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Dairy Market
in China
The Chinese retail dairy market totaled USD 40.6 billion in 2013.
From 2007 to 2009 milk production in China prevailed steady at 35.3 million tones per year. Since 2010 production increased and scaled up to 38.8 million tones in 2012, before observing a drop in 2013 to 35.31 million tones.
Total global diary production accounted for 784 million tones, with a maximum production from Europe 33% followed by Asia with 28 % , Central and North America with 18 % , South America with 11% and 5 % each from Africa and Oceania respectively. China is listed third on Global dairy production with 5%
Shortage in input for diary production, will increase import of dairy products in China
China in 2013 purchased two third of the world milk powder market at the cost of US$16.34 billion. Followed by 750 tons of milk powder imported from New Zealand, hence still China has lesser consumption rate than in both Asian or on Global map.
Introduction
Market outlook
Segmentation
Key Players
Investment backing dairy market
Growth prospects
Drivers
Opportunities
Challenges
Inside Issues
Market Outlook
Market size
China is world’s third largest country by volume accounting for 5% of the global milk production, with CAGR 8.1% recorded in 2013, to a large extent, top-line value growth is generated by emerging markets, majorly by China and Brazil.
Inner Mongolia contribution to cumulative milk production is 12.6% followed Shandong and Hebei with 10.7% and 7.3%. On similar ground Inner Mongolia is rated on per capita output of Major farm products with 307.7 Kg followed by Ningxia and Heilongjiang with 160.1 Kg and 135.1 Kg. It presents that Inner Mongolia has better breeding facility and more production of dairy product.Sources: Food and agriculture organization of the United Nations Dairy Association of ChinaChina Agriculture
Tianjin; 47.3 Hebei; 62.7
Inner Mongolia; 307.7
Heilongjiang; 135.1
Henan; 33.6
Tibet; 87.0
Shaanxi; 37.5
Qinghai; 47.9
Ningxia; 160.1
Xinjiang; 60.0
12.6%
10.7%
7.3%
6.9%
6.8%
5.0%4.2%3.0%3.0%
2.2%
38.3%
Market Size by Provinces in China (2012)
Inner MongoliaShandongHebeiHeilongjiangHenanShanxiJiangsuLianingSichuanAnhuiothers
Milk production in China 36.62 million metric tonnes
Per capita output of
Major farm products
Market Segmentation
Milk is accounting for 65% output of the overall dairy market output in China. The
segment output is expected to grow at 9.5% annual growth rate and to scale up by US $42
Billion by 2017.
Yogurt being second largest segment of production in dairy market in china
accountable for 18% is expected to boost by 10% annually while massing US $12 Billion by
2017.
Cheese output reached US $ 3.2 Billion , further expected to enhance 15% annually and
to touch US$6.4 Billion by 2017.
Butter output totaled at US$ 1.9 billion with a growth in CAGR 10.6% and to reach US$ 3.1
billion by 2017.
Cream segment valued at US$ 1.84 billion and expected to rise at a CAGR of 12.8 % and reach
US$ 2.5 billion by 2017.
Pudding/Dessert output increase to US$ .25 billion at an annual growth rate of 10.5% and
expected to reach US$ .40 billion.
65%
18%
8%
5%3%
1%
Dairy output by SegmentMilk Yogurt Cheese Butter Cream Pudding/Desserts
Source: Dairy Association of China, 2012
Market Segmentation: Milk China’s Milk Consumption 2011-13 (1000 mmt )Year Skim Milk
Consumption Whole Milk Powder
Fluid
2011 186 1433 12,600
2012 225 1540 13,517
2013 213 1725 14,450Source: Dairy : World market and trade, FAS, July 2013
Key Players : Competitive Landscape
Domestic Players
Existence of more than 1500 diary companies in China and 400 diary organizations having operating revenue over 5 million RMB. The top 4 diary companies accounted for 40% of overall market.
Foreign Players
China diary market is enjoyed by international companies, confluence by 60% market share . Major players being Mead Johnson with 12.2 %, Dumex with 11.7% , Wyeth(Nestle) with 11% and Beingmate with 9% share of overall market share.
Inner Mongolia Yili Indus-
trial Group Co.17%
China Mengniu Diary Co.15%
Shanghai Bright Diary
Inc.6%
Hebei Sanyuan foods Co.
1%
Others61%
Market Share of top 4 China Diary Companies against international
companies
Company Name Major products
Inner Mongolia Yili Industrial Group Co Liquid milk, ice cream , cheese, milk powder and mixed feed.
China Mengniu Diary Co. Liquid milk, ice cream, milk powder and cheese.
Shanghai Bright Dairy Inc. Liquid milk, cheese and milk powder
Hebei Sanyuan Foods Co. Liquid milk and solid milk
Source: China Chamber of commerce of foodstuffs,2013
Nestle • Invested US$ 395 million in Heilongjiang.
New Hope • Invested US$ 158 million in East China, Sichuan, Yunnan.
Yili• Invested US$ 50 million in Hushian Dairy.
Key Investment to back Dairy market
• Invested US$ 550 million in Yashili. Danone
Growth Prospect- Effective connection with consumers to change taste in building greater development and demand- Rise in consumption of premium product to avail better product- Acceleration in innovation due to new taste preferences and product availability - Persistent awareness for better health consumption leading to increase in dairy product - Better breeding technique and recoup quality cattle feed.
Dairy market in China