Bowei Gong, Shanghai Office, Bord Bia - Irish Food Board
Cheese consumption in China forecasts a positive image in China,for more importing statistics on cheese please refer to previous FoodAlert here.
Cheese consumption remains low but grows fast
Daily dairy intake is consistently an important theme in China, however cheese consumption, while growing still remains low. Chinese dairy consumption of fresh & UHT milk, yoghurt, and milk powder account for 95% market share. Cheese, butter and other dairy products share the remaining 5%.
Cheese consumption in China recorded 0.1kg per capita in 2016. Looking at the neighbour countries, Japan and South Korea, both were over 20 times higher than China (2.4kg and 2.6kg respectively), which implies a significant opportunity for cheese in China in the future.
In a short term cheese will remain a minor component in Chinese dairy options, but a wider exposure to western diets and increasing disposable income will encourage more Chinese consumers to eat cheese than ever before. Retail sales volume is predicted to grow promisingly by a CAGR of 10% in the next five years.
Cheese snacking in retail is a prominent growth driver
Although foodservice is still the most important channel for cheese consumption across the country, the retail sales will perform well in 2018, especially in higher tier cities, thanks to the higher purchasing power and more exposure of western lifestyle. In retail, processed cheese snacks are trendy at the moment.
Kids cheese market dominates 55% of retail cheese market (Kantar 2017) and sees a positive growth in the near future. However, Milkana has already occupied the majority of the market share, which leaves little room for new entrants. Compared to the well-developed kids cheese market, the cheese snacking market for adults has ample room for growth.
Similar to kids cheese, cheese snacks are majorly processed and have a variety of shapes, including stick, mini cup portion, cube, ball, triangle, bar shape and so forth. Functional wise, convenience-in-use and easy-to-carry is crucial factor for snacking consumption. On the other hand, innovative appearance is leading consumer trends.
As a type of snacking, flavour should be attractive enough to cater to consumers’ needs. Traditional original flavour cheese snacks can hardly meet varied demands of sophisticated Chinese consumers. Compared to slight taste improvement by foreign brands, some Chinese brands provide very unique offerings, such as potato, date, peanut, and pizza flavour.
Cheese snacks can be premiumised
With the consumption upgrades and increasing purchasing power, more Chinese consumers are willing to pay premium for products with healthier benefits, higher quality and fun packaging. Cheese can also be created as a type of snack for premium market thanks to the following reasons:
1. Natural nutritional ingredients: rich in calcium, rich in protein, natural fat, low in sodium. To Chinese consumers, nutritional benefits are usually associated with higher added value.
2. Consumers’ perception toward cheese is westernised and imported, which is associated with mid-high end image by most Chinese consumers.
3. Stories behind multiple cheese types: cheese snacking is a shortcut for Chinese consumers to teach them about cheese and ignite interest in a variety of cheese flavours.
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