Premiumisation of products and packaging was more evident this year than past years at SIAL China and Craft Beer China. Chinese consumers are maturing quickly and looking to trade up, so brands are providing plenty of options.
Craft Beer China is supporting this trend through their second China trade show, which indicates where craft beer is going in China. One German distributor noted that of the Chinese distributors he works with, several are now trying to compete on quality and differentiation rather than traditionally promoted features – quantity and price. Efforts to differentiate products were seen through the types of beer being imported and their distinction through packaging and bundling. One distributor aimed to give their beer a ‘more luxury feel’ through fancy packaging complete with a necklace as an ‘extra treat’.
Premiumisation is also taking place in snack and beverage offerings with companies providing value through superior products and packaging. Branding among domestic companies also shows local players are catching on to the premiumisation trend, something that will be further discussed in part 3 of this series coming later this week.
Creative Packaging Innovations
Much attention is paid to getting the packaging correct, and rightly so as packaging is one of the categories Chinese consumers review via ecommerce. As packaging is one of the first things consumers see it should demonstrate the value of a product, communicate the benefits and clearly exhibit the brand’s ethos. Packaging is an extension of a brand and should not be an afterthought. Innovative packaging is typically well-received in China, and SIAL China showed off some of the latest concepts.
One product that we were impressed by was the incredibly secure ‘crocodile’ packaging that kept Polish cereal fresh and crisp. Cereal and big bags of snacks are often eaten over a period of days or weeks and the packaging must be easy to use and keep the product fresh. Chinese are particularly fussy over product freshness. Lids that pop off and bags that don’t seal tight are two of the top complaints when it comes to packaging.
Another inventive product was a drink from the Czech Republic that stored an ‘active substance’ sealed in the lid. The ‘active substance’, akin to an energy drink powder, is released from the lid and mixed with the bottle’s water. ‘Dosage’ control is allowed with cap settings giving you the option of one, two or three ‘doses’. Control over quantity is likely to be well-received as Chinese often complain that flavouring is too strong or that products are too concentrated.
Domestic brands are continuing to improve their packaging and meet the demands of consumers. Traditionally snacks are packaged in nondescript, low-cost plastic bags. Now brands are using more sleek and stylish packaging that makes it hard to detect where a brand is from without close examination of the package. This was more prevalent this year compared to last. An example of the superior packaging is the Beijing beer below looking as if it could be straight from Chicago or Copenhagen.
Conclusions to Food & Beverage Trends in China Day 2
The fact that Chinese consumers are trading up in droves has led to brands providing more premium offerings, both in quality and presentation. Both premiumisation and packaging are part of the mix in order to capture the Chinese consumers who are increasingly looking to try new products
Read part 1 and part 3 of China Skinny’s Food & Beverage Trends series.