Yogurt - China - November 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Scope and definitions
EXECUTIVE SUMMARY
The market 
The market slows down in 2020 but will pick up again in the future
Figure 1: Retail market value and volume of yogurt (exclude lactobacillus drinks), china, 2015-2020
Figure 2: Total China retail sales and forecast of yogurt, 2015-25
Figure 3: Total China retail volumes and forecast of yogurt, 2015-25
Impact of COVID-19 on yogurt
Figure 4: Short, medium and long term impact of COVID-19 on yogurt, November 2020
Ambient yogurt still leads growth while chilled yogurt is under pressure
Figure 5: China retail sales value and forecast of ambient yogurt, 2015-25
Figure 6: China retail sales value and forecast of chilled yogurt, 2015-2025
Companies and brands
Yili and Mengniu market share rises to 66.5% and Junlebao enters the top three
Figure 7: Key players’ share of yogurt market, China, 2018-2019
Building competitiveness in both upstream and downstream
Innovations focus on flavour &amp; texture and precise functions
Figure 8: Key changes in product claims* in new yogurt launches, China, 2016-2020 (to Oct)
The consumer
Ambient yogurt prioritised over chilled yogurt thanks to high accessibility
Figure 9: Consumption change, May 2020
Overall top choices and regional brands’ advantages unchanged
Figure 10: Brands consumed in the last six months, by city, May 2020
Higher willingness to pay more for chilled yogurt, especially among parents
Figure 11: Typical spending on a single-serve yogurt, May 2020
Figure 12: Spending habits, by children in household, May 2020
Offline is still leading choice but gourmet stores are worth noting
Figure 13: Purchasing channel of yogurt, May 2020
Figure 14: Purchase channel, by typical spend on a single-serve yogurt, May 2020
Indulgent impression of spoonable yogurt needs to be bolstered
Figure 15: Yogurt preference, by consumption occasion, May 2020
Going beyond digestive health to gut health can help yogurt establish credibility in immunity-related claims 
Figure 16: Interests in functional benefits, May 2020
What we think
ISSUES AND INSIGHTS
Spoonable yogurt needs all-round indulgent improvements
The facts
The implications
Figure 17: Examples of dessert flavoured yogurts, US and China, 2020
Figure 18: Examples of creative yogurt packaging, China, 2020
Go beyond higher protein to seize opportunities among fitness consumers
The facts
The implications
Figure 19: Examples of introductions about different types of protein for fitness consumers, China 2020
Figure 20: Examples of fitness yogurt with both whey and casein claims, China and Spain, 2020
Leverage freeze-drying technology to expand snack occasions
The facts
The implications
Figure 21: Examples of freeze-dried yogurt cubes, China 2019-2020
Figure 22: Yili’s sub-brand yixiaosheng launched freeze-dried crayfish flavour yogurt cubes, china, 2020
THE MARKET – WHAT YOU NEED TO KNOW
Yogurt market slows down in 2020 but will regain momentum in 2021
Ambient yogurt still a growth engine
Chilled yogurt struggles to expand territory in last two years
Increasing awareness of immunity means long-term demand will sustain
MARKET SIZE AND FORECAST
Sales growth slowed down in 2020 but still remarkable
Figure 23: Retail market value and volume of yogurt (exclude lactobacillus drinks), China, 2015-2020
Yogurt will regain growth momentum in 2021
Figure 24: China retail sales value and forecast of yogurt, 2015-25
Figure 25: China retail sales volume and forecast of yogurt, 2015-25
MARKET FACTORS
Spending shifts to essentials as COVID-19 hits consumer confidence
Figure 26: Confidence in future financial outlook, Dec 2019-Nov 2020
Figure 27: Change in total retail sales of consumer goods, China 2019-Sept 2020
Attention to immunity management fuels demand for dairy products
Figure 28: Mengniu Champion yogurt promoting immunity-enhancing feature, China 2020
E-commerce continues to unlock sales potential with live commerce
KEY PLAYERS – WHAT YOU NEED TO KNOW
National players strengthen market leadership
Key innovation highlights
MARKET SHARE
Further market consolidation among top two leaders
Figure 29: Key players’ share of yogurt market in terms of retail sales value, China, 2018-2019
Junlebao Dairy ascends to No. 3 position
Newcomers battle it out in chilled yogurt
COMPETITIVE STRATEGIES
Strengthen control of upstream
Elevate channel synergies
Strategic cooperation with leading channel players
Figure 30: Yili JoyDay yogurt workshop and product concept
Figure 31: Bright yogurt subscription service on ele.me
Channel customized products
Figure 32: Examples of channel exclusive yogurt products, China 2019-2020
WHO’S INNOVATING?
Flavour and texture innovation
Make it more chunky and chewy
Figure 33: Share of new product launches in yogurt, by texture, China, 2017-2020 (to Oct)
Figure 34: Examples of new chunky ingredients in yogurt, China, 2020
Novel mixed flavours
Figure 35: Examples of novel mixed flavours in yogurt, China 2020
Oriental nourishing flavours vs Western dessert flavours
Figure 36: Examples of oriental nourishing flavour yogurt, China 2020
Figure 37: Examples of Western dessert flavoured yogurt, China 2020
Health-related and functional innovation
Gut health puts probiotics and fibre under the spotlight
Figure 38: Key changes in product claims* in new yogurt launches, China, 2016-2020 (to Oct)
Figure 39: Examples of new yogurt products catering to gut health, China and Japan, 2019-2020
Protein content continues to increase
Figure 40: Average protein per 100 grams of yogurt in new product launches, 2016-2020 (to Oct)
Figure 41: Example of high protein fitness yogurt, US, 2020
Niche functional claims emerge
Figure 42: Examples of functional benefits in yogurt, China 2020
Plant-based yogurt finally makes its way to China
Figure 43: Plant-based yogurt from Nongfu Spring, China 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
RMB6-9 is the most acceptable price range for single-serve yogurt
Offline remains the leading purchasing channel
Spoonable yogurt does not necessarily equal indulgence
General immunity-related function is most wanted but specific functions get a boost too
CONSUMPTION CHANGE
Ambient yogurt still leads consumption uptake
Figure 44: Consumption change, May 2020
Switching to ambient is more evident during the outbreak
Figure 45: % of consumers drink more, by type of yogurt consumed less, May 2020
Families with children are still key target group
Figure 46: Consumption change on ambient yogurt, by children in households, May 2020
BRAND CHOICE
Top five choices have not changed since 2017
Figure 47: Brands consumed in the last six months, May 2020
Regional differences still prevail
Figure 48: Brands consumed in the last six months, by city, May 2020
New entrants stand out with an image of beauty-boosting and weight-control functions
Figure 49: Brands consumed in the last 6 months, by interest in functional benefits, May 2020
SPENDING HABITS
Half of consumers are prepared to pay between RMB6-9 on a single-serve yogurt
Consumers are prepared to pay more for chilled yogurt but not for spoonable yogurt
Figure 50: Typical spending on a single-serve yogurt, May 2020
Parents are prepared to pay more for chilled yogurt
Figure 51: Typical spending on a single-serve yogurt, by family status, May 2020
PURCHASING CHANNEL
Gourmet stores are key to targeting premium yogurt buyers
Figure 52: Purchasing channel of yogurt, May 2020
Figure 53: Purchasing channel, by family status, May 2020
Figure 54: Purchase channel, by typical spend on a single-serve yogurt, May 2020
Yogurt choices in gourmet stores may attract young males with fitness goals
Figure 55: Purchasing channel – gourmet stores, by gender and age, May 2020
Figure 56: Purchasing channel, by males with vs without an interest in yogurt with maintaining muscle claims, May 2020
CONSUMPTION HABITS 
Yogurt is still largely considered a source of dairy for its nutritional value
Figure 57: Consumption habits of yogurt, May 2020
Spoonable yogurt still needs to enhance its association with indulgence
Figure 58: Yogurt preference, by consumption occasion, May 2020
Parents pay more attention to nutrition and singles are more flavour driven
Figure 59: Consumption habits – by family status, May 2020
INTEREST IN FUNCTIONAL BENEFITS
General immunity boosting is most wanted functional benefit after COVID-19
Figure 60: Interests in functional benefits, May 2020
Consumers under 30 expect appearance-related functions while over-30s care more about physical health
Figure 61: Interest in functional benefits, by age, May 2020
High household income consumers focus more on specific functional yogurt
Figure 62: Interest in functional benefits, by household income, May 2020
Figure 63: Gap of interest in functional benefits, by consumer income and classification, May 2020
MEET THE MINTROPOLITANS
More willing to pay RMB10-15 on a single-serve yogurt for indulgence
Figure 64: Spending habits, by consumer classification, May 2020
Invest in gourmet stores and fresh grocery e-commerce
Figure 65: Purchasing channel, by consumer classification, May 2020
Nutrition as well as appearance
Figure 66: Interests in functional benefits, by consumer classification, May 2020
APPENDIX – MARKET SIZE AND FORECAST
Figure 67: China retail sales value and forecast of yogurt, 2015-25
Figure 68: China retail sales volume and forecast of yogurt, 2015-25
APPENDIX – MARKET SEGMENTATION
Figure 69: China retail sales and forecast of ambient yogurt, 2015-25
Figure 70: Total China retail sales and forecast of chilled yogurt, 2015-25
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations