Table of Contents
Executive Summary
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- The market
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- Figure 1: Retail market value of milk and dairy beverages (including lactobacillus drinks), China, 2015-25
- Companies and brands
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- Figure 2: Leading companies’ value share of milk and flavoured milk segment, China, 2019-20
- Figure 3: Leading companies’ value share of the lactobacillus drinks segment, China, 2019-20
- The consumer
- Opportunities and challenges coexist for chilled plain milk
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- Figure 4: Consumption frequency, January 2021
- Occasion marketing can help unlock new growth potential
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- Figure 5: Consumption occasions, January 2021
- Nutrition and milk source quality are unchanged key premium points
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- Figure 6: Premium product features, January 2021
- Only one in four know if they are lactose intolerant or not
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- Figure 7: Perception of lactose, January 2021
- Consumers buying into TCM have higher expectations of healthy milk
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- Figure 8: Percentage points difference of functions, by preference of different ingredients type, January 2021
- Still a long way to go before the majority perceive chilled milk as a superior choice
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- Figure 9: Attitudes towards nutritional value of different processing milk, January 2021
- What we think
Issues and Insights
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- Consumers knowledge of chilled milk is at early stage
- The facts
- The implications
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- Figure 10: Zhi Chun five-hour chilled milk from Wei Gang, China, 2021
- Tap into the bigger beverage market by leveraging dairy’s health halo
- The facts
- The implications
- Bedtime, dessert time
- The facts
- The implications
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- Figure 11: Pasteurised malt flavour bedtime milk from Dairy Home, Thailand, 2020
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- Figure 12: Examples from ice cream brands to target hometainment occasion, 2020
- Strengthen the connection of gut health and mental health
- The facts
- The implications
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- Figure 13: Glow Bar’s Naked unflavoured moon shake adaptogenic protein powder, UK, 2020
The Market – What You Need to Know
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- The milk market is overall stabilised
- Consumer demand and policies drive future growth
- Chilled plain milk enjoys the highest growth rate
Market Size and Forecast
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- Growth of the milk market is more contributed by volume
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- Figure 14: Retail market of milk and dairy beverages (include lactobacillus drinks), China, 2016-20
- Figure 15: Retail market of milk and dairy beverages (exclude lactobacillus drinks), China, 2016-20
- Still strong growth potential compared to other countries
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- Figure 16: Milk volume consumption per capita, China, Japan, US and UK, 2015-19
- Stable growth for the following five years
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- Figure 17: Retail market value of milk and dairy beverages (including lactobacillus drinks), China, 2015-25
Market Factors
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- Consumption trade up to yogurt poses a threat
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- Figure 18: Changes to consumption after COVID-19 – % bought more, 26 April-2 May
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- Figure 19: Changes in food and drink spending after COVID-19, % spent more, 27 May-3 June
- Plant-based drinks lurk as well
- Private label milk products from fresh food ecommerce
- CPI of dairy stays stable compared to that of food category
- Policy support
Market Segmentation
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- Chilled milk is the fastest-growing segment, while ambient is resilient
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- Figure 20: Retail market value of chilled plain milk, China, 2015-25
- Figure 21: Retail market value of ambient plain milk, China, 2015-25
- Lactobacillus drinks still growing but losing momentum
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- Figure 22: Retail market value of lactobacillus drinks, China, 2015-25
- Flavoured milk keeps decreasing, facing threat from bigger beverage market
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- Figure 23: Retail market value of flavoured liquid milk, China, 2015-25
Key Players – What You Need to Know
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- Whole industry keeps centralising
- Expanding from multiple directions
- Active global and domestic innovations
Market Share
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- CR2 keeps increasing, whole industry more centralised
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- Figure 24: Leading companies’ value share of milk and flavoured milk segment, China, 2019-20
- Chilled lactobacillus brands are losing share temporarily
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- Figure 25: Leading companies’ value share of the lactobacillus drinks segment, China, 2019-20
- Four competitive cohorts in chilled milk market
Competitive Strategies
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- Mergers and acquisitions
- Snatching upstream milk source is level up
- Mengniu cooperates with Coca-Cola to win bigger in chilled milk
- IPO fever
- Product strategy
- A2 liquid milk is emerging
- Dairy giants enter the market of lactobacillus sparkling water
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- Figure 26: Example of lactobacillus sparkling water from dairy giants, 2021, China
- Chilled milk for seniors
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- Figure 27: Functional chilled milk from Bright, China, 2020
- Channel strategy
- Chilled milk is betting on door-to-door service
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- Figure 28: Bright cooperated with Tmall to promote Sui Xin Ding service, China, 2020
- Figure 29: Official fresh grocery store of New Hope, 2020
- Build quality perception through foodservice
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- Figure 30: Example of marketing dairy and dairy-alternative products in premium coffee houses, Shanghai, 2021
Who’s Innovating?
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- China Innovation trends
- Ingredients related claims growing faster
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- Figure 31: Top 10 fastest growing claims in milk market, China, 2016 (April)-2021 (March)
- Flavour: influenced by tea house but Chinese style is rising
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- Figure 32: Top 10 Fastest growing flavours in milk market, China, 2016 (April)-2021(March)
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- Figure 33: Yi Li Gu Li Duo with TCM ingredients, China, 2020
- Core nutrition: Protein grows the fastest while sugar down
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- Figure 34: Average core nutrition of milk, China, 2016-20
- Global Innovation Trends
- Animal and plant mixed milk drinks
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- Figure 35: Live real farms lactose-free dairy + plant-based milk blend, USA, 2019
- Broader functions beyond bone health
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- Figure 36: Examples of milk with function of mental health
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- Figure 37: Milk with collagen, Japan, 2019
- Packaging: Eye-catching signs to communicate function
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- Figure 38: Examples of milk with function of mental health
The Consumer – What You Need to Know
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- Chilled milk faces bright future but threats at same time
- Emerging occasions help generate future growth
- Potential space to shape consumers’ perception
Consumption Frequency
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- Overall popularity ranking remains unchanged, but chilled plain milk sees small increase
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- Figure 39: Consumption frequency, January 2021
- Chilled milk still needs to do more to highlight its advantage
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- Figure 40: Consumption frequency, 2019-21
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- Figure 41: Percentage change in medium users of ambient yogurt and chilled plain milk between 2019 and 2021, by age and gender
- Dairy products have more growth potential in South and Mid-West
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- Figure 42: Percentage of heavy users, by region, January 2021
Consumption Occasions
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- Plain milk’s strong occasion association is a double-edged sword
- Other dairy beverages are similarly seen as flavour drinks for leisure time
- Workout is still a niche occasion
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- Figure 43: Consumption occasions, January 2021
- Opportunities for chilled milk to target different age groups
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- Figure 44: Consumption occasions of chilled plain milk, by age groups, January 2021
Opportunity for Premiumisation
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- Nutrition and milk source quality communication carry more weight
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- Figure 45: Premium product features, January 2021
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- Figure 46: Preference of premiumisation, January 2017 and 2021
- Education about typical cows needs diving deeper
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- Figure 47: Attitudes towards different breeds of cows, by selection of premiumisation product feature, January 2021
Perception of Lactose
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- Only one quarter of respondents know if they have a lactose issue or not
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- Figure 48: Perception of lactose, January 2021
- Even lactose-aware consumers have limited product knowledge
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- Figure 49: Perception of lactose, by consumer group, January 2021
- Plant-based dairy alternatives are getting ahead in competition
Ideal Wellbeing Milk
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- Beauty for female, physical health for male
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- Figure 50: Ideal functions of healthy milk, January 2021
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- Figure 51: Ideal healthy milk, by gender, China, February, 2021
- Build association with anti-ageing function and milk
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- Figure 52: Signs of ageing, by gender, March 2021
- TCM ingredients help to target consumers with higher health expectations
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- Figure 53: Percentage points difference of functions, by preference of different ingredients type, January 2021
Attitudes towards Milk
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- Still a lot of opportunities to shape consumers’ perception
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- Figure 54: Attitudes towards nutritional value of different processing milk, January 2021
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- Figure 55: Attitudes towards pasteurized milk and UHT milk, by consumer group, January 2021
- Figure 56: Attitudes towards nutritional value of different breeds, January 2021
- Being local doesn’t matter unless people trust you
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- Figure 57: Attitudes towards factors influencing freshness of chilled milk, January 2021
- Different consumer segments to target
- TCM vs Western; both have fans
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- Figure 58: Attitudes towards different type of ingredients, January 2021
- Figure 59: Attitudes towards different type of ingredients, by gender and age, January 2021
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- Figure 60: Perception of milk – CHAID – Tree output, March 2021
- Health vs taste-driven for lactobacillus drinks
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- Figure 61: Reason to drink lactobacillus beverages, January 2021
Appendix – Market Size and Forecast
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- Figure 62: Total market value of milk and dairy beverages (including lactobacillus drinks), China, 2015-25
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Appendix – Market Segmentation
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- Figure 63: Retail market value of chilled plain milk, China, 2015-25
- Figure 64: Retail market value of ambient plain milk, China, 2015-25
- Figure 65: Retail market value of lactobacillus drinks, China, 2015-25
- Figure 66: Retail market value of flavoured liquid milk, China, 2015-25
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- Figure 67: Retail market value of white powder milk, China, 2015-25
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Appendix – Methodology and Abbreviations
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- Methodology
- CHAID analysis methodology
- Abbreviations
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