Dairy products are an important and delicious part of the Western diet. However, Chinese people are historically less enthused by milk, associating it with what they considered to barbarous tribal groups. Not drinking milk or eating dairy products for thousands of years greatly effected the Chinese stomach, and even today a significant, possibly majority, portion of the Chinese population is lactose intolerant.
However, despite cultural, historical and health barriers, with rising incomes and a greater Western influence, Chinese consumers are buying more and more dairy products, especially milk . Unfortunately, this growing desire for milk products, many of which are consumed by kids, has coincided with some of China’s worst food scandals.
Most famously, the 2008 Melamine milk scandals raised fears about baby formula in China and around the world. During the scandal, over 300,000 Chinese babies fell ill and at least 6 died. As a result of the scandal, Chinese consumers have became extremely wary of their local dairy products. Milk has become so dangerous in the public imagination that some kids are even snorting it in a manner reminiscent of other types of white powders.
Concerns about milk safety have hardly abated since 2008. Chinese citizens who travel abroad frequently bring back massive quantities of powdered milk for their younger relatives. Until 2013, Chinese parents, concerned about their children’s safety, were traveling to Hong Kong and buying milk in such huge quantities that they caused dairy shortages for Hong Kong residents. In order to help stem the milky tide, the Hong Kong government imposed strict regulations governing the amount of milk consumers could bring back to the mainland.
With the new Hong Kong limits, the knowledge that not everyone can afford to go abroad to buy milk, and continued fears about product safety, many multinationals smell a prime business opportunity. Despite fears about milk quality, according to Bloomberg, the market in China is still set to double to 31 billion USD by 2017. Australian, New Zealander and American firms are racing to ramp up milk powder production to meet the soaring Chinese demand. Companies are buying more land to graze dairy cows, and constructing new plants to process dairy products for the Chinese market. Chinese customers, despite their increased desire for milk, are wary after numerous scandals — just last week, there were fresh accusations that China Modern Dairy was selling cows that had tested positive for tuberculosis.
Foreign milk companies have a huge advantage in the Chinese market: they are not Chinese. And for worried parents, that may make all of the difference in their purchasing decisions.
Image via Wikipedia Commons.