Fonterra launches new brand in China

A baker shows his talent at an international bakery expo in Shanghai. The event attracted 1,500 companies and 80,000 professionals.XIAO JIE/CHINA DAILY

Fonterra, New Zealand's dairy cooperative and a leading dairy food services player in China, has launched its new brand, Anchor Food Professionals, in Shanghai, in a move designed to take advantage of a fast-expanding dairy market in the Chinese mainland, estimated to have an annual compound growth rate of more than 20 percent.

Market researchers looking at the sector said that new lifestyle concepts are being adopted by Chinese consumers, such as "afternoon tea", "coffee break", and "office pantry".

And analysts said these have driven the growth of consumption of dairy food and beverages, transforming food consumption habits.

They added that helping to sustain the rise in demand are creative new food and beverages which are now finding favor with Chinese consumers.

The managing director of Fonterra's China operation, Christina Zhu, said Anchor Food Professionals would provide western restaurants, bakeries and casual dining restaurants in China with different products ranging from cream and cheese to butter, and the company would also help businesses with their product presentation, pricing, and promotions.

Analysts say that a wide variety of western food and beverages have been penetrating the Chinese market and that consumers' demand for bakery products, such as cakes, bread, dairy drink and desserts such as icecream, is growing fast, which in turn is attracting more players to compete in the developing market.

According to data compiled in April by Dianping Holdings, China's biggest online food service rating website and a key information provider, the size of the food services market in China that uses dairy goods has grown from 71.2 billion yuan ($10.92 billion) in 2012 to 187.2 billion yuan in 2016, and is expected to further grow to 550.8 billion yuan in 2020.

The number of bakery, beverage and deli shops using dairy goods has also surged. In 2015 alone, China had 40,000 new bakeries and beverage stores serving dairy food and drinks, while in 2012 the number was fewer than 5,000.

"The market is growing fast and consumer appetites are also changing quickly. Just two years ago the most popular bakery items were puffs and egg tarts, now the most popular items have become durian cakes, cream cakes, and cheese cakes," said Sun Hongxia, an analyst and manager in the strategic branding department of dianping.com.

A research note from China Galaxy Securities Co Ltd said young consumers are particularly frequent visitors to bakeries. A survey which polled more than 2,000 respondents across China showed 43 percent of consumers, aged between 20 and 30, said they visit bakeries two to six times every week.

The average consumer spend on a single bakery item has also been increasing. "I can recall five years ago when I spent 5 yuan on a tart, I considered it a little treat for my hard work at the end of a day. But now as my income has risen, I love to buy 16-yuan croissants for breakfast, or buy an assorted bag of bread for the weekend," said Yu Zhihua, a 27-year-old Shanghai consumer, shopping at a bakery in Lujiazui.

Yu said her average spend in bakeries has increased from around 30 yuan per week five years ago, to 200 yuan now.

Food sector experts say they have also seen growing consumer interest in homemade bakeries, another driver of the general growth in dairy goods consumption in the country.

wuyiyao@chinadaily.com.cn