Exporters toast China’s taste for pizza and cakes
Print Edition
At the upmarket Black Swan bakery in Beijing, where well-heeled customers browse rooms of glass cases displaying elaborate layered western-style cakes, Jin Yuchen is buying birthday cake for his mother.
Jin is one of a rapidly growing number of Chinese consumers with a taste for non-traditional foods such as rich cakes and pizza that is fuelling demand for imported cheese.
Like many others, Jin chooses domestic producers for his daily milk consumption but wants that extra badge of quality for a special occasion.
“I drink milk produced domestically,” Jin said as he selects a pink confection. “But for my mother, I insisted on buying a cake that uses high-quality ingredients.”
The Black Swan bakery imports cream cheese and other dairy products from New Zealand’s Fonterra, the world’s largest dairy exporter, which is ramping up cheese production to meet the growing Chinese demand.
Chinese diets have traditionally been low on dairy products, in part because most adult Chinese are lactose intolerant, meaning they have difficulty digesting the sugar found in milk. Cheese and cream contain lower levels of lactose than milk. Euromonitor International expects the China cheese market to jump 23 percent to 3.5 billion yuan (US$547 million) this year.
“The tastes of Chinese consumers are developing and more of them are becoming more accustomed to Western food culture,” Euromonitor said in a report. “With the rapid expansion of fast food chains such as Pizza Hut and McDonalds, the majority of Chinese people have already tasted cheese and have found they are able to accept it.”
Restaurants and bakeries account for up to 80 percent of the market. Pizza chains in particular are multiplying rapidly — Yum Brands Inc is eyeing expansion beyond its 1,600 Pizza Hut outlets in China.
“We absolutely love cheese, I want to eat it every day,” said Ms Zheng, 45, a housewife eating in a Shanghai Pizza Hut restaurant who declined to give her first name. The remaining 20 percent of the market is driven by retail consumers, mostly buying cheese for children as a healthy snack.
“Dairy import companies are really starting to think about developing their cheese segments,” said Matthieu David-Experton, chief executive of Daxue Consulting in Shanghai. “The market is wide open.”
US firm Kraft Heinz Co, which sells products such as Kraft Parmesan Cheese in China, said it sees “significant untapped potential” for many of its brands in China.
The United States has ambitions to lift China above its current position as the country’s No.5 cheese export market, its Dairy Export Council said.
“Just as Fonterra and other supplies from Oceania and Europe are seeing, we see China as a growing opportunity,” Alan Levitt, the council’s vice president of communications, said by email.
Denmark-based co-operative Arla Foods, Europe’s biggest mozzarella producer, said it expected its branded business to double in China this year.
“We continue to see that Chinese consumers use and eat cheese more and more,” said Asia chief Jesper Colding.
Domestically, the leader is Bongrain (Tianjin) Foods Co Ltd, a subsidiary of France’s Savencia Fromage and Dairy. Bongrain last year opened the first internet cheese retailing on Alibaba Group Holding’s Tmall Global online marketplace and also launched a cheese dessert, packaged like ice cream and marketed as a snack.
But for many, part of the cache comes from using foreign-sourced cheese, no matter the expense. Lin Yuwei, a chef at one of Beijing’s five hip With Wheat Bakeries, uses Fonterra products in creations inspired by a visit to dairy farms in New Zealand and Australia.
“As a high-end bakery chain, we are willing to pay prices for dairy products of a superior quality,” Lin said.
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