Food & Beverage Innovation Forum 2021 (FBIF2021), themed as "Explore New Growth," was held at Hangzhou International Expo Center from June 30 to July 2. Over 170+ senior executives from Nestle, Yili Group among others shared their insights on the new trend of dairy products in post-pandemic China in the forum.
With the Covid-19 pandemic sweeping the world, the health awareness of people hit a new high, especially in China, which means consumers focus more on health, nutrition and immunity, and tend to seek healthier food and lifestyle. According to the Nielsen investigations shared by Thomas, a senior director from NielsenIQ BASES (North Asia), the top three most concerned selling points of products in post-pandemic China are nutritional supplements, natural raw materials and immunity enhancement function. Dairy products have always been perceived as a nutritional powerhouse in China, for Chinese consumers believe dairy products can enhance immunity and help digestion. Are dairy products healthy? Yes. But now, consumers want healthier.
1. Less or more? All for health
To make a healthier product, dairy makers forge ahead and step on the two different paths. One path leads to a product with less burden, and the other leads to adding more healthy ingredients.
According to the data from Nielsen, in 2020, sales of additive-free fresh milk and non-fat pure milk grew by 24.4% and 86.6% respectively in the Chinese market. On the contrary, sales of milk with sugar added suffered a 4.4% decline. Consumers are making their voices by embracing products with less burden and turning away from products with excessive additives, sugar, fat, etc. The other path leads to adding more ingredients into the product, but healthy ingredients only. Statistics indicate that the sales of yogurt containing grain and high-calcium milk powder increased 8.5% and 3.7% respectively in the Chinese market last year, far outstripping the average growth of yogurt and milk powder.
In fact, these two paths are never contradictory. Both “addition” and “subtraction” are indispensable for the birth of a healthier dairy product, which can be exemplified by many products with more healthy ingredients tending to be less burdened today. No matter which path was chosen, both lead to a healthier product.
2. Dairy products with functional benefits are preferred
As Chinese become more health-conscious in the post-pandemic era, along with the steadily growing per capita GDP, the potential consumption capacity of health product is escalating. Statistics showcased that more than a third of consumers are seeking functional benefits in their food. It is estimated that the market scale of functional food will exceed 600 billion yuan in 2022. Benefiting from the functionality of milk itself, dairy brands across Asia are also developing a wide range of other functions, such as sleep aid and liver repair. Ava Huo, the strategic marketing manager from IFF, shared that Chinese consumers are keen to seek more functional benefits, including bone-strengthening, sleep aid, stomach care, and stress-relieving.
Beyond the support from consumers, favorable policies also accelerate the development of dairy products with health claims. One the one hand, since China initiated the 14th five-year-plan, the implementation of "Healthy China 2030 plan" has been promoted to the height of national strategy, which aims to popularize dietary nutrition education and help Chinese to form scientific dietary habits. On the other hand, the competent authority has approved an increasingly amount of new food materials, and lots of them can be used to improve nutrition and add function in food. For example, in this January, China National Health Commission approved the use of sodium hyaluronate in dairy, enabling dairy products to have more functional benefits. Check ChemLinked News for more details.
3. "Healthier" dairy categories thriving
Driven by the innovation of the dairy makers and choices of consumers, dairy categories which are commonly recognized as “healthier” found more opportunities to thrive in the market.
Low-temperature fresh milk
Despite with only 17% of Chinese liquid milk market, low-temperature fresh milk is perceived as a promising category with great potential. Chinese consumers tend to believe low-temperature fresh milk has better nutrition and a function of boosting immunity when compare with long-life milk. According to the data from Nielsen, the market hit a 21.5% year-on-year growth in 2020. Wayne Wang, general manager & founder of Classykiss, pointed out that the number of cold storages in China has sustained the ongoing double-digit growth, which has contributed and will keep contributing a lot to the growth of low-temperature fresh milk market.
Probiotic yogurt
As revealed by the data from Ipsos and Zhongtai Securities's research institute, the probiotic market is anticipated to approach 100 billion yuan valuations, with an average annual growth rate of 14%. More to the point, fermented dairy products hold a whopping 76% share of the whole probiotic market. Notably, there’s a good reason for the thriving of the probiotic yogurt market. According to a survey on consumer’s health problems and habits in 2020, up to 72% consumers found themselves bothered by gastro issues. Another survey showed that more than half of the interviewees believe that eating yogurt and products containing probiotics help them to improve gastro health. These results reveal a mighty consumer base for probiotic yogurt to win a bigger market.
High-protein milk
Annie Liu, China country manager from Innova Market Insights, shared the data that almost 40% of Chinese consumers increased their protein intake over the past 12 months. 81% believe that they need food with great nutrition such as protein and fiber after the pandemic. Besides, 21% put the high-protein claim at the top among other factors influencing their purchase intentions of dairy products. Meanwhile, many dairy makers captured and embraced this market trend. In China, among all kinds of health claims for dairy products, high-protein is always the top claim.
We provide full-scale global food market entry services (including product registration, ingredient review, regulatory consultation, customized training, market research, branding strategy). Please contact us to discuss how we can help you by 
