The Chinese dairy market is forecasted to grow by 6.6% CAGR until 2022 with consistent sales increases predicted for yogurt and cheese, according to new research from Mintel.
Since 2014 yogurt has posted an annual retail sales growth of over 20% in China, and between 2015 and 2017 cheese saw a growth rate of between 15% and 25%.
The news follows research published last year which predicts that China will overtake the US as the world’s largest dairy market by 2022.
Despite consistent sales growth for yogurt and cheese, Mintel data shows that annual per capita volume consumption for major dairy products remains low compared to other countries.
For example, per capita volume milk consumption in China is 14.3 litres, compared to 36.8 litres in Japan and 51.7 litres in the US. Per person consumption of yogurt in China is 3.43 kg, 4.92 kg in the US and 9.66 kg in Japan. Finally, the Chinese consume 0.02 kg of cheese per person, while the Japanese take in 1.46 kg per person and in the US 6.89 kg per person.
Summer Chen, senior food and drink analyst at Mintel, said: “Dairy consumption in China is still low when compared to Japan, where consumers share a similar dietary tradition to China. Mintel research indicates that China’s dairy market growth will be driven by increased consumption, resulting from the expansion of consumption occasion, value increase due to the rising price of raw milk, and consumers trading up to more premium options.
“When we look specifically at the yogurt market, thanks to the recent craze over ambient yogurt, the category is now leading not only in China’s dairy market, but among all food and drink products.”
When it comes to dairy products, health-related factors are the main areas consumers in China are willing to pay more for. Among the four surveyed dairy products (including milk, yogurt, butter and cheese), milk and yogurt are perceived by consumers to be healthier and more nutritious (51% and 48% respectively), helping to improve immunity (49% and 44% respectively), and also good for kids (51% and 49% respectively) and the elderly (46% and 37% respectively).
Mintel data says that urban Chinese consumers prefer dairy products from big (65%) and nationwide (59%) dairy brands. While their attitudes towards local milk sources are divided – 44% believe they are reliable, while 36% believe local milk sources are not reliable. Nevertheless, more consumers prefer imported dairy products (43%) than domestic ones (34%). Even among those who trust local milk sources, 32% prefer imported dairy products.
Summer Chen added: “When looking at the battle between domestic and imported dairy products, it seems that while urban Chinese consumers are regaining confidence in domestic milk sources and products, they still prefer imported options.
“To appeal more to consumers, domestic brands need to strengthen their offering in other areas, like positioning with a premium brand image, showcasing additional health benefits, and spotlighting innovative flavours in order to compete with imported brands.”
© FoodBev Media Ltd 2019
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