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Yoghurt - China - August 2016

“Constant product upgrading and continued emphasis on naturalness and higher nutritional values will help draw consumers in and keep current users, while there are also innovation opportunities to appeal to the rising interest in super indulgent variants and a need for yogurt/yogurt drinks as a menu item while eating out.”
– Laurel Gu, Director of Research: Food & Drink, Lifestyle

This report examines the following issues:

  • The upcoming era of super indulgent yogurt
  • Exotic ways of fermentation need further elaborations before becoming popular
  • Yogurt drinks can expand their presence in casual dining places

The yogurt market has been growing robustly both in terms of volume and value. The big players are facing ever increasing competitive pressure from overseas players, regional players, start-up companies, as well as players in other food and beverage markets.

Besides geographic expansion of yogurt as a health supplementing food, the indulgence consumption occasion is gaining momentum, showing great scope as well as a necessity for brands to invest heavily in future product innovations which could take different forms in order to strengthen product appeal.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Definitions
          • Figure 1: Definition of Low/Mid/High MHI groups, by city tier
      • Executive Summary

          • The market
            • A big winner in the food and beverage market
              • Figure 2: Best- and worst-case forecast for retail yogurt market value, China, 2011-21
              • Figure 3: Retail value sales and growth rate of drinking and spoonable yogurt, China, 2012-16
            • Key players
              • National players increasing leading edge
                • Overseas players and niche premium brands fuelling competition in tier one cities
                  • Regional players winning with regional tastes
                    • Lactobacillus drinks manufacturers looking for new product ideas
                      • Figure 4: Leading companies’ market share in yogurt market, by sales value, China, 2014-15
                    • The consumer
                      • Increasing frequent yogurt consumers
                        • Figure 5: Consumption frequency of yogurt and yogurt drinks, April 2016
                      • Yogurt consumption in non-retail channels is high
                        • Figure 6: Yogurt/yogurt drinks consumption in non-retail channels, April 2016
                        • Figure 7: Attitudes towards eating yogurt/yogurt drinks in restaurants, April 2016
                      • Glass bottles/jars have potential to hit the market
                        • Figure 8: Preferred packaging types, April 2016
                        • Figure 9: Perceptions towards different packaging types, April 2016
                      • Naturalness and high nutritional values are most powerful premiumisation drivers
                        • Figure 10: Product features that are worth paying more for, April 2016
                        • Figure 11: Attitude towards new yogurt concepts, April 2016
                      • What we think
                      • Issues and Insights

                        • The upcoming era of super indulgent yogurt
                          • The facts
                            • The implications
                              • Figure 12: Yoplait’s yogurt products featuring indulgent flavours, US, 2015-16
                              • Figure 13: Examples of yogurt in glass jars, China, 2015-16
                            • Exotic ways of fermentation need further elaborations before becoming popular
                              • The facts
                                • The implications
                                  • Figure 14: Examples of yogurt claimed to be fermented in exotic ways, China, 2015-16
                                  • Figure 15: Examples of packaged Skyr yogurt, USA, 2015-16
                                • Yogurt drinks can expand their presence in casual dining places
                                  • The facts
                                    • The implications
                                        • Figure 16: Examples of light flavour yogurt drinks, China and Japan, 2015-16
                                    • The Market – What You Need to Know

                                      • Strong market growth since 2014
                                        • Ambient drinking yogurt leads category growth
                                          • Flavoured spoonable yogurt will grow faster than plain variants
                                          • Market size and forecast

                                            • Yogurt market accelerates since 2014
                                              • Figure 17: Retail market value and volume of yogurt, China, 2011-16
                                            • A winning market in food and beverage over the next few years
                                              • Figure 18: Best- and worst-case forecast for retail yogurt market volume, China, 2011-21
                                              • Figure 19: Best- and worst-case forecast for retail yogurt market value, China, 2011-21
                                          • Market Drivers

                                            • Ambient yogurt to reach more consumers and tap into gifting market
                                              • Figure 20: Example of ambient yogurt in gifting pack, China, 2015-16
                                            • Lower milk prices ease pricing pressure
                                              • Figure 21: Raw milk price, China, 2010-15
                                            • Inherent advantages over other dairy products
                                              • New consumption occasions and location
                                                • Scope for future product innovations
                                                • Market Segmentation

                                                  • Drinking yogurt leads category growth
                                                    • Figure 22: Retail value sales and growth rate of drinking and spoonable yogurt, China, 2011-16
                                                  • Rise of ambient lactobacillus drinks
                                                    • Figure 23: Example of UHT lactobacillus drinks, China, 2015-16
                                                    • Figure 24: Example of probiotics in powder format, China and overseas markets, 2015-16
                                                    • Figure 25: Best- and worst-case forecast for retail drinking yogurt segment, China, 2011-21
                                                  • Flavoured products taking greater share within spoonable yogurt
                                                    • Figure 26: Retail sales value and growth rate of natural and flavoured spoonable yogurt, China, 2011-16
                                                    • Figure 27: Examples of yogurt with rich and special taste, China, 2015-16
                                                    • Figure 28: Best- and worst-case forecast for retail spoonable flavoured yogurt segment, China, 2011-21
                                                    • Figure 29: Best- and worst-case forecast for retail spoonable natural yogurt segment, China, 2011-21
                                                • Key Players – What You Need to Know

                                                  • Mengniu and Yili increasing their leading edge
                                                    • Rising foreign brands, niche premium brands and regional players
                                                      • Major companies make moves to attract young consumers
                                                        • Product innovation takes a variety of forms
                                                        • Market Share

                                                          • Mengniu and Yili achieved significant gains
                                                            • Figure 30: Leading companies’ market share in yogurt market, by value, China, 2014-15
                                                          • Bright Dairy facing challenges in going premium
                                                            • Figure 31: Bright Dairy’s premium line extension, China, 2016
                                                          • Yakult and Weichuan are looking to reinvigorate the lactobacillus drink segment
                                                            • Smaller players finding ways to gain share
                                                              • Overseas players entering China
                                                                • Figure 32: Example of imported yogurt shelf in a premium supermarket, Shanghai, China, 2016
                                                              • Niche brands gain share with unique propositions
                                                                • Figure 33: Example of a Le Pur strained yogurt variant, China, 2016
                                                              • Beverage brands joining competition
                                                                • Figure 34: Unif’s newly-launched yogurt brand, China, 2016
                                                            • Competitive Strategies

                                                              • Gaining kid, teenagers and young consumers through pop culture marketing
                                                                • Figure 35: Example of yogurt and yogurt drinks targeting kids and young people, China, 2015-16
                                                              • Boosting non-retail sales
                                                                • Heavy promotions on premium brands to encourage trading up
                                                                  • Partnership with healthy lifestyle brands and events
                                                                  • Who’s Innovating?

                                                                    • Brown (baked) yogurt
                                                                      • Figure 36: Example of brown yogurt, China, 2015-16
                                                                    • Extra high protein content
                                                                      • Figure 37: Example of yogurt featuring high protein content, China, 2015-16
                                                                    • Savoury flavours moving into the spotlight
                                                                      • Figure 38: Example of non-sweet yogurt flavours, China, 2015-16
                                                                    • Yogurt dessert
                                                                      • Figure 39: Example of yogurt desserts, China, 2015-16
                                                                    • Lactobacillus drinks moving across the spectrum of texture
                                                                      • Figure 40: Example of category-blurring yogurt drinks, China, 2015-16
                                                                  • The Consumer – What you need to know

                                                                    • Increasing consumption frequency
                                                                      • Surprisingly high consumption rate in Non-retail channels
                                                                        • Glass bottle/jars generate strong packaging appeal
                                                                          • “All-natural” can most effectively help premium product win consumers
                                                                          • Consumption Frequency

                                                                            • Ambient yogurt becoming an everyday dairy product
                                                                              • Figure 41: Consumption frequency of yogurt and yogurt drinks, April 2016
                                                                            • 40s consume less yogurt
                                                                              • Figure 42: Percentage of consumers who have not had yogurt or yogurt drinks in the last 3 months, by age, April 2016
                                                                            • Chilled variants are favoured by females
                                                                              • Figure 43: Percentage of consumers who had yogurt or yogurt drinks more than once a week, by gender, April 2016
                                                                              • Figure 44: Percentage of female consumers who had chilled yogurt or yogurt drinks more than once a week, by age, April 2016
                                                                          • Yogurt/Yogurt Drinks Consumption in Non-retail Channels

                                                                            • Higher than expected yogurt consumption in non-retail channels
                                                                                • Figure 45: Yogurt/yogurt drinks consumption in non-retail channels, April 2016
                                                                            • Preferred Packaging Types and Reasons

                                                                              • Cardboard box has the strongest appeal thanks to its premium look and convenience features
                                                                                • Figure 46: Preferred packaging types, April 2016
                                                                                • Figure 47: Cardboard box advocators’ perceptions towards different packaging types, April 2016
                                                                                • Figure 48: Example of yogurt in a TPA pack with cap sealing, China, 2016
                                                                              • Glass bottles see potential to hit the market
                                                                                • Figure 49: Preferred packaging types amongst females aged 20-24, April 2016
                                                                                • Figure 50: Perceptions towards different packaging types, April 2016
                                                                                • Figure 51: Percentage of consumers who agree that glass bottles/jars are premium, by consumer segments, April 2016
                                                                              • Portability and adaptability for on-the-go consumption are important packaging measurements
                                                                              • Product Features that are Worth Paying More for

                                                                                • “All-natural” is a more alluring safety assurance than “free-from” claims
                                                                                  • Figure 52: Product features that are worth paying more for, April 2016
                                                                                • Consumers across age groups pay attention to different product features
                                                                                  • Figure 53: Selected product features that are worth paying more for, by age, April 2016
                                                                                • Females are flavour explorers while males focus more on protein
                                                                                  • Figure 54: Selected product features that are worth paying more for, by gender, April 2016
                                                                                • High protein content, imported milk origin and vegetable contents can attract high earners
                                                                                  • Figure 55: Selected product features that are worth paying more for, by income, April 2016
                                                                                  • Figure 56: Example of yogurt and yogurt drinks featuring vegetables, Japan, 2015-16
                                                                              • Attitudes towards Yogurt

                                                                                • More yogurt products expected at on-trade channels
                                                                                  • Figure 57: Attitudes towards eating yogurt/yogurt drinks in restaurants, April 2016
                                                                                • Novelty-seeking will continue to entice new product trial
                                                                                  • Figure 58: Attitude towards new yogurt concepts, April 2016
                                                                              • Meet the Mintropolitans

                                                                                • Heavier consumption indicates yogurt will continue to enjoy good growth
                                                                                  • Figure 59: Percentage of consumers who eat each yogurt/yogurt drink type more than once a week, by consumer segmentation, April 2016
                                                                                  • Figure 60: Yogurt/yogurt drinks consumption in non-retail channels, by consumer segmentation, April 2016
                                                                                • Excessively high willingness to pay more for imported milk and high protein
                                                                                  • Figure 61: Product features that are worth paying more for, by consumer classification, April 2016
                                                                              • Appendix – Methodology and Abbreviations

                                                                                • Methodology
                                                                                  • Fan chart forecast
                                                                                    • Abbreviations

                                                                                    Companies Covered

                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                    Yoghurt - China - August 2016

                                                                                    £3,195.84 (Excl.Tax)