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May 17, 2021updated 01 Feb 2022 12:12pm

Protein, traditional flavours driving China’s yogurt market

Covid-19 has sparked a flurry of innovation in China's growing yogurt market – a category dominated by domestic brands. Peter Peverelli sets out what consumers are looking for.

By Peter Peverelli

Food is one of the most innovative industries worldwide. Consumers want to see regular changes in flavours, textures and colours.

Typically, snacks are at the forefront of such innovation. These are often not the healthiest foods, but scanning the products launched in China in recent months, a product generally regarded as a relatively healthier snack stands out: yogurt.

Dairy is regarded as a nutritious food group in China and therefore tops the country’s current food pyramid. The Chinese believe dairy products enhance the immune system, so the Covid-19 pandemic has triggered the launch of a host of new products. As many consumers still have a problem with the ‘creamy’ flavour of fresh milk, yogurt has always been widely accepted as lighter and more refreshing product.

The prices of new products in China’s yogurt market have increased sharply during the past year with the appearance of fancier products. This is creating some apprehension among less affluent yogurt lovers. Consumers of yogurt in the “post-90” cohort indicate they usually buy yogurt for approximately CNY5 (US$0.78) a pack. However, this type of yogurt is seen less and less in the various retail channels. Brands that are currently popular are priced around CNY18 a pack – and that is now regarded as relatively cheap.

One of the latest launches is Blueglass’ avocado yogurt with oat flakes. Blueglass is a brand of Beijing Yuehuo Catering Management Co., a business founded in 2012. It owns a farm with 10,000 Holstein cows, and engages in independent R&D of patented strains and fermentation technology. However, this yogurt is priced at CNY42 a pack.

Young, educated blue-collar workers might buy this product (avocado is becoming popular) but it is too expensive for the average consumer. According to a recent study, the best price range for yogurt to reach a large consumer segment is CNY5-10. For high-grade fancy yogurts, CNY18-20 would be acceptable, according to a report last month from the local FBIF Food & Beverage Innovation Forum.

Protein power in China’s yogurt market

Several of the recently-launched yogurts in China have a high protein content. Rushi (or ‘Like Real’; a brand of Shanghai Bright Dairy) was the first brand of unsweetened yogurt in China, launched around two years ago. This year, it has added a high protein variety. LePure from Shanghai LePure Bioengineering has rolled out a high-protein yogurt sold with a jasmine-tea flavour.

While existing Chinese yogurts were almost drinkable, modern consumers are developing a liking for yogurts with a more viscous structure like Greek or Bulgarian yogurt. Products with higher protein content create such a texture while also having a higher nutritional appeal.

A rising star in this segment of China’s yogurt market is Classy Kiss from Green’s (Shenzhen) Bioengineering, which emphasises its 3.3 grams of protein per yogurt in its marketing. Several of my local, thirty-something friends (I am writing this column from China) have suggested I should try it for its smooth mouthfeel. Classy Kiss has recently launched a ‘0 sugar, 0 fat’ yogurt under the Yo Keep brand.

The importance of tradition

In a number of previous columns, I have pointed to the trend of using traditional flavours in food NPD in China – and this has been seen in recently-launched yogurts. Away from LePure’s yogurt flavoured with jasmine tea, Beijing’s famous pastry maker Daoxiangcun (founded in 1895), while not a dairy producer itself, has even launched a one-time Dragon Boat Festival yogurt flavoured with mooncake, the traditional pastry eaten during that festival and of which the company is a principal supplier. (Other food companies are experimenting with mooncakes as well, with a mooncake ice cream from Häagen-Dasz a notable example).

Traditionally linked with health, black food is popular in China. A number of black products have been launched in China’s yogurt market. There is a yogurt coloured with inkfish ink and black sesame seeds from Yiming. Meanwhile, Yili Dairy, under its Ambrosial brand, also has a range of black yogurt with unusual flavours including chives, garlic, shrimp, rice vinegar, etc. It will be interesting to see if these off-flavoured yogurts are here to stay.

As in a growing number of markets worldwide, a number of recently-launched yogurts do not contain milk (or not only milk).

Tianyou Dairy has launched Zero, a 0 sugar, 0 additives soybean-based yogurt. Doubendou’s Flógurt is also a soy-based yogurt. Doubendou, a subsidiary of Dali Foods Group, one of China’s major food companies, produces a broad range of soybean milks and Flógurt is its first yogurt.

How major international brands can milk interest

China’s growing appetite for yogurt should be attractive for international suppliers. However, although a number of foreign brands are available in Chinese supermarkets, none is playing a leading role.

The current ten most popular yogurt brands on online supermarket Jingdong (as of 12 May) do not include a foreign brand. Jingdong’s main competitor, Tmall, has compiled a list (as of 6 May) of the top ten most popular imported yogurts. Interestingly, the top brand, Weidendorf, is not really from overseas, but a brand owned by Chinese food brand developer Pinlive Foods Ltd. The only information Pinlive provides is that it is of German origin. The remaining brands in this list are not top international brands.

Why are major international brands struggling to make inroads in China’s yogurt market? The trend towards more protein can be readily addressed by a type of yogurt that has gained popularity in Europe in recent years: skyr. Arla Foods’s range of skyr-style yogurts are doing well in Europe and its advertising statement should appeal to young, affluent Chinese consumers as well.

Adding Chinese flavours would require some R&D, but why not launch yogurts with ‘typical flavours’ from your own country. Danone is offering Danio flavoured with the typical Dutch speculaas (ginger snaps). Strictly speaking, that product is quark but Chinese producers are not so strict in naming their products and Chinese consumers regard quark as a type of yogurt. Macarons are extremely popular in China, so what is stopping French yogurt makers from offer macaron-flavoured yogurt there?

There are, of course, also opportunities to be had in the area of dairy alternatives, a category gaining steam in markets in North America and Europe. Other principal ingredients, like almond, could be tried in China.

 

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