Chinese shoppers seek healthy choices

28 March 2012

BEIJING: Companies like Coca-Cola and PepsiCo have opportunities to expand in China by catering to consumer interest in healthier soft drinks, a new study has argued.

Mintel, the research firm, interviewed residents of first, second and third tier cities in China, up to 96% of which drank carbonated beverages, depending on their precise location.

More specifically, the average Chinese shopper consumed 10.34 litres of carbonated soft drinks in 2011, versus the totals of 167.5 litres per person registered in the US and 57 litres in the UK.

Exactly 50% of Mintel's panel typically viewed these products solely as "a treat", whereas 67% expressed an interest in buying diet or low calorie variants.

Furthermore, 72% of respondents tried to avoid carbonated drinks which contained artificial ingredients and 75% would be keen to try similar lines using natural constituents.

The report thus suggested that an "unmet need" existed in China, as just 1.8% of category launches in 2011 took the form of products claiming to be free from additives or preservatives. This figure had only increased modestly from the 1.5% recorded in 2006. By contrast, the comparatives stood at 37% in the UK and 16% in the US last year.

"With obesity on the rise in China, consumers are increasingly trying to adopt a healthier lifestyle such as minimising the intake of artificial ingredients and exercising more," said Tan Heng Hong, research manager at Mintel.

The main opportunities available include single-serve or "mini" packs and trialling diverse and innovative flavours, as Chinese shoppers have proved "adventurous" in these areas, the analysis added.

However, challenger brands can find it difficult to make progress, given the size and strength of the leading two players.

"The dominance of Coca-Cola Company and PepsiCo of the carbonated soft drinks market in China has meant that smaller companies are struggling to establish themselves in the market," Tan Heng Hong said.

From 2006 to 2010, the last full year for which Mintel has data, China's carbonated soft drinks category grew by 10.2%, while the US logged a 1.5% decline and the UK was down by 1%.

Data sourced from Mintel; additional content by Warc staff