CITIC Construction Investment: Fresh milk is the main natural dispersion, high added value segments are more concentrated
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that consumption of dairy products in Japan rose three times, and consumption grew rapidly after World War II until it reached saturation in the 90s, and the structure is still evolving. After the number of young people peaked, overall milk consumption declined, and the elderly gradually became another major consumer force. Japanese dairy companies were unable to build moats by controlling milk sources/channels, so continuous product innovation iteration+R&D reserves+consumer education became the core premium source. Yoghurt highlights functional products and promotes an increase in product premium rates, turning yogurt from “food” into a “daily health management carrier”, and consumption has yet to peak. Cheese accounts for the main part of solid dairy products, and consumption growth continues through the cycle. In terms of pattern, fresh milk is mainly naturally scattered, and high-value-added segments such as yogurt/cheese/lactic acid bacteria are more concentrated.
CITIC Construction Investment's main views are as follows:
Consumption of dairy products rose three times in Japan, and continued to grow rapidly until the 90s with the economic development
Japan consumes a wide variety of dairy products. The consumption of milk and cheese per capita is leading China, and yogurt and lactic acid bacteria drinks are comparable to those in Europe and America. Japanese dairy products can be traced back to the Asuka period. Used as medicinal herbs, they became popular consumer goods during the Meiji Restoration. After World War II, international aid restarted dairy consumption in Japan. Subsequent rapid economic development led to the optimization of the diet structure. Dairy consumption grew rapidly until it reached saturation in the 90s, but the structure is still evolving.
The elderly population is gradually becoming the main consumer force, with outstanding functional characteristics
Milk supplied by schools accounts for a significant proportion of the consumption of dairy products in Japan, and milk drinking habits are cultivated in schools. Consumption of dairy products and milk changes in a U-shape with age. After the number of young people peaked, overall consumption of milk declined, and the elderly gradually became another major consumer force. Milk is mainly low-temperature UHT products, which match the production and consumption regions. Yoghurt has outstanding functionality, and consumption has yet to peak. Meiji yoghurt has a large market share due to its functional properties. Lactic acid bacteria drinks have developed to maturity, and leading companies all have a background in pharmaceutical technology. Among solid dairy products, cheese accounts for the main part, and consumption growth has continued to rise rapidly through the cycle. The products cover all age groups and various scenarios such as catering, meal preparation, and cooking. In terms of pattern, fresh milk is mainly naturally scattered, and high-value-added segments such as yogurt/cheese/lactic acid bacteria are more concentrated.
Health is the foundation, functionality is the spear
There is still a clear gap in milk consumption between urban and rural areas in China. The per capita consumption of milk in rural areas is only about 60% of the average per capita in urban areas, and the optimization of the low temperature structure continues. Currently, the leisure properties of yogurt are still prominent. Probiotics have become the focus of the functional layout, and we look forward to the launch of major functional single products. The deep processing business follows the trend of “drinking milk” to “eating milk,” and is expected to become the core carrier of dairy consumption in the future.
Risk warning: food safety risk; risk of a rapid rise in raw milk prices; competition is slowing down below market expectations.