Milk and Flavoured Milk - China

 Published On: Jun, 2013 |  Published By: Mintel Group | Format: PDF

"China’s milk market is attracting more international players. With increasing competition, manufacturers should look at opportunities beyond traditional demographic-specific targeting, to educate consumers about which milk is right for them and drive consumption out-of-home to drive sales."

Some questions answered in this report include:

How can domestic and international brands compete more effectively when China’s milk market becomes more international?
What can brands do to drive growth in the market by encouraging more daily consumption?
What is unique about China’s milk market and consumers’ consumption behaviour? What implications does that have for product innovation and marketing?
In face of competition from UHT milk, how can the pasteurised milk market be further developed?

INTRODUCTION
Definition
Methodology
Consumer research
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Market size of milk and flavoured milk in China, 2007-12
Figure 2: Forecast of milk and flavoured milk total market (retail and non-retail) in China, by volume, 2007-17
Figure 3: Forecast of milk and flavoured milk retail sales in China, by value, 2007-17
Figure 4: Retail sales of milk by segment, China, 2012
Companies and brands
Figure 5: Market share of top five dairy companies in China milk and flavoured milk retail market, 2012
The consumer
Usage of milk
Milk purchasing channel
Attitudes towards milk
Key issues
The Chinese milk market attracts global interest
Figure 6: Milk market demand and supply volume projection, China, 2007-17
Increasing food pairing and out-of-home consumption occasions can help brands to encourage daily milk drinking
Figure 7: Milk/flavoured milk drink usage frequency, March 2013
Figure 8: Examples of innovative dairy drinks in international markets, 2013
Consumers’ lack of knowledge about milk suggests scope for manufacturers to drive usage by educating consumers
Figure 9: Top milk/flavoured milk purchase factors, by region, March 2013
THE MARKET
Key points
Market size and forecast
Figure 10: Market size of milk and flavoured milk in China, 2007-12
Figure 11: Forecast of China milk and flavoured milk, total market (retail and non-retail), by volume, 2007-17
Figure 12: Forecast of China milk and flavoured milk (retail only), by value, 2007-17
Background and context
Figure 13: Growth rates of volume retail sales in China’s ice-cream, chocolate and coffee market, 2007-12
Figure 14: Average farm size and milk yield by country/region, 2009
Growth drivers and barriers
Growth drivers
Figure 15: Correlation between annual urban household income and per capita spending on dairy products in urban China, 2001-10
Figure 16: Volume share of dairy consumption by product type in urban China, 2001 and 2010
Figure 17: Growth of cafés and ice-cream houses in China, 2008-12
Growth barriers
Market segmentation
Milk imports leap ahead but remain niche
Figure 18: Imported liquid milk (non-sweetened, non-concentrated) in China by volume and value, 2008-12
Figure 19: Imported UHT milk aisle in a supermarket in Shanghai, April 2013
Figure 20: Volume share (2012) and segment growth (CAGR 2007-12) of milk and flavoured milk sales in China by segment
UHT holds the lead in the Chinese milk market
Figure 21: Typical price tiers within the China UHT milk market, May 2013
Flavoured milk enjoys growing popularity
Figure 22: New product launches in China milk market, by top 10 flavours (incl. blend), 2008-April 2013
Pasteurised milk remains niche
Figure 23: Price comparison of UHT and pasteurised milk in China, May 2013
Non-retail gains share
Segment future growth
Figure 24: Forecast of growth of China milk and flavoured milk sales, by segment, by volume, 2012-17
COMPANIES AND BRANDS
Key points
A still fragmented market
Figure 25: Market share of top five dairy manufacturers in China milk and flavoured milk retail market, 2012
Consolidation is taking place in the market
Figure 26: Companies’ value share in China’s milk and flavoured milk retail sales, 2009-12
National giants vs. regional guardians
Figure 27: Geographical overview of supply and demand of dairy products in China, 2010
Heavy investment in securing milk supply and upgrading production
Figure 28: Selected investments by domestic dairy producers in China, 2010-13
Inner Mongolia Yili Industrial Group Co., Ltd.
Figure 29: selected new milk product launches by Yili, 2007-12, China
Figure 30: Yili’s outdoor advertising during the 2012 London Olympics
Figure 31: Yili’s product placement in Transformer 3 film, 2011
China Mengniu Dairy Co., Ltd.
Figure 32: Selected Mengniu milk product launches, 2007-12
Figure 33: Mengniu’s school milk programme
Bright Dairy & Food Co., Ltd.
Figure 34: Bright’s packaging innovation on Ubest pasteurised milk, 2008-12
Want Want China Holdings Ltd
Figure 35: Wangzai reconstituted milk products, 2010-2013
THE CONSUMER
Key points
Milk and flavoured milk usage
Figure 36: Milk and flavoured milk usage, by type March 2013
Figure 37: Frequent usage of milk and flavoured milk, by type, March 2013
Ways of consuming milk
Figure 38: Ways of consuming milk, March 2013
Milk/flavoured milk purchase location
Figure 39: Milk/flavoured milk purchase location, March 2013
Milk flavour preference
Figure 40: Flavours of milk purchased and interest in purchasing, March 2013
Important purchase factors
Figure 41: Milk/flavoured milk purchase factors, March 2013
Attitudes towards milk/flavoured milk
Figure 42: Attitudes towards milk/flavoured milk, March 2013
KEY ISSUE – CHINESE MILK MARKET ATTRACTS GLOBAL INTEREST
Key points
Demand will outgrow domestic supply in China’s milk market
Figure 43: Annual per capita milk consumption in selected countries, 2012
Figure 44: Milk market demand and supply volume projection, China, 2007-17
Popularity of imported UHT expands from online to offline retailers but differentiation is still limited to country of origin
Figure 45: Attitudes towards imported milk, by demographics, March 2013
Figure 46: Milk/flavoured milk purchase factors, total of top three ranks, March 2013
Figure 47: Milk shelf in the chilled section in a convenience store, Shanghai, May 2013
Figure 48: Examples of milk in gifting packaging in China
Targeting products to demographic groups is a major trend in China with more niche targeting opportunities beyond kids, women and seniors
Figure 49: Demographic claims in milk and flavoured milk new launches, China and Global (excl. Asia Pacific), Jan 2011-April 2013
Figure 50: Most common ingredient and functional benefit claims featured in new milk launches targeting specific demographic groups, China, Jan 2008-April 2013
Figure 51: Example of a milk product targeting specific health needs, China, 2007
Figure 52: Example of a milk product targeting specific health needs in the UK, 2011
Figure 53: Frequency of usage of milk by gender and age group, March 2013
Figure 54: Binggrae milk drink products in China, 2012
Figure 55: Price comparison between Bright Dairy standard and fortified milk products, China, May 2013
What it means
KEY ISSUE – INCREASING FOOD PAIRING AND OUT-OF-HOME CONSUMPTION OCCASIONS CAN HELP BRANDS TO ENCOURAGE DAILY MILK USAGE
Key points
Extending milk’s image beyond a standalone drink with food pairings should support higher usage
Figure 56: Milk/flavoured milk usage frequency, March 2013
Figure 57: Milk consumption with other foods/drinks, by demographics, March 2013
Figure 58: Milk featured in Oreo biscuit advertising, China, 2013
Figure 59: Got Milk? strawberry flavoured magic straws
Figure 60: Unilever’s Knorr bouillon advertising encourages new usage occasions, China, 2013
Figure 61: Packaging of energy drink brand Ichimore, China, 2013
Convenient packaging and smaller products can facilitate usage in the workplace and on-the-go
Figure 62: Examples of innovative dairy drinks in international markets, 2013
Expanding successful on-trade products into retail, and vice versa, can offer brands additional revenue streams and boost visibility
Figure 63: Packaged milk teas in the retail market, China, 2013
Figure 64: Grain-flavoured milk products, China, 2013
Figure 65: Purchase of milk from speciality outlets and attitudes towards milk speciality outlets, by demographics, March 2013
Figure 66: Bright Fresh House, the milk speciality outlet in Shanghai
What it means
KEY ISSUE – CONSUMERS’ LACK OF KNOWLEDGE ABOUT MILK PROVIDES GAPS FOR MANUFACTURERS TO FILL BY SHAPING PRODUCT PERCEPTIONS AND INFLUENCING CHOICE
Key points
Pasteurised milk has growth potential given importance of freshness as a purchasing choice factor
Figure 67: Top ranked milk/flavoured milk purchase factors, by region, March 2013
Figure 68: Nutrition loss comparison between pasteurised and UHT milk
Figure 69: Sanyuan pasteurised milk, China, April 2013
Figure 70: Typical packaging of pasteurised milk in China and other markets, 2013
Strengthening the premium image of pasteurised milk and emotional attachment to local brands can help regional players compete against national operators
Figure 71: Example of milk in a glass bottle in the retail channel, 2013
Lactose-free milk segment needs to draw attention to addressing specific problems to fully capitalise on the high prevalence of lactose intolerance
Figure 72: Shuhua milk featured in popular US drama, March 2012
Figure 73: Packaging label comparison of lactose-free/low-lactose milk products in different markets, 2013
What it means
APPENDIX – MARKET SIZE AND FORECAST
Figure 74: Forecast of China UHT white milk market (retail only), by volume, 2007-17
Figure 75: Forecast of China UHT white milk market (retail only), by value, 2007-17
Figure 76: Forecast of China pasteurised white milk market (retail only), by volume, 2007-17
Figure 77: Forecast of China pasteurised white milk market (retail only), by value, 2007-17
Figure 78: Forecast of China flavoured milk market (retail only), by volume, 2007-17
Figure 79: Forecast of China flavoured milk market (retail only), by value, 2007-17
Figure 80: Forecast of China powdered milk market (retail only), by volume, 2007-17
Figure 81: Forecast of China powdered milk market (retail only), by value, 2007-17
Figure 82: Forecast of China milk and flavoured milk market (non-retail), by volume, 2007-17
APPENDIX – MILK AND FLAVOURED MILK USAGE
Figure 83: Milk/flavoured milk drink usage frequency, March 2013
Figure 84: Milk/flavoured milk drink usage frequency, March 2013 (continued)
Figure 85: Frequency of usage of “Semi-skimmed milk’ and ‘skimmed milk’, by demographics, March 2013
Figure 86: Frequency of usage of ‘Full fat/whole milk’ and ‘premium milk’, by demographics, March 2013
Figure 87: Frequency of usage of ‘Any long life milk (UHT)’ and ‘Flavoured milk’, by demographics, March 2013
Figure 88: Frequency of usage of ‘Milk with additional benefits’ and ‘lactose-free milk’, by demographics, March 2013
Figure 89: Frequency of usage of ‘Other cow’s milk alternative’, by demographics, March 2013
APPENDIX – WAYS OF CONSUMING MILK
Figure 90: Ways of consuming milk, March 2013
Figure 91: Most popular ways of consuming milk, by demographics, March 2013
Figure 92: Next most popular ways of consuming milk, by demographics, March 2013
APPENDIX – MILK/FLAVOURED MILK PURCHASE LOCATION
Figure 93: Milk/flavoured milk purchase location, March 2013
Figure 94: Most popular retail channels from which milk/flavoured milk has been purchased, by demographics, March 2013
Figure 95: Next most popular retail channels from which milk/flavoured milk has been purchased, by demographics, March 2013
Figure 96: Food service outlets from which milk/flavoured milk has been purchased, by demographics, March 2013
APPENDIX – MILK FLAVOUR PREFERENCE
Figure 97: Flavour of flavoured milk purchased, March 2013
Figure 98: Most popular flavours of flavoured milk purchased, by demographics, March 2013
Figure 99: Next most popular flavours of flavoured milk purchased, by demographics, March 2013
APPENDIX – INTEREST IN PURCHASING DIFFERENT MILK FLAVOURS
Figure 100: Flavour of flavoured milk not purchased but interested in purchasing, March 2013
Figure 101: Most popular flavour of flavoured milk not purchased but interested in purchasing, by demographics, March 2013
Figure 102: Next most popular flavour of flavoured milk not purchased but interested in purchasing, by demographics, March 2013
APPENDIX – IMPORTANT FACTORS WHEN PURCHASING MILK
Figure 103: Milk/flavoured milk purchase factors, March 2013
Figure 104: Rank 1: Milk/flavoured milk purchase factors, by demographics, March 2013
Figure 105: Rank 2: Milk/flavoured milk purchase factors, by demographics, March 2013
Figure 106: Rank 3: Milk/flavoured milk purchase factors, by demographics, March 2013
APPENDIX – ATTITUDES TOWARDS MILK/FLAVOURED MILK
Figure 107: Attitudes towards milk/flavoured milk, March 2013
Figure 108: Most popular attitudes towards milk/flavoured milk, by demographics, March 2013
Figure 109: Other attitudes towards milk/flavoured milk, by demographics, March 2013

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