Fears for 'White Rabbit' candy as public tastes change Updated: 2012-01-20 11:12 By Xie Yu (China Daily)

White Rabbit brand candies on sale at a supermarket in Yichang, Hubei province. The traditional sweet has seen increased competition from imported chocolates and candy. [Photo/China Daily]

SHANGHAI - Among the vast array of snacks that any self-respecting Shanghai family offers visiting relatives and friends during the Lunar New Year holiday, which begins on Jan 23, one invariably finds a special milk candy in wrappings with a design dating back to the 1940s.

Indeed, the brand White Rabbit (Dabaitu) is embedded in the collective memories of generations of Shanghai people. Despite its nostalgic appeal, though, White Rabbit is showing its age.

Earlier this week, media reports said that one of its owners, Pudong Gudong Industrial Co, put its 10-percent stake in the brand up for sale. The remaining 90 percent is held by Shanghai Guan Sheng Yuan (Group) Co Ltd, controlled by the Shanghai Bright Food (Group) Co Ltd.

Shanghai Guan Sheng Yuan made a statement on Wednesday in which it said that the stock transfer was actually taking place with an associated enterprise, known as the White Rabbit Candy Factory under the White Rabbit brand, which only accounted for a small part of the whole business.

"There is no crisis. Actually, total revenue increased by 30 percent in 2011," said Lan Xue, general manager of Guan Sheng Yuan, though he didn't provide an exact amount.

But he noted that the company was building a new production base for the milk candy in a Shanghai suburb, which would push the annual production capacity to 50,000 tons.

Lan said Guan Sheng Yuan would buy the 10-percent stake, and he emphasized that White Rabbit was the leading brand in the milk candy market.

But the brand's prospects remain a matter of concern, with milk candies vanishing from supermarkets and living rooms, replaced by imported chocolate and toffee.

Other traditional Shanghai brands are facing tough times too. Many Shanghai people can remember the Seagull brand cameras that they once craved and the Shanghai brand watches that they wore with pride.

Such made-in-Shanghai products have become virtually extinct. These days, the once-famous twin-lens Seagull cameras can only be found in second-hand outlets, and Shanghai brand watches are sold only at hawker stalls near the old crumbling factory where they were made.

White Rabbit was an iconic Shanghai brand, cherished in the memories of at least two generations of Shanghainese, a must for Spring Festival celebrations and wedding parties.

The history of this milk-flavored candy can be traced back to 1943, when the trademark looked like Mickey Mouse. It was changed to a white rabbit in 1959, in a bid to build up a national brand image.

But amid fierce competition in the candy industry, which has seen an influx of foreign brands, the old sweet has fast lost market share.

"Before, it was definitely a plus to have 'Big White Rabbit' on the dining table at a wedding banquets, which was a sign of the hosts' good taste and wealth. But people favor chocolates these days. Milk candies are no longer trendy," said retired accountant Tan Hongcha, 53.

There are also concerns over flavor and safety.

"We used to say that by melting three White Rabbit candies in a glass of water, you will get very good milk. But nowadays, I do not think the candies are as good as before," Tan said.

During a food inspection in 2008, White Rabbit was found to contain melamine, an industrial chemical illegally added to milk to give misleading high protein readings. Although the company later said it had sorted out the problem, the incident has continued to cast a shadow on the brand.

Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center, said the old brand needed to move with the times.

"Milk-flavored candies were considered nutritious when life was hard and people could not afford milk. Nowadays when people are getting richer, it should develop new selling points to attract consumers," he said.

Whether by updating its packaging or developing new products, White Rabbit should shed its old-fashioned image and "build itself into a leisure food brand", Qi added.

He said that the company could learn from Hengyuanxiang, an old Shanghai wool brand that has refashioned itself into a knitting, apparel and home textile powerhouse in the past 20 years.

The revival of many old "national brands" has been much-discussed in recent years, but it's been more talk than action for most.

Last September, Shanghai WhiteCat Shareholding Co Ltd, maker of a wide range of household goods, delisted from the Shanghai Stock Exchange after several unsuccessful restructuring attempts.

Last August, VIVE, a luxury cosmetics label reborn from the old Shanghai brand Two Sisters (Shuangmei), established in the late 1800s, reopened its first and only store in the Peace Hotel.

The brand decided to continue to use the "calendar girl" image originally used in the Two Sisters days.

Meanwhile, parent company Shanghai Jahwa United Co Ltd hired a design company to create the new logo, product packaging and store design, in a bid to attract high-end consumers with a more trendy image. But its market prospects are still unclear.