China’s largest snack producer using Millennials to beat foreign snack giants

Three Squirrels Inc, China’s largest snack food producer, is counting on the millennials with a distinct taste for local flavours to help grow its sales by tenfold to Rmb 100 billion (US$14.4 billion) in the next decade.
This generation, those born between 1980 and 2000, made up about 415 million or about 31% of China’s population. By 2021, this cohort will contribute 46% of China’s urban population.
Zhang Liaoyuan, Founder of Three Squirrels said, “We hope Chinese consumers can favour our local snacks.” The company uses red banners, rousing slogans and striking posters which shows the founder’s affection for late Communist Party chief Mao Zedong. A growing sense of national pride has pushed some millennials towards home-grown brands. In addition, the snack producer is also capitalising on its understanding of local tastes, work culture and shopping habits. Its best-selling titbits include nuts and fruits, duck neck and dried pork slices.
Meanwhile, the advent of ‘996’ culture i.e. working from 9am to 9pm for 6 days a week, leaves many workers with less time for proper meals, as such its snacks have become the ‘replacement meals’.
It is interesting to note that some Chinese consumers still prefer spicy and salty snacks over sweet snacks like chocolates or candies. In addition, more and more consumers view sugary snacks as unhealthy. With this growing consumer attitude, companies like Three Squirrels has its unique advantage over long-established foreign snack companies like Mondelez and Mars Inc which also have strong presence in China.
In December 2019, Three Squirrels had also opened its new manufacturing plant in eastern Anhui province. Its combined 33 production lines now churn out 2.4 million snack packs daily. Zhang said the company is also building more physical stores with a target of 1,000 new stores by the end of 2020. He added that more than 80% of snack purchases occurred in bricks-and-mortar stores in China.
Latest report by the Ministry of Commerce showed that China’s snack industry is humongous and is expected to grow by 36% from Rmb 2.2 trillion (US$310 billion) in 2016 to Rmb 3 trillion (US$423 billion) in 2020, with healthier snacks growing at a faster rate.