China will have world's largest dairy market by 2018, with value of US$60.64B, despite dairy not being part of traditional Chinese diet, Canadean says

June 26, 2014 (press release) – China will be the largest dairy market in the world by 2018, despite dairy not being part of the traditional Chinese diet. This comes as western influence makes its impact and the aging Chinese population grows more concerned about bone health.

According to a new report from Canadean, China is one of the fastest growing dairy markets and will become the largest global market by 2018, worth $60,639 million. Although dairy is not part of the traditional diet in China, more Chinese are exposed to fast-food outlets, travel and experience of global cuisines and media coverage of western tastes. This leads to more Chinese consuming dairy, such as milk and cereals for breakfast or cheese in pizza and burgers. As lactose intolerance is widespread in Asia, Canadean predicts that lactose-free and low-lactose products will be particularly popular in China.

Chinese dairy market brimming with potential

Despite China being on its way to becoming the largest dairy food market in terms of volume, the average Chinese consumer enjoys only 209 dairy products per year. In contrast, the average UK consumer eats and drinks 1,039 dairy items, which indicates room for high growth in China. Canadean sees a big potential in consumers aged 55 and older. Those consumers are increasingly mindful of their health and start turning to dairy with higher protein or calcium content to prevent gut and bone diseases. However, the health benefits of dairy are sill widely unknown in China. Veronika Zhupanova, analyst at Canadean, says: “Knowledge of osteoporosis is limited, which means brands need to educate consumers about dairy’s role in aiding bone health via packaging, advertising and awareness campaigns.”

Foreign marketers need to adapt to changing consumer needs

The Chinese dairy market is developing rapidly, and is still far from saturated. Imported products from certain areas, such as Australia and Europe are benefiting from a higher level of trust. Chinese consumers view them as enforcing more stringent product safety regulations than domestic producers, but manufacturers should not only bet on their reliable image. Zhupanova adds: "In the near future foreign manufacturers need to adjust their strategies to target the unique features of the Chinese market. For instance, a significant proportion of Chinese households still does not have a refrigerator, which is driving the importance of ultra-pasteurised dairy products.” 

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