Why a sudden interest in yogurt products?
Today there is a high demand for de dairy products in China and in particular in yogurt. And if the sales of yogurt keep increasing, the milk business will fall behind and will not be able to catch up. This means the yogurt 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 yogurts 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 for yogurt 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 yogurt good in China.
Besides big dairy brands responding to the yogurt 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 many if not even more varieties of yogurt to Chinese consumers.
In Europe, there is a wide range of different kinds of flavors. For example, coconut flavor or strawberry flavor with muesli incorporated. And now the Chinese consumers look for more sophisticated dairy products, as a result, a wider range of yogurts are hitting the shelves. The yogurts that are popular in China are the ones with a special flavor and with other textures. For example, a yogurt variety with pieces of chocolate or a caramel flavor. See the figures for the 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 products and namely, yogurt.
Sales of functional and fortified yogurts in China are expected to increase 23 percent to 43 billion yuan this year compared to 2016. And by 2022, sales are expected to surge 56 percent 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 yogurt-making technology.
You can also read our Full Guide to Exporting Milk in China
Yogurt: 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 is vending machines that sell yogurt. These vending machines will be located in neighborhoods, so Chinese consumers won’t have to walk too far from their homes to buy yogurt.
Yili Dairy Group and the Greek Academy of Agricultural Science founded Ambrosial yogurt. The sales of this company increased by 106.7 percent in 2016 compared to 2015. The reason for this sustainable amount is due to the fact that Ambrosial yogurt 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 for the increase in yogurt sales.
In total Yili Dairy Group spent over 2.5 billion yuan on tv-ads, print media, and radio in 2016. And this is only in China. It is a very large amount of money solely spent on tv-ads, print media, and radio but if you take into consideration that the sales of Ambrosial increase by 106.7 percent mainly because of Running Man, then isn’t that far of a stretch and rather good investment.
In addition to that Ambrosial yogurt has also launched new varieties of yogurt and improved old recipes. For example, a new variety is the new peach oat flavor. And by launching more diverse flavors, 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.”
- source How to Promote Dairy Products in China
How to Launch your Yoghurt Brand in China?
1/ China is a Brand Market
2/ Enlarge Your Distribution
3/ Work on your Awareness
You can also read our Strategic Guide to Export Food Brands in China