As the Chinese New Year approaches, a peak time for confectionery consumption and gifting — Hsu Fu Chi — a leading domestic confectionery brand under Nestle, is bolstering its production capabilities to meet the surging demand for festive snacks.

On Feb 2, the company unveiled a new juice gummy production workshop in Dongguan, Guangdong province, with some 200 million yuan ($28.8 million) investment aimed at enhancing production efficiency through smart manufacturing.

The 14,000-square-meter facility, designed to produce 40 metric tons of juice gummies per day, is equipped with a fully automated production line. The expansion followed Hsu Fu Chi's 2023 capacity boost and aims to secure a steady supply of its best-selling juice gummies during the holiday season.

Nestle's investment comes at a time of rapid growth in China's snack food sector, with consumers increasingly seeking healthier, fun and indulgent options. The Dongguan workshop integrates advanced German technology and AI-powered systems designed to optimize production.

Features include automated guided vehicle logistics, robot-assisted material handling, unmanned forklift storage and a fully automated cleaning system. The upgrades are expected to increase production capacity by 30 percent, improve efficiency by 20 percent and reduce energy consumption by 15 percent, according to the company.

Kais Marzouki, chairman and CEO of Nestle Greater China, said that the expansion is more than just a capacity increase.

"The launch of the juice gummy production line is a clear demonstration of Nestle's commitment to China, our second-largest global market," Marzouki said. "This investment marks a new chapter, where intelligent manufacturing drives value chain upgrades and local innovations that benefit our global network."

Liu Xinggang, president of Hsu Fu Chi, said the company focuses on responding to the fast-growing demand for premium snacks. "This expansion is designed to better meet the 'sweet expectations' of our customers and to solidify our leadership in the snack and confectionery sector," Liu said.

Since 2020, Nestle has invested over 5 billion yuan in China, focusing on high-growth sectors such as infant formula, snacks and pet care. By the start of 2025, Nestle had completed its full acquisition of Hsu Fu Chi, continuing to leverage the country's industrial and innovation ecosystem to drive smart manufacturing, enhance product quality and contribute to regional economic development and industrial upgrades.

According to consultancy Mintel Group, nearly 70 percent of limited-edition products are launched with Chinese New Year-themed packaging, as consumers increasingly choose candies, chocolates and other sweets for children during the festive season.

Its research also shows that young adults aged between 18 and 29, multi-person households and parents with children aged between four and 12 are the primary demographic drivers. Young consumers tend to prioritize personal enjoyment and social sharing, while family buyers focus on emotional connection, and parents seek products with nutritional benefits.

As consumer preferences shift, new product development is leaning toward healthier, functional options, including vitamins, probiotics and low or no-sugar varieties, alongside emotionally engaging items such as holiday-limited editions or nostalgic flavors, according to Mintel. While traditional candies like hard candy, mints and crisp candy still dominate, the market share of functional candies and innovative chocolate products is growing steadily.