China’s Food Capital – Yantai

It’s getting time to highlight another important food region of China in this blog: Yantai in Shandong.

Regional marketing: ‘Hospitable Shandong’

Shandong province is often referred to as China’s fruit and vegetable garden. Shandong was China’s top vegetable production region in 2019 with 11.65% of the national output. Yantai, a coastal city in Shandong, is committed to building a brand for itself as “China’s food city”. Geographically, Yantai is situated close to the Liaodong peninsula of Liaoning province, another important food production region, with a quick ferry service with Dalian, a major industrial and port city on that peninsula.

YantaiLoc

According to the mayor of Yantai, “We are working to boost the city’s food sector by promoting food diversity and security, aiming to develop the city into a heavyweight in both China and the overseas food market”.

The food sector has always been one of Yantai’s competitive industries. The China Food Industry Association recognised Yantai as a well-known Chinese food city in 2009.

Statistics from the local government show that in 2017 revenue generated from the city’s food industry hit RMB 194.87 billion, an increase of 11.9% from the previous year. This figure was 13.8% of the total industrial turnover of the region and 11.9% of the  turnover of the provincial food industry. A recent survey comparing the GDP of major Chinese cities with that of nations in other parts of the world, revealed that the economy of Yantai is roughly comparable to that of Belarus.

There are more than 500 major enterprises doing business in the city’s food industry. These include Changyu Pioneer Wine Co., cooking oil producer Shandong Luhua Co., Shandong Longda Meat Foodstuff Co., and Shandong Oriental Ocean Sci-tech Co.; the company annually produces 1,500,000 mt of edible oil in 33 factories around the nation, benefiting more than 10 mln peanut farmers.

Yantai has a competitive edge in 16 food sectors including fruit and vegetables, oil, meat, aquatic products, rice noodles (fensi), cake, candy, instant foods, dairy products and condiments. A noteworthy product is the cherry. The cherries from Yantai are the best in China. The following illustration is a promotional picture indicating the nutrients in cherries.

The city has 27 nationally famous trademarks and 96 leading provincial trademarks in the food sector. Three brands – Changyu, Luhua and Longda – were named among China’s top 500 most valuable brands in 2014.

Food products made in Yantai are exported to more than 80 countries and regions including Russia, the United States and South Korea. According to the city’s plans, revenue generated from the food industry will reach RMB 300 billion by the end of 2017.

Yantai’s industrial sector generated more revenue and profits in the first half of 2017 than that of any other city in Shandong province, according to data from Yantai’s municipal commission of economy and information technology. The city’s total industrial revenues reached RMB 931 billion in the first half of 2017, leading to total profits of RMB 66 billion, the statistics state.

Home of fruits

With its favorable climate conditions and geographical location, Yantai has become one of China’s most important fruit planting, processing and exporting bases”.

The city is known as China’s hometown of fruit. Fruits produced in Yantai, such as apples, cherries, pears and grapes, are known far and wide.

Yantai apples, which were given geographic indication status by the State Quality Supervision and Inspection and Quarantine Administration in 2002, have become one of the things the city is renowned for. An important centre for apple growing is Qixia, a town Southeast of Yantai.

With a cultivating history of more than 140 years, Yantai has 181,333 hectares of apple orchards, with an annual output of 4.23 mln mt, according to statistics from the Yantai Agriculture Bureau.

The city has more than 200 varieties of apples. The brand Yantai Apple has a value of RMB 10.59 billion, the leading amount in China’s fruit industry for seven consecutive years.

With a bright color and sweet taste, Yantai apples are exported to more than 60 countries and regions with an annual export volume of 600,000 mt, accounting for one-fourth of the country’s total apple exports.

Twenty-one tons of Yantai apples were shipped from Yantai to the United States again on Nov 9, 2015. It was the first time for Yantai apples to enter the US market. As a country with strict inspection and quarantine measures, the US had previously forbidden apple imports from China for 17 years.

“As the price in the US is twice the price in Asian countries, expanding to the US market will surely promote the apple industry in Yantai and increase locals’ income,” said Bai Guoqiang, head of Yantai Agriculture Bureau.

Cherries are another well-known fruit from Yantai, where cherry trees have grown for 130 years. More than 25,000 hectares of cherry trees produce about 190,000 mt of the fruit a year. The cherries are exported to more than 60 countries and regions, including South Korea, Germany and the US.

Fruit juice

With such a variety of fruits, it is not a surprise that Yantai and the surrounding regions are a centre of fruit juice production in China. One of the country’s leading producers of apple juice concentrate, Andre, is located in Mouping, just East of Yantai.

AndreLogo

North Andre Juice Co. Ltd. was established in 1996. The company’s products include: juice concentrate, pureed and preserved fruit, fruit essences, and pectin. Since its establishment, the company has invested more than 3 billion RMB and set up 9 modern juice concentrate production bases in Shandong, Shaanxi, Jiangsu, Liaoning and Shanxi. Andre operates a total of 14 juice concentrate processing lines, 2 pectin production lines, 1 puree processing line and 1 dried fruit production line. The designed annual fruit processing products is more than 2 mln mt, and the annual juice concentrate production 340,000 mt, the annual pectin production 4000 mt and the annual puree production 10000 mt. In April 2003, Andre Juice Company went public on the Hong Kong Stock Exchange, becoming the first listed company in juice concentrate industry in China.

China’s Bordeaux

At almost the same latitude as Bordeaux in France, Yantai is also considered one of the world’s top seven coastal grape-growing areas. It was named the only “international grape and wine city” in Asia by the International Office of Vine and Wine in 1987.

The city now has more than 18,000 hectares of vineyards, 11,000 hectares of which provide grapes for winemaking. It is home to more than 20 international wine businesses and a large number of domestic vintners, including the brands Changyu, Great Wall (owned by the COFCO Group) and Dynasty. Chateau Lafite Rothschild selected Penglai, a county-level city of Yantai, to develop its first vineyard and chateau in China. Penglai established a sister relationship with Australia’s Barossa, one of the world’s finest wine producing regions, on March 25.

Changyu Wine Co. is China’s oldest and largest winery. The company was founded in 1892 by Zhang Bishi. The company’s name is formed from his surname Zhang (Chang) and the Chinese character meaning prosperity. In 2002, the company entered into cooperation with Castel group in France to establish the first professional chateau in China. In 2006, the company cooperated with a Canadian company to build the largest ice wine chateau in the world near Huanlong Lake of Liaoning province. It has also expanded overseas, building Chateau Changyu Kely in New Zealand. Changyu Pioneer Wine Company is now among the ten largest wine companies in the world, producing more than 900,000 hls of wine p.a.

Changyu is constructing a Wine City, with help from the Italian wine company Illva Saronno Holding Spa. It will include a European style chateau and a Wine Research Institute. The facility has been referred to as a Disney World for Wine in a Bloomberg report.

International food expo

To further boost its food industry, Yantai holds a series of international food trade fairs and trade fairs every year.

Fruit & Vegetable Food Fair

YantaiExpo

During the 16th Fruit, Vegetable and Food Fair held in the city last month, thousands of participants from more than 10 countries and regions including Japan, South Korea and Italy came to Yantai in search of business opportunities.

The four-day event attracted organizations and companies from home and abroad to display fruits, vegetables, seedlings, food processing equipment and agricultural machinery at nearly 900 booths.

Six overseas organizations and delegations including the Japan Consul General in Qingdao participated in the fair and brought their latest developments in fruit and vegetable production and related equipment manufacturing.

Some high-tech products at the expo were particularly interesting, including irrigation equipment from Israel, Italy’s agriculture testing machines, apple-planting technology from Japan and unmanned plant protection helicopters from Shandong.

Held in Yantai every year since 1999, the event has become one of China’s most influential expos in the fruit, vegetable and food industry. It provides a sound exchange and cooperation platform for Chinese and foreign companies in the sector.

The fair’s organizers said that the event has attracted more than 1.7 million delegates from across the world during the past 15 years. This year’s event alone attracted 58,000 visitors and the trade volume hit RMB 230 million.

East Asia International Food Trade Fair

The 12th East Asia International Food Trade Fair was held in Yantai June 2 – 5, 2017. resulted in the signing of cooperation agreements worth RMB 1.60 billion. With the theme of “Green, Innovation, Cooperation and Development” attracted more than 900 enterprises from home and abroad. They brought more than 13,000 food products covering 16 categories, from imported food to time-honored Chinese products. The fair was also regarded as lucrative by enterprises from other Chinese regions. More than 100 food enterprises from Sichuan brought their products to the fair, including local liquors, pigs, tea, pickles, condiments and snacks. Exhibitors from Jilin also made appearances as a group, presenting, among other products, ginseng, forest frog’s oviducts and pilose antler, known as the “three treasures in Northeast China”. Enterprises in Harbin offered Qing’an rice, time-honoured Harbin sausages and other specialties. Co-organised to the food fair, Yantai also hosted a trade fair for Jiangxi specialties and an expo of imported maternal and child products.

Scottish Chambers of Commerce opens trade office in Yantai

The Scottish Chambers of Commerce opened an international trade office in Yantai, a Chinese port city in Shandong province May 16, 2017. The formal opening ceremony was hosted by Zhang Bo, vice-mayor of the city, together with senior officials from Yantai municipal government. The Scottish delegation was led by SCC’s new president, Tim Allan, and chief executive Liz Cameron. The Scottish Chambers of Commerce identified robotics, bioscience, manufacturing, engineering and smart technologies, agriculture, food and drink and soccer management as being areas of key interest.

Dutch university opens branch in Yantai

The University of Groningen, The Netherlands, in collaboration with China Agricultural University, plans to establish a presence on a campus in the city of Yantai. In Yantai the university plans to offer Bachelor’s, Master’s and PhD programmes that incorporate significant research activities and collaboration with the business sector. TheYantai campus is located in the middle of a high-tech zone covering 38 km². It is the home of many high-end industries, companies and research institutes, providing good opportunities for top sector jobs and cooperation in the area of research. In addition, as one of China’s greenest cities. Yantai is situated in the province of Shandong, whose 97 million inhabitants offer great potential in attracting future students. However, the Board of Groningen University ran into trouble early 2018, when a majority in the University Council voted against the project. The Board is now trying to reformulate the cooperation.

Bioscience Innovation Demonstration Zone

Yantai will see rapid development in its medical and health industry as authorities are mulling over building an international bioscience innovation demonstration zone. Based on the rapid development of its medical industry, the zone will consist of seven industrial parks including biomedicine industrial park, traditional Chinese medicine and precision healthcare industrial park, which will be built during the 13th Five Year Plan (2016-20) period, according to Li Wei, head of Yantai Food and Drug Administration.

By the end of 2020, the projected prime operating revenues of Yantai’s medical and health industry will exceed RMB 100 bln, achieving year-on-year growth of 15%. Yantai is home to many key national laboratories and boasts high innovation capabilities and potential.

Yantai will introduce supportive policies to encourage research and development, and attract and nurture leading enterprises and high-caliber talents in sectors such as medicine and medical equipment. Yantai has set up a special fund of RMB 200 mln to build platforms providing technological support. To boost the profile and competitiveness of Yantai’s medical industry, Yantai will host the first international conference on medical innovation and development from Sept 16 to 17, 2017.

Yantai specialties served at BRICS Summit

Three Yantai-based food brands made their way onto the dining tables of the 9th BRICS Summit, which was held in Xiamen, Fujian province on Sept 3-5, 2017. Leaders from Brazil, Russia, India, China and South Africa were served up apples, condiments and Longkou fensi (a kind of vermicelli made from bean starch) from Yantai during the summit. Fruit supplier Yantai Lianlei Foods was given the green light to provide its apples for the summit in April. Lianlei apples first went on sale in Xiamen six years ago, and they have become hugely popular in the coastal city, their sales volume rising from just a few tons to more than 1000 mt. The company’s apples are also exported to Japan and several countries in Europe and America. Longkou fensi (see above) produced by Shuangta Foods was also selected as a designated food for the Xiamen summit by the China Food and Drug Administration. Shinho Group also hit the headlines after becoming the official supplier of eight condiments including bean paste, soy sauce, vinegar and pepper to the summit.

Yantai, Stavanger sign ‘sister city’ intent

Yantai and the Norwegian port city of Stavanger are on their way to establishing official friendship ties. Zhang Dailing, vice mayor of Yantai extended a warm welcome to a Norwegian delegation headed by John Peter Hernes, vice mayor of Stavanger, on Oct 19, 2017. The purpose of the delegation is to strengthen cooperation on marine fishery and heavy industrial equipment between the two cities and sign a letter of intent to become sister cities. Other foreign sister cities of Yantai are: San Diego, Omaha (USA), Beppu, Miyako (Japan), Tauranga (New Zealand), Vladivostok (Russia), Gunsan, Wonju, Ulsan, Incheon, Ansan (South Korea), Phuket (Thailand), Angus (UK), Orebro (Sweden), Burgas (Bulgaria), Campel, Ange (France), Szombathely, Miskolc (Hungary), MacKay, Iscah, Wendendy (Australia), Enalesburg (Spain), Lahore (Pakistan).

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation..

 

Do novel foods reflect an individualisation trend in Chinese culture?

Chinese demographers estimate that China will have 92 mln singles in 2021

Yili Dairy, China’s top dairy brand (and second food brand in 2014), based in the capital of Inner Mongolia, Huhhot, has launched remarkable marketing campaigns for some of its popular products. Mengniu, located in the same city, has followed suit.

Oat milk

Breakfast milk is; another member of the expanding Chinese family of formulated dairy products. Yili has entered this market with Oat Milk.

The phenomenon breakfast milk is a product of the increasing of the pace of life in China. From the beginning of the Chinese nation to very recent times, three hot meals a day were sacred in China. Gobbling down a sandwich on your way to work, a familiar sight in my home region, would abhor any Chinese. That thing with the sandwich is still rare in China, but the quick ready-made breakfast is emerging.

The ad for Oat Milk shows Taiwanese singer Eddy Peng drinking (well, at least one end of the straw is in his mouth and the other in a carton of Oat Milk) striking a masculine pose. The text introduces him as a nanshen ‘male god’. Although Chinese women are just as attracted to males like this as their sisters in any other part of the world, such direct sexual remarks are rather un-Chinese. And I am not talking about post 1949 China. Han Chinese are usually rather reserved about this type of emotions.

Eddy

The text adds that male gods are busy chasing their ideals, but impeded by the hardship of work. I have translated the Chinese word ouxiang ‘icon’ here as ideal. It alludes that Peng is the male icon of many Chinese men, but also an object of worship for most women.

The Oat Milk slogan is: four special functions:

OatMilk

Overtime Miracle

Travel Mate

Slimming Success

Ideal Snack

Overtime has entered China already a while ago. China is one of the few nations the constitution of which includes the right to rest for all citizens. However, overtime now seems to be more normal than in many Western countries. What Yili seems to be suggesting is that its Oat Milk can be used to replace the meal that a proper employer would provide to staff members who agree to overtime. A carton of milk with chunks of oat floating in it, that you can consume while continuing to work, would until recently never be accepted. Now, the marketers of Yili seem to believe that this suggestion will no longer elicit protests.

The Chinese term lütu banlü has been coined after kafei banlü Coffee Mate. However, the latter is a powder that is much easier (and again quicker) to use than liquid coffee creamer. Oat Milk is a liquid that you are advised through this ad to carry with you while travelling. A quick bite/sip on the road. Once more, this suggested use is a replacement of the meal that Chinese travellers would usually not be willing to skip. Chinese travellers board a train heavily packed, not with clothes, but food and drinks to consume while chatting with their companions and enjoying the landscape.

Both functions seem to indicate that the pace of life is accelerating in China. One of the cultural rituals affect most strongly by this development is that of eating three warm meals a day.

The oat fibre in Oat Milk is said to help keeping your waist slim. That by itself would not be much more than an empty promise, but the picture of a man Eddy Peng makes it real. Drink Yili Oat Milk and look like Eddy Peng.

The word ‘snack’ in my translation of the final term refers to the Chinese concept of lingshi. It literally means ‘fragmentary food’, food that you can eat any time between meals. When you look at the scope of what is regarded as lingshi by Chinese it seems to be basically identical to xiuxian shipinleisure food’, about which I have devoted an entire post in this blog. Lingshi then seems to be a more colloquial term, while xiuxian shipin is used in a more commercial context. Why it is called ideal seems obvious: as you are snacking anyway, you might as well do it on healthy food. However, I wonder if people would be willing to pack a relatively heavy carton of beverage instead of that pack of melon seeds, preserved plums or other traditional snacks.

Regardless whether Yili’s Oat Milk will be a success or a failure, its ad already is making history.

So, what’s in it? Here is the ingredients list:

Fresh milk, water, crystal sugar, oat grains, oat meal, Vit. A, Vit. D3, iron (fe edta), zinc, food additives (microcrystalline cellulose, CMC, gellan gum, carrageenan, monoglyceride,sucrose ester, sodium bicarbonate), food flavour.

So it is not completely natural, but we would not have expected it to be to begin with.

In the course of 2018, Yili has launched another oat milk, this time flavoured with coconut, marketed under the Guliduo (‘Lots of Cereals’) brand. It is said be made of Vietnamese coconut, carefully selected milk and Australian oat.

You Yoghurt

Yili has hired the services of another Tainwanese star, Jack Chou, to advertise for one of its yoghurt ranges: You Yoghurt (you means ‘best’). Jack Chou is shown sitting in a director’s chair, shouting ‘I want You’. The scene is derived from the TV program Voice of China.

YiliYouAd

Note that the makers of this ad assume that the intended audience have a command of English sound enough to recognise the pun. The deeper reference to the old American military posters telling young American men that ‘Uncle Sam wants you’ will escape the attention of most of them, though.

Expressing love through French fries

Early 2020, McDonald’s contracted the young superstar Jackson Yee, another male young god, not as their icon, but as their ‘spokesperson (daiyanren)’ for its advertisements. Af first sight, it seemed like yet another good looking young guy trying to sell food. However, some of the ads are quite funny, although I’m not sure if they were designed to be funny. My favourite is the ad for Mickey D’s famous French fries, which includes the slogan: ‘every single fry tastes of love‘.

Winter Olympics

Yili is one of the first Chinese food companies to respond to Beijing’s winning of the Winter Olympics in 2022. The company has launched the following commercial:

YiliOlymp

The text reads: ‘I have a seven-year appointment with the Olympic Games‘. And again we see the emerging individualism in this frame. The lonely icehockey player, instead of a team and the use of ‘I’ instead of ‘we’.

It is fascinating to see how a traditional state owned enterprise is able to reinvent itself to fit into the 21st Century. According to the Rabobank survey, Yili now ranks among the world’s 20 largest dairy companies.

Yoghurt icecream

Mengniu, China’s second largest dairy company, has recently launched one of China’s first yoghurt icecreams, marketed under the Dilan brand. The company started the promotion campaign with handing out samples for free to white collar workers in Beijing’s major commercial buildings. Dilan’s ads also indicate that the product is geared to that market segment: the individualist young professionals focused on their careers.

DailanYoghIce

Ambrosial

Yili’s has launched another innovative marketing campaign for its latest range of formulated dairy products, marketed under the brand name Ambrosial, in early 2020. This product’s ads can be divided in three types. The first is linking the brand with famous athletes, singers or movie stars.

The second type tries to link the brand to several symbols of modern life.

The third is more abstract, linking the brand to a number of goods pointing at good taste and healthy living and a human arm grasping a bottle of Ambrosial.

Ingredients:

Fresh milk, crystal sugar, whey protein powder, addives (acetylated distarch phosphate, pectin, agar, diacetyl tartaric acid ester of mono(di)glycerides, gellan, food flavours), lactobacillus bulgaricus, streptococcus thermophilus.

Single-portion milk

Here we see a trend towards individualisation expressed in the packaging as well. Some Chinese hate milk, a few like it, and many drink a glass a day for its healthy image. If there is only one milk drinker in a household of, say, four, milk can easily spoil before finishing your 1 litre bottle or UHT pack. Xiajin (Ningxia) has launched a 243 ml bottle of milk to solve this problem in 2019. It is interesting to note that it is not one of the top dairy processors like Yili, Mengniu or Bright that first launch milk in individual portions, but Xiajin, that has been a good second tier dairy company for several decades.

Tea for one

A group of friends chatting for hours around a table with not much more than a pot of tea and a tray of melon seeds is still a very common sight in China. However, the first brand of tea presented in small bags for a single cup has appeared on the market. The term ‘independent’ in ad for this Chicory and Gardenia Tea by Qiandaohu (Hangzhou, Zhejiang) leaves nothing to the imagination.

 

Male vs Female

Yet another product of Yili is a lactic acid beverage branded Changyi that is marketed as being beneficial to the ‘male spirit’ (nanshen). Most of Yili’s new ads introduced above use male bodies as icons for position various dairy products. This product takes this trend one step further by directly referring to the male spirit.

Changyi

Mengniu has launched a sweetened milk, Tianxiaohai, that comes in separate female (pink) and male (blue) packagings

MnFemPack  MnMalePack

However, the ingredients are exactly the same; no gender-related formulation.

Fresh milk (>= 80%), sugar, additives (sucrose ester, monoglyceride, carrageenan), flavour

Uni-president has launched a series of flavoured consisting of two flavours in 2020. The packaging of both includes the phrase ‘his & hers’. However, although it is not indicated which flavour is his and which hers, one pack is blue and the other red, consistent with the cross-cultural mainstream bias that ‘blue is for boys’ and ‘pink is for girls’.

No sharing with others

Specialists in national culture all agree that Chinese culture is collectivist, placing the group’s interests above that of the individual. This trait of Chinese culture has left a huge mark on the Chinese practice of eating and drinking, in which sharing is a key concept. A Chinese meal is typically eaten around a round table with all dishes placed in the middle, for all participants to share. An now, in 2016, Yili launches this ad.

YiliWangpai

The ad is for Weikezi Chocolate Milk and the boy is saying: ‘Weikezi is delicious, no way I’m going to share it with you’. That statement sounds outrageously un-Chinese. So, is this a sign that young Chinese are becoming more individualist, or is this ad perhaps meant to provoke? I am sure it will make more than few Chinese eyebrows rise.

The ultimate individualisation: one person hot pot

Hot pot is a hot item in China. Nothing beats a group of people around a table throwing chunks of meat, vegetables, bean curd, mushrooms, or virtually any other fresh ingredient in a pot with boiling water and fishing them up when they are cooked. Hot pot is the ultimate communitarian food for a communitarian nation like the Chinese. Even a European fondue is hard to imagine to enjoy on your own, right? Well, be prepared to see this fact shattered by exactly those extremely communitarian Chinese. The past year has witnessed the launching of a number of one-person instant hot pots.

On the outside they look like a big instant noodle cups. Inside you will find a variety of ingredients, like the classic hot pot. Just heat it in the microwave, open it, and enjoy . . . on your own. Some brands are even packed in self-heating packagings. Squeezing the pack will create a chemical reaction that will heat up your hot pot, so you even lose the microwave. I have collated pictures of a couple of the instant hot pots currently on the market. How does it taste? Probably like most instant foods. Is it fun? Not more than eating instant noodles, or instant congee, certainly not as fun as enjoying hot pot with a group of friends or your relatives.

   

Single dog noodles

Early 2018, entrepreneur Zeng Ruilu founded Single Dog, a company producing potato crisps and similar snacks in single portions, geared to the growing group single Chinese. This company launched a range of single portions instant noodles in 2019. Smart readers will say: ‘aren’t all instant noodles made for one person to eat?’. You are right, of course, but Single Noodles (Danshenliang) still caught on. While Chinese singles used to be single for specific reasons (like a shy nature), more and more Chinese remain single for a while by choice. Those people like to confirm this by snacking on food that is specially made for them.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.

 

Yoghurt in China – innovative but old is still hip

Yoghurt is the most widely acceptable dairy product among Chinese consumers.

Yoghurt has always been one of the more popular dairy products in China. The value of the Chinese yoghurt market for 2017 is estimated at RMB 89 bln. An important reason is that it is easier to digest by people with lactose intolerance. Yoghurt is also less ‘creamy’ in taste that liquid milk, and lacks the alien smell of most Western cheeses.

The Chinese yoghurt market is dominated by the two Inner Mongolian giants Yili and Mengniu and their Beijing cousin Sanyuan and Shanghai-based Bright as the Benjamin. The following table shows the yoghurt market shares of the major companies in January 2018.

Company Share (%)
Mengniu 28
Yili 27
Sanyuan 21
Bright 15
Tianrun 3
Junlebao 3
Yiguo Fresh 1
Weiquan 1
Others 1

Old yoghurt newly formulated

However, even though a large variety of yoghurts is available in the local supermarkets, Chinese consumers have started to grow bored with the relatively sweet and rather liquid products.

To counter the demand for a new type of yoghurt, a number of Chinese dairy companies started launching more viscous products a year and a half ago, resembling products like Greek yoghurt or quark. In fact, Yili (Inner Mongolia) has launched a Greek yoghurt early 2016 (see photo). They are market as ‘old yoghurt’, trying to create a ‘traditional’ image; yoghurt as it originally used to be.

YIliGreek

 

Huishan Dairy (Liaoning) has launched a type of Russian yoghurt early 2017, branded Wolingka.

After so many food safety incidents, an investigative journalist of the Beijing Evening News purchased old and regular yoghurt of three leading brands, to compare the ingredients used in each product, as listed on the packaging. He has furthermore interviewed a number of experts in this field.

The results allow us to have a look into the kitchen of the present day top producers in this industry in China, and one with a rare degree of detailedness. We will start with offering a translation of the information of the 8 products (4 brands of Old Yoghurt and 4 types of normal yoghurt of the same brands). For each product, the following information will be provided: brand and product name, ingredients, and price. I will then summarise the judgments of the journalist and the experts and end with some comments from my side.

 

Junlebao

Traditional Old yoghurt Raw milk, sugar, whey protein powder, streptococcus thermophilus, lactobacillus bulgaricus additives (HPDSP, gelatin, pectin, monoglyceride, aspartame, acesulfame-k) RMB 2.48/139 gr = RMB 0.018/gr
Yoghurt Raw milk, streptococcus thermophilus, lactobacillus bulgaricus, additives (HPDSP, gelatin, pectin, aspartame, acesulfame-k) RMB 10.50/800 gr = RMB 0.013/gr

 

Bright

1911 100 years Old Yoghurt Raw milk, sugar, whey protein powder, streptococcus thermophilus, additives (HPDSP, gelatin, pectin, agar, food flavors) RMB 4.90/160 gr = RMB 0.031/gr
Yoghurt (sugar free) Raw milk, whey protein powder, streptococcus thermophilus, additives (HPDSP, gelatin, pectin, agar, food flavors) RMB 8.80/800 gr = RMB 0.011/gr

 

Mengniu

Inner Mongolian Old Yoghurt Raw milk, sugar, whey protein powder, thin cream, streptococcus thermophilus, lactobacillus bulgaricus, additives (gelatin, agar) RMB 3.80/160 gr = RMB 0.024/gr)
Yoghurt Raw milk, sugar, lactobacillus bulgaricus, streptococcus thermophilus, additives (HPDSP, agar, aspartame, acesulfame-k) RMB 8.00/800 gr = RMB 0.01/gr

 

 

Yili

Old yoghurt Fresh milk, sugar, streptococcus thermophilus, lactobacillus bulgaricus, additives (gelatin, diacetyl tartaric acid ester of mono(di)glycerides, HPDSP, pectin, acfesulfame-k, aspartame) RMB 3.95/15o gr = RMB 0.026/gr
Probiotic plain yoghurt Fresh milk, sugar, whey protein powder, streptococcus thermophilus, lactobacillus bulgaricus, bifidus, lactobacillus acidophilus, additives (HPDSP, pectin, gelatin) RMB 10.90/800 gr = RMB 0.014/gr

 

Sanyuan

Old Beijing plain yoghurt Raw milk, sugar, streptococcus thermophilus, lactobacillus bulgaricus, additives (gelatin, diacetyl tartaric acid ester of mono(di)glycerides, pectin, xanthan) RMB 3.80/180 gr = RMB 0.021/gr
Plain yoghurt Raw milk, sugar, streptococcus thermophilus, lactobacillus bulgaricus, additives (gelatin) RMB 9.50/800 gr = RMB 0.012/gr

 

The journalist’s findings

Retailers generally like the Old Yoghurt, which they describe as ‘selling itself without any marketing effort’. Most consumers interviewed while buying it state that Old Yoghurt has an ‘original’ taste and ‘reminds one of the past’.

The price difference is significant. It is smallest for Junlebao, but for the other brands, the Old Yoghurt is on the average twice as expensive per gram as the regular variety.

However, these differences in price are not reflected in the lists of ingredients. Actually, these are remarkably similar for the Old and regular varieties. Moreover, the differences between the various brands are also very small. Even more peculiar is that an ingredient that is typical for Old Yoghurt in one brand is typical for the regular variety for competitive brand.

Apparently the only real difference between these two types of yoghurt is that dosage rates of thickeners, giving Old Yoghurt the thick mouth feel that traditional yoghurt used to have.

The experts’ opinion

The journalist has interviewed a number of dairy scientists on this topic. All agree that Old Yoghurt is a ‘concept’ rather than a real product. Real traditional yoghurt was a solidified milk, produced by fermenting raw milk with certain bacterial cultures in stone jars. There is nothing mysterious about it.

All brands of Old Yoghurt described by the journalist contain gelatin; and so do even some of the regular yoghurts. The thicker mouth feel is thus emulated by means of additives. The current Old Yoghurts are certainly not healthier than the average yoghurts.

My comments

This is a fascinating discussion. Actually, in European regular media we rarely find such detailed reporting on the use of food ingredients to ‘construct’ images of food products. Evidently, the food safety incidents that have taken place in China during the past couple of years have sensitised the awareness of Chinese consumers to an extent that consumer associations in Western countries can only dream of.

The issue revealed here by a Chinese journalist is by no means a typically Chinese phenomenon. One can buy semi-finished muffins and other types of cake in Europe, than can be baked at home to enable consumers to serve hot freshly baked muffins to their guests. TV commercials advertise these products showing people in the street smelling that (grand-)mother is baking cake. We are not aware of protests by consumers or consumer associations about such commercials. What European consumers seem to miss is how it is possible to smell a cake being baked from such a large distance.

Our ‘(grand-)mother’s apple pie’ is also emulated with premixes containing artificial flavours. These are further combined with emulsifiers and other additives, to ensure that even the most inexperienced person can bake such a pie or muffin. These additives are all approved for use in food, but so are the ingredients of Old Yoghurt in China. The Chinese journalist is not exposing excessive use of ingredients or the use of illegal additives. He is simply pointing out that consumers need to be aware of the fact that current Old Yoghurt is not related to the traditional thick yoghurt that Europeans use to eat when they were young. In this respect, Chinese consumers and media seem to be a step ahead of their European counterparts.

A few days after this publication on Old Yoghurt, another article appeared interviewing two more dairy experts. Their judgment was significantly milder. Old Yoghurt was first launched by a relatively small company in Qinghai, a region where people are traditional consumers of dairy products. Once that product became a success, it was imitated by dairy companies all over China. However, these companies lacked the skills to produce a thick type of yoghurt in the traditional way. The move to thickeners is then easily made.

The experts further point out that gelatin, starch and most other thickeners are natural products that are used in a large number of foods, and even in the kitchens of many consumers. Their use as food ingredients has been approved and there even is no maximum dosage rate for this kind of ingredients. The dairy experts do point out that there are better ways of producing a thicker kind of yoghurt, like lowering the water content of the milk. This requires more technical skills than adding thickeners. The current problems of Old Yoghurt in China are therefore directly related to the large number of relatively small companies, lacking skilled staff.

Recent developments

The most recent development is that the more and more producers are replacing the term ‘old yoghurt’ with other fancy names. Yili has launched a ‘Pureday Clotted Yoghurt’ and Junlebao a ‘Laojuezhuang European Sour Cheese’ (laojuezhuan literally means ‘cheese estate’. The names and design of the packaging shows that the basic proposition, that these are traditional European products, is now emphasised even more than before.

PuredayLaojuezhuang

The formulations have not changed dramatically:

Yili’s ‘Pureday Clotted Yoghurt’ Sugar, whey protein, fresh milk, butter oil, egg yolk powder, additives (gelatin, DATEM, HPDSP, pectin), flavours, streptococcus thermophilus, lactobacillus bulgaricus RMB 5.50/138 gr = RMB 0.039/gr
Junlebao’s ‘Laojuezhuang European Sour Cheese’ Sugar, whey protein, fresh milk, condensed milk, additives(gelatin, DATEM, HPDSP, pectin, xanthan), lactic acid culture RMB 4.70/139 gr = RMB 0.034/gr

Organic yoghurt

Organic yogurts are proving popular for health-conscious office workers and young parents. Discerning shoppers seem willing to pay that little bit more for the right products as supermarkets start stocking an array of upmarket brands. Classy Kiss, a yogurt rolled out from Green’s Bioengineering (Shenzhen) Co Ltd, posted significant sales growth in third and fourth-tier markets. It recently launched an organic brand, which sells at around RMB 14, one of the most expensive products from its dairy range. Earlier, it also launched a yogurt designed to help improve the digestive system after a meal. The company hopes it will be able to cash in on the growing demand for healthy products. Sales of functional and fortified yogurts in China are expected to rise 23% to RMB 43 bln in 2017 compared to 2016. By 2022, sales are expected to surge 56% to RMB 75 bln.

Drinkable yoghurt for the young

Younger Chinese consumers have taken a fancy to creamy, sweet, flavored yogurt and yogurt-based drinks. Category sales have surged about 20% annually since 2014 to reach RMB 122 bln in 2017. Chinese consumers perceive yoghurt as “nutritious”, “helps to boost immunity”, “easy to digest” and “suitable for children and the old”. Yogurt has become a leading product in the domestic dairy market. But compared to other countries, yogurt consumption in China is relatively low at 3.43 kg per person per year (Japan leads with 9.66 kg and the figure for the United States is 4.92 kg). The recent uptrend in yogurt sales in China has positive implications for the larger dairy market. Overall dairy sales in China are expected to exceed RMB 480 bln by 2022 on a compound annual growth rate or CAGR of 6.6%.

Le Pur yoghurt

A noteworthy new arrival on in China’s domestic yoghurt industry is Le Pur. The name embodies the company’s simple and down-to-earth ambition of providing pure and delicious, quality yoghurt. With its dairy imported from countries such as the UK and New Zealand, and other ingredients, such as freshly-picked blueberries sourced from Shandong Province, hazelnut jam from Germany and vanilla from Madagascar, Le Pur aims to provide only “genuine ingredients.” Le Pur’s founder and CEO Denny Liu, a graduate of the Wharton School and a former employee of the Blackstone Group. Liu was also a special adviser to world leading industrial companies like PepsiCo. In late 2014, Liu gave up his career and started to make dairy from scratch. Within a year, he started Le Pur and gained over 40,000 fans on Le Pur’s official Sina Weibo and WeChat public accounts. So far, the number of fans has grown to around 320,000. Just a few months after launching Le Pur, Liu branched out into online to offline operations, and the company’s daily sales volume grew to around 1,000 bottles, according to cyzone.cn, a news platform for start-up businesses in China, on May 10, 2015. One of Le Pur’s marketing strategies is its down-to-earth interaction with consumers. In their concept store in Sanlitun, they showcase the yoghurt’s production line in a 30-square-meter room. The store has never lacked visitors. Le Pur also involves its customers in the choice of flavour and package design.

Salty yoghurt

Terun Dairy (Xinjiang) surprised the market by launching a new type of salty yoghurt late 2018. This flavour fits in with the worldwide vogue for salty sweets, like salty caramel or salty chocolate.

Greek yoghurt

Yili Dairy and the Greek Academy of Agricultural Science founded Ambrosial yoghurt. The sales of this company increased with 106.7% in 2016 compared to 2015. The reason for this sustainable amount is due to the fact that Ambrosial yoghurt is a sponsor of the Chinese popular tv-program Running Man. The viewers of Running Man are the Chinese youth who are also the ones who are responsible of the increase in yoghurt sales. In total Yili Dairy Group spent over RMB 2.5 bln on tv-ads, print media and radio in 2016. In addition to that Ambrosial yoghurt has also launched new varieties of yoghurt and improved old recipes. For example, for a new variety is, the new peach oat flavour. And by launching more diverse flavours, Ambrosial is responding to the sophisticated taste of the Chinese consumers.

Related items in this post:

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.

 

 

Formulated milk beverages in China

Even though dairy has been incorporated in several traditional regional cuisines, China is not known as a typical dairy nation. However, the industry has been developing rapidly during the previous decades, in spite of a number of food safety problems that have received global attention. The main reason is that Chinese, with support of the national government, strongly believe in the nutritional value of milk. Already in 2006, the prime minister stated that ideally every Chinese should drink one glass of milk per day.

China produced 32.31 million MT of raw milk in 2019. A little over 60% of this was used to produce drinking milk.

Still, a high volume of milk is consumed by the food industry. This is because, in spite of the healthy image of dairy, the average Chinese consumer still finds the taste of milk hard to appreciate.

Designer beverages

The combination of these facts, high nutrition + disagreeable taste, has created a very unique market segment in the Chinese dairy industry, including a broad variety of beverages with milk as their main ingredient, combined with a number of flavours and nutrients. We will refer to this product group as formulated milk beverages (FMB).

FMB can be further categorized in a number of ways. First of all there is the distinction between fermented and non-fermented beverages. Fermented FMB have a more sour taste and often contain probiotics.

Another subtype is what the Chinese industry refers to as ‘protein drinks’. These beverages used peanuts, almonds, soybeans, etc., as their main ingredients. They have a thicker texture than the average soft drink. A number of protein drinks combine milk with peanuts, red beans, or other of these protein ingredients, which makes them part of the scope of FMB.

These macro ingredients are usually supplemented with a number of other ingredients that can be divided in three main types:

  • Flavours: achieving the targeted flavour of the end product. Red bean milk will obviously contain red beans, but also needs a small amount of red bean flavour
  • Sweeteners: Chinese like their drinks sweet, so sugar is an ingredient in the bulk of FMB. However, with the growing awareness of the harm of excessive sugar intake, part or all sugar can be replaced by a combination of artificial sweeteners
  • Texturizers: texture is an essential aspect of FMB, and especially the protein beverages. Chinese consumers expect a creamy, thick, texture. Even Chinese who do regularly consumer plain fluid milk expect such a creamy mouth feel. Some Chinese ‘plain’ liquid milk products therefore contain small quantities of thickeners, to ensure that consumers do not suspect it to be diluted milk.
  • Nutrients: FMB are all marketed as nutritious products, healthier alternatives for the regular soft drinks. Milk, beans, fruits (e.g. dates; you will find a recipe in the linked blog), and vegetables already add to that nutritious impression, but special nutrients can be added as well. These include the regular vitamins and minerals, but also herbal extracts from traditional Chinese medicine, like Lingzhi fungus (Ganoderma).

Here is a representative example: Strawberry Flavoured Milk Drink

Produced by: Zhujiang (Pearl River) Beverage Company, Zhongshan, Guangdong

Image

Ingredients:

Main ingredients water, sugar, whole cream milk powder, strawberry juice
Sweeteners acesulfame‐K, sucralose
Flavour ingredients citric acid, strawberry flavour, monosodium glutamate
Other ingredients potassium sorbate, monascus colour

 

Many readers will doubt the nutritional value of a product like this, compared to simply drinking a glass of milk, which should be a lot cheaper as well. However, for the time being, this can be expected to be the mainstream in ‘dairy products’ in China.

Also see the dairy section in our item on cost price break down of several Chinese food and beverage groups.

New development: combination with probiotics, organic salt

Probiotics have become a pet ingredient in Chinese formulated dairy beverages. The total turnover in 2015 of probiotic milk drinks was RMB 11.98 billion, up 14.9% compared to 2014.

Huishan Dairy (Liaoning) has launched a new range of fermented dairy drinks with fruit and vegetable juice under the brand name Huawo. The company thus combines two major ‘healthy’ trends in the Chinese food industry: probiotics and natural juice, in one product.

Huawo

Haocaitou (Fujian) has launched a dairy drink with probiotics and natural lake salt imported from Australia, that it markets as a sports beverage.

Rusuanyan

Also look at the Xiaoxixi vinegar milk with pineapple vinegar introduced in my post on new vinegar-based foods and beverages.

A special subtype in this category are the imitations of Yakult. This Japanese product is so successful worldwide, that a number of Chinese companies have not been able to resist the urge to launch similar products. A recent one in this category is Yili (Inner Mongolia), that launched its Meiyitian lactic acid drink early 2018.

Government support

A discussion has been going on in the Chinese media whether these beverages should be allowed to be marketed as dairy products. The government has supported the industry in this debate by officially allowing these drinks to use ‘XX milk’ a product names in October 2014. In this way, the producers are allowed to position their products with a healthy image.

The trend for 2018: healthier formulations

Three Chinese dairy companies are ending the year by launching healthy dairy specialties. It is hard to say if these launches are incidental, or that they are part of a concerted action. However, these beverages can be regarded as examples of the new generation of formulated milk drinks. These beverages are not only formulated to mask the less attractive flavours of milk, but also add several functional ingredients.

Mengniu: A2 beta-casein pure milk

A2 milk is cow’s milk that mostly lacks a form of beta-casein proteins called A1 and instead has mostly the A2 form. Milk like this was brought to market by New Zealand’s a2 Milk Company and is sold mostly in Australia, New Zealand, China, United States and the United Kingdom. Mengniu has selected 2000 cows from its Future Star (Weilaixing) Farm as designated producers of A2 beta-casein milk. It is marketed as a healthy milk for children.

Yili: Changqing (clearing bowels) flavoured fermented milk

The meaning of the product name speaks for itself

Ingredients: raw milk, oat fruit jam (³8%), crystal sugar, thin cream, concentrated milk protein, hydroxypropyl distarch phosphate, pectin, DATEM (diacetyl tartaric acid ester of mono(di)glycerides), agar agar, lactococcus lactis, lactococcus lactis subsp. cremoris, lactococcus lactis subsp. diacetyl, streptococcus thermophiles, lactobacillus plantarum, lactobacillus rhamnosus.

Kedi: Soy milk milk

The English translation is rather unfortunate. The Chinese name, Doujiang niunai, literally means ‘soy sauce cow milk’, but soy sauce refers to a different product in English, and our default milk is cow milk, so we usually leave the ‘cow’ unmentioned, while we speak of ‘soy milk’, due to the colour of the liquid. Anyway, it is a combination of milk and (non-GMO) soy milk powder. In Kedi’s own words, it is the best of both.

UniPresident, non-dairy specialist has launched a Papaya Milk in March 2018

Eurasia Consult has a database of more than 130 formulated dairy drinks and their manufacturers + a large number of recipes for formulated dairy products that circulate among Chinese food technologists.

Also see my post on individualisation in Chinese food marketing.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.