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Dairy in China

Dairy in China

CHEESE IN CHINA

Trends

Cheese continued to see high double-digit value growth in 2017. Amid increasing Western fast food restaurants like McDonald’s and Pizza Hut, people find the stretchable feature of cheese fun while eating and gradually accept this Western-flavoured food. This typical Western food is evolving to various types of food not only limited to pizza, but also cheese meat sauce fries, all kinds of milk tea or fruit drinks covered with cream and cheese mix, cheese-flavoured biscuits, cheese-flavoured ice cream, etc. Consumers embrace all kinds of creative food with cheese so happily that one blogger even jokes about it online, stating “Food will be definitely oversold as long as “cheese” is involved in its name.”

Competitive Landscape

Bongrain (Tianjin) Foods Co Ltd led sales in 2017, and continued to record strong growth in value sales in this year. Bongrain (Tianjin) Foods Co Ltd has successfully grasped the opportunity in children’s cheese where it enjoys a high reputation. It has launched several marketing campaigns such as advertisements of its children’s cheese sticks online before video display, and has sponsored children’s TV programme to make children familiar with its brand name. However, amid the wave of consumption upgrading, its value growth rate can hardly be maintained at as a level as in its old times, restricted to its semi-low-end orientation.

Prospects

Cheese is expected to continue positive retail value growth over the forecast period with a CAGR of 15% at constant 2017 prices, primarily thanks to the growing consumer awareness of cheese. Cheese’s development in China is still at the early stage with low per capita consumption and novelty driving sales. Cheese is perceived as a healthy food that contains more protein and calcium than drinking milk. With health awareness increasing, the room for development is plenty for cheese in China during the forecast period. However, considering the slowing growth pace of macroeconomics in China and the growing cheese consumption base, the growth rate is expected to slow down when comparing the CAGR at constant 2017 prices to the CAGR at constant 2016 prices.

DRINKING MILK PRODUCTS IN CHINA

Trends

Strengthened awareness and rising disposable incomes have allowed consumers to increasingly pursue more fresh, nutritious and premium drinking milk products. Fresh milk, featuring freshness and high nutrients, is therefore increasingly preferred by consumers compared to shelf stable milk. To the contrary, products known for excessive artificial additives and low health value, as represented by flavoured milk drinks in particular, witness a continuous sales drop. In order to better adapt to the shift of consumer preference, manufacturers increasingly focus on research and development of fresher drinking milk products, such as introducing fresh milk product lines and launching shelf stable milk products with shorter shelf life of 60 days or less.

Competitive Landscape

Inner Mongolia Yili Industrial Group Co Ltd continued to lead drinking milk products with a value share of 21% in 2017, despite a 3% value sales drop from the previous year. Though faced with the shift of consumers from shelf stable milk to fresh milk as well as the huge sales decline in its flavoured milk drinks, Yili manages to maintain its leading position with strong sales growth in its premium shelf stable milk brand, Satine, which also includes an organic shelf stable milk series. Besides this, Yili’s superiority in distribution channels also enables its products to maximise their exposure and access to consumers, helping to strengthen its sales.

Prospects

Drinking milk products is expected to slowly shrink over the forecast period, at a value CAGR of 1% at constant 2017 prices. Owing to the strengthened health awareness among consumers, sales of flavoured milk drinks are expected to drop over the forecast period, and the prospects of other milk alternatives and shelf stable milk remain gloomy as well. To the contrary, fresh milk is predicted to maintain stable growth, benefiting from the growing need among consumers for more fresh and nutritional drinking milk products. To adapt to the consumer preference shift, manufacturers are expected to optimise their product portfolios with products in more specific segments and more premium quality and positioning.

YOGHURT AND SOUR MILK PRODUCTS IN CHINA

Trends

Yoghurt and sour milk products continued to register dynamic value growth in China in 2017, as most Chinese consumers generally associate these products with benefits to overall wellbeing, digestive health in particular. In the first place, faster lifestyle and higher tension from work and life have led consumers to increasingly pursue convenient but healthy food. Probiotic drinking yoghurt, featuring a fortified function with extra probiotic additives to strengthen consumers’ digestive system, has accordingly sustained its popularity among consumers, especially the younger generation who mainly consume fast food and, thus, indicate greater need of improving their digestive health. Furthermore, the rising pursuit of more fresh and natural food products by consumers drives manufacturers to launch various yoghurt products free of additives and featuring freshness.

Competitive Landscape

Inner Mongolia Yili Industrial Group Co Ltd led yoghurt and sour milk products in 2017 with a value share of 25%, significantly owing to the impressive sales performance of its ambient yoghurt brand, Ambrosial, and probiotic drinking yoghurt brand, Chang Yi 100%. On the one hand, featuring a creamy taste and the high protein of Greek yoghurt and aided by aggressive marketing and retailing exposure, Ambrosial further consolidated its leading position in ambient yoghurt in China and introduced a new product flavoured with peach and cereals in April 2017 to better serve the needs of consumers for premium products. On the other hand, Chang Yi 100%, upon its launch in 2015, rapidly generated popularity among young consumers who usually consume greasy fast food and, thus, highly demand products which are better for their digestive health.

Prospects

Thanks to its convenient storage and transportation, ambient yoghurt is predicted to maintain robust growth over the forecast period by rapidly penetrating lower-tier cities and rural areas. However, on the other hand, the strengthened health awareness also drives consumers, in particular those living in top-tier cities, to increasingly prefer fresher food products. As a result, chilled yoghurt is also projected to grow stably in the forecast period.

OTHER DAIRY IN CHINA

Trends

Largely due to increasing substitutes and growing health awareness, other diary in China, such as coffee whiteners and condensed milk, witnessed a slower upward trend in value sales than in 2016 registering a growth rate of 3% in 2017. In the first place, rising fresh coffee shops, such as Starbucks, provide more convenience for consumers than instant coffee does. There are also a rising number of consumers switching to all-in-one types of instant coffee containing a mixture of coffee and milk powders. As a result, coffee whiteners and condensed milk are losing consumers to these substitutes. Furthermore, owing to the strengthened health awareness against anti-fats, coffee whiteners and condensed milk are facing a decrease in popularity.

Competitive Landscape

Nestlé (China) Ltd remained the dominant player in coffee whiteners in 2016 with a 72% value share, followed by Mondelez China Inc. Given the fact that Maxwell House withdrew from coffee whiteners, Nestlé witnessed the biggest value sales increase in 2016, and continued to see a strong increase in 2017 without a strong competitor. Because of the great acceptance of Nestlé coffee and coffee whiteners over time, most of Maxwell House Coffee Mate’s consumers have generally transferred to purchasing Nestlé’s coffee whitener, thus driving up Nestlé’s growth. Furthermore, the flavoursome taste of Nestlé’s coffee whitener still attracts consumers over other brands.

Prospects

Other dairy is expected to continue growing, but at slower retail growth rates during the forecast period. It is mainly dragged down by coffee whiteners. Retail value sales of coffee whiteners are expected to rise at a 1% CAGR over the forecast period which is lower than in the review period. As the derivative product of instant standard coffee, coffee whiteners is vulnerable to fresh coffee, all-in-one types of instant coffee and increasing health awareness of trans fat. By providing convenience and a similar flavour, the substitutes have obvious advantage over the traditional mixture of instant coffee and coffee whitener. In addition, more consumers are starting to use milk as a healthier substitute for coffee whitener when drinking coffee, which is also dampening coffee whiteners.


Butter and Margarine
Cheese
Drinking Milk Products
Other Dairy
Yoghurt and Sour Milk Products
Dairy in China - Company Profiles
Inner Mongolia Mengniu Dairy Industry (Group) Co Ltd in Packaged Food (China)
STRATEGIC DIRECTION
KEY FACTS
Summary 1 Inner Mongolia Mengniu Dairy Industry (Group) Co Ltd: Key Facts
Summary 2 Inner Mongolia Mengniu Dairy Industry (Group) Co Ltd: Operational Indicators
COMPETITIVE POSITIONING
Summary 3 Inner Mongolia Mengniu Dairy Industry (Group) Co Ltd: Competitive Position 2017
Inner Mongolia Yili Industrial Group Co Ltd in Packaged Food (China)
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Inner Mongolia Yili Industrial Group Co Ltd: Key Facts
Summary 5 Inner Mongolia Yili Industrial Group Co Ltd: Operational Indicators
COMPETITIVE POSITIONING
Summary 6 Inner Mongolia Yili Industrial Group Co Ltd: Competitive Position 2017
Want Want Holdings Ltd in Packaged Food (China)
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Want Want Holdings Ltd: Key Facts
Summary 8 Want Want Holdings Ltd: Operational Indicators
COMPETITIVE POSITIONING
Summary 9 Want Want Holdings Ltd: Competitive Position 2017
Packaged Food in China - Industry Overview
EXECUTIVE SUMMARY
Packaged food records dynamic and faster current value growth in 2017
Segmentation fuels growth and supports demand in a virtuous circle
Dairy giants continue to lead the industry
Internet retailing continues to gain share through strong growth
Sustainable value growth is expected over the forecast period
KEY TRENDS AND DEVELOPMENTS
Fresher packaged food is increasingly popular
Outlook
Further segmentation drives growth
Outlook
Booming cross-border platforms facilitate growth of overseas players present within niche areas
Outlook
Western cuisine is increasingly impacting packaged food in China
Outlook
FOODSERVICE: KEY TRENDS AND DEVELOPMENTS
Headlines
Trends: Sales to Foodservice
Trends: Consumer Foodservice
Prospects
Category Data
Table 1 Foodservice Sales of Packaged Food by Category: Volume 2012-2017
Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2012-2017
Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2017-2022
Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2017-2022
MARKET DATA
Table 5 Sales of Packaged Food by Category: Volume 2012-2017
Table 6 Sales of Packaged Food by Category: Value 2012-2017
Table 7 Sales of Packaged Food by Category: % Volume Growth 2012-2017
Table 8 Sales of Packaged Food by Category: % Value Growth 2012-2017
Table 9 GBO Company Shares of Packaged Food: % Value 2013-2017
Table 10 NBO Company Shares of Packaged Food: % Value 2013-2017
Table 11 LBN Brand Shares of Packaged Food: % Value 2014-2017
Table 12 Penetration of Private Label by Category: % Value 2012-2017
Table 13 Distribution of Packaged Food by Format: % Value 2012-2017
Table 14 Distribution of Packaged Food by Format and Category: % Value 2017
Table 15 Forecast Sales of Packaged Food by Category: Volume 2017-2022
Table 16 Forecast Sales of Packaged Food by Category: Value 2017-2022
Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2017-2022
Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2017-2022
DEFINITIONS
SOURCES
Summary 10 Research Sources

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