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In this interview, Ignatius Szeto, vice president of Yili Group, discusses how functional ingredients, sensory innovation and ageing-friendly product development are shaping the company’s approach to high-value dairy innovation.

Your keynote speech at the Global Dairy Congress explores high-value functional product opportunities. Can you tell us how this is shaping dairy innovation?

The dairy sector is currently undergoing a profound transformation toward high-value nutrition. As a health-oriented industry, dairy must remain genuinely consumer-centric, moving away from a one-size-fits-all approach toward personalised products that address the specific health needs of different population groups. This shift is reshaping R&D priorities: in the future, core competitiveness will no longer be defined by scale alone, but by 'nutritional conversion capability' – the ability to unlock, restructure and amplify the nutritional value of dairy products.

The foundation of this capability lies in breakthroughs in advanced dairy processing technologies. Take lactoferrin for example, a bioactive protein widely recognised for its immune-supporting properties. Yili has dedicated more than a decade to R&D to achieve industrial-scale production of high-purity, high-yield, high-activity lactoferrin powder, bringing its technology to the global forefront. Yili has also achieved significant breakthroughs in other key areas, including natural cheese and demineralised whey.

Ultimately, these advances in processing translate into tangible consumer value, fully aligning with the conference theme of 'precision matching'. Today’s global consumers are no longer satisfied with generic nutritional products; instead, they are seeking targeted solutions for specific health goals such as gut health, immune support, weight management, and bone, joint and muscle health. This requires dairy companies to take the lead in precision nutrition by integrating the entire value chain – from independent R&D and large-scale production to end-use applications – delivering precisely matched solutions for all consumer groups, across all life stages, and in diverse consumption scenarios.

What are the key trends you are observing in functional dairy this year and how is Yili responding to them?

The macro trend: I believe global consumers today are increasingly seeking health and nutrition solutions that are more precise, diverse and personalised. As Pan Gang, chairman of Yili Group, has noted, consumer demand for dairy has shifted from basic "nutritional supplementation" to "functional segmentation" and "experience upgrading". To fully capture this trend, we must unlock the functional nutrients and enhance the drinking experience of milk through technological innovation, enabling truly precise nutritional delivery.

Industrialisation of high-value ingredients: In collaboration with the National Technology Innovation Center for Dairy, Yili is actively accelerating the industrial application of advanced extraction technologies for key ingredients such as lactoferrin, β-casein and α-lactalbumin.

In China, Phase III of our Health Valley Global Intelligent Production Base of Cheese is scheduled to commence operations in 2026. Once operational, it will significantly enhance our localised, highly efficient smart manufacturing capacity for premium cheese and dairy ingredients, securing a robust supply of high-value components such as whey protein, lactoferrin and casein.

In addition, we have independently established a Chinese maternal and infant strain bank and developed a proprietary portfolio of flagship probiotic strains to support health across all life stages. Representative examples include BL-99, which helps relieve functional dyspepsia and supports gut immune function in middle-aged and elderly populations, and K56, which is designed to support weight management by reducing visceral fat and overall body fat.

Experience upgrading and sensory innovation: Today’s consumers expect more from dairy than nutrition alone; they also seek superior taste and enhanced sensory experiences. In sensory innovation, we have launched the Youngfun Chewy Lemon, pioneering a '4D lemon experience' that combines refreshing juice, tender pulp, crispy peel and aromatic citrus oil, and catering to younger consumers’ preference for multi-layered, chewy textures.

In the fresh milk category, we will launch a major new brand in 2026: MiaoXian (Instant Fresh). Positioned as a premium fresh milk brand, it adopts INF 0.09-second ultra-instant sterilisation technology, which instantly locks in freshness while preserving a rich, creamy taste and maintaining 3.6g/100ml native milk protein.

In the goat milk segment, Yili’s proprietary patented deodorisation technology effectively addresses the industry’s long-standing 'goaty' odour challenge. Through a multi-step physical process, we effectively reduce the 'goaty' odour while preserving native nutrients, restoring a clean, naturally sweet milk aroma and delivering a richer goat milk experience.

Eastern wisdom and dietary therapy innovation: Drawing on traditional Chinese health philosophy, Yili is deeply integrating the concept of dietary therapy with modern dairy technology. Through our strategic partnership with Tong Ren Tang, we are exploring the functional food and wellness products market.

Based on the fundamental philosophy of 'food as medicine,' we have launched the Xinhuo series of dietary formula milk powders, including Xinhuo Blood Sugar Management Formula Milk Powder, Xinhuo Bone Energy Formula Milk Powder and Xinhuo Heart Energy Formula Milk Powder.

These products are designed to address the specific health needs of middle-aged and elderly consumers in areas such as blood sugar control, bone health, cardiovascular support and sleep quality, offering highly targeted 'Chinese dietary therapy solutions'.

Can you tell us about any major technological advancements Yili has made recently that are accelerating functional nutrition product development?

Building on comprehensive life-stage nutrition research, Yili systematically identifies health needs from early childhood through older adulthood, providing clear direction for functional dairy innovation:

Empowering maternal and infant nutrition: To address core needs in early life – such as cognitive development, immune support and bone growth – we continue to advance the technological translation of unique breast milk–derived ingredients.

For example, Yili successfully developed YLGB-1496 (Bifidobacterium longum subsp. infantis), the first proprietary flagship probiotic strain isolated from healthy maternal breast milk by a Chinese dairy company for pediatric applications. By precisely translating this strain and other advanced bioactive components, including HMOs, DHA and ARA, we aim to support a comprehensive and healthy foundation for both mothers and infants.

Customised formulas for adults: Guided by multidimensional health needs identified in our white paper, we have developed a range of targeted solutions. These include Yili Xinhuo Bone Energy Formula Milk Powder, focused on integrated support for bones, joints and muscles; Yili Xinhuo Blood Sugar Management Formula Milk Powder, designed for blood sugar control with low-GI certification and enriched with traditional Chinese ingredients such as Ganoderma and Pueraria; and Yili Xinhuo Heart Energy Formula Milk Powder, dedicated to cardiovascular health support.

In addition, we offer Yili Qingmu Red Ginseng Revitalizing Milk Powder for women’s wellness, as well as Yili Health Science Immunoglobulin Protein Powder to support general immune function.

Product innovation for an ageing population: Addressing key health challenges among the elderly population – such as reduced bone density, slower metabolism, declining sleep quality and increased cardiovascular risk – Yili Xinhuo follows a research-driven development approach. We integrate the 'food as medicine' philosophy and functional wellness insights with dairy-derived nutrition to deliver synergistic benefits and enhanced efficacy through science-based formulation.

Supported by 15 national invention patents covering the full innovation chain – from strain screening and formulation development to functional validation – we have developed differentiated functional formulas that bring precision nutrition into real-world application.

Yili was successful in this year’s World Dairy Innovation Awards. Could you tell us a bit about what inspired these stand-out innovations from Yili?

We are truly honoured that Yili’s innovative achievements have once again received unanimous recognition from the authoritative judging panel at the Global Dairy Congress. Yili has a long and distinguished history with the World Dairy Innovation Awards. Since 2020, we have been shortlisted for seven consecutive years, consistently showcasing the innovation vitality and global competitiveness of China’s dairy industry.

This year, Yili was recognised with two winner titles, alongside ten finalist and seven commended honours. Gonglao’s Hulunbuir Strain Milk Skin Yogurt won the Best Artisan Product award for its authentic reproduction and innovative reinterpretation of traditional grassland delicacies, while Changqing Lemon & Oat Popping Beads Probiotic Yogurt was named Best Yogurt for its innovative texture and functional health attributes.

The underlying driver of Yili’s sustained innovation has always been deep insight into consumer needs. For example, lactose intolerance is a widespread challenge among Chinese consumers. To address this, we have long focused on advancing lactose hydrolysis and active nutrient preservation technologies.

We not only launched China’s first lactose-free milk under the Shuhua brand, but also extended our mature zero-lactose solution into the milk powder category. In 2025, Yili’s Qinghuo Adult Milk Powder claimed the Best Intolerance-Friendly Innovation at the World Dairy Innovation Awards.

This consumer-centric innovation philosophy is rooted in Yili’s belief that 'no innovation, no future,' and is strongly supported by our global R&D network and open innovation ecosystem. We have established 15 innovation centers across Asia, Europe and Oceania, and lead the construction of China’s only national-level dairy technology innovation centre.

In addition, we have built extensive partnerships with world-renowned institutions such as the University of Cambridge, Wageningen University & Research and Lincoln University, as well as leading domestic research institutions including Peking University, Tsinghua University, the Chinese Academy of Sciences, China Agricultural University and Jiangnan University.

Together, we are translating global expertise into tangible technological breakthroughs and product innovations.

Looking ahead over the next five years, what is Yili's roadmap for R&D and innovation in ageing-friendly dairy products?

Moving forward, Yili will remain firmly 'consumer-centric' and leverage multidisciplinary collaboration to continuously advance high-quality innovation in dairy products for the ageing population. Specifically, we will focus on the following four core dimensions:

Texture and packaging innovation: We will prioritise the development of novel functional dairy products tailored to individuals with swallowing problems. At the same time, we will continue to advance packaging technologies that enhance safety, ease of use and everyday convenience for middle-aged and elderly consumers.

Improving nutrition and portion: We will further strengthen precision nutrition and functional innovation to support healthy ageing. In parallel, we will tailor portion sizes of dairy products to better match the needs of specific consumer groups and diverse consumption scenarios.

Taste preference: We will continuously diversify our product portfolio by developing a wider range of functional dairy offerings, including dairy-based staple foods. Meanwhile, we will innovate more appealing flavors tailored to taste preferences in ageing populations.

Scientific communication and consumer education: In collaboration with the International Dairy Federation, we will further explore the positive role of dairy in healthy ageing. In addition, by working closely with industry experts and key opinion leaders, we aim to strengthen science-based public education, enhance consumer understanding of nutrition and healthy diets and provide practical daily dietary guidance.