Searching for the sweet spot: Lotte says low-and-no-sugar are key snacking and confectionery NPD drivers
Lotte has two main production sites in Asia, one in Japan and one in Thailand, and according to the firm’s Thai branch, its current most-popular brands both locally and for export to the region are Koala’s March biscuits, Toppo biscuit sticks and Xylitol chewing gum.
“Lotte is present in snacks and confectionary markets all over the world and in APAC, and we have noticed that lower-sugar and sugar-free products have been gaining traction amongst consumers in many countries,” Thai Lotte Assistant Export Department Manager Surasak Suwannapim told FoodNavigator-Asia.
“This has been very obvious in the chewing gum sector, where we developed the entire sugar-free Xylitol range based on this trend and it very quickly became a best-seller.
“The other important trend for chewing gum is a focus on minty flavours – [some time back there was focus on fruity and sweet flavours] but today everything needs to be mint, so Xylitol’s flavours are all mint-based such as lime mint, fresh mint, blueberry mint and so on.”
A similar trend on sugar reduction has also been observed in the biscuits sector which Lotte has had many years of experience in, driving the firm to develop its first-ever product not targeted at children.
“We recently launched the Black Koala’s March, which are bitter chocolate biscuits that are less sweet than our traditional chocolate, strawberry or vanilla flavours,” he said.
“This is our first product targeted at adults and not our usual children or teenager demographic. Lotte is really looking at diversifying our consumer base so we are looking more closely at how to develop products to fit taste buds of more target demographics and not just particular groups.
“We are looking at more types of low-sugar development but for biscuits there is definitely a manufacturing challenge as biscuits like ours need some sugar to taste good – it is an area we are researching, and hopefully in future we will also be able to develop products that can also appeal to adult male consumers, which is a demographic we have had less products to cater for in the past.”
Expansion challenges
In addition, although Lotte has become very much a household name in many APAC and even western markets, it still has its eye on more geographies including the Middle East and South Africa.
“In these two markets, we have exported some chewing gum there but our biscuits have not had much reach,” he added.
“There are significant challenges to overcome here though, as the market is very saturated and very competitive. In South Africa for instance, there are already big local snack and biscuit manufacturers in the market, and there is also an abundance of chocolate and cocoa in the region so it will be difficult to compete with them in terms of transportation and logistics costs.
“What we are working on is a way to present our products with a more unique branding and proposition to appeal to local consumers, so whether this is the proposition of being an Asian or Thai product or some other way, we hope to find a way to appeal to them.”
Flavour innovation
Beyond this, Lotte also has a specialised R&D department focusing on flavour innovation, and the firm launches one to two limited edition products annually to keep consumers interested.
“The R&D department will analyse new trends every year and make new products based on these – so we launch special flavours such as pineapple and peach, and potentially even a durian flavour, though there is likely to be much more interest in China for this than other markets,” he said.
“These will run as limited edition products every year, so we will make one to two batches of a flavour and if the response is really overwhelming it might come back again the following year, or if the year’s trends show something is really trending fiercely the focus might be on that instead – it’s all about keeping consumers interested and excited to try new items.”
