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China’s demand for yoghurt drinks on the rise

New research from Canadean has found that China will become the third largest market for drinking yoghurt products by 2016.

The demand for the product is said to exceed that of flavoured milk as well as grain, nut, rice and seed milk alternative drinks. According to Canadean, this is mainly due to significant and sustained investments taking place in the Chinese yoghurt market.

In May last year Mengniu and Danone signed a framework agreement to establish a joint venture for the production and supply of chilled yoghurt products. At the same time Mengniu increased its stake in China Modern Dairy to 28 percent. Yili Group also formed an alliance with the Italian dairy firm, Sterilgarda Alimenti, and signed a memorandum of understanding with Dairy Farmers of America regarding strategic purchasing and farming service cooperation.

“With insufficient supply of raw milk and rising raw milk prices in 2013, Chinese dairy producers devoted resources to maintaining steady milk supplies by investing more in milk sources and cattle ranches. These investments are now bearing fruit, with the drinking yoghurt category expected to experience steady growth well into 2019,” said Michael Loubser, beverage analyst at Canadean

Canadean say that rising disposable incomes together with the marketed benefits of drinking yoghurt have spearheaded the demand for the product. Canadean also say that the ambient drinking yoghurt segment is doing particularly well with 110 percent growth in 2013. The market for ambient drinking yoghurt is expected to grow further in 2014, to take 70 percent of the drinking yoghurt market.

“Consumption habits have shifted, and a significant portion of the market is now ‘on the go’ which makes yoghurt drinks, especially ambient variants, very convenient for busy consumers,” said Loubser. 

 

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