2025 marks a year for China's dairy industry to shift from passive pressure to proactive adjustment, with signs of recovery emerging amid divergence. Over the past few years, oversupply of raw milk coupled with consumption recovery falling short of expectations, price declines and inventory pressure have coexisted for a long time, keeping the industry operating at a low level overall. Judging from financial report performance, this pressure has not completely disappeared. Among the 29 listed dairy companies' 2025 annual reports reviewed by the author, only 10 achieved growth in both revenue and net profit, while over 60% fell into declines in both revenue and net profit, or structural imbalances of profit growth without revenue growth, with divergence further intensifying. But unlike before, with no significant improvement in the external environment, some dairy companies are no longer solely relying on cyclical recovery but have begun to restructure their growth models: some are redoing channels to find new growth, some are optimizing product structures and strengthening value expression, and others are offsetting cost pressures through more refined operations. While the dairy industry remains under pressure, who is transcending the cycle? The answer lies in these 29 financial reports. On the product front: Bidding farewell to the era of "all-round growth" Segmented tracks become the new battlefield The most obvious signal in this round of changes in the dairy industry is that growth is beginning to diverge. From the 2025 performance, dairy companies are no longer achieving "all-round" overall growth but are accelerating concentration into several segmented tracks. Among them, the most direct change is occurring in the low-temperature milk track. With the enhancement of health consumption concepts, consumer demand for dairy products has shifted from "whether it exists" to "whether it is good," with a greater pursuit of freshness, naturalness, and health. This shift in demand has made low-temperature milk one of the few stable growth poles in 2025. Compared with ambient milk, low-temperature products rely more on local milk sources and cold chain systems, making it easier for regional dairy companies to establish local advantages. Taking New Hope Dairy as an example, it adheres to its "Fresh Cube" strategy, making low-temperature fresh milk and low-temperature yogurt core categories, and relies on local supply chains in Southwest and East China to shorten distribution radius. Supported by this strategy, in 2025 New Hope Dairy achieved revenue of 11.233 billion yuan, a year-on-year increase of 5.33%, and net profit attributable to the parent company increased by 35.98%, with low-temperature milk becoming the core engine driving the company's revenue and profit growth. On the other side, ambient milk has entered a stage of stock competition: growth no longer relies on scale but shifts to structural optimization and market defense. Leading products represented by Yili's Jindian and Ambrosial, and Mengniu's Telunsu, are more about stabilizing existing market share and consolidating brand advantages through product iteration and portfolio adjustment. Essentially, this track has bid farewell to the era of "lying down to earn" with extensive growth, switching to stock defense and refined operations. Meanwhile, some new opportunities are gradually emerging, and the adjustment in the cheese track is a typical case. In 2025, Milkground's cheese business revenue increased by 22.84% year-on-year, supported by its defined direction of product creativity and innovation for both C-end and B-end. For the C-end, Milkground focuses on "cheese snacks" and "cheese functional products," launching new-generation star products such as Cheese Mini Triangles, Cheese Nut Crisps, and Cheese Mini Bags; for traditional classic items like cheese sticks and cheese slices, through continuous upgrades and iterations, new single products like Cheese Mini Balls have evolved, further expanding consumption scenarios. Changes on the milk powder front come from demographic shifts. With accelerating aging, adult nutrition is transforming from a supplement to a definitive demand. In this context, some dairy companies have begun to layout around new demand structures: Feihe leverages its Heilongjiang milk sources to enter the middle-aged and elderly milk powder track; H&H Group has increased its adult nutrition and care business, forming a dual-engine drive with infant nutrition; Ausnutria has launched formula milk powders for pregnant women and sports populations, covering more segmented consumer groups. Putting these changes together, it can be seen that the growth logic on the product front has gradually become clear: companies no longer pursue breadth of category coverage but focus on high-potential populations and segmented scenarios to do deep and thorough work. Whoever can complete this structural upgrade is the one who can truly hedge against cyclical pressure. On the channel front: B-end and scenario-based approaches become the main line Looking at the performance of dairy companies on the channel front in 2025, it can be seen that the logic of channel layout has quietly shifted: from "selling to more places" to "entering more specific and higher-frequency consumption scenarios." Under this change, many companies have begun to diverge from traditional retail channels in three directions. First is the rapid rise of B-end catering channels, such as the expansion of coffee, tea drinks, and baking, which has driven demand for dairy B-end catering ingredients, becoming a definite increment. Milkground deeply embeds itself in the tea drink and baking supply chains, providing customized raw materials like mozzarella cheese; Mengniu has established a professional B-end team "Nailifang," deeply binding with leading new tea drink brands like Starbucks and Mixue Bingcheng; Bright Dairy has launched customized dairy products for catering, using the B-end as an important supplement to hedge against C-end fluctuations. Overall, this channel layout has become a strategic choice for many dairy companies. Second, the lower-tier market has become a tug-of-war battlefield between leading and regional dairy companies. Yili promotes county-level terminal coverage, extending outlets to the "last mile" of townships; Mengniu fills blank markets through township partner models; regional dairy companies rely on local supply chain and distribution advantages to establish stable repurchase in high-frequency scenarios such as communities, breakfast shops, and campuses, forming channel stickiness by being closer to local life. Finally, there is deep cultivation of DTC models and instant retail channels. Leading companies connect directly with consumers through e-commerce, live streaming, and instant delivery; New Hope Dairy and Yiming Food improve order response efficiency by optimizing the distribution system and coordinating with terminal stores, shifting channels from "tiered distribution" to "instant matching of demand," and gradually accumulating user data and demand trends. Overall, changes on the channel front are not simple diversification but a shift from "distribution quantity" to "scenario precision." Whether a company can enter high-frequency consumption scenarios and form stable turnover efficiency within them becomes the key to winning on the channel front. On the operational front: Cost dividends belong to lean operators In 2025, feed costs fell and raw milk prices stabilized, opening a window of periodic cost dividends for the industry. However, this round of dividends has not been evenly converted into profit recovery but has quickly differentiated into different operational results among companies. The reason is that cost improvement only provides a certain space for recovery; what truly determines profit trends is the company's own operational efficiency and management capability. The first to see reduced losses and recovery were upstream milk source companies. Benefiting from lower feed costs and refined pasture management, Youran Dairy and Modern Dairy achieved loss reductions of 37.42% and 20.34% respectively through measures such as precision feeding, optimizing herd structure, and culling low-yield cows; Yuanshengtai Ecological Animal Husbandry, under the combined effect of cost control and increased per-cow yield, achieved net profit of 552 million yuan in 2025, a year-on-year increase of 86.20%, becoming a standout profitable company in the upstream milk source sector. Downstream leaders, leveraging full industry chain operations, converted cost dividends into profit elasticity. Yili achieved significant net profit growth through large-scale procurement cost control and expense optimization; Mengniu significantly improved operational quality through extreme cost control and product structure upgrades, fully demonstrating the anti-cyclical capability of leaders. At the same time, industry consensus has accelerated back to focusing on core business and optimizing assets. Tianrun Dairy and Kedi Dairy improved overall operational quality by divesting inefficient assets and non-core businesses, while some companies focused on cross-industry expansion or non-core business drivers have faced greater pressure in this round of adjustment. Overall, cost reduction is only a temporary external variable; it may affect the speed of recovery but does not change the essence of "who can be profitable." What ultimately determines this result is the company's internal response capability under changing cost environments: whether it can reduce costs, improve efficiency, and reallocate resources to more efficient business structures. Final Thoughts 29 dairy companies, 29 samples, piecing together a picture of divergence in the dairy industry. For this picture, what truly deserves attention is not whether the industry has recovered, but who is using proactive adjustment to replace the path dependence of waiting for recovery. Growth no longer comes from overall uplift but from local breakthroughs; profit no longer comes from scale expansion but from efficiency reconstruction. As the industry's unified answers become fewer, the choices of different companies become more important. Because what determines position next is not speed on the same track, but whether a company has changed its way of solving problems. The cycle is still there, but the solutions have already changed.