1 in 2 Chinese are adventurous foodies, making innovation an increasingly high priority for food and beverage marketers
- 45% of consumers consider themselves explorers in terms of eating and drinking, claiming they are always the first to try new or unique food and beverage products
- 51% of consumers admit that they are more willing than before to pay a premium for food and beverage products with add-on benefits
October 25, Shanghai — In China, the old Chinese saying “people live on food" has evolved into “people live on adventurous food”. New research shows that 45% of Chinese consumers consider themselves "adventurous" foodies- a number that is a third higher than it was four years ago (34%).
The latest Food & Beverage China study by global insights consultancy Kantar TNS reveals that consumers are constantly evolving. Consumer markets are increasingly fragmented. Post-90’s consumers advocate hedonism, pursue freedom, and are full of “entertainment” spirit, a stark contrast to the post-70s generation, which is more focused on health, balance, and product quality. At the same time, changes in lifestyle, such as more opportunities to travel, the growing presence of cooking programs on TV, such as S-style Show(姐姐好饿)， Here comes Star Cook(星厨驾到)、Twelve Food Styles(十二道锋味)，and the rising number of culinary schools, expose Chinese consumers to a wider variety of tastes. The proliferation of e-commerce makes a greater selection of foods and beverages from across China and around the world now just one click away. As a result, Chinese consumers are becoming more sophisticated, and needs in food and beverage are ever evolving, leading to more diverse and more premium requirements.
This means consumers are more ready than ever for new, upgraded products and they are ready to pay more for products with add-on benefits, presenting a market that demands the food and beverage industry to be bold in innovation. However, successful product development is not all that easy. According to Kantar Worldpanel, among new products launched in Asia-Pacific in 2014, only 12% actually succeeded. Following wave after wave of disappointing product innovation in the food and beverage industry, how can marketers get a pulse on consumers and the market, and develop truly successful innovations?
Category boundaries are increasingly blurred and cross-category competition has become the new normal—marketers must take a broad view in assessing competition they are facing
No matter how marketers define a category or what they put on a certain shelf, at the end of the day, consumers are going to select the product best suited to meet their needs regardless of category. Sometimes even the line between food and beverage is not as clear as it once was. When consumers need to refresh, the products they might consider include ice cream, ready-to-drink tea, sports drinks, or even chilled milk. For food and beverage companies, a critical step to success through innovation is to think beyond category boundaries to focus first and foremost on consumers’ needs. Cross-category product innovations, such as fruit-flavored water, grain milk, and mushroom biscuits, have emerged in recent years, redefining the market as they offer superior solutions to consumers’ needs. Integrating advantages of other competing categories into one’s own product is one of the key directions for future product development.
The myth of “one product fits all” no longer exists, while niche offers based on precise positioning will become the norm instead— marketers should not try to make a single product be everything to everyone
Marketers must understand nuances in consumer needs, as needs differ for different consumer groups and for different moments.
65% of post-90’s consumers claim that they eat primarily according to their mood, a ratio much higher than that of post-70’s and post-80’s consumers. One of the key demands of these post-90’s foodies is that eating and drinking be fun. Cool-brewed tea “Classmate Xiaoming”(小茗同学) plays to this demand, targeting post-90’s consumers with the promise of something different that provides pleasure and amusement. With "serious amusement, low key cool brew” as its brand slogan and funny, more novel packaging, “Classmate Xiaoming”(小茗同学) has quickly become a hit in the market.
In addition to precise targeting of consumer groups, marketers also need to precisely target consumption moments, as consumption needs vary across moments, even for the same group of consumers. Take chocolate as an example. When consumers eat chocolate alone to satisfy their cravings, they often prefer milk chocolate, which is sweeter and creamier. But if they go mountain climbing, they will want to replenish energy more quickly, making chocolates like Snickers a better choice. When throwing a party, high-quality dark chocolate goes perfectly with champagne for a more premium experience. Thoroughly understanding different moments and consumer needs in those moments will provide brands with opportunities for more successful product innovation.
Product brand is becoming a trend—marketers need to treat product variants as brands
Innovation has already gone beyond just the product itself. Packaging, communications, and channel have all become fertile ground for innovation. All-round innovation requires the integration and synergy of these factors, so that the product itself delivers the brand proposition and conveys a consistent message to consumers, while the parent brand provides an endorsement of the quality. Tea π (茶π) from Nongfu Spring is an example. From its novel name, fun package, and new flavor (Oolong Peach), to its spokesman, each feature of Tea π speaks for the brand name of Tea π instead of for the parent brand Nongfu Spring. Nongfu Spring's other products, such as "Scream"（尖叫）, "Oriental Leaves"（东方树叶）and "茶ea"（打奶茶）, all have their own unique branding as well.
Consumers get bored with new products more quickly than ever— marketers must speed up their innovation with unique and relevant propositions
Food & Beverage China finds one key pain point of consumers is that the majority of products available are not new and unique enough. The experience of today’s consumers, especially the post-90s generation, is ever broadening and their tastes are more discerning than before, making them less likely to repeatedly purchase the same products. In the future, loyalty will be built on fast and continuous innovation which can help keep consumers’ attention on the brand. For example, Oreo’s recent introduction of a Swedish fish flavor, as well as the new “Liuliuda Tea”(溜溜哒) flavor of “Classmate Xiaoming”(小茗同学), generated buzz and momentum for the brands, making consumers stay engaged and loyal.
Deepender Rana, CEO of Kantar TNS Great China says，”Compared with four years ago, when we conducted our first Food & Beverage China study, the China market has dramatically changed. Some food and beverage products have vanished, whileothers have upgraded. As consumers getting more segmented and consumption moments better understood, the nuances in consumer needs and consumption upgrade have provided marketers with unlimited challenges and opportunities in the depth and breadth of product innovation.”
Notes to editors
About Food & Beverage China 2016
Food & Beverage China 2016 is syndicated research by Kantar TNS that talks to 7,700 consumers in over 30 tier 1-3 cities and covers 110+ food and beverage categories in assessing consumers’ ideal needs in food and beverages. The study provides unparalleled understanding of Chinese consumers’ food and beverage needs, building a strong foundation for opportunity identification for food and beverage categories. Food & Beverage China provide clients with precise recommendations on how to go after the most promising opportunities, with in-depth examination of business issues most critical to them in achieving innovation success.
About Kantar TNS
Kantar TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and customer strategies, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, Kantar TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world. Kantar TNS is part of Kantar, the data investment management division of WPP and one of the world's largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information.
Kantar is the data investment management arm of WPP and one of the world's largest insight, information and consultancy groups. By uniting the diverse talents of its 12 specialist companies, the group is the pre-eminent provider of compelling data and inspirational insights for the global business community. Its 30,000 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. For further information, please visit us at www.kantar.com