China matters!

Song Kun Gang proposes a Chinese version of the 3-A-Day program: milk for breakfast, cheese for lunch and yogurt as a bedtime snack. 

The affable chairman of the China Dairy Industry Association would like to see people consume more dairy. And, he certainly understands the need. He was 35 years old before he took his first drink of milk ― not because he resisted milk all those years, but because it wasn’t available. He grew up in an era where milk was rationed out to children, the sick and the elderly, mainly in urban areas. Chairman Song grew up in a rural area on a diet consisting of steamed bread and vegetables. All the while, he was aware that milk was available to a privileged few, so it must have outstanding nutritional benefits. 

Today, milk is much more available in China. And, annual dairy consumption has risen to 53 to 56 pounds per person in the urban areas. Although that is less than one-tenth of U.S. consumption, the growth curve is quite high. Chairman Song predicts that dairy consumption in China will rise 15 to 17 percent annually over the next several years.

This should matter to you.

Unlimited potential

OK, you say, the domestic market here in the United States still carries the lion’s share of demand. But did you know that exports now account for about 11 percent of total U.S. dairy production on a total solids basis? That can make an important difference to your milk check. 

China demonstrates perhaps better than any other country the potential to grow our export market.

Besides being the most populous nation on Earth, with a fast-growing economy, China’s leadership is encouraging more dairy consumption. Late last year, the government came out with a new set of nutritional guidelines that encourage citizens to consume 300 grams of dairy per day ― nearly a five-fold increase over current consumption in the urban areas. Two years ago, Chinese Prime Minister Wen Jinbao visited a dairy farm in the Sichuan Province and proclaimed that he had dream to provide all Chinese, especially children, with a half a kilogram of milk per day. If his dream is realized, it will boost consumption by seven and one-half times the current amount.

China’s vast potential made an impression on Randy Roecker who was part of an information mission to the country in early September, sponsored by the U.S. Dairy Export Council.

Roecker, a dairy producer from Loganville, Wis., says he was impressed by the sheer size of the population in Beijing and Shanghai, with 15 million and 18 million residents, respectively. He recalls seeing row after row of high-rise apartment buildings, indicating that a large number of people are packed into those areas. 

Milk was once considered a luxury item in China, Roecker says. “It’s now seen as a very important part of the diet,” he adds, citing the latest revision to the country’s dietary guidelines from 100 grams of dairy per person per day to 300 grams. 

Roecker also sees “unlimited potential” for the sale of whey powder to China. He cites these examples:

• Bottled water is very important in China, since the local water supply is non-potable. (Hotels warn guests not to drink tap water because it may not be sanitary.) Whey powder can be added to bottled water to provide extra protein. Some sports beverages already offer this benefit.
• Twenty million babies are born each year in China, and there is tremendous potential for the use of whey powder in infant formula.

Boost from Olympics

And, cheese is making inroads, as many Chinese take on Westernized eating habits.

Yet, per capita cheese consumption is still low ― 0.02 pounds 2004, compared to 2.9 pounds in Korea, 5.7 pounds in Japan and 31.2 pounds in the U.S. that same year.

Here’s where the recent Olympic Games may provide a boost. Daniel Chan, the U.S. Dairy Export Council’s representative in China, says Japan and Korea experienced huge growth in cheese consumption after hosting their own Olympics in 1964 and 1988, respectively. Japan has experienced a six-fold increase in per capita cheese consumption since the 1970s. The Olympic Games help to create nutritional awareness ― people want to know how their country’s athletes stack up against the athletes of other nations, Chan says. 

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