Nut Industry in China is Developing Steadily

It has been more than 4 years since Wolong’s fist product Daily Nuts went on market. This product has not only become a marketing paradigm for the nut industry, but also opened a new era of mixed nuts. With the promotion of the nut consumption trend of daily nut products, "adults should eat about 25 grams of nuts a day to meet their nutritional needs" has become a familiar message for consumers. The Chinese market's focus on nuts has reached a record high.


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Healthy Demand Promotes the Development of the Nut Industry

Nuts are commonly dried fruit with a hard peel. The daily-used definition of nuts is broader and generally refers to edible dried fruits with hard shells. Nuts are rich in nutrients and antioxidants, and they are excellent foods and energy sources. Long-term consumption of nuts in a moderate amount has positive effects on the prevention of cardiovascular disease and diabetes. However, nuts are high in fat, and excessive consumption may also increase the risk of obesity. In addition, nuts are a common source of food allergies, so you need to be careful when eating them.

Before the popularization of the health function of nuts, the nuts most exposed to Chinese consumers were seed nuts such as sunflower seeds and peanuts, and sales of tree nuts such as almonds and cashews were extremely small. After the idea of "adults should eat about 25 grams of nuts a day to meet their nutritional needs" became popular, nuts gradually changed from annual snacks to daily food for some consumers. The market share of tree nuts is increasing, and the nut industry is also developing. In the past, consumers often bought nuts offline in supermarkets or stores. Today, more than 50% of nuts are sold through online platforms.


Most Tree Nuts were Imported

Except for seed nuts and walnuts, which are basically self-sufficient, most tree nuts are imported in China. The increase in unit price brought by imports is a major obstacle to nut marketing, which directly leads China to lag behind the world average in nut consumption.

Comparing the consumption of major nuts such as almonds, walnuts, and pecans in China, the United States, and Japan during the same period, it can be found that, except for locally produced walnuts, China's consumption of nuts is much lower than the United States and even lower than the world average Level. Although nuts are fast-moving consumer foods, they are not daily necessities. The market size of nut is closely related to per capita disposable income, and the nut consumption in China will also follow the increasement of per capita disposable income.

Nut Market in China Has a Huge Room for Development


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Fierce Marketing Competition

Innovation is also needed in food industry. Wolong is the first to launch Daily Nut in market, and it suits customers’ pursuit for healthy lifestyle. This small-packaged product that integrates a variety of nuts and dried fruits is not nutritious and healthy, but also portable and easy to store. Daily Nut soon became the “star product” of the nut industry. As a result, Wolong also gained a big share of market in the nut industry that was already fiercely competitive at that time. Although products like Wolong’s Daily Nut are producing by countless brands, Wolong is still in the leading position in the nut market.

However, the success on Daily Nut is not enough for Wolong to surpass the top manufacturers in nut industry. In the first half of 2019, the sales revenue of Wolong’s Daily Nut was about 620 million yuan, and this accounted about 90% of its whole revenue. Although enterprises like Baicaowei and Qiaqia are having inferior performance than Wolong on daily nut products, they are still far ahead in the whole sales revenue.

Sales of Nut in 2019 H1 (M)

Due to the serious homogeneity of the products in the nut roasting industry and the fact that they are fast-moving consumer goods, merchants generally pay great attention to marketing. With Chinese lunar New Year in the corner, Three Squirrels, Qiaqia and Baicaowei have launched high-frequency advertisements through Focus Media in elevators of first-tier and second-tier cities. In addition, it is not uncommon to hire celebrity endorsements and implant advertisements in film and television dramas. Because Three Squirrels uses cartoon character as its trademark, it also marketing through animation. With the marketing costs rising constantly, most enterprises have spent more than 100 million yuan per year.

Sales Expense in 2019 H1 (M)

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