Growth Opportunities For Dairy & Soy In China

Thursday, October 19th, 2017 | 981 Views


Growth Opportunities For Dairy & Soy In China dairy market is forecast to see strong continued growth through to 2021 paired with a high market value of US$50 billion making it a key opportunity for dairy producers, according to market research agency GlobalData.

 

Overall, the country’s dairy market grew 10.5 percent in the last five years, and this will increase from 2016 to 2021 while by comparison, on-trade growth will decrease slightly over the same period. This is suggestive of an increased pool of middle class consumption, but the pinch of eating out will still motivate people to stay in rather than go out for dairy and soy products.

It is predicted that off-trade dairy consumption alone in 2016 will surpass total dairy and soy consumption in 2016.

Contributing to this substantive growth is China’s burgeoning middle class. These segments of the population are increasingly urban and are developing western-leaning tastes. For many Chinese consumers dairy products, especially milk, are seen as healthy potential sources of nutrients.

Dairy consumption in the country is centred on younger consumers. These consumers, having grown up in the age of globalisation and Western influence, have much more positive perceptions of dairy products, especially in regards to benefits to health.

Tempering this growth somewhat is Chinese sensitivity/intolerance to dairy. A significant portion of the Chinese population is lactose-intolerant or lactase-deficient, and experience adverse effects from dairy products. This could cause a preference for dairy-free products at some point but for now, it is expected that consumers will increase their milk consumption as the middle class expands.

The Chinese dairy market has seen increasing premiumisation across all sector categories. The country’s rapid economic growth has pulled hundreds of millions of people out of poverty in recent decades. This rapid economic development combined with an increasingly urban population bodes well for consumer goods producers in the country but especially so for those producing goods associated with the West which carry premium connotations.

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