Probiotics set for explosive growth in China

By Dominique Patton

- Last updated on GMT

Related tags: Probiotics, Yoghurt

Probiotics, unheard of a year ago, are now being added to more and
more products in China, and look set to see rapid growth in demand,
according to key supplier Chr Hansen.

Earlier this year, the Danish cultures maker formed a strategic alliance with the China's leading liquid milk producer Mengniu Dairy to promote the healthy bacteria in market where dairy foods are already booming.

As part of the agreement, Chr. Hansen will help train Mengniu's R&D and production staff, distributors, and sales force, and advise on marketing strategy and positioning for probiotics on the Chinese market.

"Twelve months ago there was almost no interest in probiotics,"​ explained Mark Johnston, the firm's dairy manager for the reigon.

"But now between 10 and 20 per cent of yoghurts produced industrially contain probiotics,"​ he told NutraIngredients.com.

However he added that most companies are simply adding the probiotics without communicating on their benefits.

A workshop organised by the Danish and Chinese firms in Beijing next week will attempt to offer some tips on how to market probiotic foods and the kind of claims that can be made.

Speakers from Chr Hansen will promote the use of probiotics for immune health, outlining the research in this area. Johnston noted that health claim regulations remain 'fuzzy' in China but that in general companies can follow practice in Europe, with soft claims being made on the packaging and further marketing material used as support.

Dairy consumption in China is growing at an average rate of more than 20 per cent. Of the estimated 600,000 - 700,000 tons of yoghurt being produced industrially each year, much is sold in drinkable form rather than the more typical set yoghurts consumed in Europe.

"The market is heavily influenced by Japan and Taiwan,"​ said Johnston.

Taiwanese firm Wei Chun has raised standards at the premium end of the market with its presence in China and probiotic yoghurts will continue to grow the premium offering.

"There are probably about 200 million Chinese with disposable income buying processed foods,"​ said Johnston.

Rapid growth in the dairy sector has already attracted a number of western firms and probiotics could be another area of opportunity.

"Local companies have a very strong position in the dairy sector, and the Chinese seem to be quite patriotic. But there's probably room for everyone,"​ believes Johnston.

The National Bureau of Statistics of China forecasts a ten-fold increase in Chinese dairy consumption between now and 2015.

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