Just 10 years ago, while many Chinese were used to seeing foreign people (and Jerry Mouse) eating cheese on television, the smell of a mature cheddar was more likely to induce nausea than hunger. However, times are changing. Imported cheese rose 39 percent in 2014 (up from 22 percent in 2013), is already a US$340 million market in China, and is still growing rapidly.
Cheap Ships, Pizza & Chips
The market of cheese imports in China has been dominated by New Zealand and Australia, and to a lesser extent the US, with Europe and the rest of the world trailing far behind.
Total volume of cheese exports
Total value of cheese exports
Source: China Customs (1 tonne = 1,000 kg)
The popularity of these countries in China appear to be the result of a number of different factors, such as lower freight costs (from Australasian nations and US versus Europe), free-trade agreements (between New Zealand and China, and later this year with Australia as well), and the nature of the Chinese market where demand for food service and processes cheese far outstrips demand for retail products.
In The Shadow Of Sanlu
However, this is not to say that there is no market for retail cheese products in China. Imports from the European nations have increased in recent years and show promising potential for further growth.
One particularly promising market is children’s snacks and breakfast spreads. Children’s cheeses are therefore often marketed to parents as health products, with manufacturers claiming that their high calcium content and added vitamins will aid children’s growth.
Cheese is also popular among Chinese parents because it is often considered a ‘safe’ dairy product, more difficult to contaminate than liquid milk or yoghurt. Following the string of food safety scandals–the most notable one being the infamous 2008 melamine incident–few Chinese consumers have trust in domestic dairy products.
Despite the Chinese government’s introduction of reforms in an attempt to repair the image of the dairy industry, this has only been partially successful and Chinese consumers are still paying a premium for foreign brands that are considered safer.
With the perceived safety of cheese products, foreign companies especially can gain an advantage if they successfully position themselves as premium brands, and/or narrow the price difference between their products and those of their domestic competitors through the use of ecommerce websites.
Future Of China’s Cheese
Wendkuni, California, US
But what about more traditional retail cheese products— is China on the verge of becoming a nation of cheese connoisseurs?
It is still too early to say, but there are signs that China is starting to develop a cheese culture of its own. Baidu.com, China’s largest Internet search engine, has reported a 60 percent increase in searches for the word ‘cheese’ in the last three years, suggesting that more Chinese are starting to see cheese as more than just a pizza topping or baked good filling.
However, whether Chinese tastes change radically enough to create a mass market for hard cheeses is another matter. But since ‘Reform and Opening’, China has embraced a whole series of Western products that at first seemed ill-suited to the Chinese palate, including cola, hamburgers and, of course, pizza, it is too early to dismiss that thought.
Just 15 years ago, it would have been hard to imagine that China would become the biggest market for red wine in the world by 2014. Maybe in another 15 years, the children who today are eating Milkana while watching Tom and Jerry will be hooked on Stilton, Gorgonzola, and Roquefort.
Note: This article has been condensed. Read the full article here.