According to data from market research firm Frost & Sullivan, the market for functional candies has been growing at a 17.3% CAGR in China.
Many functional candies have rapidly appeared on the market, which in turn has seen traditional sweet innovation slowing down somewhat in the country.
“It has been getting more and more difficult for conventional candy and chocolate firms in China because there is a strong government focus on sugar reduction, which has hit the industry hard,” conventional candy firm Golden Monkey Food R&D Director Zhaoyang Chu told the floor at the recent Food and Beverage Innovation Forum (FBIF) 2025.
“More and more young consumers are paying attention to this as they are exposed to much more information via the internet than we were back in the day, and this has resulted in major challenges for us in terms of consumption.”
FMCG foods heavyweight Want-Want Group’s GM of Candy Jian Lu had a different take, highlighting the potential for conventional candies to also take on particular functions that appeal to Gen Z consumers.
“We have a very good example in terms of the soft candy category which has been rising ever since the COVID-19 pandemic outbreak regardless of any debate concerning sugar content and diabetes,” he said.
“This is driven very strongly by the emotional value that it can confer to consumers – it provides a form of stress relief upon chewing, in addition to candy itself bringing joy and pleasure to the consumer, as well as the rush of endorphins that the sugar can bring.
“But again, when we look at Gen Z consumers, they not only want this basic joy and stress relief but also want added functionality, which is where candy firms need to look more closely at formulations and tech to provide that value, eg replacing gelatin with collagen to provide natural health properties alongside the chewy texture.”
This was seconded by global Top 100 candy manufacturing firm Amos Foods, which attributed a lot of the challenges currently faced by the candy sector to the media representation of sugar.
“The current media communication regarding sugar is not very friendly, and I actually think there is some level of misunderstanding causing this,” Amos Foods Co-Founder Steven Ma added.
“The Chinese language in and of itself is actually a little bit unfriendly to ‘sugar’ because candy (糖果), white sugar (白砂糖) and diabetes （糖尿病）all contain the word ‘sugar’ (糖) in them.
“But in English, these three things are completely different concepts – we need to make it clearer that diabetes and weight gain are not always or only caused by eating sugar.
“That said, I am still quite confident in making candies especially for our population of 260m Gen Z consumers because they actually are against the concept of being preached at or having overwhelming propaganda pushed at them, as they are very big on the idea of being able to think for themselves and making their own decisions.”
So what works for China’s Gen Z’s?
To this end, Ma offered several tips for candy innovators to note when creating candies for Gen Z.
“Gen Z consumers are in essence more focused on themselves with a preference for novelty and challenging boundaries – for instance, they are not automatically accepting of big brands but instead are more accepting of products based on national trends and Chinese medicinal ingredients,” he said.
“For example, we launched a product made with Autumn Pear (秋梨) paste last year, which is traditionally used to treat ailments like cough and asthma, and it did exceptionally well as a candy amongst the young consumers.”
Another area with major potential is that of enabling expression and more closely linking candy to the five senses, such as Amos Foods’ musical lollipop.
This allows consumers to ‘listen to music through your mouth’, adding an additional layer of sensory enjoyment to the candy consumption.
“In terms of breaking boundaries, we also have candies that are aligned with musical expression today too – the first generation can only play songs of the manufacturer’s choice, the second generation is linked to Bluetooth to provide a range of songs, and the latest third generation even allows for recording.
“This is very strongly linked to emotional expression because not only can candy givers record messages to their receivers, but there are other occasions like children wanting to record apologies and passing this to parents to offer a bridge of sorts for reconciliation.
The Audio Lollipop essentially works using bone conduction, using vibrations from the lollipop to send sound waves through the jaw bone to the inner ear when the consumer takes a bite.
Each lollipop comes with a set of earplugs to enhance the experience, and each flavour comes with a genre of music that appeals to Gen Z, eg Watermelon is K-pop, Strawberry is Hip Hop, and so on.
“This is an area we will be pursuing in detail as it seems tailor-designed for Gen Z, covering the sense of tech, social value and emotional value,” he added.
“So despite their high demands, Gen Z consumers have given candy firms many new windows and opportunities for product development.”
