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Yogurt ferments the dairy segment
Last Updated: 2018-05-28 17:18 | China Daily
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Chinese consumers have taken a fancy to novel dairy products such as creamy, sweet, flavored yogurt and yogurt-based drinks.

Category sales have surged about 20 percent annually since 2014 to reach 122 billion yuan ($19.1 billion) in 2017, confirming the trend of health-related products tasting success in the China market.

And global consultancy firms such as Mintel are conducting consumer surveys and finding that about 50 percent of interviewees associate yogurt with key words and phrases such as "nutritious", "helps to boost immunity", "easy to digest" and "suitable for children and the old".

That's not all. Although a dairy item, yogurt is seen as better than alternatives such as "high protein" milk, butter that has "high calories, fat and cholesterol", and cheese that has both healthy and unhealthy elements linked to it, a Mintel report said.

"The rapid growth of yogurt shows it has become a leading product in the domestic dairy market, or even in the whole food and beverage market," said Chen Yangzhi, an analyst with Mintel.

But compared to other countries, yogurt consumption in China is relatively low at 3.43 kilograms per person per year (Japan leads with 9.66 kg and the figure for the United States is 4.92 kg).

But the recent uptrend in yogurt sales in China has positive implications for the larger dairy market, industry insiders said.

Overall dairy sales in China are expected to exceed 480 billion yuan by 2022 on a compound annual growth rate or CAGR of 6.6 percent, the Mintel report said.

"The price of raw milk is increasing while more consumers are willing to pay for high-end products, which will lead to increase in overall dairy sales," Chen said. "Besides, there are more circumstances when people buy dairy products."

Traditionally, Chinese customers tend to buy and take along dairy products when visiting friends during the Spring Festival holiday.

Now, dairy companies are planning to create more occasions to market and sell yogurt, like encouraging consumers to go in for do-it-yourself or DIY yogurt, according to a report jointly published by market research firm Nielsen and Chinese online search titan Baidu Inc.

Dairy products accounted for 21 percent of the whole fast-moving consumer goods or FMCG sales last year, and two of the top three FMCG companies in terms of sales revenue in China were dairy producers, the Nielsen-Baidu report stated.

Yang Xueyi, a public relations practitioner in Beijing, said she tends to choose yogurt over milk or other beverages due to its nutritional value, tasty flavor and mouthfeel. "I began to drink yogurt when I was young. I think it has rich nutrition, such as probiotics. Besides, it tastes better than milk."

Yang generally spends about 100 yuan on yogurt per month. Her preferred variety is a slightly fluid-like yogurt, which she likes to sip using a ministraw, at least once a week.

"Some of my friends like diverse flavors such as charcoal-fired milk, but I prefer the simplest one-only milk, probiotics and sugar, with no other additives."

Mintel's report acknowledges consumers such as Yang who increasingly favor dairy products that have nutrition packed in, in the form of calcium and nuts, but are free of additives.

In this category, packaging and marketing gimmicks (like limited-edition versions) are less important, the Mintel report said.

It's not as if the yogurt segment has no challenges in China. Some sections of the scientific community have alleged that some yogurt varieties have excess sugar or fat, or use harmful additives.

Ma Guansheng, deputy director-general of the China Nutrition Society, said there are "fake yogurt" products in the market, which are generally mixed with water, sugar, lactic acid and citric acid.

"With such low amount of milk and no probiotic elements, it cannot be regarded as yogurt, but a sweet beverage. You'd better tell them from real yogurt, and remember drinks that taste good are not necessarily nutritious," he said.

Zhang Lei, deputy marketing general manager of Chinese dairy producer New Hope Group, said at a forum last month that the company does not add any additives to its yogurt. "Customers' health and drinking experience are the most important factors."

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