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Country Report

Dairy in

Dairy in China

Aug 2018

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Executive Summary

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Prospects

Processed cheese continues to outperform unprocessed cheese in volume terms

The most important category within cheese, processed cheese posted continued strong retail growth in 2018, thanks to the diverse formats and acceptable flavours and textures. Flavour is the most important factor why processed cheese is winning over unprocessed cheese.

Segmentation boosts other processed cheese due to healthy snackification

Amidst increasing awareness of children’s diets, cheese snacks have been well-received by parents. Amongst all the cheese categories, other processed cheese is most often used for children’s cheese, due to the well-accepted light flavour.

Foodservice sees high potential for cheese consumption

Consumption patterns are changing from eating at home to eating out, with consumer foodservice booming in 2018. As a result, more manufacturers expanded their businesses to foodservice.

Competitive Landscape

Bongrain (Tianjin) Foods continues to lead

As the first player to see the potential of children’s cheese, and following the launch of Milkana children’s cheese sticks, Bongrain (Tianjin) Foods has grown to become the main player in this segment and in overall cheese, seeing rapid expansion in the review period. However, the competition is increasing, as more players entered this segment in 2017, such as Beijing San Yuan Foods.

Fonterra Commercial Trading (Shanghai) strengthens its brand reputation

The overall performance of Fonterra Commercial Trading (Shanghai) is outstanding, particularly in foodservice. Although the company’s retail business does not heavily invest in campaigns or marketing, its rapid expansion in foodservice plays a strong role in retail by strengthening its brand reputation.

Milkland (Tianjin) Foods Technology gains share by extending to retail

A foodservice provider at the beginning, Milkland (Tianjin) Foods Technology increasingly leaned towards retail in the review period. Although its retail share is still low, it has high potential.

Prospects

Other milk alternatives rebounds thanks to product innovation

Although suffering a current value decline from 2014, other milk alternatives registered slow recovery in 2018, mainly thanks to multiple launches by various leading players to adapt to the growing demand for premium products featuring innovative flavours and fashionable packaging. For instance, Hebei Yangyuan Zhihui Beverage introduced a new walnut milk series made by CET cold brewed technique in 2018, which used the walnut seed and peel to strengthen the nutritional value.

Premium soy milk is on the rise owing to its nutritional value

Noting the high lactose intolerance rate in China, to better satisfy the need of Chinese consumers Fujian Dali Food launched a premium soy milk brand, Dou Ben Dou, in April 2017, initiating a strong wave of premium soy milk across China. Following Dali, other local packaged food giants, including Inner Mongolia Yili Industrial Group, also successively entered soy milk by introducing premium-positioned brands in late 2017 and early 2018.

Fresh milk continues to outpace shelf stable milk because of its fresh positioning

Fresh milk, benefiting from its fresh and accordingly premium positioning, continued to register strong growth in 2018, and noticeably outpaced shelf stable milk. Fuelled by consumers’ pursuit of fresh and nutritious drinking milk products, fresh milk experienced rapid growth and growing popularity across the country.

Competitive Landscape

Inner Mongolia Yili maintains its lead in drinking milk products

Inner Mongolia Yili Industrial Group continued to lead drinking milk products in 2018, primarily owing to the strong growth of its premium shelf stable milk brand Satine. Responding to the stronger demand for premium dairy products with guaranteed quality, as well as the gifting tradition in China, Satine managed to impress consumers with its high-end positioning and exquisite gift wrapping, and was accordingly considered amongst the most popular gift options in dairy in China.

New Hope Dairy witnesses strong growth thanks to the popularity of fresh milk

Thanks to its strength in fresh milk, New Hope Dairy directly benefited from the strong performance of fresh milk over the review period, witnessing strong growth in its entire range of drinking milk products in 2018. On the one hand, by consistently acquiring various regional dairy players across the country, New Hope managed to widen the distribution of its fresh milk, and accordingly strengthened its awareness and reputation in the Chinese market.

Hebei Yangyuan Zhihui Beverage rebounds in 2018

Hebei Yangyuan Zhihui Beverage, despite seeing serious value declines in 2016 and 2017, witnessed strong growth in 2018, primarily thanks to the upgrading of its product portfolio, with the launch of more premium and fashionable products targeting the younger generation, along with the renewal of the company’s branding strategy. To better impress consumers with its new products, Yangyuan invited Wang Yuan, one of the most popular teenage idols in China, to be its brand ambassador, which enabled the brand to completely refresh its image with a trendy young positioning.

Prospects

Drinking yoghurt continues to outpace spoonable yoghurt due to its convenience

Drinking yoghurt continued to record the strongest performance within yoghurt and sour milk products in 2018, primarily thanks to the rapid growth of ambient yoghurt and probiotic drinks, which constituted the majority of drinking yoghurt in China. On the one hand, featuring superior convenience, ambient yoghurt directly broke through the restrictions of transportation and storage, and greatly widened the retail distribution area, enabling these products to rapidly penetrate lower-tier cities and remote rural China.

Snackification leads product innovation in yoghurt and sour milk products

Noting the stronger demand amongst local consumers for healthy but tasty food, manufacturers of yoghurt and sour milk products in China focused on the development of snack-like yoghurt products in 2018. Trendy and niche flavours were increasingly widely introduced: in March 2018, Bright Dairy & Food introduced a new launch under its spoonable yoghurt brand YoGreek in apple and cinnamon flavour, whilst Shijiazhuang Junlebao and Xinjiang Tianrun both introduced yoghurt in cheese flavour.

Supermarkets and hypermarkets dominate distribution

Supermarkets and hypermarkets together continued to dominate the distribution of yoghurt and sour milk products in China in 2018, mainly because of the wide shelf space and cold storage facilities in these channels. On the other hand, thanks to the rapid explosion of ambient yoghurt, as well as the rapid development of cold chain logistics, internet retailing (regardless of its current limited share) witnessed strong expansion in 2018.

Competitive Landscape

Inner Mongolia Yili strengthens its lead in yoghurt

Inner Mongolia Yili Industrial Group continued to lead yoghurt and sour milk products in 2018, thanks both to the consistent dynamic growth of its ambient yoghurt brand Ambrosial and product innovation and development of its other popular yoghurt brands, such as Changqing and Mei Yi Tian. Ambrosial further consolidated its lead in ambient yoghurt in China by rapidly extending into lower-tier cities and rural areas.

Bright Dairy & Food declines because of the poor performance of Momchilovtsi

Bright Dairy & Food, after continuous growth over the review period, witnessed a value decline in 2018, mainly due to the poor performance of its ambient yoghurt brand Momchilovtsi. Although it introduced ambient yoghurt in the Chinese market, Momchilovtsi failed to compete with Ambrosial by Inner Mongolia Yili and Just Yoghurt by Inner Mongolia Mengniu from 2016, as Bright Dairy’s distribution network was inferior to these two national dairy giants.

Xinjiang Tianrun Dairy maintains strong growth with innovative new launches

Xinjiang Tianrun Dairy continued to register dynamic growth in yoghurt and sour milk products in 2018, owing to its stronger expansion into markets outside Xinjiang and superior product innovation. On the one hand, Tianrun further developed its distribution network across the country, both online and offline, to strengthen its exposure and access to consumers, from top-tier cities to rural areas.

Prospects

Coffee whiteners and condensed milk are hampered by specialist coffee shops

Coffee whiteners and condensed milk suffered sluggish current value growth in 2018, mainly dampened by the boom in specialist coffee shops. With rising personal incomes, more consumers, particularly younger consumers, preferred to enjoy freshly brewed coffee instead of instant coffee, leading to the contraction of sales of instant coffee in China towards the end of the review period, and only slow growth in coffee whiteners.

Cream sees a robust performance in foodservice

Cream showed dynamic growth in China in 2018, but only in the foodservice channel, thanks to the development of cream-topped freshly brewed tea, also called cheese tea or milk cap tea, and dubbed as the Asian Cappuccino, represented by Hey Tea. Targeting mainly younger people, born in the 1980s, 1990s or even 2000s, cream-topped freshly brewed tea enables consumers to enjoy two different tastes in a single tea product – creamy on the top and refreshing on the bottom.

Supermarkets dominates distribution

Supermarkets dominated the distribution of other dairy products in 2018. Supermarkets and hypermarkets accounted for the overwhelming majority of retail value sales, further squeezing distribution in independent small grocers and other grocery retailers.

Competitive Landscape

Nestlé (China) further consolidates its lead in other dairy

Nestlé (China) continued to dominate other dairy in 2018, and even increased its lead, mainly thanks to the withdrawal of its largest competitor, Maxwell House (Mondelez China) from the market in 2017. Nestlé (China) also bundles coffee whiteners with its instant coffee products, in addition to benefiting from established brand awareness and a good reputation amongst local consumers.

Multinational brands dominate the retail market

Multinational brands, represented by Coffee-mate, Eagle and Carnation, all under Nestlé (China), dominate the retail market for other dairy, owing to their dominance in instant coffee in China, taking into consideration the fact that coffee whiteners and condensed milk are used in instant coffee. On the other hand, domestic manufacturers were late-comers in these saturated categories, with little room for further development.

Domestic manufacturers develop more vigorously in the foodservice channel

Although facing an unfavourable situation in the retail market for other dairy, domestic players are making efforts in the foodservice channel, jumping on the bandwagon of the cream-topped tea craze in China. Zhejiang Panda Dairy Products takes the lead amongst domestic players, benefiting from its successful marketing and development in stores offering cream-topped tea and desserts.

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Dairy Market Sample Report Dairy Market Sample Data

Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in China with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in China, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in China market research report includes:

Analysis of key supply-side and demand trends
Detailed segmentation of international and local products
Historic volumes and values, company and brand market shares
Five year forecasts of market trends and market growth
Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

What is the market size of Dairy in China?
What are the major brands in China?
How has the economic downturn impacted sales performance given its staple food status?
Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

Gain competitive intelligence about market leaders
Track key industry trends, opportunities and threats
Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

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Dairy in China - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Robust growth is witnessed in butter and spreads, due to its low base

Butter continues to outperform margarine and spreads

Unsalted butter is well-received due to its use in home baking

COMPETITIVE LANDSCAPE

Fonterra Commercial Trading (Shanghai) leads butter and spreads

Foreign brands dominate owing to their high acceptance

The popularity of small packaging

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2013-2018
Table 2 Sales of Butter and Spreads by Category: Value 2013-2018
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2013-2018
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2013-2018
Table 5 NBO Company Shares of Butter and Spreads: % Value 2014-2018
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2015-2018
Table 7 Distribution of Butter and Spreads by Format: % Value 2013-2018
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2018-2023
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2018-2023
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2018-2023
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2018-2023

Cheese

HEADLINES

PROSPECTS

Processed cheese continues to outperform unprocessed cheese in volume terms

Segmentation boosts other processed cheese due to healthy snackification

Foodservice sees high potential for cheese consumption

COMPETITIVE LANDSCAPE

Bongrain (Tianjin) Foods continues to lead

Fonterra Commercial Trading (Shanghai) strengthens its brand reputation

Milkland (Tianjin) Foods Technology gains share by extending to retail

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2013-2018
Table 13 Sales of Cheese by Category: Value 2013-2018
Table 14 Sales of Cheese by Category: % Volume Growth 2013-2018
Table 15 Sales of Cheese by Category: % Value Growth 2013-2018
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018
Table 17 Sales of Unprocessed Cheese by Type: % Value 2013-2018
Table 18 NBO Company Shares of Cheese: % Value 2014-2018
Table 19 LBN Brand Shares of Cheese: % Value 2015-2018
Table 20 Distribution of Cheese by Format: % Value 2013-2018
Table 21 Forecast Sales of Cheese by Category: Volume 2018-2023
Table 22 Forecast Sales of Cheese by Category: Value 2018-2023
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2018-2023

Drinking Milk Products

HEADLINES

PROSPECTS

Other milk alternatives rebounds thanks to product innovation

Premium soy milk is on the rise owing to its nutritional value

Fresh milk continues to outpace shelf stable milk because of its fresh positioning

COMPETITIVE LANDSCAPE

Inner Mongolia Yili maintains its lead in drinking milk products

New Hope Dairy witnesses strong growth thanks to the popularity of fresh milk

Hebei Yangyuan Zhihui Beverage rebounds in 2018

CATEGORY DATA

Table 25 Sales of Drinking Milk Products by Category: Volume 2013-2018
Table 26 Sales of Drinking Milk Products by Category: Value 2013-2018
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2013-2018
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2013-2018
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2014-2018
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2015-2018
Table 31 Distribution of Drinking Milk Products by Format: % Value 2013-2018
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2018-2023
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2018-2023
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2018-2023
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2018-2023

Other Dairy

HEADLINES

PROSPECTS

Coffee whiteners and condensed milk are hampered by specialist coffee shops

Cream sees a robust performance in foodservice

Supermarkets dominates distribution

COMPETITIVE LANDSCAPE

Nestlé (China) further consolidates its lead in other dairy

Multinational brands dominate the retail market

Domestic manufacturers develop more vigorously in the foodservice channel

CATEGORY DATA

Table 36 Sales of Other Dairy by Category: Volume 2013-2018
Table 37 Sales of Other Dairy by Category: Value 2013-2018
Table 38 Sales of Other Dairy by Category: % Volume Growth 2013-2018
Table 39 Sales of Other Dairy by Category: % Value Growth 2013-2018
Table 40 NBO Company Shares of Other Dairy: % Value 2014-2018
Table 41 LBN Brand Shares of Other Dairy: % Value 2015-2018
Table 42 Distribution of Other Dairy by Format: % Value 2013-2018
Table 43 Forecast Sales of Other Dairy by Category: Volume 2018-2023
Table 44 Forecast Sales of Other Dairy by Category: Value 2018-2023
Table 45 Forecast Sales of Other Dairy by Category: % Volume Growth 2018-2023
Table 46 Forecast Sales of Other Dairy by Category: % Value Growth 2018-2023

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Drinking yoghurt continues to outpace spoonable yoghurt due to its convenience

Snackification leads product innovation in yoghurt and sour milk products

Supermarkets and hypermarkets dominate distribution

COMPETITIVE LANDSCAPE

Inner Mongolia Yili strengthens its lead in yoghurt

Bright Dairy & Food declines because of the poor performance of Momchilovtsi

Xinjiang Tianrun Dairy maintains strong growth with innovative new launches

CATEGORY DATA

Table 47 Sales of Yoghurt and Sour Milk Products by Category: Volume 2013-2018
Table 48 Sales of Yoghurt and Sour Milk Products by Category: Value 2013-2018
Table 49 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2013-2018
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2013-2018
Table 51 Sales of Flavoured Yoghurt by Flavour: Rankings 2013-2018
Table 52 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2014-2018
Table 53 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2015-2018
Table 54 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2013-2018
Table 55 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2018-2023
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2018-2023
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2018-2023
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2018-2023

Packaged Food in China - Industry Overview

EXECUTIVE SUMMARY

Packaged food grows steadily mainly thanks to convenience, premiumisation and health trends

Packaged food posts steady current value growth in 2018, with the young generation being particularly targeted

Leading players consolidate their positions while other players shine in niches

Internet retailing and convenience stores continue to gain share

Packaged food is set for steady current value growth

FOODSERVICE

Sales to Foodservice

Rising health-awareness underpins sales of healthy food in foodservice

Foodservice-customised packaged food is on the rise

Foodservice is more concentrated than retail

Consumer Foodservice

The preference for light food is reshaping consumer foodservice
Changing consumer habits underpin the growth of consumer foodservice

CATEGORY DATA

Table 59 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 60 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 61 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 62 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 63 Sales of Packaged Food by Category: Volume 2013-2018
Table 64 Sales of Packaged Food by Category: Value 2013-2018
Table 65 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 66 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 67 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 68 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 69 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 70 Penetration of Private Label by Category: % Value 2013-2018
Table 71 Distribution of Packaged Food by Format: % Value 2013-2018
Table 72 Distribution of Packaged Food by Format and Category: % Value 2018
Table 73 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 74 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 75 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 76 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

Megatrends

Country Report

Dairy in China

New Report Guarantee

Executive Summary

New Report Guarantee

Prospects

Processed cheese continues to outperform unprocessed cheese in volume terms

Segmentation boosts other processed cheese due to healthy snackification

Foodservice sees high potential for cheese consumption

Competitive Landscape

Bongrain (Tianjin) Foods continues to lead

Fonterra Commercial Trading (Shanghai) strengthens its brand reputation

Milkland (Tianjin) Foods Technology gains share by extending to retail

Prospects

Other milk alternatives rebounds thanks to product innovation

Premium soy milk is on the rise owing to its nutritional value

Fresh milk continues to outpace shelf stable milk because of its fresh positioning

Competitive Landscape

Inner Mongolia Yili maintains its lead in drinking milk products

New Hope Dairy witnesses strong growth thanks to the popularity of fresh milk

Hebei Yangyuan Zhihui Beverage rebounds in 2018

Prospects

Drinking yoghurt continues to outpace spoonable yoghurt due to its convenience

Snackification leads product innovation in yoghurt and sour milk products

Supermarkets and hypermarkets dominate distribution

Competitive Landscape

Inner Mongolia Yili strengthens its lead in yoghurt

Bright Dairy & Food declines because of the poor performance of Momchilovtsi

Xinjiang Tianrun Dairy maintains strong growth with innovative new launches

Prospects

Coffee whiteners and condensed milk are hampered by specialist coffee shops

Cream sees a robust performance in foodservice

Supermarkets dominates distribution

Competitive Landscape

Nestlé (China) further consolidates its lead in other dairy

Multinational brands dominate the retail market

Domestic manufacturers develop more vigorously in the foodservice channel

Samples

Overview

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Table of Contents

Dairy in China - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Robust growth is witnessed in butter and spreads, due to its low base

Butter continues to outperform margarine and spreads

Unsalted butter is well-received due to its use in home baking

COMPETITIVE LANDSCAPE

Fonterra Commercial Trading (Shanghai) leads butter and spreads

Foreign brands dominate owing to their high acceptance

The popularity of small packaging

CATEGORY DATA

Cheese

HEADLINES

PROSPECTS

Processed cheese continues to outperform unprocessed cheese in volume terms

Segmentation boosts other processed cheese due to healthy snackification

Foodservice sees high potential for cheese consumption

COMPETITIVE LANDSCAPE

Bongrain (Tianjin) Foods continues to lead

Fonterra Commercial Trading (Shanghai) strengthens its brand reputation

Milkland (Tianjin) Foods Technology gains share by extending to retail

CATEGORY DATA

Drinking Milk Products

HEADLINES

PROSPECTS

Other milk alternatives rebounds thanks to product innovation

Premium soy milk is on the rise owing to its nutritional value

Fresh milk continues to outpace shelf stable milk because of its fresh positioning

COMPETITIVE LANDSCAPE

Inner Mongolia Yili maintains its lead in drinking milk products

New Hope Dairy witnesses strong growth thanks to the popularity of fresh milk

Hebei Yangyuan Zhihui Beverage rebounds in 2018

CATEGORY DATA

Other Dairy

HEADLINES