. Last year, coated cakes’ sales increased rapidly. Fast, mushroom power is also very popular with consumers. Except for Korea Orion, the products are local chocolate companies.

For a long time, foreign-funded chocolate has attracted attention for its high-quality raw materials, long-term brand reputation, and repeated advertising bombing, which has caused little attention to domestic chocolate brands, and chocolate products have provided domestic chocolate companies with an opportunity to break through the barriers.

4 Strengthen the snack food market

As soon as the Spring Festival, Valentine’s Day, National Day, and other holidays, there are always reports such as “The Chinese chocolate market has been divided by foreign brands, and domestic chocolate is hard to find”, and a series of data are cited to support this. This demonstration method does not show the decline of domestic chocolate consumption but shows the different consumption patterns of domestic and foreign chocolate brands.

The gift-oriented trend of foreign chocolate is evident, but if it is consumed as a snack food, domestic brands have more advantages. Most foreign chocolate products are pure fat chocolates, which have already completed the brand building stage and are expensive, so they are often used as wedding supplies or holiday gifts. However, domestic chocolates are mostly fat-replacement products, and their brand awareness is relatively low. Their prices are more suitable for daily consumption, so they are consumed as snack foods.

Pure fat chocolate has a high threshold, is expensive, and has a narrow audience. In terms of snacks, the application of fat replacement is more extensive than pure fat. Domestic chocolate companies have positioned their target consumer groups and used cross-border integration of products to develop the snack food market. The prospects will be more impressive.

Domestic companies such as good neighbors have been deeply involved in the wedding market for many years in the wedding and gift market. Still, it is difficult for them to compete directly with foreign brands due to their products’ differences. Most domestic chocolate brands are taking the snack food route. Most domestic chocolate brands are taking the snack food route. The products must-have selling points, quality, and price suitable for consumers, while at the same time cost-effective. This route is a significant direction for the development of domestic chocolate brands.

Looking back, the development of China’s chocolate market is not slow. With foreign brands already dominating, domestic chocolate companies can only select raw materials, upgrade equipment, be technically in line with international standards, be in line with foreign companies in quality, and have differences in categories. They can gradually differentiate themselves in the market. Compete on the same platform to break through the oligopoly of the chocolate industry. Of course, there is a long way to go, and it needs to be done slowly.

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