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May 13, 2019

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Ice cream at forefront of dairy competition

Domestic and foreign dairy companies are trying to milk consumer interest in China by diversifying products and adapting to changing public tastes.

Shanghai-based Bright Dairy Food Co redefined its ice cream segment in April after acquiring Shanghai Yimin No. 1 Food Factory last year.

Yimin, now a subsidiary, specializes in ice cream, confectionery products and cold drinks. It has been selling popsicles and ice cream under the Bright brand for more than six decades, but the flavors that once defined the taste of summer from the 1950s through to the 1990s eventually fell victim to a perception of being old and stodgy.

Despite some nostalgia feelings for the unpretentious flavors and packaging of the past, Shanghai consumers over the years have clamored for the ice cream maker to get in tune with a younger generation more adventurous in its tastes.

Bright is combining its Momchilovtsi yoghurt, a brand first introduced from a village in Bulgaria in 2010, with Yimin’s ice cream lines as part of efforts to resuscitate the time-honored old brand.

“We welcome consumers’ contributions to new product ideas, and we are keeping our options open with regard to new industry partnerships and new product lines,” Bright Dairy Chairman Pu Shaohua said when the revitalized ice cream product was launched.

Adding yogurt flavor to sugary ice cream is just one example of domestic brands adapting to new market realities, including the popularity of delivery services.

Bright Dairy’s on-demand fresh milk delivery platform, which currently covers 17 cities in China, will be expanded to fill orders for ice cream and yogurt drinks.

Yili, Mengniu and Unilever are the three major players in the ice cream market, according to market research firm Euromonitor International. Bright Dairy claims it has an edge over its rivals with higher quality milk.

The fresh milk sector is an area of increasing industry focus and competition.

Fresh low-fat and skim milk, marketed under Bright’s UBest brand, has been on the shelf for a few weeks now, and yogurt with new types of probiotics and flavors will also hit the market in the near future.

Euromonitor said it expects the fresh milk market in China to be valued at about 39.1 billion yuan (US$.5.75 billion) by 2022, compared with the 95-billion-yuan value of UHT, or stable shelf-life, milk.

Fresh milk is estimated to grow at an average of 6 percent in the next four years, while UHT milk market is forecast at more modest 1 percent growth annually.

One of Bright’s stronger rivals is New Zealand’s Fonterra, which is making inroads in the fresh milk market.

Its Anchor brand butter and cheese were introduced into China about five years ago, and now its fresh milk is set to expand, with claims of high-quality and pure taste.

Shanghai resident Agnes Huang, who has bought Anchor butter and UHT milk in the past, said she’s game to try new dairy products, but most consumers like her certainly won’t be sticking to only one brand.

“Dairy products have been offering new tastes much faster than I expected, especially ahead of the summertime, and that gives me more reason to try new flavors and new brands,” she explained.

Anchor’s fresh milk comes from its dairy farm in Tangshan, Hebei province. National expansion is anticipated after Fonterra successfully sold small batches through Alibaba’s fresh food and grocery market Freshippo for a year.

Chester Cao, vice president of consumer brands for Fonterra China, said the company is also testing market response before launching more dairy products under the Anchor brand.

Refrigerated fresh pasteurized milk will be an even more active category in the coming years, according to Loris Li, consumer research director at Mintel China.

Consumption of dairy products will increase, both from the standpoint of daily nutrition and as a snack, she added. Up to 83 percent of new products launched in China in the past three years have been UHT-processed milk, highlighting the huge potential of the fresh milk segment.


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