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Yogurt - China - December 2012

All yogurt makers in China have to deal with a sceptical public whose confidence in domestically produced dairy products has been eroded by a seemingly unending series of food and safety scandals. Mintel’s survey results reveal that consumers are looking for spoonable yogurts that reflect wholesomeness and naturalness. Though flavoured yogurts do have a substantial and growing following, natural, textured and pure spoonable yogurts products are the base from which new and anxious consumers will develop an enduring attachment to yogurt in their daily lives..”


– David Huang – Senior Research Manager

 

Report Description:

Despite scandals plaguing China’s dairy sector, the country’s market for yogurt products has continued to grow. The continued macroeconomic growth of China’s economy overall, the development of the country’s tier 3 through to tier-5 cities, and the steady increase in income levels of the Mainland’s burgeoning consumer class have been primary drivers of the momentum for yogurt consumption.

Agriculture is one of the strategic development sectors for the Chinese central government. As such they have championed the development of three state-owned dairy enterprises that effectively control 60% of the domestic yogurt market. Mengniu, Yili and Bright control most of the largest farms and national distribution networks in the country, they also dominate China’s chilled distribution chain for dairy products, key to ensuring yogurts get to stores with sufficiently long shelf-lives to be attractive to shoppers.

Since the melamine scandal of 2008 the government has also encouraged consolidation of the dairy industry to reinforce quality standards and streamline upstream milk production. The government has also pushed its largest dairy product makers to develop agreements with foreign companies to upgrade technologies and processes involved in the safety and distribution of products.

However, regional strongholds remain where smaller dairies still control the supply chain of milk, local distribution channels and even shelf space. For instance, Sanyuan yogurts are popular with consumers in Beijing, while Weiquan has a very sizable consumer base in Shanghai.

By dominating the production, distribution and retail channels, domestic producers have made it difficult for international players like Danone and Yakult. While Danone pulled out of production in the Shanghai market and retrenched in Beijing to focus on a more affluent consumer, Yakult has taken a more studied approach to the marketplace by gradually building up factories in major tier 1 cities with an extensive and highly localized sales network that extends into fast-growing tier 3 and tier 4 cities.

Nevertheless, all yogurt makers in China have to deal with a sceptical public whose confidence in domestically produced dairy products has been eroded by a seemingly unending series of food and safety scandals. Mintel’s survey results reveal that consumers are looking for spoonable yogurts that reflect wholesomeness and naturalness. Though flavoured yogurts do have a substantial and growing following, natural, textured and pure spoonable yogurts products are the base from which new and anxious consumers will develop an enduring attachment to yogurt in their daily lives.

The industry’s single greatest challenge in China is engendering trust: the trust of consumers who are new to dairy products and regaining the trust of buyers who have grown cynical about the dairy industry at large.

 

Liqueurs - UK - January 2012

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Table of contents

  1. Introduction

      • Definitions
        • Market segments
          • Demographics
          • Executive Summary

              • The market
                • Figure 1: China yogurt market value, 2007-12
                • Figure 2: China yogurt market volume, 2007-12
              • Enablers and inhibitors to industry growth
                • The forecast
                  • Figure 3: Yogurt market value, 2007-17
                  • Figure 4: Yogurt market volume, 2007-17
                • Companies
                    • Figure 5: Dairy market share of leading yogurt makers in China by value, 2009-12
                  • Dairy scandals focus Mengniu’s development strategy
                    • Yili grows despite setbacks
                      • Bright growth through acquisitions
                        • International makers face serious challenges in China
                          • Consumer groups
                            • From a demographic perspective
                              • From a psychographic perspective
                                • Key issues
                                  • Three domestic brands dominate the market
                                    • Figure 6: Repertoire of yogurt brands bought in the past 6 months, October 2012
                                  • Consumers wary of additive claims for greater health and beauty
                                    • Figure 7: Top 3 factors to consider when buying yogurt, October 2012
                                    • Figure 8: Most popular top ranked factors to consider when buying yogurt, by demographics, October 2012
                                  • Back to basics: Yogurt flavour and texture trump complexity in consumer tastes
                                    • Figure 9: Frequency of having yogurt, October 2012
                                    • Figure 10: Top 3 factors to consider when buying yogurt, October 2012
                                  • Engaging consumers who have been neglected in the market
                                    • Figure 11: Agreement with the statement ‘Yogurt is a healthy alternative to treats like dessert or ice cream’, by demographics, October 2012
                                    • Figure 12: Agreement with the statement ‘yogurts with nutritional benefits such as probiotics are worth paying more for’, by demographics, October 2012
                                    • Figure 13: Most popular occasions of having yogurt, by demographics, October 2012
                                    • Figure 14: Next most popular occasions of having yogurt, by demographics, October 2012
                                • Three Domestic Brands Dominate the Market

                                  • Key points
                                    • State-owned or government-backed dairies dominate the market
                                      • Figure 15: Yogurt brands bought in the past 6 months, October 2012
                                      • Figure 16: Number of yogurt brands bought in the past 6 months, October 2012
                                      • Figure 17: Number of yogurt brands bought in the past 6 months, by demographics, October 2012
                                      • Figure 18: Yogurt brands bought most often in the past 6 months, October 2012
                                      • Figure 19: Market share by value of top three dairy producers in China, 2009-12
                                      • Figure 20: Market share by volume of top three dairy producers in China, 2009-12
                                      • Figure 21: Yogurt brands bought most often in the past 6 months, October 2012
                                    • Sources of dominance – secured and sufficient supply of high quality raw milk
                                      • Local brands remain strong in their home markets
                                        • Figure 22: Most popular yogurt brands bought in the past 6 months, by demographics, October 2012
                                        • Figure 23: Brands bought most often in the past 6 months, by cities, October 2012
                                      • Consumers purchase big and familiar brands due to safety concerns
                                        • Figure 24: Attitudes toward yogurt, October 2012
                                      • International brands find it difficult to thrive in the market despite positive image
                                        • Figure 25: Attitudes toward yogurt, October 2012
                                        • Figure 26: Agreement with the statement ‘International yogurt brands are of higher quality than local brands’, by regions, October 2012
                                        • Figure 27: Agreement with the statement ‘International yogurt brands are of higher quality than local brands’, by demographics, October 2012
                                        • Figure 28: Agreement with the statement ‘International yogurt brands are of higher quality than local brands’, by demographics, October 2012
                                      • Opportunities for international brands
                                        • Investment in cow farm or R&D center
                                          • M&A & JV activity
                                            • Marketing to target the affluent
                                              • What it means
                                              • Great Opportunities Still Exist in Health Benefits and Beyond

                                                • Key points
                                                  • Digestive is one of the main health benefits people look for
                                                    • Figure 29: Consumers’ attitude towards yogurt/yogurt drinks’, by demographics, October 2012
                                                    • Figure 30: Attitudes toward yogurt, October 2012
                                                  • Vanity aspects of the health benefits are under-appreciated
                                                    • Figure 31: Top 3 factors to consider when buying yogurt, October 2012
                                                    • Figure 32: Share of new yogurt product claims in China, 2008-12
                                                  • Exploring yogurt’s health benefits and more
                                                    • Figure 33: Occasions of having yogurt, October 2012
                                                  • Food pairing for digestion, both on-trade and off-trade
                                                    • Snacking is another trigger for consuming yogurt
                                                      • Figure 34: Occasions of having yogurt, October 2012
                                                      • Figure 35: ‘Yogurt is a healthy alternative to treats like dessert or ice cream’, by demographics, October 2012
                                                      • Figure 36: Comparison of occasions for eating ice cream vs yogurt, 2012
                                                      • Figure 37: Comparison of channels through which yogurt vs ice cream purchased, 2012
                                                    • What it means
                                                    • Back to Basics: Yogurt Flavour and Texture Trump Complexity in Consumer Tastes

                                                      • Key points
                                                        • Consumers most keen on All Natural yogurt
                                                          • Figure 38: Top 3 factors to consider when buying yogurt, October 2012
                                                          • Figure 39: Attitudes towards yogurt, October 2012
                                                          • Figure 40: Share of no additives/preservatives claims for new yogurt products launched into China market, January 2008-December 2012
                                                          • Figure 41: Share of yogurt flavours launched in China, 2008-12
                                                          • Figure 42: Top ingredients promoted by yogurt products sold in China
                                                          • Figure 43: Frequency of having yogurt, October 2012
                                                          • Figure 44: Usage of top ingredients promoted by yogurt products sold in China, 1997-2012
                                                        • Brands respond by introducing all sorts of ‘natural’ yogurt products
                                                          • Greek yogurt becomes very popular because of its natural image
                                                              • Figure 45: Most popular frequency of having Greek-style yogurt, by demographics, October 2012
                                                              • Figure 46: Most popular frequency of having Greek-style yogurt, by demographics, October 2012
                                                              • Figure 47: Most popular frequency of having Greek-style yogurt, by demographics, October 2012
                                                            • ‘Old’ Yogurt has jumped on the ‘all natural’ bandwagon
                                                              • Consumers want a sense of control over what goes into their yogurt
                                                                • Figure 48: Top 3 factors to consider when buying yogurt, October 2012
                                                                • Figure 49: Frequency of having yogurt, October 2012
                                                                • Figure 50: Most popular frequency of having flavoured yogurt, by demographics, October 2012
                                                                • Figure 51: Most popular frequency of having greek-style yogurt, by demographics, October 2012
                                                                • Figure 52: Agreement with the statement ‘I prefer natural/Greek-style yogurts with a neutral flavour, which I can modify myself’, by demographics, October 2012
                                                                • Figure 53: Agreement with the statement ‘I prefer natural/Greek-style yogurts with a neutral flavour, which I can modify myself’, by demographics, October 2012
                                                              • What it means
                                                              • Underserved Consumer Segments: Convenience Seekers, Men in Their Forties and Low Income Earners

                                                                • Key points
                                                                  • Convenience seekers
                                                                    • Convenience is one of the USPs for yogurt drink
                                                                      • Figure 54: Most popular occasions of having yogurt drinks, by demographics, October 2012
                                                                      • Figure 55: Attitudes towards yogurt, October 2012
                                                                    • Reasons for not drinking yogurt drink more frequently
                                                                      • Figure 56: Frequency of having yogurt, October 2012
                                                                      • Figure 57: Cost of store drinks relative to yogurt drink, 2012
                                                                    • Opportunities to increase the frequency of drinking yogurt drink
                                                                      • Men aged 40+ another consumer group that has been neglected
                                                                        • Men are less interested in the health benefits of yogurt
                                                                            • Figure 58: Agreement with statements ‘, by demographics, October 2012
                                                                          • Men less likely to consume yogurt on most occasions
                                                                            • Figure 59: Occasions of having yogurt, by demographics, October 2012
                                                                          • Reasons for men’s lack of interest in yogurt
                                                                              • Figure 60: Key grocery shopping decision maker, by demographics, April 2012
                                                                            • Importance of men and how yogurt brands have been dealing with them so far
                                                                              • Opportunities in the men segment
                                                                                • Consumers with low income are missed as well
                                                                                  • Low income earners are wary of additional health benefits and ingredients
                                                                                      • Figure 61: Agreement with the statements ‘I believe yogurt is good for one's digestion’, by demographics, October 2012
                                                                                      • Figure 62: Most popular top ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                    • What yogurt brands have been doing so far?
                                                                                      • Opportunities to sell yogurt to consumers with low income
                                                                                        • What it means
                                                                                        • The Future of the Market

                                                                                            • Figure 63: Total yogurt market value, 2007-17
                                                                                            • Figure 64: Market value projections for spoonable unflavoured yogurt, 2007-17
                                                                                            • Figure 65: Market value projections for spoonable flavoured, 2007-17
                                                                                            • Figure 66: Market value projections for drinkable/cultured yogurt, 2007-17
                                                                                        • Appendix – Frequency of Having Yogurt

                                                                                            • Figure 67: Frequency of having yogurt, October 2012
                                                                                            • Figure 68: Frequency of having yogurt, October 2012
                                                                                            • Figure 69: Most popular frequency of having natural yogurt, by demographics, October 2012
                                                                                            • Figure 70: Next most popular frequency of having natural yogurt, by demographics, October 2012
                                                                                            • Figure 71: Most popular frequency of having flavoured yogurt, by demographics, October 2012
                                                                                            • Figure 72: Next most popular frequency of having flavoured yogurt, by demographics, October 2012
                                                                                            • Figure 73: Most popular frequency of having Greek-style yogurt, by demographics, October 2012
                                                                                            • Figure 74: Next most popular frequency of having Greek-style yogurt, by demographics, October 2012
                                                                                            • Figure 75: Most popular frequency of having yogurt drink, by demographics, October 2012
                                                                                            • Figure 76: Next most popular frequency of having yogurt drink, by demographics, October 2012
                                                                                            • Figure 77: Most popular frequency of having other type of yogurt, by demographics, October 2012
                                                                                        • Appendix – Occasions of Having Yogurt

                                                                                            • Figure 78: Occasions of having yogurt, October 2012
                                                                                            • Figure 79: Most popular occasions of having yogurt, by demographics, October 2012
                                                                                            • Figure 80: Next most popular occasions of having yogurt, by demographics, October 2012
                                                                                            • Figure 81: Occasions of having yogurt drinks, October 2012
                                                                                            • Figure 82: Most popular occasions of having yogurt drinks, by demographics, October 2012
                                                                                            • Figure 83: Next most popular occasions of having yogurt drinks, by demographics, October 2012
                                                                                        • Appendix – Yogurt Brands Bought in the Past 6 Months

                                                                                            • Figure 84: Yogurt brands bought in the past 6 months, October 2012
                                                                                            • Figure 85: Most popular yogurt brands bought in the past 6 months, by demographics, October 2012
                                                                                            • Figure 86: Next most popular yogurt brands bought in the past 6 months, by demographics, October 2012
                                                                                        • Appendix – Number of Yogurt Brands Bought

                                                                                            • Figure 87: Number of yogurt brands bought in the past 6 months, October 2012
                                                                                            • Figure 88: Number of yogurt brands bought in the past 6 months, by demographics, October 2012
                                                                                        • Appendix – Yogurt Brands Bought Most Often in the Past 6 Months

                                                                                            • Figure 89: Yogurt brands bought most often in the past 6 months, October 2012
                                                                                            • Figure 90: Most popular yogurt brands bought most often in the past 6 months, by demographics, October 2012
                                                                                        • Appendix – Channels of Buying Yogurt

                                                                                            • Figure 91: Channels of buying yogurt, October 2012
                                                                                            • Figure 92: Most popular channels of buying yogurt, by demographics, October 2012
                                                                                            • Figure 93: Next most popular channels of buying yogurt, by demographics, October 2012
                                                                                        • Appendix – Top Three Factors to Consider when Buying Yogurt

                                                                                            • Figure 94: Top 3 factors to consider when buying yogurt, October 2012
                                                                                            • Figure 95: Most popular top ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 96: Next most popular top ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 97: Other top ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 98: Most popular second ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 99: Next most popular second ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 100: Other second ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 101: Most popular third ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 102: Next most popular third ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                            • Figure 103: Other third ranked factors to consider when buying yogurt, by demographics, October 2012
                                                                                        • Appendix – Attitudes toward Yogurt

                                                                                            • Figure 104: Attitudes toward yogurt, October 2012
                                                                                            • Figure 105: Agreement with the statements ‘I believe yogurt is good for one's digestion’ and ‘I generally pay attention to the health claims on yogurt/yogurt drinks, by demographics, October 2012
                                                                                            • Figure 106: Agreement with the statements ‘Yogurt is a healthy alternative to treats like dessert or ice cream’ and ‘It is not very convenient to eat yogurt while on the go’, by demographics, October 2012
                                                                                            • Figure 107: Agreement with the statements ‘yogurt/yogurt drinks make a perfect snack in between meals’ and ‘yogurt is a good accompaniment to other food such as cracker, biscuits, cereals or salad’, by demographics, October 2012
                                                                                            • Figure 108: Agreement with the statements ‘I prefer yogurt with fruit bits’ and ‘yogurts with nutritional benefits such as probiotics are worth paying more for’, by demographics, October 2012
                                                                                            • Figure 109: Agreement with the statements ‘I am concerned about preservatives used in yogurt’ and ‘I would like to see more yogurt/yogurt drinks with 'super food' ingredients’, by demographics, October 2012
                                                                                            • Figure 110: Agreement with the statements ‘I would like to see a greater variety of yogurt flavours’ and ‘I prefer natural/Greek-style yogurts with a neutral flavour, which I can modify myself’, by demographics, October 2012
                                                                                            • Figure 111: Agreement with the statements ‘International yogurt brands are of higher quality than local brands’ and ‘I prefer well known yogurt brands for safety reasons’, by demographics, October 2012
                                                                                            • Figure 112: Agreement with the statement ‘Own label yogurt is just as good as well-known yogurt brands’, by demographics, October 2012

                                                                                        Companies Covered

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                                                                                        Yogurt - China - December 2012

                                                                                        £3,273.18 (Excl.Tax)