For most segments value and volume sales for milk and dairy beverages continues to grow steadily in China; however, the flavoured milk segment faces decline as consumers seek to reduce their sugar intake. Increasing new launches targeted towards adult palettes will likely be a good strategy to tackle the decline in flavoured milk sales. Ambient products will continue to see expansion in lower tier cities as the government encourages increased dairy consumption in line with the Chinese Dietary Guidelines and consumers gain a better understanding of the health benefits. Growth in market value of ambient products will also be driven by current consumers trading up into premium products with additional functionality or fortified claims.

Chilled plain milk and lactobacillus drinks will continue high velocity growth as cold-chain logistics become more mature and consumers demand higher quality products. Current developments lie mostly in the Eastern region, especially within economically developed cities and provinces. As most consumers still choose dairy products for nutritional purposes, more of them will turn to chilled products as they become more readily available.

Consumption of liquid milk products stalled in the beginning of 2019 due to supply-side disruptions caused by regulations imposed to limit the spread of COVID-19. Chilled products, with their short shelf-lives, were more heavily impacted. However, the market has already started showing signs of a healthy recovery since the resumption of transport in March as consumers resume their habits and increase consumption of food and drinks they associate with boosting immunity, including dairy beverages.

• The impact of COVID-19 on the milk and dairy beverages market

• Changes in consumer behaviour post-COVID-19

• The value of market segments and brand performance in 2019

• Launch activity and product innovation

• Consumer behaviour and perception towards milk and dairy beverages

• Market growth opportunities

This Report covers plain liquid milk, powdered milk, flavoured milk, and lactobacillus beverages. Flavoured milk products discussed in this Report should have no less than 80% of milk content, and no less than 2.3g of protein content per 100g/ml.

Lactobacillus beverages are defined as dairy-based drinks which are fermented using lactic acid bacteria, with less than 2.3g protein content per 100ml. These drinks usually contain sugar or sweeteners, acids, juice, and plant extracts.

The following are excluded from market sizing but discussed in the context of competition and consumer trends where relevant:

Condensed, evaporated, sour and cultured milk; soymilk and other plant based milk; milk specifically for babies (infant milk formula); drinking yogurts; acidic milk drinks, eg Nutri-Express (营养快线), and Suan Suan Ru (酸酸乳); lactobacillus water, which is fermented using lactic acid bacteria.

For the purpose of this Report, Mintel has defined those consuming dairy beverages “once a day or more” as heavy users, “2-3 times a week” as moderate users, “2-3 times a month” or “once a month or less” as light users, and those who have not consumed it in the last 3 months as non-users.

Mintel divides consumers into three groups based on their monthly household income (MHI) and monthly personal income (MPI). The tables below show the definitions of each consumer group.