Liquid Dairy Trends Report for Q1-Q3 2023 01-15-2024

Summary: In Q1–Q3 this year, China's sales of liquid dairy products slipped in value terms by 2.2% YoY, attributed to reduced purchase frequency per customer and lower average unit prices.

On 11 Dec., the Economic Daily (a Chinese state-owned newspaper) and Yili jointly published the Q1–Q3 Dairy Products Consumption Trend Report, with analysis of consumer data from Kantar. This shows that China's sales of liquid dairy products (UHT/fresh milk, UHT/chilled yoghurt, milk beverages and lactobacillus drinks) fell slightly over this period of 2023, whilst the share made up by imported products fell still further. The report also illustrates the market is trending towards the healthier categories.

Weak Consumption

In Q1–Q3, national sales of liquid dairy products went down by 2.2% YoY, with 99.3% market penetration. Although more urban households were consuming liquid dairy products, the purchase frequency per customer dropped and the average unit price of liquid dairy products declined by 4.1% YoY according to data from the Ministry of Commerce as of end of June.

Segment performances were mixed:

  • Ambient liquid dairy ((UHT milk, yoghurt and milk beverages): sales down 1.1% YoY, dropping less than the overall category average
  • Chilled liquid dairy (chilled milk, yoghurt and cultured milk): sales down 6.3% YoY, due to fewer consumer purchases; but chilled milk purchase volumes and prices were up
  • By distribution channel, sales of liquid dairy through hypermarkets and large supermarkets fell over Q1-Q3 by 14.5% and 7.5% YoY respectively. But sales increased in smaller stores (incl. mini markets up 13.6%, convenience stores up 13.6%, grocery shops up 3.8%), and also in wholesalers (up 13.1%) and online shopping platforms (up 0.4%).

  • Sales of ambient liquid dairy: hypermarkets made up 16.2% (a 15.6% decline), while mini markets and online platforms accounted for shares of 17.4% and 15.3% (growth of 15.7% and 1.4% YoY)
  • Sales of chilled liquid dairy: hypermarkets led with a share of 22.6% (but saw a 10.9% decline); mini markets accounted for 14.9% (4.0% growth), and online platforms accounted for 14.0% (down by 4.2%)
  • By consumption region, sales in county-level cities and counties grew faster, contributing 30.4% of sales of liquid dairy products, up by 1.0% YoY; conversely, sales in provincial capital cities, prefecture-level cities and Beijing, Shanghai and Guangzhou all fell.

    Health Awareness Driving Segments

    As awareness of heath and nutrition issues has grown among the public, demand grew in niche segments that feature sugar reduction, organics and speciality proteins.

  • In Q1–Q3, sales of sugar-reduced yoghurt increased by 14%, in contrast with a 15.0% decrease in sales of whole sugar yoghurt
  • Sales of organic milk were up by 19.0%, compared with a meager 0.9% growth in non-organic milk
  • Sales of milk marketed with speciality proteins grew sharply by 27%: A2 milk up 34%, immunoglobulin milk up 57%, lactoferrin milk up 65%; while standard milk grew only 2%.
  • Imports under pressure

    In Q1–Q3, locally produced liquid dairy products accounted for 97.2% of total sales compared with imported liquid dairy products at 2.8% only in value terms, with a significant reduction in ambient products, and strong growth in chilled products, but from a very low base.

    Table Sales of Domestic and Imported Liquid Dairy Products, Q1–Q3 2023
    Item Domestic Imported
    Market Share YoY Change Market Share YoY Change
    Liquid dairy 97.20% -1.10% 2.80% -21.30%
    —Ambient dairy products 96.60% 0.10% 3.40% -22.80%
    —Chilled dairy products 99.50% -5.80% 0.50% 105.30%

    Source: Q1–Q3 Dairy Products Consumption Trend Report


    For more information,please check our Dairy Products China News.

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