Dairy Industry Overview
2018-08-15 09:45 Wednesday
A Prospective Industrial Research Institute market report revealed that dairy product sales in China reached 359 billion RMB in 2017, a 7% increase from the previous year, with total profits of nearly 25 billion RMB. Sales from the top 15 dairy producers accounted for 17.94 billion RMB, 50% of the national total.
Profits in China's dairy industry have increased from 246.993 billion RMB to 359.041 billion RMB, a 7.77% CAGR since 2012, and an overall increase of 45.36%.
The report also reveals that national dairy product yields reached 8.416 million tons in the first quarter of 2018, an 8.2% increase from the previous year. China's dairy product yields are projected to exceed 30 million tons in 2018, and continue at a 5.65% CAGR from 2018-2023.
Dairy Industry Development Trends
1. Improved Consumption
Due to income growth, Chinese consumers have shown increased interest in a wider range of dairy products, from traditional milk, cheese, and yogurts, to cutting-edge probiotic and dairy alternatives.
Pasteurized dairy products only account for 10% of liquid milk consumption in China's liquid milk, compared with 80% in Europe and the United States. Therefore, the Chinese market presents new opportunities for producers of low-temperature dairy products.
Regional dairy producers possess unique advantages over national enterprises in terms of regional distribution channels and consumer loyalty. In the wake of increased consumption, regional dairy products companies can achieve both rapid and sustainable development in the low-temperature dairy sector.
2. The Flourishing Rural Market
Thanks to income growth in rural areas, nutrition has assumed a greater importance in daily life. The growth in dairy product consumption in the rural market has outpaced general food products, aquatic products, and eggs.
Recent data reveals that per capita consumption expenditures in rural areas have grown at a robust 8.1% annual rate, providing a further boost to dairy product consumption in rural areas. Liquid dairy product sales in rural areas grew by 8.8% in 2017, demonstrating the potential of the rural market
3. An Expanding Market
Increasing consumer consumption, the effects of urbanization, and a newfound emphasis on nutrition, have resulting in a burgeoning Chinese dairy industry. If projections and expert testimony are any indication, China will become the largest global dairy market in the near future.