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    Home > Biochemistry News > Biotechnology News > Candies and sweets will not end, not all 0 sugars are easy to sell

    Candies and sweets will not end, not all 0 sugars are easy to sell

    • Last Update: 2021-04-16
    • Source: Internet
    • Author: User
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    Dessert "Jiu Jiu Wang" launched

    Dessert "Jiu Jiu Wang" launched



    A company that mainly produces candies is about to go public.

    The sweets maker Jiujiuwang closed its IPO last week.


    It is reported that the company intends to issue 198 million shares, of which 10% will be publicly offered in Hong Kong and 90% will be sold internationally.




    According to public information, Jiujiuwang Foods was established in China in 1999 and mainly produces and sells sweet products including gum-based candies, compressed candies, aerated candies and hard candies.


    In the 1990s, Zheng Zhenzhong from Jinjiang, Fujian Province, used the strategy of "surrounding the city from rural areas" to get a piece of cake in the clear mouth candy market dominated by foreign-funded enterprises.




    As far as Jiujiuwang's current product "form" is concerned, it looks like the candy we ate when we were young.


    For example, xylitol, refreshing tablets, chewing gum, and bubble gum are familiar to those born in the 80s and 90s.


    At present, Jiujiuwang Foods ranks second in the overall dessert market in Fujian Province, accounting for approximately 2.
    7% of the regional market share in 2019 and approximately 0.
    7% of the Chinese market share.
    The company's prospectus shows that its factory is located in Jinjiang City, Fujian Province, with 32 production lines and an annual output of approximately 1,5045.
    4 tons.



    "They are not very large, but they are actually small and medium-sized enterprises.


    Fujian's generation is mostly engaged in subcontracting processing.
    The competition in the candy industry is very scattered, and there are no large companies with a market share of about 30%.




    From May 2019 to February 2021, Jiujiu Wang hit the IPO three times, all without results.


    Finally in the fourth time, got his wish.




    Jiujiuwang purchases raw materials from suppliers, produces and packs dessert products in-house, and its main sales channels include OEM customers and traders with its own brands in China and overseas countries.


    In addition, the company also has its own brands-Kusha, Ralab and Jiujiuwang.
    According to the online product map, Kusha mainly focuses on sugar-free mints, but its online sales performance is not outstanding, and Ralab has not settled in Tmall stores.




    FMCG found that the biggest customer of Jiujiuwang is Gray Brothers Candy.


    In 2017, 2018, 2019, and August 31, 2020, the revenue from Gray Brothers accounted for 22.
    2% and 25.




    On the sales side, Jiujiuwang currently has 129 distributors, and its mature sales network covers one municipality, two autonomous regions and 21 provinces in China, forming an extensive national sales network, and entering hypermarkets, supermarkets, grocery stores and candy Food store.



    It is worth noting that Jiujiuwang is relatively weak in the field of e-commerce.


    In the food industry where there are endless online brands, the weakness of e-commerce is undoubtedly a shortcoming.
    As of August 2020, Jiujiuwang’s online sales accounted for only 2%.
    Others still rely on OEM customers and offline distributors.




    Judging from the continuous submissions of Jiujiuwang, the company plans to raise funds to maintain market competitiveness through expansion of production capacity, and plans to raise funds to add 9 production lines for the production of tablet candies and gum-based candies; and it is expected that if the fundraising is successful, By the end of October 2020, the company will have 41 production lines with an annual output of nearly 19,000 tons of various types of candies.



    "Sweets" is far from reaching its curtain call

    "Sweets" is far from reaching its curtain call

    When FMCG saw the news of Jiujiuwang's listing, he was slightly surprised.
    In recent years, sugar reduction and sugar-free have become the "main theme" of the food industry.
    Is it "soliciting hardship" for a confectioner on the market?



    However, the facts are actually very slapped.



    China's sweets market has not only expanded steadily, but has become one of the largest sweets markets in the world.
    Although the per capita consumption of sweets has declined, the Chinese sweets retail market is supported by the strong growth of the Chinese economy, which has led to an increase in unit prices.
    The market size of China's sweets retail market has grown from nearly RMB 80 billion in 2014 to 93.
    7 billion in 2019, with a compound annual growth rate of 3.
    2%.
    After all, the population base is large, no matter how sugar is reduced, it is still a big market.



    The Frost & Sullivan report shows that although the growth rate of the Chinese sweets market is limited, it is also a market of 100 billion yuan.
    The market size of the Chinese sweets retail market is expected to grow to 109.
    1 billion yuan by the end of 2024.



    Especially in the sinking market.
    Last year, FMCG discovered at the Autumn Sugar and Wine Fair that products with higher sugar content dominate the market.
    Although Yuanqi Forest is hot enough, according to public media reports, its 2020 sales will only be about 3 billion yuan.
    The representative of "sweet drinks"-Wangzai Milk sold nearly 5 billion yuan in the first half of last year alone.
    In 2020, Coca-Cola's soda sales in China and India will continue to achieve steady growth.
    In the first half of 2020, after the Asian epidemic eased, Pepsi's sales also increased by 10%.



    The limelight has been robbed of "sugar-free", and sugary drinks have chosen to make money silently.



    To consumers, on the surface, everyone seems to be "sugar-free", but they can't hold back for a few days and still can't help but come to a bottle of "happy water".
    Not to mention anything else, Heycha or Nayuki's tea, which one is not sweet and sweet.
    Adhering to "sugar-free" is the same as eating meal replacements to lose weight.
    In essence, it is contrary to most people's appetites and requires self-control.



    At present, in the dessert retail market, supermarkets are still the main distribution channel.
    In 2019, the retail sales of sweets in supermarkets accounted for 34.
    6% of the Chinese sweets market; followed by grocery stores and hypermarkets, accounting for 22.
    5% and 14%, respectively.



    Due to the highly fragmented local competition in the domestic sweets market, there are also many international sweets brands that have established production facilities in the country, relying on extensive distribution networks and brand awareness to share the food market.
    Jiujiuwang stated in the prospectus: “There are more than 1,000 market participants in the Chinese sweets manufacturing market, of which a large number are small-scale manufacturers.
    The competition among Chinese sweets market manufacturers is mainly based on brand recognition, product quality and differentiation, and Distribution channels.
    "



    Since the competition is fierce, FMCG has found that the popular candy in the market is moving towards high-value and functional development.

    For example, Sugarfina, a luxury confectionery company in the United States, raised $35 million in financing.
    Sugarfina candies are famous for their creativity.
    One of its more famous cases is the introduction of a gummy bear Whispering Angel Rosé in 2016.
    This gummy candies quickly sold out within 2 hours, but I wanted to buy this candy but did not buy it.
    The number of customers reached 18,000.



    Not only that, high-end candies that combine functionality are also very popular in the market, such as the vitamin product under the functional food brand-"Multi-dimensional jelly".
    On March 4th, Minayo received tens of millions of Pre-A rounds of financing.
    Minayo products were launched in August 2020, and the sales in the next month exceeded 2 million.
    The current monthly repurchase rate has exceeded 30%, and the customer unit price is 200 yuan.
    the above.
    BY-HEALTH also launched collagen jelly to treat health needs as snacks.



    "The domestic confectionery companies have a misunderstanding, that is, they like to make concepts on sugar-free or less sugar, but many consumers are not comfortable with the taste of sugar substitutes.
    In fact, people who eat sugar don't care about sugar, he just wants sweetness.
    The people who reduce sugar and sugar are those who exercise and lose weight.
    These are two different groups.
    What can be learned is that the confectionery companies in Japan and Taiwan have done enough to add fruit juice and upgrade raw materials.
    "Consumer Products Industry consulting expert Shen Boyuan told FMCG.

    Source: WeChat Official Account "Quick Dissipation"

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