China's Chocolate market Dominated by Foreign Brands

China's Chocolate market Dominated by Foreign Brands Foreign chocolate brands such as Dove, Cadbury and Hershey's have now captured about 70% of the Chinese chocolate market. As Barry Callebaut, the world's largest chocolate maker with 25% of the global market, recently opened its first chocolate facility in China in Suzhou City, the top 20 chocolate companies in the world have now all entered the Chinese market. But in the face of global competition, China's local chocolate companies have been additional suppressed down the value chain.

Second largest chocolate market As the Chf 4 billion-revenue-per-year Barry Callebaut set up its first yield line in Suzhou, a faultless multinational chocolate commerce chain is also emerging. commerce insiders recommend that this would be a blow to local Chinese chocolate companies in this globalized competition. It additional indicated that retention up with international competition is particularly important, or the Chinese commerce chain will become even more vulnerable. In modern years, the global chocolate store has notably slowed down, with only 2-3% growth per annum. This is generally because per capita chocolate consumption in developed countries is already at a high level, averaging 11 kg. On the other hand, China's per capita chocolate consumption is only 0.1 kg, and its domestic chocolate store has been growing at a improbable 10-15% per year, with an estimated store possible of Us.7 billion. Thus China has become the world's second biggest chocolate store only behind the Us. The world's top 20 chocolate companies have all entered China, and there are more than 70 imported or Jv chocolate brands in today's Chinese market. Barry Callebaut has made it clear that they are arrival to share and share in China's economic growth. It plans to build the Suzhou facility into the largest among its 38 factories globally, and accomplish a 6-fold sales growth in the next five years via the Suzhou factory's high capacity. "We hope we can fully utilise this factory's capacity to rapidly growth yield from 25,000 tons to 75,000 tons, development it the world's largest chocolate factory," said Barry Callebaut Ceo Patrick De Maeseneire. Multinational ambitions It is understood that Barry Callebaut's new plant in Suzhou will become the company's Asia-Pacific headquarter, as well as a sales network centre for serving China and multinational food manufacturers and specialised customers. Major brands, such as Cadbury, Hershey's and Nestle, all currently have large quantity of outsourcing manufacturing contracts with Barry Callebaut, whose Oem yield of cocoa liquor and chocolate products amounts to 15-20% of each of the three major brands' each year output. So the Swiss Barry Callebaut is of course the Big Brother of the global chocolate industry. In fact, even before the arrival of Barry Callebaut, China's local chocolate companies had already been losing store shares to multinational competitors. The Us Hershey's has thought about to plough the Chinese market, planning to accomplish 23% share of the local store by 2010 and the runner-up position in China. Meanwhile, Korean and Japanese chocolate producers are also accelerating their entry into the Chinese market. Local companies not in the local market Although the rapidly growing Chinese chocolate store is good news for its local chocolate companies, Chinese consumers today are often referring to foreign brands such as Dove, Cadbury, Hershey's and Ferrero but seldom mentioning local brands. As a foreign product, China only has a chocolate manufacturing history of less than 50 years, so there is positive gap behind foreign brands in terms of yield techniques and technologies. Due to inappropriate processing tool and incomplete yield facilities, stock capability assurance is difficult for many local chocolate companies. Furthermore, most Chinese chocolate companies are weak in stock R&D, resulting in slow stock changes and updates. At present, most local chocolate companies are stuck in an embarrassing situation of low stock quality. The above commerce issues have costed local companies' opportunities to share in the competition for the Chinese chocolate market. Multinational chocolate brands have come to the Chinese store one by one since the 1990s, and now they are in a dominant store position. With their valuable financial power, multinationals can play their technological and cultural cards, as well as promoting their premium capability and unique tastes, to rapidly capture the Chinese market. As Barry Callebaut finally entered the Chinese market, its Suzhou facility will make chocolate yield even economy for multinational brands. For local Chinese companies that are mostly in the low-end market, they may no longer hold this store segment firm. Keep up with the globalization Statistics showed that there are about 63 large-scale local chocolate companies in China, with each year yield of 150,000 tons. Statistics from commerce associations also revealed that China currently has about 250 chocolate companies in total. Industry insiders pointed out that the Chinese food and beverage commerce is a extremely and internationally competing market. The vast possible of China's chocolate store is not only for foreign brands, but is also laid in front of local chocolate producers. The local chocolate commerce is now in a structural change and survival-of-the-fittest stage, and no doubt the entry of foreign brands will gift challenges to the local industry. But if local chocolate companies can share in this international competition, it could not only drive the chocolate quiz, from Chinese consumers, but also promote amelioration of China's chocolate market. Local Chinese chocolate companies need to enduringly heighten their stock quality, make your mind up finer raw ingredients, upgrade yield facilities, adopt international technologies, heighten stock innovation and brand management. Only then can they compete with multinational companies on a level-playing field, and make a breakthrough in this foreign-dominated Chinese chocolate market. For more information on Chinese businesses, please visit www.chinabizintel.com China's Chocolate market Dominated by Foreign Brands