Year 12 | 19 January 2020 | TO ENTER | TO REGISTER

Value of China's dairy products have grown more than 10 times in the recent decade

China's dairy product industry had been rapidly developing in the past few years. Although in 2008, the food safety scandals brought down the revenue and the industry image, it is recovering and continues to develop recently. The industry pattern is now focused on health and technology innovation, and with the price increase, the enterprises are fighting their ways to a broader market.

Dairy products are generally defined as food produced from the milk of mammals. They are usually high energy-yielding food products. Apart from breastfed infants, the human consumption of dairy products is sourced primarily from the milk of cows, yet goats, sheep, yaks, camels, and other mammals.

China's dairy product industry started with a late beginning and little competitiveness, but it has been rapidly developing especially after the reform and opening up, with a double-digit increasing rate compared to 1%, the global average increasing rate. The output and total output value of China's dairy products have grown more than 10 times in the recent decade. However, the dairy consumption per capita of China is far less than that of the world average level. Moreover, the government has carried out a series of policy in favor of the prompt development of dairy product industry, which is inspiring for the transforming industry on the basis of marketization, legalization, standardization and environmental protection.

China's dairy product industry has been competitive in terms of the price, milk source, capital, land, advertisement, and mutual argument. In 2007, the industry entered a new stage of competition, focusing on product innovation, technology innovation and so forth, from the low price to high technology. With the consumption idea shifting from "having dairy products" to "having high-quality dairy products", China's dairy product enterprises now promote the concept such as high-content technology, healthy and functional products and so on, especially after China's milk-adulteration scandal in 2008.
China's dairy product industry has been booming apart from the 2008 food safety incident, the total output value of which rose from CNY 86.257 billion in 2005 to CNY 187.413 billion in 2010, with a growth rate of 17.93%. Although the growth rate dropped from 24.52% to 5.87% during 2007 and 2009, the statistics rebounded in 2010, and the industry has been substantially developing since, with the total output of CNY 21.594 million tons in Dec. 2011, increasing by 11.59% YOY.

Since Jan. 1st, 2012, almost the whole industry has raised the price of dairy products, especially that of the milk products. Part of the milk products from enterprises such as Sanyuan, Yili, Mengniu increases by CNY 1 to CNY 2 per box. The increase in price is due to the pressure from the cost of milk source, packaging material, salary, logistics and so on. Moreover, since the continual negative news of domestic dairy enterprises bursts out, e.g. school milk incident, the enterprises have to enlarge the image-refreshing input to eliminate the negative effect, which greatly increases the cost. Price increase is the marketing strategy contributing to accomplish the annual goal.

Generally, the dairy product industry is recovering from the scandals in 2008, and remains competitive and fast developing. The prospect of the industry is believed to be promising if the enterprises put forward healthy competition, improve the technology innovation, and build the brand image with real high-quality products. After all, consumers' trust is based on good faith of the enterprises.

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by S. C.
30 july 2012, World News > Asia