The China Liquid Milk market continues to grow

In 2013, high end liquid milk in China grew by 25.4 percent and it’s predicted the trend will continue and retail sales will reach US$11.36 billion in 2017.

The dairy product industry of China grew at 12.3 percent Compound Annual Growth Rate during 2004 to 2013. Liquid milk industry represents the Chinese dairy products market whose output have reached 23.36 million tons while retail sales have reached USD 24.20 billion in 2013 holding around 86.6 percent of dairy product industry of China. It is anticipated that liquid milk output will touch 35.46 million tons and retail sales expected to reach USD 35.42 billion by 2017.

In 2013 the high-end liquid milk of China drove retail sales of US$6.9 billion growing 25.4 percent per year and holding 28.9 percent of the total China liquid milk industry. In 2017 the high-end liquid milk retail sales will reach US$11.36 billion which is equivalent to 32.1 percent of the total China liquid milk industry.

The China liquid milk industry has created an oligopolistic model, in which Yili and Mengniu dominate almost half of the liquid milk market of China. In 2013 Yili and Mengniu held their respective share of 24.7 percent and 25.2 percent in the liquid milk industry followed by the Bright Dairy & Food which is ranked third with 7.7 percent. However Royal Dairy, Yantang Dairy, China Shengmu and Modern Farming attained less than 1 percent of the total liquid milk industry of China. The local Chinese dairy products enterprises are trying to work together with counterparts overseas to resolve milk sourcing problems.

In 2013 the biggest dairy producer of Italy, Sterilgarda Alimenti entered into a strategic partnership with Yili. Under the agreement, Sterilgarda Alimenti manufactures UHT dairy products for Yili to assist it in expanding the high-end product lines. In April 2014 Bright Dairy & Food signed a processing agreement with Pactum Australia in which it is stated that Pactum should process UHT milk for Bright Dairy & Food.

As the demand for Chinese liquid milk is soaring up some multinational liquid milk enterprises have also entered the Chinese market. In August 2013 the dairy giant of New Zealand, Fonterra, released ‘Anchor’ UHT milk in Chinese dairy products market. In November 2013 Meiji Dairies of Japan unveiled yogurt products and pasteurized milk in China. In February 2014, the Italian biggie, Centrale Latte Torino launched soy-based beverage and UHT milk products in China.