---
title: "A Realistic Look at the Soy Milk Market"
description: "A journalist's investigation reveals that despite optimistic industry reports, the actual soy milk market in China is struggling, with low distribution and consumer acceptance, as many consumers prefer milk at similar prices. The article highlights challenges in consumer perception, usage occasions, and category value, suggesting that the industry needs long-term efforts to educate consumers and develop the market."
author: "陈峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-24"
language: "en"
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---

# A Realistic Look at the Soy Milk Market

> A journalist's investigation reveals that despite optimistic industry reports, the actual soy milk market in China is struggling, with low distribution and consumer acceptance, as many consumers prefer milk at similar prices. The article highlights challenges in consumer perception, usage occasions, and category value, suggesting that the industry needs long-term efforts to educate consumers and develop the market.

"Boss, do you have soy milk in your store?" "Soy milk? You mean soy milk powder? It's on the top of the left shelf." "No, I mean the bottled soy milk, do you have it?" "No, we don't." "Why don't you sell soy milk?" "Nobody buys it. Why stock it? It takes up space."
This was a conversation I had with a shopkeeper when I walked into a small convenience store in Beijing. After the chat, I wasn't ready to give up, so I visited several other small shops in the area, and the answers were mostly the same. It wasn't until I walked into a chain convenience store at a subway entrance that I managed to buy a carton of Vitasoy.
I couldn't help but wonder: why do articles about soy milk often say things like "The soy milk category is growing rapidly, with a compound annual growth rate of over 10%" and "Soy milk is about to usher in a 100-billion-yuan market"? The soy milk market seems to be thriving.
**Is it my illusion or the market's illusion?** After visiting some small shops in Beijing, I took a business trip to Anshan, Liaoning, a third-tier city in Northeast China. With doubts in mind, I visited no fewer than 20 large, medium, and small supermarkets and stores.
Although I only covered two types of markets, I believe the real soy milk market is far from the "prosperous" picture painted in industry analysis reports.
**-01-** **The market tells me soy milk isn't that good**
I went to Anshan on a business trip to visit a distributor friend's company. I arrived two days early and followed the salespeople on their store visits. The data wasn't extensive—just over 20 stores—but the results were:
In small mom-and-pop stores and small supermarkets, the distribution rate for liquid soy milk was 0%; **in a few chain convenience stores, there were some Vitasoy products; in medium and large supermarkets, such products existed, but only a small display in the corner, almost negligible compared to milk. Soy milk powder, on the other hand, was available in 60-70% of stores, but sales were not ideal.**
In a supermarket where dairy products had three stacks and five shelves, there were only a few soy milk products on the top of the last shelf.
In my impression, the soy milk category has established companies like Weiwei and Vitasoy, as well as later entrants like Dali, Mengniu, and Yili, who launched products. Why can't we see them in the market?
After detailed inquiries, the shopkeeper said, "They don't sell well; consumers don't recognize them." Consumers said, "I don't know; I haven't seen many people drinking it," and "At a similar price, I might as well buy milk."
Even in a first-tier city like Beijing, not many people buy it. **"Soy milk might need a restock every few days, but milk needs several cases restocked every day. At similar prices, sales can differ by dozens of times,"** a clerk at a Beijing Bianlifeng store told me.
At a similar price, why not drink milk? That's the perception of many consumers. Not visible in stores, not recognized by consumers—that's the current situation of soy milk in some markets.
**-02-** **Industry data looks good, but there are many problems**
Maybe Anshan and a small area of Beijing aren't very representative, so let's look at a larger scope, from both the industry and corporate levels.
First, the industry: According to data from various institutions and companies, China has become the world's largest plant-based protein beverage market, and soy milk is the largest category.
**From 2014 to 2018, the compound annual growth rate of packaged soy milk drinks (including ready-to-drink soy milk) in China was 9.3% in volume and 12% in value, far exceeding milk's 1.1% and 4.6%.**
From the data, the industry is doing well. But in recent years, the companies behind the once-popular soy milk brands haven't been doing well:
> Weiwei Group was placed under investigation; its stock price is currently below 4 yuan per share, far from the nearly 15 yuan in 2015;
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> Vitasoy was "short-sold," with a weekly drop of over 20% at the end of May this year;
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> After Doudouben was launched, Dali Foods never separately disclosed its performance, and there have been reports of unsold products...
Old soy milk companies have been unable to solve the dilemma of slowing growth; new entrants are focusing on marketing, hoping soy milk will become a new growth point. What's the result?
Mengniu, in a joint venture with a foreign company, introduced the plant-based protein beverage brand "Silk Plant Milk." With good technology, rich market experience, and a mature team, Mengniu spent several years changing the formula to launch an American-style soy milk product, but then the team disbanded and the cooperation fell through.
In 2017, Yili created its first non-dairy category, "Soy Select." Leveraging strong channel resources and brand advantages, plus heavy advertising, it didn't achieve good results. Last year, Soy Select upgraded to launch a sugar-free plant milk product, but its monthly sales on Tmall flagship store were only 2,000+.
In addition, giants like Uni-President and Coca-Cola have also tried the soy milk category, but so far, none of their soy milk products have been able to surpass their predecessors and stand on their own. While plant-based protein beverages are re-emerging, the market share of the national beverage soy milk continues to be squeezed, and new plant-based protein products are also eroding the traditional soy milk market.
At present, the soy milk industry seems to be flourishing, but in reality, there are not many truly outstanding products. In such fierce competition, the soy milk category still has a long way to go to achieve a 100-billion-yuan scale, or even to match the milk category.
**-03-** **What soy milk needs to solve is not a brand problem**
The attempts by major giants have not been very effective so far. Does this mean that the soy milk category is truly not recognized by consumers and has a bleak future? Actually, that's not the case; otherwise, the category wouldn't have seen such high compound growth in both volume and value.
But the problems are obvious, mainly three points.
> **Consumer base:** Traditional family consumption, and it's being replaced by milk, leading to a serious decline.
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> **Consumption scenarios:** There's no representative consumption occasion, so it can't generate proactive purchases.
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> **Category consumption:** The raw material of soy milk is soybeans, which has weak scarcity and weak perceived value.
In terms of consumer base, most soy milk consumption is still mainly for family breakfast, and consumers' purchases are concentrated in KA stores and related gift box markets. **Soy milk needs to solve the problem of almost no high-frequency consumption; breaking into the young consumer group is the best way out.**
In terms of consumption scenarios, when you're on fire, you think of drinking herbal tea; when you use your brain and need to replenish it, you think of walnut milk... What about soy milk? What I can think of is carrying a 0.5 yuan bag of soy milk on the way to school as a child. **Soy milk urgently needs to focus on a representative consumption scenario to open up the situation.**
Actually, the most important issue is the category itself. From the category's perspective, soy milk not only contains rich protein but also various vitamins and minerals, with nutritional value not inferior to milk. Moreover, plant protein doesn't contain cholesterol and can also avoid the common lactose intolerance in Chinese people. These advantages make soy milk align with the current "health" trend and bring new development opportunities.
But here's the problem: Are these advantages of soy milk new? Hasn't soy milk been popularized? Of course not. Soy milk has nationwide recognition. So why is milk widely accepted, but soy milk products aren't as recognized?
Actually, it's **the scarcity perception bias that leads to consumers' deviation in perceiving the value of soy milk.** Why is milk good? Because for a long time, China was a big agricultural country, with many oxen for farming, fewer beef cattle, and even fewer dairy cows, so production was insufficient. Moreover, in the early days, there was no corresponding refrigeration and transportation technology, so "northern milk" couldn't be "transported south." Thus, milk was once a luxury for most Chinese people.
What about soy milk? Its close relative, soy milk (豆浆), has been drunk for nearly two thousand years, and **the raw material of soy milk is soybeans, with strong nutritional value but weak perceived value...** **Various factors lead to consumers' cognitive bias: soy milk is good, but milk is more "valuable."** So when prices are similar and both are affordable, it's obvious whether consumers will buy milk or soy milk.
If the category problem can be solved, the consumer base and consumption scenario problems will also be solved. This requires the joint efforts of the entire industry, especially leading brands and companies.
Another point worth noting: earlier I mentioned that I couldn't see soy milk products when visiting the market. Why? Because from the backend, distributors also have no motivation to promote soy milk distribution.
**Distributors are in it to make money, not to be assistants!** **Distributors won't cultivate or educate consumers.** This requires brand owners to first solve the pain points of distributors. If they can't even convince distributors, how can they distribute? If consumers can't see the product, how can they cultivate awareness?
Actually, major brand owners are still confident in the development of the soy milk category, as seen from the rush of companies to enter. Category development and consumer awareness cultivation take time. The currently emerging soy milk brands have only entered in recent years, so the time cycle isn't long enough, and they are still exploring.
At present, **the soy milk industry with many giants has shown a good sign. Cultivating awareness for a category is not achieved overnight; the development of soy milk needs to be viewed over a longer period.**
As mentioned before, the development prospects of the soy milk category are actually good. From the 2018 data above, the per capita consumption of soy milk in China is not high. Even if it doesn't reach Thailand's level, if the average consumption reaches 3.0 liters, there's nearly double the growth space, which is huge.
Looking at cases, Japan's soy milk market has been developing well. On one hand, companies continuously promote and educate consumers well, and consumers can buy soy milk products nearby. On the other hand, they put effort into product development, with various flavors, tastes, neutral, and acidic soy milk products available. With multiple factors combined, Japan's soy milk growth rate is over 10% annually.
Data and factual cases prove that soy milk is very suitable for Asian constitutions and aligns with the current "health" trend. So we have every reason to be optimistic about the future of the soy milk category, even though the industry still has many problems and difficulties after years of development.
The development of the soy milk industry still requires tremendous efforts from practitioners, especially leading brands and companies, who should step up, lead the industry, continuously deepen consumer cultivation, and be prepared for a long cultivation cycle. Perhaps only after ten or twenty years will brand owners be able to reap the rewards in the soy milk market.
Compared to the milk industry, how to tell the story of this cup of soy milk is worth deep thought for all practitioners. The development of the soy milk category has a long way to go.


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