Changing market: A youngster sits at a themed restaurant in Beijing. China’s producers of dairy goods are experimenting with new products and branding to attract youth. — AFP
Beijing: Dairy brands in China are adopting creative strategies to navigate some of the industry’s emerging challenges, such as a declining birthrate, an ageing population, a market traditionally dominated by shelf-stable milk products and increased consumer preference for more cold-chain products.
Sales of packaged milk products fell 2.9% in the first quarter compared with the same period last year, mainly due to a recovery in outdoor activities and a shift in consumer spending patterns post-Covid, according to the China Shopper Report 2024 by Bain & Co and Kantar Worldpanel.
Given the situation, it is imperative that Chinese dairy brands create new categories and discover innovative opportunities, said Yan Wei, a principal of the China health and consumer and investor support teams at global management consultancy Roland Berger.
Yan made the remarks during the Food and Beverage Innovation Forum (FBIF) 2024 and FBIF Food Innovation Exhibition held in Shanghai from June 25-27.
Some dairy brands have already taken steps to overcome the challenges.
Haihe Dairy, an over six-decade-old time-honoured brand based in Tianjin, has, for instance, designed innovative products specifically for Gen Z consumers.
The company has infused local humour and incorporated the relaxed nature of Tianjin residents to come up with offerings such as coriander and avocado-flavoured milk.
Zou Yang, chairman of Haihe Dairy, credits its success to Tianjin’s inherent sense of humour.
Speaking at the FBIF Forum, Zou described Tianjin as a “Florida” for China, renowned for its xiangsheng, or crosstalk comedy.
Viral moments, such as the “diving grandpa” and motorboat surfing during city floods, epitomise the unique humour and laid back attitude of Tianjin residents.
Haihe Dairy has integrated city landmarks and cultural elements into its yoghurt-product promotions, making “playfulness” a hallmark of its product innovation, Zou said.
“In our collaborative products, we focus on the unique characteristics of Tianjin,” Zou said.
Haihe has partnered with Tianjin’s traditional bakery, Xianghe Bobo Shop, to open five co-branded fresh-milk stores in the city, using Haihe milk in baking pastries.
The company has also collaborated with the Tianjin Museum on culture-themed products and launched co-branded ice cream with the De Yun She Performance Group, known for xiangsheng performances. These collaborations have made their products iconic representations of Tianjin.
Looking ahead, Haihe Dairy plans to explore further collaborations with grilled fish brands to develop iced products and specialty milk beverages, Zou said.
“Our goal is to seamlessly integrate Haihe milk into various consumption scenarios,” Zou said, adding that its products sport a playful image in order to better resonate with consumers.
Some dairy producers have chosen to innovate on taste rather than flavours.
Bai Xuedong, vice-president and co-founder of Blue Sea Dairy, said the company’s focus on brand innovation is based on surprising Gen Z consumers with changes to taste.
He cited an example of its product Haomanzu, which means “satisfied” in Chinese, a yoghurt incorporating whole strawberries and grapes, differentiating it from other freeze-dried fruit yoghurts on the market.
“You have to delight your consumers with something challenging, yet unexpected,” said Bai.
But a change of flavour in dairy products is easily copied by competitors, she added. So, Blue Sea Dairy chose to innovate on taste, providing a deliciously luxurious experience of an entire fruit-in-yoghurt product, said Bai.
The company stocks 50 tonnes of seasonal fruits a year in advance, 48 hours from picking and processing to stocking, he said.
Another player, New Raspberry Co Ltd, has also made strides in product innovation by making yoghurt as a replacement for meals.
Zhang Xingshi, general manager of the company, said it was inspired by the popular fruit and oatmeal trend to develop its Chewy Yogurt product.
Combining yoghurt with grains and freeze-dried fruits, New Raspberry has positioned yoghurt as a potential meal replacement, catering to both necessity and frequent use. — China Daily/ANN
