Nation to see big jump in dairy market: expert

Experts said the Chinese dairy market will see rising momentum in the next five years, given robust demand in the second-largest economy.

The sales of dairy products in China are expected to grow over 3 percent per year from 2018 to 2023, and the market size could reach 430 billion yuan ($62.44 billion) in 2023, up from the current 370 billion yuan, Li Shengli, director of the Sino-Dutch Dairy Development Center, told the Global Times on Wednesday. Li predicted that sales of Inner Mongolia Yili Industrial Group Co and China Mengniu Dairy Co will increase by 30 billion yuan to 50 billion yuan in five years, bringing the two giants into the global top five.

Yili had revenue of 61.3 billion yuan in the first three quarters of this year, up nearly 17 percent yearon-year. Mengniu realized revenue of 34.4 billion yuan in the first half of this year, also up 17 percent, according their fiscal reports. Li said consumption of dairy products in China will rise 15 to 20 percent in next five years.

The market for pasteurized yogurt will become saturated as its growth rate between 2011 and 2017 was about 124 percent per year, but the consumption of low-temperature milk, yogurt with health functions, milk powder and cheese have big potential, and the choices of consumers could get more diversified, he said. In terms of the dairy chain response, Rahul Colaco, president of FrieslandCampina China suggests that the dairy companies could produce nutritious, healthy products for all age groups, and digitalization and personalization could also be way out.

Large-scale farms are the main producers, similar to the US. Seasonal imbalances are likely to decline, while imbalances in supply between north and south parts of China will worsen, he warned.