Seeding epic growth with nuts

ChaCha Food sows overseas success with Thai plant, and accent on healthy snacks

Chinese snacks are becoming popular among consumers outside the mainland, and ChaCha Food Co Ltd, a Chinese producer of roasted seeds and nuts, is all set to benefit from the trend, particularly in the United States and Indonesia.

In fact, the US is the biggest overseas market for the Hefei, Anhui province-based company.

ChaCha has been selling roasted nuts and seeds for nearly 20 years now. It has sold its products around the globe: Russia, Spain, Singapore, Malaysia, South Korea, Japan and Canada.

In the US, ChaCha launched its foods in supermarket chains Walmart and Costco, mainly in New York and Los Angeles. Its best-selling item is pecan seeds, followed by various seeds in caramel and coffee flavors, the company said.

In 2018, ChaCha said its US sales volumes rose 19 percent over 2017, without disclosing specific figures.

"Our main consumers in the US are Asians, in addition to consumers who are of American, European, Russian and the Middle Eastern descent. Many US consumers like to have some seeds and nuts when they are watching baseball games, and others like to eat seeds with barbecue sauce for pleasure," said Wang Bin, vice-president and chief product officer of ChaCha.

Zhai Fengying, former deputy director of the Chinese Nutrition Society, said fresh nuts and seeds provide multiple nutritional components such as unsaturated fatty acids, vitamin E and flavonoids, and they are good for cardiovascular health. It would be beneficial to eat 10 grams of nuts every day.

Agreed Wang. "Some people prefer to have seeds while learning Chinese language and socializing. Eating seeds makes people more relaxed and offers fun. We would like to make the 'Made in China' label more reputable, and push forward the internationalization of ChaCha seeds and nuts."

ChaCha has built its first overseas plant in Thailand, in an area called Ayutthaya, 70 km north of capital Bangkok. The factory will start operations in June, and will have an annual capacity of 15,000 metric tons of seeds and nuts.

Wang said: "The products made in the Thailand plant will be sold in Southeast Asian countries, the Middle East, the US and Europe. We plan to launch our products at a number of 7-Eleven convenience stores in Thai cities, as well as supermarkets and hypermarkets.

"We will keep innovating technologies, upgrade the facilities and endeavor to move up to the middle-to-high end of the global industrial chain. The plant in Thailand is our sole overseas plant for now. We look forward to opening more overseas factories with the growth of our business."

This year, the US, China, Germany, Russia and Turkey are expected to be the top five markets for nut and seed products. In the US, the total sales of the category are predicted to hit $6.74 billion this year.

By 2023, the total sales of the category are foreseen to reach $7.19 billion in the US and $5.35 billion in China, according to market research provider Euromonitor International.

In China, Anhui Three Squirrels Electronic Commerce Co Ltd, Bestore Food Co Ltd, and Hefei Huatai Food Co Ltd, the parent group of ChaCha, enjoy the top three market shares in nuts, seeds and trail mixes. They accounted for a collective 52 percent of the market share in the country last year, Euromonitor International found.

To make its products, ChaCha chooses raw materials like cashew, almond, pistachio, and black currant globally, ranging from the US, Canada, Chile, Nigeria, Australia and Vietnam, in addition to its bases in Yunnan province, Xinjiang Uygur autonomous region, and Northeast China.

In the first six months of 2018, ChaCha's sales reached 1.87 billion yuan ($280 million), up 17 percent year-on-year, yielding a profit of 172 million yuan, up nearly 16 percent.

"Rising consumer incomes have increased consumption, spurring growth of the snack food industry," ChaCha said in its annual report.

Given its strong sales performance and bright future prospects, equity market investors appear to have taken a shine to the Shenzhen-listed ChaCha.

Its shares closed at 23.26 yuan on Friday, up 24.6 percent from 18.67 yuan on Jan 2, the first trading day of this year.