How healthy is the average Chinese
Kantar Worldpanel Research recently showed that the average consumption of dairy products in China's urban households in 2015 was 59.7 liters. This corresponds to less than a fifth of the average consumption of an EU household. Furthermore, China still has the lowest per capita consumption of milk in the world. According to HSBC analyst Christopher Leung, China's current consumption of long-life milk is around 7.4kg per capita per year, which is 45 percent lower than in Japan or South Korea. Low milk consumption is also due, among other things, to the very widespread lactose intolerance in China. However, this does not apply to yoghurt, the lactose content of which can be on a non-critical level due to processing. As a result, milk and dairy products are gradually becoming part of the daily diet of Chinese consumers, thanks in part to the Chinese government's promotion of milk as an important source of calcium and protein. The majority of Chinese consumers prefer imported products. The EU SME Center report estimates that China will be the world's largest importer of food, especially dairy products, by 2018. Therefore, China could be the world's largest dairy market by 2018. This thesis is supported by the growth in demand. Our Research And Market’s team calculated an average annual growth rate of 9.76 percent for 2014-2019. But what is the secret of this sudden growth? On the one hand, the purchasing power of the Chinese middle class is growing, and on the other hand, health awareness is growing, as large parts of the population consider dairy products, especially Westerners, to be healthy.
Health concerns are driving demand for dairy products, especially yogurt
One of the leading Chinese dairy producers, Mengniu (蒙牛), dairy product placement in the popular online series “Pretty Li Hui Zhen” (“漂亮 的 里 李慧珍”)
The younger generation of Chinese consumers are more affluent than their parents of the same age. In addition, this generation is strongly influenced by Western culture. According to a study by Bank HSBC from 2015 with around 2,000 participants between the ages of 18 and 34 and an annual income of more than 120,000 yuan (about 16,000 euros), an increasing proportion of the urban population within this group is adding milk to their daily nutrition plan because it is used as a is felt to be healthy. Yogurt and other fermented milk products in particular are popular in China. Between 2012 and 2015, yoghurt consumption even increased by two thirds, as a study by the vitamin producer DSM shows. 80 percent of the 6,220 study participants surveyed stated that they mainly buy probiotic yoghurts as these should have positive effects on the immune system. A total of 76 percent of those surveyed stated that they buy yogurt to influence intestinal health.
Western brands are preferred by young, wealthy Chinese
Various agricultural companies, and in particular some westerners, have a good reputation in the Chinese market and have therefore contributed to the growth of this market. According to HSBC, 94% of the young urban population said that they perceive foreign products as significantly better, slightly better or equivalent compared to domestic products. For this reason, too, the French market leader for dairy products, Danone, has been exporting to China since the 1980s. There the company uses the brand name "Da Non", which translates as "developing your own skills" and is therefore a clear sign that the company advertises the health-promoting effects of its products.
Yogurt consumption represents a major change in eating habits
Danone's strategy achieved its goal as China is now the fourth largest sales market (7% of annual sales) for the company. Therefore, Danone and other foreign groups such as Meiji (in China since 2013) and Morinaga (2015) have clearly contributed to the change in eating habits in China. Traditionally, most yogurts are liquid and drinkable with a straw, but Danone and its competitors have been able to market creamier yogurts that consumers can eat with the plastic spoon provided.
Beyond yogurt and similar fermented milk products, which were the most dynamic product categories in terms of market volume and market value, eating habits continue to change with the increasing consumption of dairy products such as cheese and other drinkable products.
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