Table of Contents
Overview
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- What you need to know
- Products covered in this Report
- Definition
- Classification by income
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- Figure 1: Mintel’s definition of different income groups, China
- Classification by usage frequency
Executive Summary
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- The market
- Retail market driven by geographic expansion and premiumisation
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- Figure 2: Retail market value and volume of milk and flavoured milk, by segment, China, 2011-16
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- Figure 3: Best- and worst-case forecast of retail milk market value, China, 2011-21
- Pasteurised milk growing rapidly, while flavoured milk declining
- Improved cold chain and rising lower tier market driving category growth
- Key players
- Strong marketing support on premium UHT milk helping consolidate leading positions
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- Figure 4: Leading companies value of milk and flavoured milk market, China, 2015-16
- Further amplifying the benefits of high protein milk
- Connecting with teens and seniors
- Indulgent flavours and functional benefits create more consumption occasions
- The consumer
- Necessary to engage middle aged consumers and young females
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- Figure 5: Frequency of milk consumption, China, January 2017
- Yili and Mengniu holding clear leading edge in terms of penetration
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- Figure 6: Brand penetration, China, January 2017
- Online channels and convenience stores becoming more important
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- Figure 7: Purchase channels, China, January 2017
- Consumers looking for organic and nutritional options when trading up
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- Figure 8: Opportunities for premiumisation, China, January 2017
- Smart combination of flavours and ingredients enhancing texture
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- Figure 9: Ideal milk – Flavour, China, January 2017
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- Figure 10: Ideal milk – Nutrition, China, January 2017
- What we think
Issues and Insights
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- Listen to the locals’ heart when expanding battlefield
- The facts
- The implications
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- Figure 11: CAGR of some Bright Dairy’s branches between 2013-16, by region
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- Figure 12: Shuangfeng has been emphasising its role as the dairy provider of the G20 Summit on the official website, China, (captured) 2017
- Communicate “freshness” by presenting details
- The facts
- The implications
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- Figure 13: TVC of You Best, China, 2016
- Figure 14: Products use short life time to indicate freshness, China, 2016
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- Figure 15: Home page of “Made by Cow”, Australia, 2016
- Figure 16: Products claiming to use packaging that prevents light exposure, Japan, 2015
- Gain young females’ attention by offering low-fat flavoured options
- The facts
- The implications
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- Figure 17: Arla B.O.B Skimmed Milk, UK, 2016
- Figure 18: Milk or other dairy-based beverages that contain slimming ingredients, South Korea, 2015-16
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- Figure 19: Flavoured milk products with multiple flavours blended together, Spain and Poland, 2017
- Figure 20: Flavoured milk with cute illustration, Hong Kong, 2016
The Market – What You Need to Know
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- Retail market driven by geographic expansion and premiumisation
- Pasteurised milk growing rapidly, while flavoured milk declining
- The rising lower tier market to drive category growth
Market Size and Forecast
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- Accelerating stagnant volume growth by stimulating consumption
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- Figure 21: Retail market value and volume of milk and flavoured milk, by segment, China, 2011-16
- Imported milk taking up more than one tenth of the market
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- Figure 22: Volume of milk and flavoured milk imported from the leading countries, China, 2015-16
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- Figure 23: Brand communication on their official stores on Jingdong, China, 2017
- Retail market value seeing faster growth in the future due to price rise
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- Figure 24: Price change of cardboard paper, China, April 2016-March 2017
- Figure 25: Best- and worst-case forecast of retail milk market value, China, 2011-21
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- Figure 26: Best- and worst-case forecast of retail milk market volume, China, 2011-21
Market Segmentation
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- Continuous growth of pasteurised white milk
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- Figure 27: Value share of liquid milk market, China and USA, 2015-16
- Figure 28: New launches of white milk, shelf stable vs chilled, China, 2015-16
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- Figure 29: Best- and worst-case forecast of retail white liquid milk market value, China, 2011-21
- More excitement in flavoured milk segment to tackle white space
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- Figure 30: Proportion of white milk and flavoured milk among new product launches, China, 2014-16
- Figure 31: New launches of flavoured milk without children-related cues on packaging, China, 2016
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- Figure 32: Flavoured milk targeting children with L/N/R sugar claim and using real milk, China, Norway and UK, 2017
- Figure 33: Best- and worst-case forecast of retail flavoured milk market value, China, 2011-21
- Decline of powdered milk signifying abundant milk product choices
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- Figure 34: Products in powder form cater for women with convenient packaging, South Korea and Japan, 2015-17
- Figure 35: Best- and worst-case forecast of retail powdered milk market value, China, 2011-21
Market Factors
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- National Dietary Guideline promoting daily consumption of milk
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- Figure 36: Anchor’s Live Up milk including recommendation from National Dietary Guideline on packaging, China, 2017
- Winning the lower tier market to bring up the market volume
- Improved cold chain encouraging the popularisation of pasteurised milk
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- Figure 37: Imported pasteurised white milk, China, 2017
- Looking for the right way to grab teens’ attention on milk’s value
- Low-fat and organic products gaining more attention
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- Figure 38: Proportion of new launches with selected claims, China, 2014-16
- Figure 39: Products with organic or L/N/R fat claim, China, 2016-17
Key Players – What You Need to Know
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- Strong marketing support on premium UHT milk helping consolidate leading positions
- Further amplifying the benefits of high protein milk
- Indulgent flavours and functional benefits triggering more occasions
Market Share
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- Premium UHT milk helping consolidate leading positions
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- Figure 40: Leading companies’ value share of milk and flavoured milk market, China, 2015-16
- “Picky” parents turning away from Want Want’s flavoured milk
- Yili and Mengniu gaining share with ever-growing selling expenses
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- Figure 41: The selling expenses ratio and net profit margin of the top three dairy companies in China, 2012-16
- Rise of vertically integrated dairy companies
Competitive Strategies
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- Interactive campaigns to engage consumers
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- Figure 42: Yili’s LBS+AR interactive activity on Baidu Map, China, 2017
- Playing up the “high protein” concept
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- Figure 43: Average content of protein of milk or flavoured milk launches, China, 2010-17
- Figure 44: Yili’s organic version of Satine, China, 2016-17
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- Figure 45: Satine and Mengniu’s TVCs, China, 2016-17
- Figure 46: Proportion of new launches containing milk as an ingredient within the sports and energy drinks category, by country, 2016
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- Figure 47: M-Up’s TVC, China, 2016
- Figure 48: Sanyuan Jizhi’s poster for NBA games, China, 2016
- Engaging seniors through online platforms
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- Figure 49: Yiyang 50+ Channel, China, 2017
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- Figure 50: Yiyang milk powder, China, 2017
Who’s Innovating?
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- Functional claims staying at the top, while natural claims fading
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- Figure 51: Top claims of new launches within the milk category, China, 2013-16
- Figure 52: Select claims of new launches within the milk category, China, 2013-16
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- Figure 53: Deluxe’s limited edition featuring QR code which directs to social media page, China, 2016
- Non-fruit flavours to target adults
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- Figure 54: Top flavour component sub-categories among new launches of flavoured milk, China, 2014-16
- Figure 55: Premium chocolate-flavoured milk or milk beverage specifying the provenance of cacao, South Korea, 2016-17
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- Figure 56: Proportion of chocolate and coffee flavoured milk new launches, China, South Korea and Japan, 2013-16
- Expanded fruit flavour spectrum
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- Figure 57: Top fruit flavours among new launches of flavoured milk, China, 2014-16
- Figure 58: Products with less-seen fruit flavours, China, 2015-16
- Future opportunities: dessert flavour to add indulgence
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- Figure 59: New launches of flavoured milk with dessert flavour, by country, 2014-16
- Figure 60: Flavoured milk products with dessert flavours, South Korea, Russia and USA, 2016-17
- Creating new occasions to fit urban life
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- Figure 61: New Hope’s “black and white” milk, China, 2016
- Figure 62: Milk claiming to optimise mood, Brazil and South Korea, 2016
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- Figure 63: Milk featuring “before drinking” occasion, China, 2017
- Figure 64: Product with memory-developing and stress-reducing claim, India, 2017
- Enhancing the texture of flavoured milk
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- Figure 65: Products with special texture, Japan, 2016
The Consumer – What You Need to Know
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- Necessary to engage middle aged consumers and young females
- Yili and Mengniu seeing clear advantage in terms of penetration
- Online channels and convenience stores becoming more important
- Consumers looking for organic and nutritional options when trading up
- Flavours and nutrients as essential elements of ideal milk
Change of Dairy Consumption
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- More yogurt drinkers not necessarily posing threat to milk
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- Figure 66: Change of dairy consumption, China, January 2017
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- Figure 67: Change of dairy consumption, by segment fans, China, January 2017
- Low dairy penetration amongst females aged 40-49
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- Figure 68: Change of dairy consumption, by gender and age, January 2017
- More kids in family encouraging higher milk consumption
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- Figure 69: Change of dairy consumption, by family structure, China, January 2017
- Different levels of acceptance towards pasteurised milk
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- Figure 70: Change of dairy consumption, by city, January 2017
Frequency of Milk Consumption
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- Increasing frequent drinkers of flavoured milk in tier one to three cities
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- Figure 71: Frequency of milk consumption, China, January 2017
- Pasteurised milk attracting a more solid high income consumer group
- Scope for milk product to further engage with young women
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- Figure 72: Frequency of milk consumption, by gender and age, January 2017
- Figure 73: Milk products with beauty benefits, Hong Kong and South Korea, 2016
Brand Penetration
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- Deluxe still winning in the UHT battlefield
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- Figure 74: Brand penetration, China, January 2017
- Mengniu to bring more excitement to young women
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- Figure 75: Brand penetration, by gender and age, China, January, 2017
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- Figure 76: Introduction of Nuan Hong Hong, China, 2016
- More Bright’s users among high earners
- Regional players seeing scope for geographic expansion
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- Figure 77: Brand penetration, by city, China, January, 2017
Purchase Channels
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- Online channels gaining momentum amongst high earners
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- Figure 78: Purchase channels, China, January 2017
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- Figure 79: Change of tier one consumers’ milk purchasing channels, China, 2013 & 2017
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- Figure 80: Hi Milk, China, 2016
- Different types of milk having advantage in certain channels
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- Figure 81: Avocado milk shake from a juice bar, China, 2016
- Convenience stores becoming important among young consumers
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- Figure 82: Purchase channels, by age and gender, China, January 2017
Opportunities for Premiumisation
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- Premium milk – Organic and nutritional
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- Figure 83: Opportunities for premiumisation, China, January 2017
- Rising importance of unique flavours
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- Figure 84: Flavoured milk for gifting, China, 2017
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- Figure 85: Change of select features as premium points among consumers from tier one cities, China, 2014 & 2017
- Young females holding different opinions from the mainstream
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- Figure 86: Opportunities for premiumisation, by gender and age, China, January 2017
Ideal Milk
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- The majority favouring ambient milk
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- Figure 87: Ideal milk –Temperature when serving, China, January 2017
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- Figure 88: Tianrun’s new product that claims to be microwavable, China, 2017
- Figure 89: Ideal milk –Temperature when serving, by gender and age, China, January 2017
- Fruit flavours dominating, while plant protein ingredients growing
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- Figure 90: Ideal milk – Flavour, China, January 2017
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- Figure 91: Flavoured milk claiming to satisfy hunger, China, 2016-17
- Figure 92: Compound protein drink with misleading information on the package, China, 2017
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- Figure 93: Ideal milk – Flavour, by gender and age, China, January 2017
- Figure 94: Dark/bitter chocolate flavoured milk products, China, Thailand and Japan, 2016
- More education needed to explain milk’s nutrition value
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- Figure 95: Ideal milk – Nutrition, China, January 2017
- Figure 96: White milk featuring probiotics/lactobacillus, South Korea, Egypt and USA, 2014-16
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- Figure 97: Consumers’ perception of select nutrients, China, 2016-17
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- Figure 98: Ideal milk – nutrition, by age, China, January 2017
- Figure 99: Milk product targeting seniors’ children, China, 2016
- Combination of certain ingredients and flavours triggering curiosity
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- Figure 100: Ideal milk – Added ingredients, by consumers who prefer specific milk flavour, China, January 2017
- Connection between milk type and packaging preference
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- Figure 101: Ideal milk – Package type, China, January 2017
- Figure 102: Ideal milk – Package type, by heavy users of different milk types, China, January 2017
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- Figure 103: Glass bottle design featuring black and white illustration of Huckleberry Finn, Germany, 2016
Meet the Mintropolitans
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- Higher requirements for milk from MinTs
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- Figure 104: Frequency of milk consumption, by consumer classification, China, January 2017
- Figure 105: Opportunity for premiumisation, by consumer classification, China, January 2017
- Unique flavours as MinT’s purchase trigger
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- Figure 106: Ideal milk – Flavour, by consumer classification, China, January 2017
- MinTs looking for multi-texture experience
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- Figure 107: Ideal milk – Added ingredients, by consumer classification, China, January 2017
Appendix – Market Size and Forecast
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- Figure 108: Value sales of China’s milk and flavoured milk retail market, 2011-21
- Figure 109: Volume sales of China’s milk and flavoured milk retail market, 2011-21
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Appendix – Market Segmentation
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- Figure 110: Value sales of China’s milk and flavoured milk retail market, by segment, 2011-21
- Figure 111: Best- and worst-case forecast of retail white liquid milk segment value, China, 2011-21
- Figure 112: Best- and worst-case forecast of retail white powdered milk segment value, China, 2011-21
- Figure 113: Best- and worst-case forecast of retail flavoured liquid milk segment value, China, 2011-21
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- Figure 114: Volume sales of China’s milk and flavoured milk retail market, by segment, 2011-21
- Figure 115: Best- and worst-case forecast of retail white liquid milk segment volume, China, 2011-21
- Figure 116: Best- and worst-case forecast of retail white powdered milk segment volume, China, 2011-21
- Figure 117: Best- and worst-case forecast of retail flavoured liquid milk segment volume, China, 2011-21
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Appendix – Methodology, Definition, and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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