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Children's Drinks - China - April 2016

Children's Drinks - China - April 2016

“Many current CD products have overemphasized the kids-friendly taste and package design and have overlooked that parents are the ultimate decision makers, with all-natural ingredients the element that matters most for them. Excessive food additives and high sugar content are currently parents’ biggest concern and should be removed to keep the category sustainable against the rising competition from non-children specific products.”

– Ching Yang, Research Analyst

This report looks at the following issues:

Provide true goodness for the kids
Marketing to the parents
Beyond a drink


OVERVIEW
What you need to know
Covered in this report
EXECUTIVE SUMMARY
The market
Figure 1: Retail market volume of children’s drinks in China, 2010-20
Figure 2: Retail market value of children’s drinks in China, 2010-20
Figure 3: Segment performance of children’s drinks in China, by value, 2010-20
Key players
Figure 4: Top 5 companies’ value market share in the China retail children’s drinks market, 2013-14
The consumer
Figure 5: Children’s consumption frequency of different beverages, January 2016
Figure 6: Children’s purpose of drinking different types of beverages, January 2016
Figure 7: Purchase factor of children’s drinks, January 2016
Figure 8: Health –related purchase factors of children’s drinks, January 2016
Figure 9: Consumers’ preference between children’s drinks and regular drinks, January 2016
Figure 10: Consumers’ package preference in children’s drinks, January 2016
Figure 11: Product temperature preference for children’s milk and drinking yogurt, January 2016
Figure 12: Desired improvements from children’s drinks products, January 2016
What we think
ISSUES & INSIGHTS
Provide true goodness for the kids
Marketing to the parents
Beyond a drink
Figure 13: Product example of milk or yogurt combined with cereal or granola clusters
THE MARKET
What you need to know
Growth rate slowed down since 2014 but may gain back in 3 to 5 years
Milk segment dominates the market but is shrinking
Non-kids-oriented products threatening the CD market
Market size and forecast
Growth rate slowed down since 2014…
Figure 14: Retail market of children’s drinks in China, 2010-20
…but may return in 3-5 years
Figure 15: Retail market volume of children’s drinks in China, 2010-20
Figure 16: Retail market value of children’s drinks in China, 2010-20
Market drivers
Relaxation of one-child policy
Figure 17: Population of children aged 4-12 in China, 2010-20
Consumers’ changing nursing habits
Consumers’ preference for kids-specific drinks over regular drinks
Market barriers
Competition from regular drinks
Parents’ food safety concerns
Market segmentation
Dairy products dominate the market
Figure 18: Segment performance of children’s drinks in China, by value, 2010-20
Growth rate of milk and flavoured milk slows down
Figure 19: Retail value sales and year-on-year growth rate of children’s drinks in China, by segment, 2010-15
Yogurt segment retains double-digit growth
Underdeveloped market in the non-dairy categories
KEY PLAYERS
What you need to know
Saturated market dominated by few big players
Lack of leading children’s juice manufacturers
Key marketing strategy: marketing to dads
Coconut water for the kids
Market share
Saturated market dominated by a few big players
Figure 20: Top 5 companies’ value market share in the China retail children’s drinks market, 2013-14
Lack of leading children’s juice manufacturer
Figure 21: Percentage of children’s drinks’ product categories in major markets, 2013-16 (January)
Imported brands intensifying the competition
Figure 22: Example of imported children’s milk
Figure 23: Example of imported children’s juice product, China 2015
Competitive strategies
Marketing to dads
Organic milk products with traceable ingredients and clean processing
Figure 24: Example products of organic children’s milk, China 2014
Yili extended its partnership with Disney
Figure 25: Yili QQ Star children’s drink products with Disney characters
Wahaha joins the premium market
Who’s innovating?
Play with my drink
Figure 26: Innocent’s package with interactive design and a charity campaign. UK 2015
Built-in pacifier as a brand’s icon
Shake it up before drinking
Figure 27: Example of CD products involved playful activities
Coconut water for kids
Figure 28: Example of coconut water for kids
Target the usage occasion
Figure 29: Example of CD products featuring usage occasions. China 2015
THE CONSUMER
What you need to know
Prefer children-specific products than regular drinks
Parents are the primary decision makers
All natural ingredients is the most decisive factor
‘Improve immunity’ is the most popular health-related claim
Sugar content will be reduced
Children’s beverage consumption trend
For dairy beverages, plain is better than flavoured
Figure 30: Children’s consumption frequency of dairy beverages, January 2016
Prefer 100% pure juice than juice drinks
Figure 31: Children’s consumption frequency of juice, January 2016
Figure 32: Children’s juice products by country and by sub-category, UK, USA, China 2013-16 (January)
Opportunities in plant protein drinks (PPD) and bottled water
Figure 33: Children’s consumption frequency of plant protein drinks and bottled water, January 2016
Staying away from beverages with less nutritional value
Figure 34: Consumption frequency of different types of beverages, January 2016
Purpose of drinking different beverages
Milk is the first-choice health supplement
Figure 35: Children’s purpose of drinking plan milk/flavoured milk, January 2016
Yogurt as healthy snacks
Figure 36: Children’s purpose of drinking yogurt, January 2016
Figure 37: Example of kids’ yogurt with playful and portable package design, USA 2015
Milk beverages are more fun than nutrient
Figure 38: Children’s purpose of drinking milk beverages, January 2016
PPDs should highlight its unique properties to compete with milk
Figure 39: Children’s purpose of drinking PPDs, January 2016
Juice are used for quenching the thirst
Figure 40: Children’s purpose of drinking 100% pure juice/juice drinks, January 2016
Figure 41: Example of children’s fruit flavoured water, UK and USA, 2015
Purchase factors
Parents are the primary decision makers
Figure 42: Purchase decision maker of children’s drinks, January 2016
All natural ingredients the most decisive factor
Figure 43: Purchase factor of children’s drinks, January 2016
Opportunity for product lines designed for different age groups
Use the ‘organic’ claim to endorse the product’s quality
Imported products do not always hold the advantage
Health-related purchase factors
Health benefit is a must in CDs
Figure 44: Consumers’ purchase behaviour regarding health benefits in drinks, January 2016
‘Improve immunity ‘is the most popular claim
Figure 45: Health –related purchase factors of children’s drinks, January 2016
Figure 46: Top 10 health-related claims on CD products, China 2013-16 (January)
Functional claims slightly better than ingredient claims
Need further education on the ‘no/low sugar’ claim
Figure 47: Product examples of CD products sweetened with stevia, UK and South Korea, 2015-16
Parents of younger kids interested in probiotics and intelligence growth
Figure 48: Health-related purchase factors of children’s drinks, by children’s age, January 2016
General attitudes towards children’s drinks
Prefer children-specific products than regular drinks
Figure 49: Consumers’ preference between children’s drinks and regular drinks, January 2016
Even preference in package types
Figure 50: Consumers’ package preference in children’s drinks, January 2016
Figure 51: Package type of New-launched children’ drinks products, China 2013-16 (January)
Shop more in-store than online
Figure 52: Purchase channel preference, January 2016
Prefer ambient milk than chilled
Figure 53: Product temperature preference for children’s milk and drinking yogurt, January 2016
Figure 54: New-launched children’s milk and drinking yogurt products by storage condition, China 2013-16 (January)
Heat-able package design could be favourable
Figure 55: Product temperature preference, January 2016
Desired improvements from children’s drinks products
Additives and sugar shall be removed and reduced
Figure 56: Desired improvements from children’s drinks products, January 2016
Figure 57: Example of children’s juice products without added sugar. Brazil, Philippines and USA, 2015-16
Higher threshold price
No outstanding needs in new flavours or new brands
Figure 58: Top three flavours of children’s flavoured milk and drinking yogurt
APPENDIX
Market segmentation
Figure 59: Segment performance of children’s drinks in China, by volume, 2010-20
Figure 60: Retail value sales of children’s milk and flavoured milk in China, 2010-20
Figure 61: Retail value sales of children’s drinking yogurt in China, 2010-20
Figure 62: Retail value sales of the other* children’s drinks in China, 2010-20
Figure 63: Retail value sales forecast, by segment, 2010-20
Figure 64: Retail volume sales of children’s milk and flavoured milk in China, 2010-20
Figure 65: Retail volume sales of children’s drinking yogurt in China, 2010-20
Figure 66: Retail volume sales of the other* children’s drinks in China, 2010-20
Figure 67: Retail volume sales forecast, by segment, 2010-20
Methodology and abbreviations
Methodology
Fan chart forecast
Abbreviations
RESEARCH METHODOLOGY
China Research Methodology
Confidence levels
Sample sizes by city
Sampling methodology and sampling structure
Our research partner - QQsurvey
QQ’s sampling and Quality control
Further Analysis
Appendix

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