Today there is a high demand of de dairy products in China and in particular in yoghurt. And if the sales of yoghurt keep increasing, the milk business will fall behind and will not be able to catch up. Which means the yoghurt sales will take over the milk purchases for the very first time in history.
“Now, the growth rate of ordinary temperature milk is slow,” Song said. “But low-temperature and ordinary temperature yoghurts are proving very popular.”
‘’The only explanation we can provide is that in China the middle-class is increasing and they are willing to spend more money, particularly on high-end, nutritional dairy items,” said Song Liang, a senior independent industry analyst.
With this high demand of yoghurt products, there are dairy companies who see this as the chance of a lifetime. Of course, large dairy companies from foreign countries as Japan’s Meiji and France’s Yoplait have already seen this change in the Chinese consumer habits and have drawn up a strategic plan to sell their yoghurt good in China.
Besides big dairy brands responding to the yoghurt demand, small Chinese labels, New Hope Group and China Shengmu Organic Milk Ltd, are fighting to conquer the highly competitive market. Hoping that they can sell as much if not even more varieties of yoghurt to Chinese consumers.
In Europe, there is a wide range of different kinds of flavour. For example, coconut flavour or strawberry flavour with muesli incorporated. And now the Chinese consumers look for more sophisticated dairy products, as a result, a wider range of yoghurts are hitting the shelves. The yoghurts that are popular in China are the ones with a special flavour and with other textures. For example, a yoghurt variety with pieces of chocolate or a caramel flavour. See the figures of Yoghurt Market in China
These different varieties are more expensive but as motioned before the middle-class of China is willing to splurge more cash on dairy product and namely, yoghurt.
Sales of functional and fortified yoghurts in China are expected to increase 23 per cent to 43 billion yuan this year compared to 2016. And by 2022, sales are expected to surge 56 per cent to 75 billion yuan, according to Euromonitor International.
Inner Mongolia Mengniu Dairy (Group) Co Ltd is one of the country’s leading dairy producers has teamed with the multinational Danone. The French dairy company has helped Mongolia Mengniu Dairy with new yoghurt making technology.
Yoghurt : the most significant growth potential
“Yogurt has become one of the categories with the most significant growth potential as the high-end dairy product market is expanding,” Mengniu Dairy stated in its latest half-year report.
Something Mongolia Mengniu Dairy is planning to carry out are vending machines that sell yoghurt. These vending machines will be located in neighbourhoods, so Chinese consumers won’t have to walk to far from their home to buy yoghurt.
Yili Dairy Group and the Greek Academy of Agricultural Science founded Ambrosial yoghurt. The sales of this company increased with 106.7 per cent in 2016 compared to 2015. The reason for this sustainable amount is due to the fact that Ambrosial yoghurt is a sponsor of the Chinese popular tv-program Running Man. The viewers of Running Man are the Chinese youth who are also the ones who are responsible of the increase in yoghurt sales.
In total Yili Dairy Group spent over 2.5 billion yuan on tv-ads, print media and radio in 2016. And this only in China. It a very large amount of money solely spent on tv-ads, print media and radio but if you take in consideration that the sales of Ambrosial increase with 106.7 per cent mainly because of Running Man, then isn’t that far of a stretch and rather good investment.
In addition to that Ambrosial yoghurt has also launched new varieties of yoghurt and improved old recipes. For example, for a new variety is, the new peach oat flavour. And by launching more diverse flavours, Ambrosial is responding to the sophisticated taste of the Chinese consumers. (source)
Mongolia Mengniu Dairy, Yili Dairy Group and Bright Dairy are the three main producers based in China that lead the dairy sector with a sustainable 85 percent market share.
“About three to four years ago, through consumer research and sales data analysis, we discovered that Chinese consumers’ appetite for yogurt was shifting to nutritional and healthy products,” said Laurie Chen, dairy director of hypermarket merchandising at Walmart (China) Investment Co Ltd.
China’s Yoghurt Boom Attract International New Dairy Brands
“We promptly adjusted the structure of sales after we found that trend, and we deepened the cooperation with suppliers in new product development and releases,” he added. “Based on customer’s purchasing habits, we display the products on the shelves of our supermarkets.”