Fonterra, New Zealand’s dairy cooperative and a leading dairy food services player in China, has launched its new brand, Anchor Food Professionals, in Shanghai, in a move designed to take advantage of a fast-expanding dairy market in the Chinese mainland, estimated to have an annual compound growth rate of more than 20 percent.
Market researchers looking at the sector said that new lifestyle concepts are being adoptedby Chinese consumers, such as “afternoon tea”, “coffee break”, and “office pantry”.
And analysts said these have driven the growth of consumption of dairy food and beverages,transforming food consumption habits.
They added that helping to sustain the rise in demand are creative new food and beverageswhich are now finding favor with Chinese consumers.
The managing director of Fonterra’s China operation, Christina Zhu, said Anchor FoodProfessionals would provide western restaurants, bakeries and casual dining restaurants inChina with different products ranging from cream and cheese to butter, and the companywould also help businesses with their product presentation, pricing, and promotions.
Analysts say that a wide variety of western food and beverages have been penetrating theChinese market and that consumers’ demand for bakery products, such as cakes, bread,dairy drink and desserts such as icecream, is growing fast, which in turn is attracting moreplayers to compete in the developing market.
According to data compiled in April by Dianping Holdings, China’s biggest online food servicerating website and a key information provider, the size of the food services market in Chinathat uses dairy goods has grown from 71.2 billion yuan ($10.92 billion) in 2012 to 187.2 billionyuan in 2016, and is expected to further grow to 550.8 billion yuan in 2020.
The number of bakery, beverage and deli shops using dairy goods has also surged. In 2015alone, China had 40,000 new bakeries and beverage stores serving dairy food and drinks,while in 2012 the number was fewer than 5,000.
“The market is growing fast and consumer appetites are also changing quickly. Just two yearsago the most popular bakery items were puffs and egg tarts, now the most popular items havebecome durian cakes, cream cakes, and cheese cakes,” said Sun Hongxia, an analyst andmanager in the strategic branding department of dianping.com.
A research note from China Galaxy Securities Co Ltd said young consumers are particularlyfrequent visitors to bakeries. A survey which polled more than 2,000 respondents acrossChina showed 43 percent of consumers, aged between 20 and 30, said they visit bakeriestwo to six times every week.
The average consumer spend on a single bakery item has also been increasing. “I can recallfive years ago when I spent 5 yuan on a tart, I considered it a little treat for my hard work atthe end of a day. But now as my income has risen, I love to buy 16-yuan croissants forbreakfast, or buy an assorted bag of bread for the weekend,” said Yu Zhihua, a 27-year-oldShanghai consumer, shopping at a bakery in Lujiazui.
Yu said her average spend in bakeries has increased from around 30 yuan per week fiveyears ago, to 200 yuan now.
Food sector experts say they have also seen growing consumer interest in homemadebakeries, another driver of the general growth in dairy goods consumption in the country.